136-41-52 Fazlul Karim Anik

Thesis
On
Performance of Foreign Trade Operation of
Prime Bank Ltd.-A study
For the partial fulfillment of the degree of MBA, in Southern University Bangladesh
Prepared For:
Dr.Shirajul Islam
Associate Professor
Department of Business Administration
Prepared By:
MD.FAZLUL KARIM
ID No: 136-41-52
Semester:Fall-2014
Program: MBA
Major: Marketing
Date of Submission:
Southern University Bangladesh
1
PREPARED BY MD FAZLUL KARIM
ID NO# 136-41-52
Letter of Submission
Date:
To
The Dean
Faculty of Business Administration
Sub: Submission of Thesis Report
Dear Sir,
With due respect & humble submission, I would like to submit herewith my thesis report
Performance of foreign trade operation of Prime Bank Limited- A study which has completed
under the prudent guidance of Associate Prof. Ishrat Jahan. I have carefully studied both the
theoretical & practical aspect of the topic Foreign Exchange Operation. I have tried my level best
to know about the Organization by observing its activities. This thesis report which I would like
to submit to you for your evaluation is an outcome of my own observation and contribution. I
believe and hope that you will find this study very interesting, informative and insightful.
I would therefore, like to request you to take steps for the evaluation of my thesis report and
oblige thereby.
Sincerely,
Md.Fazlul Karim
ID NO: 136-41-52
Program: MBA
Major: Marketing
ID NO# 136-41-52
Students Declaration
This thesis report entitled Performance of foreign trade operation of Prime Bank Limited- A
study has been prepared by me. It is my original work performed through primary and
secondary data collected from Prime Bank Limited. This thesis report has been submitted to the
Southern University Bangladesh, as the partial fulfillment of the MBA program, with major in
Finance I would further like to declare that the thesis report has not been submitted to any other
university or institution to get any Degree or Diploma, also not submitted for publication or
fulfillment of any other purpose.
.
Md.Fazlul Karim
ID NO: 136-41-52
Program: MBA
Major: Finance
ID NO# 136-41-52
Supervisors Approval
This thesis report entitled Performance of foreign trade operation of Prime Bank Limited- A
study is submitted for the partial fulfillment of the requirements for the degree of MBA from
the Southern University Bangladesh by Name Abul Kalam Azad Chowdhury ID No: 136-39-39
has been completed under my supervision and guidance. It is an original piece of work on the
basis of field investigation and also has made contributions to the existing store of knowledge. I
have gone through the report very carefully. In preparing this report, he has spared much time
and efforts. His thirst over seeking depth of every aspect is very much satisfactory. I suppose, the
thesis report may be considered for the award of MBA Degree.
Md.Shirajul Islam
Associate Professor
Business Administration
ID NO# 136-41-52
Preface
Thesis Program is a most efficacious program on the part of every student of MBA because he
gets practical experienced of the complexities and problems of the utilitarian life. Down-to-earth
knowledge as no alternative specially for a student of MBA. All the MBA students of the
Southern University must have to submit and thesis report for the partial fulfillment of their
MBA final examination. So, I have tried all through my thesis program in PBL Chittagong to
acquainted myself with the convoluted business world through an exchange of my theoretical
glimpses of the key points where found necessary and have tried to knit a relationship with my
observations , function with these theoretical glimpses. Each of the section in this report is
separate and definite as they are also related in the sense, that inferences have been drawn from
each of them act time and grossed up in my concluding remarks. I think, as I have tried to shape
this report in such away, so that it could practically benefit the bank and other interested
researcher as well as the serious students.
I may believe that this subject matter will prepare me with more practical about my future
profession. If my afford on this report can satisfied the demand of the reader at that moment will
be successful.
ID NO# 136-41-52
Acknowledgements
First of all I would like to express my gratitude to almighty Allah for Keep me mentally and
physically sound to prepare this report. I would also like to express my heartiest gratitude &
thanks to those people, because without their dedication and contribution this project would
not have been possible and would not get the successful compellation.
I would like to give heartiest thanks to my supervisor Associate Professor Shirajul Islam. I am
grateful for his guidance, supervision and inspiration for the completion of that report.
I sincerely express my deepest gratitude to PBL administration and all the officials of PBL for
their relentless help and caring attitude.
ID NO# 136-41-52
Executive Summary
Thesis report is a partial fulfillment requirement of one year MBA program by which a student
can gather theoretical knowledge. To fulfill the requirement of thesis, time is not sufficient to
prepare report on the overall performance of the banking sector, so I prepare report on
Performance of Foreign Trade Operation of Prime Bank Ltd That is one of the vital areas
of foreign exchange business in the bank.
The main objective of the study is to Performance of Foreign Trade Operation of Prime Bank
Ltd. To discuss the rules & regulations, Foreign exchange mechanisms are also in the way of
attaining the main goal. In this study primary data as well as secondary data has used. Primary
data collected by personal interview and observation. The secondary data collected by bank
annual report & web site, different training materials, articles etc.
This report has contained comprising with introductory chapter, organizational overview, and
foreign exchange business and performance evaluation. Organizational overview part includes
different information related with introduction Prime Bank, management, mission, vision,
product & services, rendered by the company for the customer,
Balance of the last two year. The foreign exchange business discusses the rules and regulations,
activities of import and export procedure, remittance, Foreign exchange operation mechanism.
The performance Analysis has presented regarding foreign exchange business which exists
import and export performance, remittance, LC opening, monetary value, major importing &
exporting country, imported items, exported items etc.
ID NO# 136-41-52
Sl. No:
Table of Contents
Page No:
Title Page
Letter of Submission
ii
Students Declaration
iii
Supervisors Approval
iv
Preface
Acknowledgements
vi
Executive Summary
vii
CHAPTER-01 INTRODUCTION
1.1
Prelude
15
1.2
Statement of the problem
1.3
Objectives of the study
16
1.4
Scope of the study
17
1.5
Methodology of the study
17
1.6
Limitations of the study
18
15-16
CHAPTER -02 : PRIME BANK LTD. A

SNAPSHOT
2.1
Introduction
20
2.2
Company Vision
21
2.3
Company Mission
21
2.4
Core Values
21
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2.5
Expansion in the Global Arena
2.6
Organizational Structure
2.7
Classification of bank product
2.7.1
2.8
22
22-25
26
Products and Services of Prime Bank Ltd.
27-28
Islamic Mode of Operation
29
Shariah Council
30
Prime Line
31
2.9.1
Online Branch Banking
31
2.9.2
SWIFT
31
2.9.3
One Stop Utility Services Scheme
2.9.4
ATM Services
2.8.1
2.9
31-32
32
CHAPTER -3
FOREIGN EXCHANGE POLICIES, PROCEDURES &
ACTIVITIES OF PBL
3.1
Introduction
34-36
3.2
Operational Processes in Prime Banks Foreign

Exchange Department
37-38
3.3
Concept of Letter of Credit
38-39
3.4
Types of Letter of Credit
39-40
3.5
Some Special Letter of Credit
40-42
3.6
Parties Involved in L/C
43-44
3.7
Import Procedure through Letter Of Credit

Operation of Prime Bank Ltd.
44-45
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3.7.1
Legislation of Import Policy
3.7.2
General Conditions of Import of Goods
46-49
3.7.3
Instructions issued by Bangladesh Bank for Opening

and operation of L/C for import of goods
50-51
3.7.4
Documents Required for Opening of L/C
51-52
3.7.5
Margin and Other Charges
52
3.7.6
Issuing the Letter of Credit
53-54
3.7.7
Different Means of Payment
54-55
3.7.8
Transmission of Letter Credit Payment
55
3.7.9
Receipt of Documents
56
3.7.10
Scrutiny of Documents
56-57
3.7.11
Lodgment
57-58
3.7.12
Retirement of the Documents
59
3.7.13
Delivery of Shipping Documents
59
3.7.14
Payment of the Foreign Bank Import of Goods
60-61
Export Procedure Through L/C Operation of Prime

Bank Ltd.
62-63
3.8
46
3.8.1
Documents Required for Export Transaction
64
3.8.2
Registration of Exporters
3.8.3
Securing the Export Order
3.8.4
Signing the Contract & Receiving Letter of Credit
65-66
3.8.5
Export Financing
66-67
64-65
65
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3.8.6
Popular form of Pre Shipment Credit
67
3.8.6.1
Packing Credit
67
3.8.6.2
Charge Documents for P.C
68
3.8.6.3
Additional Documents for P.C.
68
3.8.6.4
Back to back Letter of Credit
68-69
3.8.6.5
Entitlement of BTB LC as per Import Policy Order

2010-2013
69-71
3.8.7
Certification of Exp Form by Authorized Dealer
71-72
3.8.8
Making our and Delivery of Shipping Documents
72
3.8.8.1
Submitting of Documents to the AD
73
3.8.8.2
Scouting of Documents
73-74
3.8.8.3
Deduction of Charges
74
3.8.9
Foreign Currency Exchange Retention Quota

(FCERQ)
3.8.10
Shipment on F.O.B. Terms
3.8.11
Short Shipment or over Shipments
3.8.12
Lodgment of EDBP
3.8.13
Verification of Proceed Realization Certificate
3.8.14
Export Portfolio of Prime Bank Ltd
77
Foreign Remittance Section of Prime Bank Ltd
78
3.9
74-75
75
75-76
76
76-77
3.9.1
Modes of Foreign Remittances
78-79
3.9.2
Scenario of Foreign Remittance of Prime Bank Ltd.
79-80
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3.9.2.1
3.10
Some Measures of Improving this Department

Performance
80
Activities of Foreign Exchange Department
80-81
CHAPTER -04
FOREIGN EXCHANGE PERFORMANCE OF PBL
4.1
Performance Evaluation Techniques of Export,

Import & Profitability ratio
83
4.1.1
Performance in Exports
83-84
4.1.2
Performance in Imports
84-85
4.1.3
Foreign Remittance
85-86
4.1.4
Net Profit after Tax
86-87
4.1.5
Number of Foreign Correspondents
87-88
4.1.6
Number of Branches
88-89
4.2
Performance in Profit & Loss
89-90
4.3
Performance in Authorized Capital & Paid-up

capital
90-91
4.4
Profitability ratios
91
4.4.1
Return on Assets
91-92
4.4.2
Return on Equity
92-93
4.4.3
Net Interest Margin
93-94
4.4.4
Net operating Margin
94-95
4.4.5
Earnings Per Share
95-96
Impact of Profitability ratios on Foreign Trade
97-98
4.5
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CHAPTER -05
Problems
5.1
Problems associated with Foreign Exchange

Operation at Prime Bank Ltd.
100-102
CHAPTER-6
Findings, Policy Implication & Conclusions
6.1
Summary of the study
6.2
Policy Implication
6.3
Conclusions
104
105-106
107
Appendix & Abbreviation

Appendix
109-112
Abbreviation
113-114
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CHAPTER-01
INTRODUCTION
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1.1 Prelude
Bangladesh is a developing country. The common scene of Bangladesh now is that its economic
condition is improving and it is taken forward by the Banks of Bangladesh. Commercial banking
industry is one of the most important financial intermediaries which are playing a great role to
generate savings and it makes sure the proper investment of this savings in different sectors of
our economy.
Commercial banks are cooperating different types of business in various ways which is ensuring
prosperity of business which ultimately means prosperity of the economy as a whole. By now, it
has been proved that literally bank is the heart of all commercial activities in Bangladesh and one
of the most flourishing sectors of our country. And, Foreign Exchange Business can help
expansion of our economy. Thats why the banks are now giving the maximum importance in
financing Export, Import, and Remittance business enormously. Foreign trade can usually be
justified on the principle of comparative advantage. Accounting to this economic principle, it is
economical profitable for a company to specialize in the production of that commodity in which
the producer country has the greater comparative advantage and to allow the other country to
produce that commodity in which it has the lesser comparative advantage. It includes the
spectrum of goods, services, investment, technology transfer etc.
This report concentrates on the overall Performance of the Foreign Exchange & Foreign Trade in
Prime Bank Limited.
From the very beginning of taking birth, this is playing an outstanding role for the betterment of
the Import & Export market in this country.
1.2 Statement of the Problem

A comprehensive learning comprises theoretical as well as practical knowledge. Getting degrees
without actual knowledge is useless in this world. So this thesis provides leadership through
skilled employment, entrepreneurship and applied research. This program is an opportunity for
the students to learn to face the real world and thus keeping its promise to produce world class
post-graduates. PBL is a place where researcher could learn the foreign trade dealings. This
organization has created a positive image to the customers mind by providing better service. This
15
ID NO# 136-41-52
bank has introduced some modern banking scheme that has got high market demand. As it
maintain the pace with the competitive business world, its activities, culture, philosophy and
style leads a researcher to be the best at any field of working life. To write a report it is necessary
to select a topic. A well-define topic reflects what is going on to be discussed throughout the
report. The topic has been assigned by supervisor is Performance of foreign trade operation of
Prime Bank Limited- A study. The thesis has discussed how the bank can improve the
performance of foreign trade operation as well as reduces the L/C defaulting. PBL is one of the
well-known Banks in Bangladesh. This bank has already 117 branches located in different places
and also going to establish more branches. Foreign exchange division is the heart of the banking
system as it is in PBL. It is very much related with the corporate banking. Foreign exchange
division is responsible for allowing all the L/C facilities given to the potential customer/Buyer.
This bank has got many export import facilities for the customer. The PBL wants to know the
performance of foreign trade operation and to reduce the defaulting rate so that they can improve
their service.
1.3 Objective of the Study

The Principal objective of the Study is Performance of foreign trade operation of Prime
Bank Limited. To accomplish this principal objective following objectives have been
covered.
To highlight the evolution of foreign trade operation of Prime Bank Limited.
To examine the policies, procedures & activities of foreign trade operation of
Prime Bank Limited.
To evaluate the performance of foreign trade operation of Prime Bank
Limited.
To identify the problems associated with foreign trade operation of Prime
Bank Limited.
To suggest some important policy measures for improving the foreign trade
operation of Prime Bank Limited.
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1.4 Scope of the Study

This study covers the details of Prime Banks practices about foreign exchange activities
emphasizing Activities regarding Import and Export Procedure under Letter of Credit at
Prime Bank Ltd. This study also emphasizes on the sequential activities involved and used by
Prime Bank Ltd for foreign exchange transaction. The study also focuses on the impact of the
foreign exchange activities upon the client (2009-2013).
1.5 Methodology of the Study

The information has been collected from the most credible sources. Researcher has categorized it
into two sections. The first one is Primary Source and the other is Secondary Source.
Quantitative and Qualitative judgments are also applied in this report which has made the study
more meaningful and presentable.
1.5.1 Collection of Data

A) Primary Sources
Major sources of information were done through the discussion with the officers of
Foreign Exchange Dept.
B) Secondary Sources
Annual Reports of Prime Bank Limited.
Foreign Exchange Guidelines
Periodicals Published by Bangladesh Bank.
Various books. Articles, regarding Foreign Exchange operations.
Articles written on Banking
Websites on Banking and international trade.
Bank Website.
Relevant documents related to the study provided by the officials.
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1.6 Limitation of the Study

Every study has its distinct limitations. Preparing this report I have also faced some certain
limitations which are summarized below:
The main hindrance behind preparing this study was time. The span of the Thesis
program is only three months. But I have got only two months due to some unavoidable
circumstances. Since Foreign Exchange is a vast area, it is not possible to cover or go
through within this short span of time.
There is also insufficiency of current information, relevant to the study.
Consolidated data related to the study were not available for the current year. So the most
of the information is used from the previous years.
Inaccurate or Contradictory information created huge confusion during preparation of this

study.
Bank secrecy posed a major problem since disclosure of some information has been
restricted.
Relevant documents were not available as it is a technical issue.
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ID NO# 136-41-52
CHAPTER -02
PRIME BANK LTD. A

SNAPSHOT
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ID NO# 136-41-52
2.1 Introduction
Prime Bank Ltd is one of the leading private sector commercial bank in Bangladesh. It is a
scheduled commercial bank in the private sector established under the Banking Company Act
1991 and incorporated in Bangladesh as a public limited company under the Companies Act
1994 to carry out banking business in Bangladesh. It has been launched by a group of successful
entrepreneurs with recognized standing in the society. The paid up capital of the Bank is 1116
million. The management of the Bank consists of a team led by senior bankers with decades of
experience in national and international markets. The senior management team is ably supported
by a group of professionals many of whom have exposure in the international market.
Within a short span of time Prime Bank ltd. has established itself as one of the fast growing local
private banks. It has at present a network of Twenty three branches serving many of the leading
corporate houses and is gradually moving towards retail banking. Another significant delivery
channel is its own as well as shared ATM Network. Prime bank has a network of 151 ATMs out
of which 70 it owns. The other 81 ATMs are shared through ETN with eleven other banks. Since
its humble beginning in 1999, it set milestone by acquiring the business operations of the Bank
of Nova Scotia in Dhaka, first in the banking history of Bangladesh. It again repeated the
performance by acquiring the Bangladesh operations of Muslim Commercial Bank Ltd. (MCB),
a Pakistani bank.
In the year 2003 the Bank again came to the limelight with over subscription of the Initial Public
Offering of the shares of the Bank, which was a record (55 times) in our capital markets history
and its shares commands respectable premium. The asset and liability growth has been
remarkable. Prime bank has been actively participating in the local money market as well as
foreign currency market without exposing the Bank to vulnerable positions. The Bank's
investment in Treasury Bills and other securities went up noticeably opening up opportunities for
enhancing income in the context of a regime of gradual interest rate decline. Prime bank Limited
started its service with a vision to serve people with modern and innovative banking products
and services at affordable charge. Being parallel to the cutting edge technology the Bank is
offering online banking with added delivery channels like ATM, Tele-banking, SMS and Net
Banking.
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2.2 Company Vision

To become a leading banking institution and to play a pivotal role in the development of the
country.
2.3 Company Mission

Prime Bank Limited aims to become setting a new standard in banking in Bangladesh by
prudence, flair and quality of operations in their banking sector. The bank has a mission to
achieve the organizational goals. The mission isThe bank is committed to satisfying diverse needs of its customers through an array of products
at a competitive price by using appropriate technology and providing timely service so that a
sustainable growth, reasonable return and contribution to the development of the country can be
ensured with a motivated and professional work force.
2.4 Core Values

Prime Bank nurtures a very profile value to all its stakeholders. Basically they maintain four
kinds of core values to its different stakeholders. They are as follows:
For our Customers
To become most caring Bank - by providing the most courteous and efficient service in
every area of our business.
For our Employees
By promoting well - being of the members of the staff.
For our Shareholders By ensuring fair return on their investment through generating
stable profit.
For our Community
By assuming its role as socially responsible corporate entity in a tangible manner through
close adherence to national policies and objectives. and
Upholding ethical values and best practices
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2.5 Expansion in the Global Arena

The Bank has successfully expanded its services beyond cross border to provide and establish an
efficient banking system globally. It has opened a fully owned subsidiary at Singapore. Prime
Exchange Co. Pvt. Ltd., a fully owned subsidiary company of Prime Bank Limited was
incorporated in Singapore on January 06, 2006 and commenced its remittance business with
effect from July 08, 2006 under the remittance license issued by the Monetary Authority of
Singapore (MAS) under section 7A(3) of the Money Changing and Remittance Business Act
(Chapter 187), Singapore.
2.6 Organizational Structure
Prime Bank Limited is being managed by highly skilled professionals with long experience in
banking. They constantly focus in understanding and anticipating in customer needs and operate
according to it to survive in the changing market condition of the country.
In the Branch Based Approach, each individual branch is treated as separate identity and is
headed by a branch manager. The branch manager is liable to the top management for that
particular branch. Before starting a fiscal year it is the duty of branch manager to see that targets
are being fulfilled. Profit Targets, deposit targets, and other targets alike are all delegated to these
individual branches.
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Given below is an organ gram of an individual branch of Prime Bank for better
understanding
Head of Branch
Manager in Operation
GB In-Charge SAVP
Cash in Charge
SEO
Foreign Exchange InCharge AVP
Credit In Charge FAVP
Fig: 1 Organizational hierarchy of an Ideal Branch

The Department Based Approach is similar to that of the branch based approach, where each
dept. operates as a separate unit but sometimes collaborates in order operate more efficiently or
solve a common problem. Such department is also treated as separate entity but is much more
specialized in one particular area of business unlike a branch which has to be involved in
multiple tasks. Examples of few other department of Prime Bank Ltd are given below:
Human Resource Department
Financial and Administrative Department
Monitoring And Inspection Department
Marketing
Personal Relation Department
Merchant Banking and Investment Department
Treasury division
International division
General Service Division
Information Technology Department
Credit Division
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At a glance Prime Bank Limited

PRIME BANK LIMITED (PBL)
Type
Private
Industry
Banking
Date of Inauguration of Operation
17th April, 1995
Registered Office
Adamjee Court Annex Building-2, 119-120

Mothijheel C/A, Dhaka-1000, Bangladesh.
Products
Banking services, Consumer Banking,

Corporate Banking, Investment Banking
Chairman
Md. Shirajul Islam Mollah
Managing Director
Md. Ehsan Khasru
Number of Branches
117
Logo
E-mail
primebank@bangla.net
Website
www.prime-bank.com
Figure-1: Company profile of Prime Bank Limited.

Source: Website of PBL
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Organizational structure
Chairman
Board Of Directors
Executive Committee
Managing Director
Additional Managing Director
Senior Executive Vice President
Executive Vice President
Senior Vice President
Vice President
Senior Assistant Vice President
Assistant Vice President
First Assistant Vice President
Senior Executive Officer
Executive Officer
Senior Officer
Management Trainee Officer
Officer
Junior Officer
Figure-2:
Organizational structure of Prime Bank Limited.
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2.7 Classification of Bank Product

In chart given bellow we find different products / services generally made available by a bank: -
Product
Deposit
Advance
Inter Prime
banking
Consultancy
Time
demand
L/C, Foreign
Currency
Fund
oriented
Term, loans, clean
loans,
Non fund oriented
Tax,
Consultancy
Mar cent
Banking project
Counseling
Investment
Counseling
Miscellaneous
Self
custody
Credit cards,
Travelers
Cheques,
sale of
drafts,
standing
Instruction,
Bills
Discounting, Pre-shipment. Post
shipment, lines, of credits
Secured, unsecured, Overdraft,
Guarantees
Letter of credit.
Figure-3: Classification of bank product of Prime Bank Limited
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2.7.1 Products and Services of Prime Bank Ltd.

Prime Bank Limited offers various kinds of deposit products and loan schemes. The bank also
has highly qualified professional staff members who have the capability to manage and meet all
the requirements of the bank. Every account is assigned to an account manager who personally
takes care of it and is available for discussion and -inquiries, whether one writes, telephones or
calls.
Deposit Schemes
Monthly Contributory Savings Schemes (CSS): Under this scheme Minimum size of
the monthly installment is Tk.500.00 and multiples of Tk.1000.00. Maximum installment
size shall be 25000.00 for live year period. Lump sum amount shall be paid after maturity
or monthly pension shall be paid for the next 5 years according to size of deposit.
Lackhopati Deposit Scheme: Under this scheme size of the monthly installments are
Tk.250.00, Tk.500.00, Tkl285.00, Tk.2400.00 depositor will receive Tk. 1,00,000.00
after a number of period depending on installment size .Higher the installment size lower
will be the maturity period .
Prime Millionaire Scheme: This scheme is similar as Lackhopati deposit scheme only
the installment amounts is larger and at maturity depositor will get 10, 00,000.00.
Education Savings Scheme (ESS): Under this scheme parents can save for their
children's education by paying a certain amount of monthly installment and Lump sum
amount shall be paid after maturity.
Monthly Benefit Deposit Scheme (MBDS): Under this scheme customer can deposit a
fixed amount of money for five years the amount has to be 100,000 or multiple of
100,000 he / she will receive 900 per month as interest on every lac during those five
years.
Double Benefit Deposit Scheme (DBS): Under this scheme a customer can keep a fixed
amount of money for six year end of the maturity period the amount will become double
.The amount has to be multiple of 25000.
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Fixed Deposit Receipt Scheme (FDR): Under this scheme customer can devote a fixed
amount of money for one month, three months, six months or twelve months for interest
rate of 7.5%, 11 % or 11.5%.
Current Account: Current Account is a non interest bearing checkable deposit (Demand
Deposit) which allows the owner of the bank accounts to write checks to third parties.
Savings account: Savings Account is an interest bearing checkable deposit (Negotiable
order of withdrawal) which allows the owner of the bank accounts to write checks to
third parties. Interest rate of Savings Deposit Account is 8.00% for the year 2013.
Card Division Service
ATM Card: Automated Teller Machine (ATM) card is new concept in modem banking,
has already been introduced to facilitate subscribers 24 hour cash access through a plastic
card. Prime Bank Limited has started their ATM card services from 15th March 2008 by
opening a ATM booth at Motijheel Branch. After that Prime Bank Limited made an
agreement with Dutch Bangla Bank to use their ATM Booth.
Credit Card: Very stiff competition prevails in credit card market. Many players have
entered the market and competition is growing. Prime Bank Ltd started its credit card
operation in 1999 by introducing Master Card and is now principal member of both
worldwide accepted plastic money network i.e MasterCard and VISA, thus positioned itself
with strong footing within the industry, the risk of loss to credit card customers. Call center
of the Bank provides 24 hours service to the credit card customers.
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2.8 Islamic Mode of Operation

Prime Bank Limited has started its operation as a Conventional Bank in April 1995. But pretty
soon afterwards, within few months, the Bank has taken up the Challenge to start Islamic
Banking Operations. The Challenge is not so much as in operating Islamic Banking but in
maintaining both the forms in Parallel. From its inception as an Islami Bank the bank has proven
itself to be worthy of its slogan of Bank with a Difference, through successful operation of
Islami Banking.
Prime Bank has started its Islami Banking operation through its first Branch being inaugurated
at19, Dilkusha C/A, Dhaka on 18 December 1995. Since then it has so far has established five
more branches at different locations in the Country. Because of its popularity and managements
commitment toward social well being gradual expansion of Prime Banks Islami Banking
operations is assured. Following are the salient features of Islamic Banking, as is practiced in
Prime Bank Limited:
01. All activities are conducted according to Islamic Shariah.
02. Interest free monetary operations.
03. Building partnership relation between the Bank and its customers.
04. Following Islamic principles in its investment portfolio.
05. While investing special consideration to social needs is given.
06. Through small and long term deposit schemes providing hope to the poor income group of
the society.
07. Client service centric banking, through which making the clients feel special.
08. Conduct welfare activates etc.
Service Portfolio
Prime Bank Limited provides following services under Islamic Banking:
01. Deposit
02. Investment
03. Foreign Trade
04. Remittance and Fund Transfer
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2.8.1 Shariah Council

Shariah Council We established a Shariah Council to advice and provides guidance on Islamic
Banking Operations. The following Islamic scholars having vast knowledge and ideas in Islamic
Shariah relating to banking operations sit on the Board:
Name
Status in the Shariah Council

Chairman
Maulana Mohammad Salahuddin

Ex-Principal Madrasha-e-Alia, Bakshi Bazar, Dhaka
Vice Chairman
Mr. Shah Abdul Hannan

Ex-Chairman, Islami Bank Bangladesh Ltd.
Member
Maulana Abul Kalam Azad

Chairman, Bangladesh Masjid Council, Uttara, Dhaka.
Maulana Mohammad Shahidul Islam
Member
Professor Dr. Shamsher Ali
Member
Vice Chancellor, Southeast University,Dhaka.

Member
A.S.M Fakhrul Ahsan

Former Deputy Governor, Bangladesh Bank
Member
Azam J Chowdhury
Chairman, Prime Bank Ltd.
Member
Capt. Imam Anwar Hossain

Director, Prime Bank Ltd.
Member
Mohammad Ehsanul Haque

Managing Director, Prime Bank Limited
Member Secretary
Mahbubul Alam
Additional Managing Director, Prime Bank Limited
Figure-4: Shariah Council of Prime Bank Limited.
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2.9 Prime Line

2.9.1 Online Branch Banking
The Bank has set up a Wide Area Network (WAN) across the country to provide online branch
banking facility to its valued clients. Under the Scheme, clients of any branch shall be able to do
banking transaction at other branches of the bank. Under this system a client will to be able to do
following type of transactions: Cash withdrawal from his/her account at any branch of the Bank
irrespective of location.
Cash deposit in his/her account at any branch of the Bank irrespective of location.
Cash deposit in other's account at any branch of the Bank irrespective of location. Transfer of
money from his/her account with any branch of the Bank. Any amount can be deposited or
transferred under Prime Line. In the system, however, at present there is a limit for cash
withdrawal through bearer or by account holder himself.
2.9.2 SWIFT
Prime Bank Limited is one of the first few Bangladeshi Banks who have become member of
SWIFT (Society for Worldwide Inter-bank Financial Telecommunication) in 1999. SWIFT is a
member owned co-operative, which provides a fast and accurate communication network for
financial transactions such as Letters of Credit, Fund transfer etc. By becoming a member of
SWIFT, the bank has opened up possibilities for uninterrupted connectivity with over 5,700 user
institutions in 150 countries around the world.
2.9.3 One Stop Utility Services Scheme

Like any other country of the world, the people living in the urban areas of our country lead a
very busy life. Time is very valuable to them. Despite this, they are to waste their valuable time
at the counter of different Banks and other Institutions for payment of their monthly bills of
different utility services like Electricity, Telephone, Water, and Gas etc. They, as such, face
enormous difficulties for payment of their monthly bills in time. Such inconveniences of the
urban people can be removed by making an arrangement to collect all the bills of various utility
services at One Point.
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2.9.3.1 Scope of Services

With this end in view, Prime Bank Limited has introduced a Scheme entitled "ONE STOP
UTILITY SERVICES SCHEME". The scheme is designed to provide all the required services to
the customer in making payment of their following bills on their behalf from the counter of the
Bank:
To pay Electricity Bills
Cash deposit in his/her account at any branch of the Bank irrespective of location.
Cash deposit in other's account at any branch of the Bank irrespective of location. Transfer of
money from his/her account with any branch of the Bank. Any amount can be deposited or
transferred under Prime Line. In the system, however, at present there is a limit for cash
withdrawal through bearer or by account holder himself.
2.9.4 ATM Services

To deliver 24 hours cash withdrawal services, Prime Bank has launched its ATM Operation
since March 11, 2008. Presently the bank has been providing this service to their customers
through 29 ATM Booths. Moreover the bank has made agreement with Dutch-Bangla Bank
Limited to use their ATM booths by Prime Bank customers.
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CHAPTER -3
FOREIGN EXCHANGE
POLICES AND PROCEDURES
OF PRIME BANK LIMITED
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3.1 Foreign Exchange Trend at Prime Bank Ltd.

The export and import business is now are executed through the intervention of commercial
banks. Banks make the way through which the exporter can get payment from importer. Foreign
exchange is the department of commercial banks which facilitates importers and exporters in
their trades. It is very significant department in the financial sector of the country especially in
the developing countries. Bangladesh bank has some regulations regarding the foreign exchange
to maintain for the authorized dealer. Authorized dealer is the dealer of the foreign currency who
is authorized by the Bangladesh Bank to exchange foreign currency. Prime Bank Ltd has 37
branches which are authorized by the Bangladesh Bank to exchange foreign currency.
The Basic functions of foreign exchange department are:
Facilitating Import Trade
Facilitating Export Trade
Provided funded and non funded credit facility
Providing non commercial remittances
Maintaining foreign currency accounts
Selling of foreign currency.
The above functions are done by three sections:
Import Section
Export Section
The Foreign Remittance Section
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Now the division of foreign exchange department is stated below in a pictorial format:
Foreign Exchange
Import Section
Export Section
Local Export
Foreign Export
Direct Export
Foreign Remittance
Section
Export through
Back to Back
Figure-5: Foreign Exchange Department of Prime Bank Ltd.
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The study is based on the current Foreign Exchange Trend for Prime Bank Ltd. It deals with
Export, Import and Remittance services that the bank provides, giving us the current trend of
business in each of this area's. In addition in-depth analysis of statistical data covering the types
of commodities, amount of foreign currency that is being traded has also been covered in this
report. But first let us take a look at the role of foreign trade in Bangladesh.
Foreign Trade plays an important role in the economic advancement of every nation. So the
government of almost all developing countries including Bangladesh focuses on the import and
export relations of foreign countries. In our country, the foreign trade is controlled by
Bangladesh Bank under the Import and Export Control Act, 1950. Here any importer and
exporter who are not registered with CCI &E are not allowed to import the goods in the country
or export goods to other countries. While the foreign Exchange Business was becoming more
complex and hounded by more rules and regulations, the L/C is one type of undertaking that
could reduce the risk and legalize the contract between buyer and seller. And through the L/C,
the contract between the importer and exporter is given a legal shape by the Authorized Dealerthe bank .As the banks are included in the process, the contract becomes more reliable for both
the importer and exporter to both the parties. While through the L/C a reputed bank guarantees
the payments for imported goods on the behalf of the importer, the exporter gets the security for
payment .Therefore; the Letter of Credit constitutes one of the most important methods of
foreign trade. All documentary credit covering imports into Bangladesh are subjected to the
provisions of UCPDC500 (Union Customs and practices for documentary credit 1993 revision
ICC Publication 500).
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3.2 Operational Processes in Prime Banks Foreign Exchange Department

The International Division placed at the Prime Bank's head office at Motijheel is the backbone of
all international transaction that is conducted through the various branches of the bank. A total of
42 branches of Prime Bank have the license to carry " out international trade functions. Each of
these AD branches have foreign exchange department whose sole purpose is to carry out cross
border transaction demanded by the customers.
The functions of such Foreign Exchange Department can be divided into three sections:
(a) Import Section
(b) Export Section, and
(c) The Foreign Remittance Section
The following is a brief description of each of these sections.
Import Section
This section deals with the import of foreign commodities into Bangladesh. It starts with
the opening of an L/C till the payments arc made to the foreign exporters. The import
section is in turn is divided into two divisions. One division looks after Sight L/C and
another one looks after Back to Back L/C. The Basic difference between these two types
of L/C is that, sight L/C requires at sight payment for the imported items, the buyer
should pay within three days of documents arrival. And on the other hand, (the issuance
period for Back to Back credit can range from two months to even a year depending on
the L/C terms.
Export Section
All Export departments of Prime Bank's branches are equipped with facilities that would
help an exporter ship their good beyond the nation's boundary, thus earning foreign
currency for the country. And majority of such customers for Prime Bank Ltd are
involved in the Ready Made Garment sector with only a few exporting other different
commodities.
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Foreign Remittance Section

Foreign remittance can be stated as the purchase and sale of freely convertible foreign
currency as admissible under Exchange Control Regulations of the country. Inward
remittance is the purchase and outward remittance is the sale of foreign currency. Later
this section will be discussed.
3.3 Concept of Letter Of Credit

A letter of credit is an instrument issued by a bank to a customer placing at the letters disposal
such agreed sums in foreign currency as stipulated. An importer is a country requests his bank to
open a credit in foreign currency in favor of his exporter at a bank in the letters country. The
letter of credit is issued against payment of amount by the importer or against satisfactory
security.
The L/C authorizes the exporter to draw a draft under is terms and sell to a specified bank in his
country. He has to hand over to the bank, will the Bill of exchange, shipping documents and such
other papers as may be agreed upon between the exporter and the importer. The exporter is
assured of his payment because of the credit while the importer is protected because documents
in respect of export of goods have to be delivered by the exporter to the paying bank before the
payment is made.
In the Import Policy Order 2003-2006 Letter of Credit denoted as - '"Letter of Credit" means a
letter of credit opened for the purpose of import under this Order' The
"Documentary Credit^)" and
"Standby
Letter(s)
means
expression
any arrangements, however
named or described, whereby a bank ("the issuing bank") acting at (he request and on me
instruction of ;i customer (the "Applicant") or on its own behalf.
Is to make a payment to or the order of a third party ("the Beneficiary"), or is to accept
and pay bills of exchange (Draft's) drawn by the Beneficiary, Or
authorizes another bank to effect such payment, or to accept and pay such bills of
exchange Draft(s),Or
authorizes another bank to negotiate,
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Against stipulated document(s), provided that the terms and conditions of the Credit arc
complied with.
The uniform customs and practices for documentary Credit (UCPDC) published by
International! Chamber of Commerce (2007) revision, publication no, 600 define
Documentary Credit:
Any arrangement however named or described whereby a bank (the issuing bank) acting
at the request and on the instructions of a customs (the Applicant) or on it's own behalf,
Is to make a payment to or to the order of a third party (the beneficiary) or is to accept
and pay bills of exchange (Drafts) drawn by the beneficiary or
Authorize another bank to effect such payment or to accept and pay such bills of
exchange (Drafts)
Authorize another bank to negotiate against stipulated documents provide that terms and
conditions are complied with.
3.4 Types of Letter Of Credit

There are many types of Letter of Credits that are used in different countries of the world. But
International Chamber of Commerce (ICC) vides their UCPDC- 600, which denotes only two
types of LETTER OF Credits; mentioned:
Revocable Letter of Credit
A revocable credit may be amended or cancelled by the issuing bank at any moment and without
prior notice to the beneficiary. This type of letter of credit can be revoked or cancelled at any
time without consent of, or notice to the beneficiary. The buyer maximum flexibility, as it can he
amended or cancelled without prior notice to the seller up lo the moment of payment but the
issuing bank at which the issuing bank has made the credit available. In the modern banking the
use of revocable credit is not widespread.
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Irrevocable Letter of Credit

An irrevocable credit is a documentary credit, which cannot he revoked, varied or
changed/amended or cancelled without the consent of all parties- buyer (Applicant), seller
(Beneficiary), Issuing Bank, and Confirming Bank (in case of confirmed Letter of Credit).
Irrevocable Credit gives the seller greater assurance of payments, but he/she remains dependent
on an undertaking of a foreign bank. In the issuance of Irrevocable Letter of Credit both the
Issuing and Conforming Bank have some liability.
3.5 Some Special Letter of Credit

Revolving Letter Of Credit
Revolving L/C can be used when goods are to be delivered in installment at specified intervals.
The amount available at any one time is equivalent to the value of one partial delivery. A
revolving credit can be cumulative or non-cumulative means that amount from unused or
incompletely used portions can be carried forward to subsequent period.
Standby Letter of Credit
Standby credit is encountered principally in the US. Under the laws of most US states, banks are
prohibited from issuing regular quarantines, so credits are used instead. In Europe, too the use of
this type of credit is increasing by virtue of their documentary credit, stand-by credit are
governed by the UCP. However, their function is that of a grantee.
Back to Back Letter of credit:
The Back to Back letter of Credit is a wing of Export department at the advising bank on behalf
of beneficiary. If the beneficiary exports readymade garments products then he may have to open
this letter of credit for import of raw materials. It is a sort of Pre-shipment finance before export
of products.
Transferable Letter of Credit:
Transferable credit is particularly well adapted to the requirements of international trade. A
trader who receives payment from a buyer in the form of a transferable documentary credit can
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use that credit to pay his own supplier. This enables him to carry out the transaction with only a
limited and lay of his own funds. The costs of the transfer are usually charged to the trader and
the transferring bank is entitled to delete them in advance.
Red Clause
In the case of a red clauses credit, the seller can obtain an advance for an agreed amount from the
correspondent bank, goods that are going to be delivered under the documentary credit. On
receiving the advances, the beneficiary must give a receipt and provide a written undertaking to
present the required documents before the credit expires. The advance is paid by the
correspondent bank, but it is the issuing bank that assumes liability. If the sellers does not present
the required documents in time and fails to refund the advance, the correspondent bank debits the
issuing bank with the amount of the advance plus interest. The issuing bank, in turn, has reveres
to the applicant, who therefore bears the risk for the advance and the interest accrued.
Green Clause
The clause which is printed /typed in green is an extension of Red Red Clause. This clause
authorizes the negotiating bank to grant advance to the beneficiary for storage facilities at the
port in addition to the earlier stated reshipment advances.
The following types of Letter of Credits arc used in the Prime Bank.
Cash or Sight Letter of Credit:
The most commonly used credits are Cash Letter of Credit or sight payment credits. These
provide for payment to be made to the beneficiary immodestly after presentation of the stipulated
documents on the condition that the terms of the credit have been complied with. The banks are
allowed reasonable time to examine the documents.
Deferred Letter of Credit:
A deferred letter of credit is a credit in which the seller will be paid on a fixed or determinable
future time. The buyer is obligated to pay the face amount at maturity.
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The only difference between cash Letter of Credit and deferred letter of Credit lied in the terms
of payment. Payment under deferred Letter of Credit is made after certain days of presentation of
the export bill.
Deferred Letter of Credit may be opened for the following cases:
Items
Period
Industrial Raw Materials (For own use)
Maximum 180 Days
Back to Back Imports
Maximum 180 Days
Agricultural Implements & Chemical Fertilizer
Maximum 180 Days
Capital Machinery
Maximum 360 Days
Coastal Vessel
Maximum 360 Days
Life Saving Drugs
Maximum 360 Days.
Acceptance Payment at Maturity:

With an acceptance credit payment is made in the form of a tern bill of exchange drawn on the
buyer, the issuing Banker the pendent bank. Once he has fulfilled the credit requirements, the
beneficiary can demand that the bill of exchange be accepted and returned to him. Thus the
accepted bill takes the place of a cash payment. Bill of exchange drawn under acceptances credit
usually has a term of 60-180 days.
The purpose of an acceptance is to give the importer time to make payment. It he sells the goods
before payments fall due, he can use the proceeds to meet the bill of Exchange in this way, he
does not have to borrow money to finance the transaction.
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3.6 Parties Involved in Letter of Credit

MAIN PARTIES
I. The issuing Bank:
Issuing Bank is the bank which opens / issues a L/C on behalf of the importer. It is also called
importers/ buyers bank.
II. The Confirming Bank:
Confirming is a bank which adds its confirmation to the credit and it is done at the request of
issuing bank. The confirming bank may or may not be the advising bank.
III. The Beneficiary
The exporter in whose favor the credit is opened and to whom the letter of credit is addressed is
known as the beneficiary. As the seller of goods he is entitled to receive payment which he does
by drawing bills under the letter of credit (L/C). As soon as he has shipped the goods and has
collected the required documents, he draws a set of papers and presents it with the documents to
the opening bank or some other bank mentioned in the L/C.
OTHER PARTIES
I.
The Applicant:
The importer at whose request a letter of credit is issued is known as the applicant or buyer. On
the strength of the contract he makes with the exporter for the purchase of some goods that the
letter of credit is opened by the opening bank.
II. The Advising Bank:
Advising Bank is the bank through which L/C is advised to the exporter. It is a bank situated in
the exporters country and it may be a branch of the opening bank or a correspondent bank. It
may also assume the role of confirming bank and /or negotiating bank depending upon the
conditions of the credit.
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III. The Negotiating/Paying Accepting Bank:

The bank which negotiates the bill and pays the amount to the beneficiary is referred to the
Negotiating Bank. It has to carefully scrutinize the documentary credit before negotiation in
order to see whether the documents apparently and in order to see whether the documents
apparently and in order. The advising bank and negotiating bank may or may not be one and
same. Sometimes it can be the confirming bank.
IV. Reimbursing Bank:
The Reimbursing or paying bank only pays the drafts drawn under the credit but undertakes no
opening bank, by debating the latters accounts with it if there is such an account or by any other
measured up, between the two bankers. As soon as the beneficiary has received payment for the
draft, he is out of the picture and the rest of the operation concerns only the paying bank and the
opening bank.
3.7 Import Procedure through Letter of Credit Operation of Prime Bank Ltd.
Import is the process of purchasing goods and services from foreign countries into Bangladesh. It
is the flow of goods and services purchased by economic agents staying in the country from
economic agents staying abroad. Individuals, firms and Government of Bangladesh import
foreign goods to meet their various necessities.
In ease of international trade, buyers and sellers are mostly unknown to each other. Therefore,
seller always seeks guarantee for that is payment of his goods exported and bank plays the role
exactly at this phase. Bank gives export guarantee that it will pay for the goods on behalf of the
buyer. This guarantee is called Letter of Credit. Thus, the contract between importer and exporter
is given a legal shape by the banker through 'Letter of Credit'. When a buyer goes to import some
goods from a foreign buyer, he requests his bank to make payments to the exporter of goods, and
the bank recovers the amount from the importer. The import procedure under L/C is discussed
below:
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3.7.1 Legislation of Import Policy

Imports
are
foreign
goods
and
services
purchased
by
consumers,
firms
&
Governments in Bangladesh. According to Import and Export Control Act, 1950, the Office of
Chief Controller of Import and Export (CCl & E) provides the registration (IRC) to the importer.
Import of goods in Bangladesh is regulated by the
Ministry of Commerce in terms of the Import and Export Control Act 1950;
Import Policy Order and the Public Notice issued by the Office of the Chief Controller of
Imports and Exports (CCI&E);
At present it is regulated by the Import Policy Order (2003-2006), which was come into
effect on March 14, 2003. And Import Policy directs certain Import Procedure, which
administers the whole activity.
Import section of Foreign Exchange Department facilitates import related banking services
concerned to import of goods in cash foreign exchange. The main facilities provided by the
import section are;
Opening of Letter of Credit;
Facilitating Payments to the Exporter on behalf of the Importer
Providing Funded and Non-funded Credit Facility;
Issuing Bank Guarantee in foreign currency on behalf of Foreign Companies.
Receive and Scrutinize of Export Documents sent from beneficiarys country.
3.7.2 General Conditions of Import of Goods

Import Trade Control Schedule Number
For import purpose, use of ITC Number (H.S. Code) with at least six digits corresponding to the
classification of goods as given in the Import Trade Control Schedule I98.S, based on the
Harmony Commodity Description and Coding System, shall be mandatory. But in cases where a
particular aim has been classified under a H. S. Code Number (having more than six digits). The
seven Digit H.S, Code published by Bangladesh Bureau of Statistics may also be mentioned in
the Letter of Credit Authorization Form, Letter of Credit and other relevant paper within a
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bracket in addition to normal H. S. Code as mentioned above. No bank shall issue Letter of
Credit Authorization form or open Letter of Credit without properly mentioning I. T. C. number
(H. S. Code) thereon.
NOC (No Objection Certificate) On the basis of ROR (Right of Refusal)
A. No Objection Certificate on the basis of Right of Refusal (ROR) form any authority shall not
be required for import of any freely importable item by any Public Sector agency. However, in
case where a public sector agency is required to import banned/restricted items included in the
Control List, prior permission of the Ministry of Commerce .shall have to be obtained on the
basis of ROR issued the Ministry of Industries or by Sponsoring Ministry/Division, or by both as
the case may be.
B. In case of import of banned/restricted items for approval projects financed under foreign aid
the concerned Government Department/Agency will approach the Chief Controller of the Import
and Export directly for necessary permission together with a list of items duly certified under
proper seal and signature giving "description, quantity/number, price and H.S. Code Number
against each item required to be imported. The details about the aided project and specific
provision of the relevant contract and other necessary information shall also have to be furnished
along with the list of the items. The Chief Controller shall issue permission/permit on the basis
of above documents.
Restriction regarding source of procurement of goods
a. Goods from Israel or goods originating from that country shall not be importable. Goods are
not also importable in the flag vessels of that country.
b. All kinds of import from and export to Serbia and Montenegro, fragments of former Socialist
Republic of Yugoslavia, shall be banned.
Pre-shipment inspection
Unless otherwise specified, pre-shipment inspection of imported goods shall not be obligatory in
case of import by private sector importers.
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Shipment of Bangladesh Flag Vessels

Subject to waiver specified below shipment of goods shall not be made on Bangladesh
Hug vessels:
a. Imports of goods up to maximum twenty metric tons in case of single individual consignee or
up to maximum 100 (one hundred) metric tons in case of group import may be made in non
Bangladeshi flag vessels. However the Director General of Shipping may notify general waivers
in the following cases, such as (1) shipment of goods from foreign ports which are not visited by
Bangladeshi Vessels, and (2) import of goods on the basis of specific agreement which provides
C & F (Cost & Freight) contract. In all other eases a certificate of waiver shall be obtained from
the Director General of Shipping of Importation of goods in non-Bangladeshi flag vessels, [f
there appears to be possibility of any Bangladeshi Hag vessels, visiting a port with in next seven
days, waiver shall be given within twenty-four hours of application for waiver. Otherwise, it will
be considered that waiver has been given. However, the specific condition of compulsory
shipment of goods on Bangladeshi flag vessels, or the condition of obtaining certificates of
waiver from the Director-General of Shipping shall not apply in cases of import under such
foreign aids, loans or grants which contain specific provisions regarding shipment of goods.
b. In case of import and export of goods by export oriented industries shipment may be made in
non-Bangladeshi Flag vessels.
Import at competitive rate
a. Import shall be made at the most competitive rate and importers may be recruited, at any time,
to submit documents regarding the price paid or to be paid by them.
b. In case of import under United Commodity Aid in the Private sector, goods shall be imported
at the most competitive rate by obtaining quotations from a minimum of three suppliers indenters
representing at least two countries abroad. This condition shall however not apply for opening of
I .Letter of Credit up TK. One Lac. For import at most competitive rate by the Public Sectors the
condition mentioned at Para 27(8) of this order shall apply.
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Import on C & F and FOB (free on Board) basis

All imports by sea, air and land route shall be made either on C & F or FOB basis. However in
ease of import on FOB basis the concerned importer shall have to properly comply with the
circular issued by Bangladesh Bank in this regard. Before opening L.C necessary insurance
cover note shall have to be purchased from the Shadharan Bima Corporation or any other
Bangladeshi insurance company. Unless there are specified provisions in the relevant loan
agreement/projects agreement concluded with the foreign donors for import of CIF (Cost,
Insurance & Freight) basis, no import shall be allowed on C1F basis without prior approval from
the Ministry of Commerce. However, Bangladesh nations, living abroad, for sending goods
against their earned foreign exchange and foreign investors, for sending capital machines and
raw materials against their equity share portion shall be allowed on C1F basis.
Import by Mentioning "Country of Origin"
a. In all cases of import, "country if origin shall be mentioned clearly on goods,
package/container. A certificate regarding "country of origin" issued by the concerned
Government agency/approved authority/organization of the exporting country must be submitted,
along with import documents to the Customer Authority at the time of release of goods.
However, the provisions of "country of origin" shall not be applicable to coal and export oriented
garments industries. In case of this cotton import, it shall not be required to mention the country
of origin on each bale. But "country of origin" shall be mentioned in the photo sanitary
certificate. Besides, 100% export oriented industries, which arc recognized by Custom Authority,
shall be waived from the restriction of "country of origin" subject to the conditions imposed by
the Foreign Exchange Regulation Act, Bangladesh Bank and Commercial bank,
b. In case of import of Limestone, in different consignments/lot by the rope-way or by river, as
raw-materials for Chattak Cement Factory, "country of origin" certificate from the exporting
country's Government/approved authority/organization shall be submitted once to the customs
authority at the time of release of goods, instead of each consignment/Jot for the quantity
mentioned in Letter of Credit, in case of river-way and as per supplied carrying list as case of
road-way.
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3.7.3 Instructions Issued By Bangladesh Bank For Opening and

Operation of L/C For Import Of Goods
All Letter of Credits and similar undertakings covering imports into Bangladesh must be
documentary Letter of Credits and should provide for payment to be 'made against full
sets of onboard (shipped) transport documents (BL, AIB, TR etc.) showing dispatch of
goods covered by Credit to a destination in Bangladesh;
They must ensure that they deal only with known customers having a place of business in
Bangladesh and can be traced easily if any occasion arise for this purpose;
They should establish Letter of Credit against specific authorization on behalf of their
own customers who maintain accounts with them with and know to be participated in the
trade;
It is not permissible to open to clean or revolving credits;
They are allowed to open divisible, transferable Letter of Credits for import into
Bangladesh under cash LCAF (Letter of Authorization Form);
It is not permissible to open Letter of Credits in favor of beneficiaries in countries from
which import into arc banned by the component authority;
Letter of Credits to be opened only against firm contract between the Applicant and
beneficiary. Bankers should second documentary evidence, before opening Letter of
Credit, that a firm order for the goods to be imported has been placed and
Accepted;
The full description of goods to be imported along with unit price and quantity to be
given in the Letter of Credit;
Confidential report of the exporter to be obtained by the bank, where the amount of Letter
of Credit exceeds TK. 2,00,000 in case of import against pro forma invoices issued direct
by foreign supplier and TK. 5,00,000 against indent issued by local agents of the
suppliers;
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Payments against discrepant documents may be made after the goods have been cleared
from the customs on the basis of the locative LCAF;
Advanced remittance against import may be made after getting prior permission from
Bangladesh Bank where the goods arc of specialized or capital nature.
3.7.4 Documents Required For Opening of L/C

L/C application and agreement Form (Bank's prescribed application form) with adhesive
stamp of Tk. 150 (Flexible) [From June 3rd 1998]
Letter of Credit authorized Form (LCAF)
CIB.
Proforma Invoice (Approved by BRTC in case of Mobile Set)
Import Registration certificate. Tax Identification Number, VAT (IRC renew)
Membership Certificate.
Last tear income tax assessment.
Harmonized System Code (HS Code)
Charged Documents.
Under Charged Documents the following letters are required:
o Demand Promissory Note.
o Letter of Disbursement
o Letter of Agreement
o Letter of Authority.
o Letter of Undertaking
o Letter of Continuity.
o Letter of Revival
o Letter of Guarantee. (Signature without Seal)
Some Exemption:
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No IRC required for importation of capital machinery for setting up new industry. Only
BOI approval required.
Country of origin issued by government/competent body. Trade body CO is not
required in case of importation of raw materials for Coal & RMG industry
3.7.5 Margin and Other Charges

Before issuing Letter of Credit, bank asks the applicant to deposit Letter of Credit margin
according to the terms of sanction and other necessary charges which includes commission,
handling charges, foreign correspondence charge, telex/SWIFT charge etc, as per terms and
conditions of sanction.
Before issuing Letter of Credit Bank asks the applicant to deposit the following, as per the terms
of the sanction:
Letter of Credit Margin
As per Government. Circular
Commission
As per internal policy (Letter of Credit

value .005 for first quarter, Subsequent
Quarter .003
Document Handling Charge
1500
SWIFT Charge
3500
Courier Charge (except India)
1500
Courier (India)
300
VAT
15% on Commission and SWIFT charge
Margin charged against any particular Letter of Credit depends upon the Item or Goods of the
import. Margin varies between nil to 100%. Generally the higher value of margin, the higher it
means that Bangladesh Bank discourages to import that goods or items. Some goods are
imported at 100% margin, as per the circular of 14th November, 2001.
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3.7.6 Issuing the Letter of Credit

In this stage, the issuing bank fills the bank-specified-form for issuing Letter of Credit. Generally
a Letter of Credit contains the following information and terms and conditions:
Charges;
Country of origin of goods;
Currency and amount;
Date and place of the expiry of the Documentary Credits ;
Description of goods and quantity ;
Documents required for negotiation;
Instruction for negotiating bank;
Last date of shipment;
Letter of Credit Authorization Form (LCAF) number, IRC (Import Registration
Certificate) number and Harmonized System (HS) code;
Mode of Carrying -Air/Ship/Truck;
Name and address of beneficiary ;
Name and address of the advising bank;
Name and address of the applicant;
Name of the issuing Bank and Branch;
Negotiating bank preferably freely negotiable in any bank;
Number of Letter of Credit and date of opening ;
Payment Term-Sight
Period of Negotiation ;
Period of presentation ;
Port of Loading and port of Discharge;
Reimbursing Bank and payment mode;
Terms and conditions regarding Transshipment and Partial Shipment;
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Depending on the specific provision in the underlying sales-contract (mentioned below), it may
be necessary to incorporate one or more of the following additional terms in the Letter of CreditWhether the pay of the bank charges is on account of the opener or seller
Whether short form of Bill of Lading (B/L) is acceptable
Whether, in case of bulk import, charter-party Bill of Lading (B/L) is acceptable or not
Whether shipment by chartered vessel is allowed, the following causes must be stipulated
in the Letter of Credit.
Shipping documents must include copies of Charter-party agreements.

Bill of Lading must be signed by named carrier or his authorized agent.
3.7.7 Different Means of Payment

Importer settles the means of payment with the seller after making the purchase contract. Import
procedure differs with relation to different means of payment. In our country in most cases, the
Documentary/Letter of Credit makes import payment. Purchase Contract contains which
payment procedure has to be applied.
a) Cash in Advance: Importer pays lull, partial or progressive payment by a foreign DD, MT or
TT. After receiving payment, exporter will send the goods and the transport receipt to the
importer. Importer will take delivery of the goods from the transport company.
b) Open Account: Exporter ships the goods and sends transport receipt to the importer. Importer
will take delivery of the goods and makes payment by foreign DD, MT, or IT at some specified
date.
c) Collection Method: Collection methods are either clean collection or documentary collection.
Again, Documentary Collection may be Document against Payment (D/P) or Document against
Acceptance (D/A). The collection procedure is that the exporter ships the goods and draws a
draft/ bill on the buyer. The exporter submits the draft/bill (only or with documents) to the
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ID NO# 136-41-52
remitting bank for collection and the bank acknowledges this. Then the remitting bank sends the
draft/bill (with or without documents) and a collection instruction letter to the collecting bank.
Acting as an agent of the remitting bank, the collecting bank notifies the importer upon receipt of
the draft. The title of goods is released to the importer upon full payment or acceptance of the
draft/bill.
d) Letter of Credit: Letter of credit is the well-accepted and most commonly used means of
payment. It is an undertaking for payment by the issuing bank to the beneficiary, upon
submission of some stipulated documents and fulfilling the terms and conditions mentioned in
the letter of credit.
3.7.8 Transmission of Letter of Credit Payment

The Letter of Credit duly signed by the authorized persons of the bank is then sent to the
advising bank. There are three modes of sending the Letter of Credits which are as follows:
A. By Mail/Courier
Letter of credit can be sent to the advising bank by mail /courier.
B. By TELEX:
It was practiced earlier in the other branches, but from the very beginning of the it did not
transmit Letter of Credit though Telex.
C. By SWIFT:
SWIFT Stands for Society of World Wide Interbank Financial Telecommunication. This is
special format maintained round the world. Through this facility party can communicate within
few minutes with other party staying any part of the world. Prime Bank Limited, provides this
facility to the clients. The advising bank verifies the authenticity of the Letter of Credit.
Prime Bank has corresponding relationship or arrangement throughout the world by which the
Letter of Credit is advised. Actually the advising bank does not take any liability if otherwise not
requested.
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3.7.9 Receipt of Documents

After opening the Letter of Credit the next step would be to await shipment followed by
negotiation of documents by a bank abroad. The beneficiary of the Letter of Credit (supplier),
after effecting shipment of the goods as per Letter of Credit terms, prepare or collect necessary
documents as required under the terms of Letter of Credit and presents the drafts to the
negotiating bank along with the supporting documents for negotiation.
The negotiating bank negotiates the draft if the documents are found in order as per terms of the
Letter of Credit, pays the beneficiary. The negotiating bank will reimburse itself either by
debiting Prime Bank's Account, if any, maintained with them (the NOSTRO Account) or will
seek reimbursing bank mentioned in Letter of Credit, if there is no account. Simultaneously, the
bank will send the documents to Prime Bank. The nature of documents has to be sent by the
negotiating bank will depend primarily on the terms of the Letter of Credit and secondly the sales
contact between the buyer and seller. However, generally the following documents are asked to
send: Bill of Lading or Airway Bill or other evidence of shipment (e.g. Railway Receipt, Truck
Receipt, and Barge Receipt)
Certificate of Origin;
Commercial Invoice;
Draft or Bill of Exchange;
Inspection of Survey Certificate;
Marine Insurance Policy;
Packing List;
Quality Control Certificate.
3.7.10 Scrutiny of Documents

On receipt of the documents, the branch shall immediately set itself to the task of .scrutinizing
the documents, What they would ensure is that the documents received from the negotiating
bank are drawn strictly in conformity with the terms of the Letter of Credit and respond to the
requirement of the underlying Letter of Credit in every respect, examination of the documents
generally includes the following points:
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ID NO# 136-41-52
Completeness of the documents;

Consistency of the documents with each other;
Compliance with the Uniform Customs and Practices for Documentary Credits (UCPDC)
issued by the International Chamber of Commerce, Paris.
One of the basic principles of documentary credit is that all parties deal with document and not
with goods (Articles 6 of UCPDC-600). That is why the documents should be scrutinized
properly. If any discrepancy in the documents is found, that is to be informed to the party. A
checklist may be followed for examining the documents.
In the UCPDC the Standard for Examining of Documents is mentioned as follows:
a) Banks must examine all documents stipulated in the Credit with reasonable care, to ascertain
whether or not they appear, on their face, to be in compliance with the terms and conditions of
the Credit. Compliance of the stipulated documents on their face with the same terms and
conditions on the Credit shall be determined by international PRIME banking practice as
reflected in these Articles. Documents which appear in their face to be inconsistent with one
another will be considered as not appearing on their face to be in compliance with (he terms and
conditions of the credit. Documents not stipulated in the credit will not be examined by banks. If
they receive such documents, they shall return them to the presenter.
b) The Issuing Bank, the Confirming Bank, if any or a Nominated bank acting on their behalf,
shall each have a responsible time, not to exceed five banking days following the day of receipt
of the documents, to examine the documents and determine whether to take up documents and
inform the party from which it received the documents accordingly.
c) If a credit contains conditions without stating the document(s) to be presented in compliance
there with, bank will deem such conditions as not stated and will disregard them.
3.7.11 Lodgment
After the scrutiny the following steps are taken step-by-step to process for lodgment of import
documents received from the negotiation bank. Lodgment means retirement of funds. Usually
payment is made within five days after the documents have been received. If the payment is
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ID NO# 136-41-52
become deferred, the negotiating bank may claim interest (LIBOR) for making delay. However,
after receiving the documents authority contacts with an importer, in which procedure they want
to collect the documents. If requested PAD is facilitated for twenty one days only.
Lodgment Constitutes the Followings: Conversion of foreign currency amount of the bill and
the foreign bank charges separately into Taka by applying Bills Collection (B.C.) selling rate
ruling on the date of lodgment is done. If forward exchange was, the booked rate is applied.T24
Payment against Documents (PAD) is created by Debiting PAD Account and Crediting I lead
Office Account Full particulars of the documents are entered in the prescribed PAD Register
allotting a consecutive serial number in the register. If the forward exchange rate is booked then
the booked rate is applied. Payment against Documents (PAD) is created by Debiting PAD
Account and Crediting Head Office Account. Full particulars of the documents are entered in
the prescribed PAD Register allotting a consecutive serial number in the register.
Documents are endorsed by putting seal and signature.
ETCA "Exchange Transaction Credit Advice" is sent to the Head Office along with a
prescribed statement to provide them credit for the payment from their overseas account
through Prime Bank Limited General Account.
Head Office (International Division) in receipt of the IIJCA and the statement will
respond the entry by debit to branch account (through
Prime Bank Limited General
Account) and contra credit to NOSTRO Account of the negotiating bank abroad.
To arrange necessary fund for payment, a requisition is sent to the International
Department.
As the T.T & O.D rate is paid to the ID, the difference between these two rates remains
as exchange gain for the Branch.
As soon as above formalities are completed the importers are served with PAD bill
intimations for retirement of concerned import document. A letter of intimation
(P.A.D. intimation) regarding receipt of the documents should be sent to the applicant
with a request to lake delivery of the documents on settlement of all dues against it and
mentioning the maturity date of P.A.D.
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3.7.12 Retirement of the Documents

On receipt of cost memo/lodgment voucher the importer pays the necessary amount. This stage
of the documentary credit operation is known as Retirement of Import Bills. The branch will
prepare the retirement voucher to reflect the amount of cost and other charges to be collected
from the importer, adjustments of margin and PAD Account. Thereafter the documents may be
handed over to the importer against proper acknowledgement after certification and
endorsement. The certifications by authorized personnel of the bank are as follows:
The invoice is certified by the authorized officer of the bank with the exchange rate as
applied in lodgment;
The Bill of Exchange received from negotiating bank on issuing bank by the beneficiary;
The Transport Documents evidencing the carrying of goods as per Letter of Credit term
has to the endorsed by the AD branch.
On receipt of intimation, the importer is given necessary instructions with regard to retirement of
the bill, disposal of the shipping documents and clearance of the goods from the
Customs -authorities. The importer may ask the bank to retire the bill by debiting his account or
may request for the providing LIM or LTR facility, if arranged earlier.
On intimation the importer approaches with a letter for retirement of the document against full
payment with up to dale interest and charges payable. Hank prepares cost memo in printed form
on account of the concerned party giving details head of charges payable.
As the vouchers are passed and necessary entries are given in PAD Ledger endorsements arc
made fewer than two authorized signature of the Banks officers (P.A. Holder). Then the
documents are delivered to the importer.
3.7.13 Delivery of Shipping Documents

If the bill is to be realized by debit to (he importer's account, the documents are handed over lo
the importer to his duly authorized clearing und forwarding agent for clearance of the goods
form customs at his own account.
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3.7.14 Payment to the Foreign Bank Import of Goods

Negotiating Bank is authorized to Debit Head Office Account (PBL) directly, if the account is
maintained with them. Negotiating Bank is authorized to obtain reimbursement claim form
foreign correspondent with which account is maintained by Head Office (PBL)
Where reimbursement is provided subsequent to the receipt of documents, an authority Letter is
to send to correspondent abroad with whom account is maintained by Head Office to make
payment to the Negotiating Bank to debit of PBL account maintained with them for the amount
of the documents.
Import portfolio consists of the goods or items are being imported through the bank, total letter
of credit opened by the bank, volume of goods etc.
In Our Country fast moving consumer goods to Capital machinery are imported. There are
basically two types of importer. They are as follows:
Industrial Importer: Industrial importer basically imports raw materials for further
processing. They sell the finished goods to the abroad or in Bangladesh. Other than
raw materials they imports Capital Machinery for different industrial purpose.
Commercial Importer: Commercial importers import finished goods. They import

those goods directly for selling into the market. But they are very limited in number.
Through this branch the majority of the goods imported are raw materials by the
industrial users.
Now we can see from the following table that how many commodities are imported by
this bank
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Name of the Commodities

Industrial Import
Commercial Import
Mobile Phone
Industrial Raw Materials
Yarn
Dyes
Aluminum Ingot
Chemicals
Pharmaceutical Raw Materials

Pharmaceuticals Packing materials
Diesel generator
Laboratory Reagents
Spare Parts Gas Pressure Regulator
Air Cooler
Toiletries
Capital Machinery
Passenger Elevator
Lighting Fixture
Food Products
Reconditioned Vehicle.
Printing Ink.
As the most numbers of Importers are Industrial Importers. The percentage of imported raw
materials is the maximum volume of imports all over the year. We can easily trace the
percentage of total L/C opened at this branch at 2006& 2007 through the following two Pie
Charts, where Industrial Raw Materials secured almost half of the L/C, and the remaining
secured different percentages according to the demands of those years. In the branch I have also
observed the frequency of imported goods. The Industrial Raw Materials Always stayed at the
top position. But the most interested thing is that the next frequent item of imported good is
Mobile Phone. The importation of mobile phones through this branch is done only by one
company which is Electra Telecom BD Ltd. Electra is the authorized dealer of Samsung Mobile
Phone. The frequency of imported capital machinery is very low, but the value of import of
capital machinery through each L/C is very high compared to all other imported goods.
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3.8 Export Procedure through Letter of Credit Operation of Prime Bank Ltd.
Creation of wealth in any country depends on the expansion of production and increasing
participation in international trade.
By increasing production in the export sector we can
improve the employment level of such a highly populated country like Bangladesh. Bangladesh
exports a large quantity of goods and services to foreign households.
Readymade textile
garments (both knitted and woven), Jute, Jute-made products, frozen shrimps, tea are the main
goods that Bangladeshi exporters export to foreign countries. Garments sector is the largest
sector that exports the lion share of the country's export. Bangladesh exports most of its
readymade garments products to U.S.A and European Community (EC) countries. Bangladesh
exports about 40% of its readymade garments products to U.S.A. Most of the exporters who
export through PBL are readymade garments exporters, They open export L/Cs here to export
their goods, which they open against the import L/C opened by their foreign importers.Export
L/C operation is just reverse of the import L/C operation. For exporting goods by the local
exporter, bank may act as advising banks and collecting bank (negotiable bank) for the exporter.
Prime Bank Ltd as an authorized dealer (AD) deals a lot of letter of credit on behalf of
beneficiary. Here Prime Bank Ltd acts as an advising or negotiating bank which advice the L/Cs.
Now the whole process of export in pictorial format is given below
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ID NO# 136-41-52
Registration with CCI&E

Receiving L/C from buyers Bank through an advising Bank in Bangladesh
Pre-shipment finance (Back to Back L/C, PC)
Certification of EXP form by Authorized Dealer
Shipment of goods by Exporter and submission of export docs to negotiating Bank
Scrutinizing Export Document by negotiating Bank
Are the document in order?
Ask the customer to remove discrepancies
No
Y
e
s
Are the discrepancies removed?
Negotiate documents
No
Inform opening Bank

of the discrepancies
Do they allow Negotiation?
Yes
N
o
Dispatch the docs and claim Reimbursement
Send the docs for collection

Check whether the Nostrum A/C is
credited or not
Y
e
N
o
s
Lodgment of FDBP
Send Reminder to L/C issuing Bank
Figure-6: Export procedure in pictorial format
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ID NO# 136-41-52
3.8.1 Documents Required For Export Transaction

There are two types of document for export transaction. They are Substantive Document and
auxiliary document. The name of the documents under these two categories is given below:
Substantive Document:
o Draft or bill of exchange.
o Commercial Invoice.
o Bill of Lading or Airway Bill.
o Marine Insurance Policy.
Auxiliary Document:
o Packing List.
o Consular Invoice.
o Certificate of Origin
o Quality Control Certificate.
o GSP Certificate.
o Inspection Certificate.
Other documents and formalities:
For Export of jute, jute goods, tea and tobacco, an exporter, in addition to Export
Registration Certificate, needs a separate license to be issued by the concerned agencies.
Sanitary certificate is required for all livestock and plants and plant products (except fruit
and vegetable) certifying that they are free of injurious insects, pests and diseases.
3.8.2 Registration of Exporters

Under the export policy of Bangladesh the exporter has to get valid Export registration
Certificate (ERC) from Chief Controller of Import & Export (CCI&E). The ERC is required to
renew every year. The ERC number is to incorporate on EXP forms and other papers connected
For obtaining ERC, intending Bangladeshi exporters are required to apply to the controller/ Joint
Controller/ Deputy Controller/ Assistant Controller of Imports and Exports, Dhaka/ Chittagong/
Raishahi/ Mymensingh/ Sylhet/ Comilla/ Badshal/ Bogra/ Rangpur/ Dinajpur in the prescribed
form along with the following documents:
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a. Nationality and Assets Certificateb. Memorandum and Article of Association and Certificate of Incorporation in case of
Limited Company-,
c. Bank Certificate
d. Income Tax Certificate
e. Trade License etc. with exports.
3.8.3 Securing the Export Order

After getting ERC Certificate the exporter may proceed to secure the export order. He can do
this by contacting the buyers directly or through agent. In this purpose the exporter may get help
from:
a. License Officer
b. Buyers Local Agent
c. Export Promoting Organization
d. Bangladesh Mission Abroad
e. Chamber of Commerce (local & foreign)
f. Trade Fair etc.
3.8.4 Signing the Contract & Receiving Letter of Credit

After communicating buyer, exporter has to get contracted (writing or oral) for exporting
exportable items from Bangladesh detailing commodity, quantity, price, shipment, insurance and
marks, inspection and arbitration etc. After getting contract for sale, exporter should ask the
buyer for Letter of Credit (L/C) clearly stating terms and conditions of export and payment.
The following are the main points to be looked into for receiving/ collecting export proceeds by
means of Documentary Credit-.
The terms of the L/C are in conformity with those of the contract"
The L/C is an irrevocable one, preferably confirmed by the advising bank;
The L/C allows sufficient time for shipment and negotiation.
(Here the regulatory framework is UCPDC-500, ICC publication)
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ID NO# 136-41-52
Terms and conditions should be stated in the contract clearly in case of other mode of payment:
(a) Cash in advance-,
(b) Open account,
(c) Collection basis (Documentary/ Clean)
(Here the regulatory framework is URC-525, ICC publication)
3.8.5 Export Financing

Financing exports constitutes an important part of a bank's activities. Exporters require financial
services at four different stages of their export operation. During each of these phases exporters
need different types of financial assistance depending on the nature of the export contract.
1. Pre-shipment credit
2. Post-shipment credit
1. Pre-shipment credit:
Pre-shipment credit, as the name suggests, is given to finance the activities of an exporter prior to
the actual shipment of the goods for export. The purpose of such credit is to meet working
capital needs starting from the point of purchasing of raw materials to final shipment of goods
for export to foreign country. Before allowing such credit to the exporters the bank takes into
consideration about the credit worthiness, export performance of the exporters, together with all
other necessary information required for sanctioning the credit in accordance with the existing
rules and regulations. Pre-shipment credit is given for the following purposesa. Cash for local procurement and meeting related expenses.
b. Procuring and processing of goods for export.
c. Packing and transporting of goods for export.
d. Payment of insurance premium.
e. Inspection fees.
f.
Freight charges etc.
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ID NO# 136-41-52
An exporter can obtain credit facilities against lien on the irrevocable, confirmed and unrestricted
export letter of credit in form of the followings-.
a. Export cash credit (Hypothecation)
b. Export cash credit (Pledge)
c. Export cash credit against trust receipt.
d. Packing credit.
e. Back to back letter of credit.
f. Credit against Red-clause letter of credit.
3.8.6 Popular Form of Pre Shipment Credit

3.8.6.1 Packing Credit:
Packing Credit is essentially a short-term advance granted by a Bank to an exporter for assisting
him to buy, process, manufacture, packs and ships the goods. Generally for movement of goods
from the hinterland areas to the pots of shipment the Banks provide interim facilities by way of
packing credit.
This type of credit is sanctioned for the transitional period starting from dispatch of goods till the
negotiation of the export documents. Practically except for single transaction, most of the preshipment credits are allowed in the form of limits duly sanctioned by Bank in favor of regular
exporters for a particular period. The drawings are required to be adjusted fully once within a
period of 3 to 6 months. Suiting to the breed and nature of export, sometimes an exporter may
also be allowed to avail a combined Cash Credit and Packing Credit limit with fixed ceiling on
revolving basis. But in no case the borrower would be allowed to exceed individual credit limit
fixed for the purpose. The drawings under Export Cash Credit limits are generally adjusted by
the drawing in packing credit limit, which is, in turn liquidated by the negotiation of export
documents.
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ID NO# 136-41-52
3.8.6.2 Charge Documents for P.C:

Banker should obtain the following charge documents duly stamped prior to disbursement:
Demand Promissory Note
Letter of Arrangement
Letter of Lien of Packing Credit (On special adhesive stamp)
Letter of Disbursement
Packing Credit Letter
3.8.6.3 Additional Documents for P.C.

Letter of Partnership along with Registered Partnership Deed in case of Partnership
Accounts.
Resolution of the Board of Directors along with Memorandum & Articles of association in
case of Accounts of Limited Companies. In case of Corporation, Resolution of the Board
Meeting along with Charter.
Personal Guarantee of all the Partners in case of Partnership Accounts and all the Directors
in case of Limited Companies.
An undertaking from the Directors of the Public Limited Company to obtain prior clearance
from the Bank before declaring any intend/final dividend.
3.8.6.4 Back to Back Letter of Credit (BTBL/C)

Bangladesh is a developing country. After receiving order from the importer, very frequently
exporters face problems of scarcity of raw material. Because, some raw materials are not
available in the country. These have to be collected from abroad. In that case, exporter gives lien
of export L/C to bank as security and opens an L/C against it for importing raw materials. This
L/C is called Back To Back L/C. In back to back L/C, PBL keeps no margin.
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ID NO# 136-41-52
Sometimes there is provision in the export L/C that the importer can use the certain portion of
the export L/C amount for importing accessories that are necessary for the making of the
product. Only in that case, BTB is opened.
Payment of Back to Back LC:
Client gives the payment of the BTB L/C after receiving the payment from the importers. But in
some cases, client sells the bills to the PBL. But if there is discrepancy, the PBL sends it for
collection.
In case of BTB L/C, PBL gives the payment to the beneficiary after receiving the payment from
the finished product (i.e. exporter). Bank gives the payment from DFC Account (Deposit
Foreign Currency Account) where Dollar is deposited in national rate.
For BTB L/C, opener has to pay interest at LIBOR rate (London Inter Bank Offering Rate).
Generally LIBOR rate fluctuates from 5% to 7%.
A schedule named Payment Order; Forwarding Schedule is prepared while making the payment.
This schedule contains the followings:
Reference number of the beneficiary's bank and date.
Beneficiary's name.
Bill value.
Payment order number and date.
Equivalent amount in Taka.
3.8.6.5 Entitlement of BTB LC as per Import Policy Order 2010 2013
BTB LC entitlement of garments items are assessed on the basis of value addition to be made
depending on the category of garments in line with the import policy in order, which are as
under:
Knit Garments
: Value addition at least 20%
Woven Garments ( Non Quota)
: Value addition at least 20%
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ID NO# 136-41-52
Woven Garments (Quota)
: Value addition at least 20% for FOB value of
exportable goods up to US$.40/Dz
High value Garments ( Non Quota) : Value addition at least 10% for FOB value of
exportable goods at least US$.60/Dz
High value Garments (Quota)
: Value addition at least 15% for FOB value of
exportable goods at least US$.60/Dz

2. Post Shipment Credit:
This type of credit refers to the credit facilities extended to the exporters by the banks after
shipment of the goods against export documents. Necessity for such credit arises as the exporter
cannot afford to wait for a long time for without paying manufacturers/suppliers.
Before
extending such credit, it is necessary on the part of banks to look into carefully the financial
soundness of exporters and buyers as well as other relevant documents connected with the export
in accordance with the rules and regulations in force. Banks in our country extend post shipment
credit to the exporters through-.
Negotiation of documents under L/C
Foreign Documentary Bill Purchase (FDBP)-.
Advances against Export Bills surrendered for collection;
Negotiation of documents under L/C:
The exporter presents the relative documents to the negotiating bank after the shipment of the
goods; a slight deviation of the documents from those specified in the L/C may raise an excuse to
the issuing bank to refuse the reimbursement of the payment already made by the negotiating
bank. So the negotiating bank must be careful prompt, systematic and indifferent while
scrutinizing the documents relating to the export.
Foreign Documentary Bill Purchase (FDBP):
Some clients of the bank always enjoy credit facilities against their export documents. They
submit the bill of export to bank for collection and payment of the BTB UC. In that case, bank
purchases the bill and collects the money from the exporter. PBL subtracts the amount of bill
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ID NO# 136-41-52
from BTB and gives the rest amount to the client in cash or by crediting his account or by the
pay order.
For this purpose, PBL maintains a separate register named FDBP Register.
This register
contains the following information:
Date
Reference number (FDBP)
Name of the drawer
Name of the collecting bank
Conversion rate
Bill amount both in figure & in Taka.
Export form number
Export L/C number
Advances against Export Bills surrendered for collection:

Banks generally accept bills for collection of proceeds when they are not drawn under an L/C or
when the documents, even though drawn against an L/C contain some discrepancies. The bank
generally negotiates bills drawn under L/C, without any discrepancy in the documents, and the
exporter gets the money from the bank immediately. However, if the bill is not eligible for
negotiation, the exporter may obtain advance from the bank against the security of export bill. In
addition to the export bill, banks may ask for collateral security like a guarantee by a third party
and equitable/registered mortgage of property.
3.8.7 Certification of Exp Form by Authorized Dealer

Before lodging the EXP Forms with the customs/ Postal authorities, the exporter should get
copies of forms certified by an AD. Now the AD will see and ensure that each set of the forms is
duly filled in. Thereafter, they will record full particulars of the in the Export Register. In order
to avoid any loss of foreign exchange to the country, AD shall not certify any EXP form unless
they have satisfied the following:
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I.
Arrangements made for realization of export proceeds within the prescribed period.
II.
The Exp form is either signed either by the exporter or one holding valid legal power
of attorney from the exporter.
III. For delay in repatriation of export proceeds the exporter as well as the AD and its
officials certifying the export form render themselves liable to punitive action under
the FER act. Therefore in their own interest both exporters and the Ads should be alert
and active in ensuring timely repatriation of export proceeds.
3.8.8 Making Out and Delivery of Shipping Documents
In case of export of goods, full payment for which the value has been received by the
exporter in advance through the AD, the bill of lading and other documents may be
endorsed by the AD in favor of foreign importers and the same may be sent directly to the
importers abroad by the AD
Sometimes the shipping documents may reach after the arrival of the exported goods to the
importers country. This cause inconveniences and involves payment of demurrage. at the
port of destination due to delay in receipt of the shipping documents. To overcome this
problem, shipping company may at the request of negotiating bank in Bangladesh issue
Telegraphic Delivery Order on their agents. A copy of this document duly authenticated by
the shipping company or agents should be passed on to the relevant AD. The AD then
sends his instruction of telegraphic transfer to hid overseas correspondence to hand over it
to the consignee and stating the amount of the consignee before the delivery order is
released. The usual shipping documents are Bill of Lading, Invoice etc which can be
dispatched to the correspondent bank as well.
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3.8.8.1 Submitting of Documents to the AD

The exporter must submit all the exp documents to the AD. The EXP documents are four in
number. Bank only works with the three copies. The copies are:
1.
Original:
Retained by customs and forward to Bangladesh bank.
2.
Duplicate:
Submit to Bangladesh bank with 14 days of shipment through AD along

with invoice.
3.
Triplicate:
Submit to the Bangladesh bank after realize the export proceeds with the
usual monthly returns.
4.
Quadruplicate: Copy retained by AD for record.
3.8.8.2 SCRUTINY OF DOCUMENTS:

The authorized dealer scrutinizes the documents very carefully. Because, they have to report it to
the Bangladesh Bank at the interval of every fifteen days in a month. The following process is
done by the authorized dealer for scrutiny of the documents.
On receipt of the EXP form and documents covering exports the AD compares the
authorized signature with the specimen signature of the duly authorized officer of the
shipping company to ensure the genuineness of the documents.
The AD should also compare the relative bill and /or documents with the relative form and
satisfy itself that the declaration made on the form is correct and the amount for which the
bill is drawn or the invoice is written is not less than the invoice value stated on the form.
If the difference between the value stated on the form and the amount of the bill is small
the AD may accept bill /documents for collection. The details of such adjustment must be
given on the relative form and must be authenticated by the AD under its stamp and
signature.
After negotiation of the bill or acceptance of the documents for collection, the ADs
should complete the certificates in this behalf on the space provided on the duplicate
copies of the EXP form.
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If the payment is received in foreign currency or nonresident taka account of a bank

branch correspondent abroad the Ads shall certify on the reverse of the triplicate copy of
the form retained with them and forward it to Bangladesh Bank with the usual return. The
quadruplicate will be retained by the AD for record.
3.8.8.3 DEDUCTION OF CHARGES:
Commissions, brokerage or other trade charges due to be paid to foreign importers or agents by
the exporters in Bangladesh relating to the particular shipment may be deducted from the
relative bill or the amount of the sale proceeds or remitted from Bangladesh after the full
proceeds have been realized only up to a maximum of 5% by deduction from the invoice value
of the goods. If the rate exceeds then special order must have to be granted from Bangladesh
Bank with some condition.
3.8.9 Foreign Currency Exchange Retention Quota: (FCERQ)

Foreign Exchange retention quota is a system where authorized dealer retained a certain
percentages of the total exported or billed amount for meeting up the emergency need of the
customers.
Merchandise exporters are entitled to a foreign exchange retention quota of 40% of
repatriated value F.O.B value of their exports.
Foreign exchange out of the retention quota may be maintained in FC accounts with the
concerned Ads in US Dollar, Pound Sterling, Deutschemark or Japanese Yen upon the
realization of the export proceeds. Balances in these accounts may be used by the
exporters for bonafide purposes. The purpose may be the following:
o Business Visits Abroad.
o Participation in Export Fairs and Seminars,
o Establishment and maintenance of offices abroad.
o Import of raw materials.
o Machineries & Spares etc.
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But Foreign Exchange from the exporters retention quota cannot be used for investment abroad
by the exporter.
Foreign Exchange out of exporters retention quota may also be kept as interest bearing
renewable term deposits with the concerned Ads in Bangladesh in US dollar, Pound
Sterling, DM or Japanese Yen, with minimum balances of US$ 2000, or1500 Pound or
equivalent.
TREATMENT OF FCERQ AT PRIME BANK LTD:
Prime Bank Ltd., maintains different amount in export retention quota based on the negotiation
with the customers or sometimes the department head assumed a particular amount or the full
amount that are transferred to the export retention quota.
The bank maintains its record regarding the bill amount and the realized amount in the
Master L/C file. In that file a separate column is created named FCERQ. After realization of
export proceeds a particular amount is transferred, which may be stated in Export Proceed
Realization Sheet or may be negotiated by the customers later.
3.8.10 Shipment On F.O.B. Terms

Generally goods are exported on F.O.B terms to the exporters country. It means that buyers pay
the carriage when goods pass the ship. The AD should verify that the bills of lading freight has
not been prepaid in Bangladesh. All cases where fright or insurance has been paid in Bangladesh
but export documents are made out on FOB basis should be reported to the Bangladesh Bank.
3.8.11 Short Shipments or Over Shipments

If the amount of bill value and Invoice value differs, at that time short/over
shipment arises. If the invoice value is greater than bill value then over shipment
arises and if it reverses then Short shipment arises. The reason may be:
They differ of quantity shipped than original amount but the rate may be same.
The total price of the goods may be increased or decreased.
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In all cases of short shipments, the exporters should give notice of short shipment on the
prescribed form in duplicate to the Customs who will forward a certified copy of the notice to the
Bangladesh Bank. The notice should bear the number and date of the relative EXP form in
respect of which goods have been short shipped.
TREATMENT OF SHORT SHIPMENT AT PRIME BANK LTD:
Prime Bank at first checks the difference between Bill Value and Invoice value. If
difference arises then the bank attaches the certificate with duplicate as well as at
triplicate after proceeds realization and then reports it to the Bangladesh Bank.
3.8.12 Lodgment of FDBP

Lodgment of FDBP (Foreign Documentary Bill Purchase) is nothing but purchase of L/C taking
the loan facility provided by the advising or other bank to the exporter against the document and
L/C keeping them as mortgage. The loan facility is given up to a certain percentages of the L/C
Value. In case of Purchase of the L/C by the advising bank or other negotiating bank the bank
will keep a signed copy of guarantee paper named Set of Charged Documents. This provides
guarantee that the signed person on that will be liable for amount mentioned in L/C with
maturity with due care and diligence. This is only requirement for the valued client in certain
case. For safety the bank may seek for other necessary documents which must be supported by
the exporter. In this case different collateral has also been taken as for security.
Prime Bank Ltd in case of all the application of regarding FDBP uses Tremendous
Globes (T24), which, purchases and receives the bill at fully automatic system.
3.8.13 Verification of Proceeds Realization Certificate: (PRC)

Sometimes exporters are required to submit to the various Government agencies evidence of
export and of realization of export proceeds. In such cases, Proceeds Realization Certificate may
be issued by the ADs in the prescribed form after getting them authenticated by the Bangladesh
Bank.
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Prime Bank Ltd at the last phase of its documentary work, Check the PRC from its
record of Quadruplicate EXP form very carefully and make necessary amendment. After
that necessary amendment it submits the certificate to the Bangladesh Bank. In this way
all the documentary work related Letter of Credit is completed
3.8.14 Export Portfolio of Prime Bank Ltd.

Export Portfolio consists of the items exported, the value of export bills that Prime Bank gets
from issuing banks from foreign countries as well as Bangladesh. Various sorts of commodities
are exported abroad through Prime Bank Ltd. But Readymade Garments consist of most of the
foreign exports. Other exported items are shrimp, jute and jute goods, leather tobacco, ceramic
tiles, fresh vegetables, tempered coated glass, bone crust, betel- nut etc.
There are two modes of export payments that are practiced in foreign trade worldwide. They are
1. Sight Bill: In this bill the exporters are paid at sight for the products they just exported.
2. Usance Bill: In this bill the exporter gets payment after a certain period of time
depending on the L/C terms and condition. This bill is usually for raw materials or semi
finished products that are exported from Bangladesh and once the goods reach in final
destination they are employed for further processing.
Foreign Export: In the bank foreign export activities play a vital role in the export division.
About 75% of the total export comes from this section. At this bank majority of the foreign
exports are Readymade garments.
Local Export: Local export indicates that goods are exported within the boundaries of
Bangladesh. Local exports consist 25% of the total export as it is not very common practice
in Bangladesh. Yarn and Accessories are the main commodities of the local export at this
branch.
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3.9 Foreign Remittance Section of Prime Bank Ltd.

The functions of this department are outward and inward remittances of foreign exchange from
one country to another country. In this process of providing this remittance service, it sells and
buys foreign currency.
3.9.1 Modes of Foreign Remittances

The remittance process involves the following four modes:
Cash Remittance:
The bank sells dollar/pound for using the abroad by purchaser. The maximum amount of
such sell is mentioned in the Bangladesh bank publication of "Convertibility of Taka for
current transactions In Bangladesh". They can purchase dollar from resident and nonresident
Bangladeshi or foreigner. Most dollars purchased cones from realization of Export Bill of
Exchange.
Traveler's Cheque:
Traveler's cheques are useful to persons, who frequently traveled abroad this bank issue
Traveler's cheque of AMEX. Customers can en-cash the TC in abroad from the drawers
bank. Customers buy TC for use in abroad. But some leave may be remained unused. The
customer can surrender these unused leaves against payment of equivalent amount. Generally
it takes 21 days for collection of TC and customers can draw cash after one month.
Telex Transfer:
Bank also remit fund by tested telegraphic massage via its foreign correspondence bank in
which it is maintaining its NOSTRO account. In the same manner, it makes payment
according to telegraphic massages of its foreign correspondence bank from the corresponding
VOSTRO account.
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Foreign Demand Draft:

Bank issues demand draft in favor of purchaser or any other according to instruction of
purchaser. The payee can collect it for- the drawer bank is which the issuing bank of demand
draft holds it NOSTRO account. Bank also makes payment on DD drawn on this bank by its
foreign correspondence bank through the VOSTRO account.
3.9.2 Scenario of Foreign Remittance of Prime Bank Ltd.

Prime Bank Ltd maintains strategic initiative to handle this department. The bank has already
added a good number rural and semi urban branches with the existing network to ensure wider
reach and coverage.
For purchase of foreign currency through Prime Bank Limited, an application must be made to a
specific AD branch and Bangladesh Bank. The application form is called IMP () form if the
purpose is import payments or for other purposes, the TM Form is used such as request for
foreign currency in case of dollar. T.C (Traveler cheques) Foreign Demand Draft (F.D.D),
Telegraphic Transfer (T.T).etc, If the bank is empowered to approve the application, it affects the
sale of foreign exchange. And if the transaction requires prior Approval from Bangladesh Bank,
the T.M form is forwarded to Bangladesh bank. In Prime Bank, (the mode of remittances are
bank draft, mail transfer and taka remittances.
Inward Remittances: Inward Remittances include the TT, FDD, purchase of bills and
drafts under L/C, purchase of foreign currency, etc. But the most significant amount in
the inward remittances of Prime Bank Limited is the remittances from wage earners. The
bank maintains proper records of ail inward remittances and provides particulars as
required by the Exchange Policy Department of Bangladesh Bank in Returns.
Outward Remittances: The outward remittances include M.T, Draft, sale of Foreign
Exchange under L/C and against Import Bills, etc .To facilitate foreign exchange
transaction, and each bank maintains accounts with foreign banks in principal financial
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centers. Prime Bank also have NOSTRO Accounts for dollar payments and other
currency accounts for payment in currencies like pound, yen, rupee , etc, The Bank has a
list of foreign correspondents and arrangements with their agencies in Bangladesh. When
deciding which correspondent (reimbursing bank in case of import) is to be chosen for
payment, the list is used.
3.9.2.1 Some Measures of Improving this Department Performances

1. Prime Bank Ltd. has arranged 24 (twenty four hours leading exchange companies and banks
including the global money transfer giant Western Union as a principal agent.
2. Establishes wide variety of branches from where remittance flow may be received easily.
3. Introduction of ATM as the alternate delivery channel increase in the number of remittance
arrangements with leading overseas exchange companies and banks.
4.The Banks fully owned exchange company in Singapore have ensured sustain inflow of
foreign remittances supplementing export receipts making import payment without depending
on the volatile foreign exchange market.
3.10 Activities of Foreign Exchange Department

Export:
The goods and services sold by Bangladesh to foreign households, businessman and government
called export. The export trade of the country is regulated by the import and export (control) Act
1950.
Import:
Import of goods into Bangladesh is regulated by Ministry of commerce and industry in terms of
the Import and Export and (control) Act 1910, with import policy orders issued by annually and
public notice issued from time to time by the office of the chief controller of import and export.
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Foreign Remittance:
Foreign Remittance" means purchase and sale of freely convertible foreign currencies as
admissible "Foreign Exchange Regulations Act- 1947" and "Guidelines for Foreign Exchange
transaction -VOL. 172 of the country. Purchase of foreign currencies constitutes inward foreign
remittance and sale of foreign currencies constitutes outward foreign remittance26
Functions:
Exports:
1. Pre-shipment advanced.
2. Purchase of foreign bills.
3. Negotiating of foreign bills.
4. Export guarantees.
5. Advising or confirming letters- letter of credit.
6. Advance for deferred payments exports.
7. Advance against bills for collection.
Imports:
1. Opening of letter of credit.
2. Advance bills.
3. Bills for collection.
4. Import loan and guarantees.
Remittances:
1. Issue of DD, TT, MT etc.
2. Payment of DD, TT, MT etc.
3. Issue and enhancement of travelers check.
4. Sale and enhancement of foreign notes.
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CHAPTER -04
FOREIGN EXCHANGE
PERFORMANCE OF PRIME
BANK LIMITED
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4.1 Performance Evaluation Techniques between Export, Import &

Profitability ratio
Generally there are some techniques, which are used in evaluating financial performance of a
firm. Basically this study is going to try the evaluation of the financial performance of PBL
through ratio. So in this chapter, we will discuss the various financial ratio, those are used in
evaluating the performance.
Now, performance evaluation techniques between Export, Import & Profitability ratios are
discussed briefly:-
4.1.1 Exports: The goods and services sold by Bangladesh to foreign households,
businessman and government called export. The export trade of the country is regulated by the
import and export (control) Act 1950.
Table-1
Export of PBL for the period (2009-2013)
Year
Growth (%)
2009
Export
(in million taka)
76,097
2010
106,943
140.53
2011
133,396
175.29
2012
143,612
188.72
2013
127,091
167.01
100
Source: Annual Report of PBL
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Chart-1
Export
Export
133,396
143,612
127,091
106,943
76,097
2009
2010
2011
2012
2013
Analysis: From the chart, it is clear that the amount of export is greater than the amount of
import i.e. it indicates a good sign. In table & graph we see that, from 2009-2012 export &
growth rate will be increases but from 2012-2013 export & growth rate will be decreases.
4.1.2 Imports: Import of goods into Bangladesh is regulated by Ministry of commerce and
industry in terms of the Import and Export and (control) Act 1910, with import policy orders
issued by annually and public notice issued from time to time by the office of the chief controller
of import and export.
Table: 2
Imports of PBL for the period (2009-2013)
Year
Growth (%)
2009
2010
2011
2012
Import
(in million taka)
96,452
147,704
174,384
168,532
2013
133,219
138.11
100
153.13
180.79
174.73

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Chart: 2 Imports
Column1
174,384
168,532
147,704
133,219
96,452
2009
2010
2011
2012
2013
Analysis: In this table and graph we see that from 2009-2011 import will be increases but from
2011-2013 import will be decreases. On the other hand growth rate will be the as import up &
down.
4.1.3 Foreign Remittance:

Table-3
Foreign Remittance of PBL for the period (2009-2013)
Year
Foreign Remittance
Growth
(in million taka)
(%)
2009
26447
100.00
2010
28433
107.50
2011
36890
139.48
2012
42443
160.48
2013
32628
123.37
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Analysis: Foreign remittance of PBL for the period (2009-2013) we see from 2009-2012 its
growth rate increases & from 2012-2013 its growth rate decreases.
Chart: 3
Foreign Remittances
Chart Title
45,000
160.48%
40,000
139.48%
123.37%
35,000
30,000
100%
107.50%
25,000
20,000
15,000
10,000
36,890
26,447
28,433
2009
2010
Growth
42,443
32,628
Foreign Remittance
5,000
0
2011
2012
2013
Analysis: From the chart, it is clear that the amounts of foreign remittance are increased from
2009-2012 but from 2012-2013 foreign remittance are decreased.
4.1.4 Net Profit after Tax:
Table: 4
Net Profit after Tax of PBL of PBL for the period (2009-2013)
Year
Net profit after tax

Million Taka
Growth
(%)
2009
2784
100.00
2010
3102
111.42
2011
3634
130.53
2012
2699
96.94
2013
1829
65.69
Sources: Annual Report of PBL
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Analysis: From NPAT table we see, 2009-2011 NPAT growth will be increases but 2012-2013
its growth will be decreases.
Chart: 4
Net profits after Tax
4000
130.53%
3500
3000
111.42%
100%
96.94%
2500
2000
65.69%
Net Profit after Tax

Growth
1500
1000
500
0
2009
2010
2011
2012
2013
Analysis: From the chart it is clear that the amounts of net profit after tax are increased every
year. It indicates a good sign. But from in 2012-2013 NPAT are decreased.
4.1.5 Number of Foreign Correspondents:

Table: 5
Number of Foreign Correspondents of PBL for the period (2009-2013)
Year
No of Foreign
Growth (%)
Correspondent
2009
602
100%
2010
621
103.15
2011
644
106.97
2012
660
109.63
2013
661
109.80
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Chart: 5
Number of Foreign Correspondents
No of Foreign Correspondent
2009
2010
2011
661
2012
2013
602
621
660
644
Analysis: In the chart, we can see that the no. of foreign correspondent is increased gradually.
4.1.6 Number of Branches:

Table -6
No of branches of PBL for the period (2009-2013)
Year
No. of Branches
Growth (%)
2009
84
100%
2010
94
111.90
2011
102
121.42
2012
113
134.52
2013
117
139.28
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Chart: 6
Number of Branches
No. of Branches
2009
100%
2013
139.28%
2009
2010
2010
111.90%
2011
2012
2012
134.52%
2013
2011
121.42%
Analysis: In the chart, we can see that the no. of branch of the banks is also increased gradually.
4.2 Performance in Profit And Loss
Year
Table-7
Performance in Profit And Loss
Profit & Loss
In million
Growth (%)
2009
2784.00
100.00
2010
3101.00
111.38
2011
3634.00
130.53
2012
2699.00
96.94
2013
1,829.00
65.69
Source: Annual report of PBL.

Note: The calculations have been made by the researcher.
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Analysis: The above table confirms that import rise overtime duly. From 2011-2012,Profit of the
PBL rise from BDT 3634.00 million to BDT 2699.00 million, because the businessman was
divert there investment into PBL highly day by day so gradually profit of the bank rises and
stood at 2699.00 million in year 2012. But in the year 2013 profit of the bank decreases and
stood at 1,829.00 million.
Chart-7
Performance in Profit And Loss
Chart Title
4000
3000
130.53%
100%
111.38%
Series 5
96.94%
Series 4
65.69%
2000
Series 3
1000
Series 2
Series 1
2009
2010
2011
2012
2013
Chart: Performance in Profit And Loss
4.3 Performance in Authorized capital & paid Up Capital

Table-8
Performance in Authorized capital & paid up Capital
In million
Growth of
Paid Up
Capital (%)
Year
Authorized Capital
Paid Up Capital
2009
10000
3555
100.00
2010
10000
5776
162.47
2011
10000
7798
219.35
2012
25000
9358
263.23
2013
25000
10,293
289.53

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Analysis: The above table confirms that authorized capital in 2009-2011 was 10000 million,
after that in 2013 it stood at 25000; the Paid up capital of PBL was 3555 million in 2009 and
5776 million in 2010. From 2011-2012, Paid up Capital rise from BDT 7798 million to BDT
9358 million, the growth was continued till 2013, stood at BDT 10,293 million in value.
Chart: 8
40000
263.23%
289.53%
30000
20000
162.47%
219.35%
100%
Authorized capital
10000
Paid up capital
0
2009
2010
2011
2012
2013
Chart: Performance in Authorized capital & paid Up Capital
4.4 Profitability ratios

Profitability is the net result of a number of policies and decisions. Profitability ratios show the
combined effects of liquidity, asset management and debt on operating results. This ratio
includes.
4.4.1 Return on Assets

This number tells how effective the business has been at putting its assets to work. The ROA is a
test of capital utilization - how much profit (before interest and income tax) a business earned on
the total capital used to make that profit. This ratio is most useful when compared with the
interest rate paid on the company's debt.
Return on Assets (ROA) = Net income after tax /Total assets
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Table-9
Return on Assets (ROA)
Amount in Million
Particulars
2009
2010
2011
2012
2013
Net income after

tax
Total Assets
2784
3102
3634
2699
1829
124806
154342
199950
236833
243869
Return on Asset
2.23%
2.00%
1.81%
1.13%
0.74%
Growth
100%
89.68%
81.16%
50.67%
33.18%

Analysis: Return on asset follows a cyclic trend. It was 2.23% in 2009. In 2010 it decreased to
2.00%. After the decrease in 2010 it started drastically decreasing and turns into 0.74% in 2013.
Chart-9
Return on Assets
2013
2012
2011
2010
2009
0.00%
ROA
0.50%
1.00%
1.50%
2.00%
2.50%
Chart: Return on Assets
4.4.2 Return on Equity

ROE measures banks profitability by revealing how much profit a bank generates with the
shareholders investment. The formula is
Return on Equity (ROE) = Net income after tax/Total equity capital
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Table-10
Return on Equity (ROE):
Amount in Million
Particulars
2009
2010
2011
2012
2013
Net income after tax
2784
3102
3634
2699
1829
Total equity capital
11745
16908
19095
20787
23030
Return on Equity
23.70%
18.34%
19.03%
12.98%
7.94%
Growth
100%
77.38%
80.29%
54.76%
33.50%

Analysis: The return on equity was 23.70% in 2009. After that it started to decrease and became
12.98% in 2012.Then the situation went worst and it turns into 7.94% in 2013.
Chart-10
Return on Equity
30.00%
20.00%
ROE
10.00%
0.00%
2009
2010
2011
2012
2013
Chart: Return on Equity
4.4.3 Net interest margin: - is a measurement of the difference between the interest
incomes generated by banks and the amount of interest paid out to their lenders .it examines how
successfully a firms investment decision is compared to its debt situations. A negative value
denotes that the firm did not make an optimal decision. The equation is
NIM= Interest income from loan Interest expense on deposit /Total asset
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Table-11
Net Interest Margin (NIM %)
Year
2009
2010
2011
2012
2013
NIM
2.95%
4.21%
3.19%
3.61%
2.75%
Growth
100%
141.71%
108.13%
122.37%
93.22%

Analysis: In this table we see that from 2009 to 2010 net interest margin is decreased that is
4.21%. But now in 2011 to2013net interest margin will be decreased year after year.
Chart-11
Net Interest Margin

6.00%
4.00%
NIM
2.00%
0.00%
2009
2010
2011
2012
2013
Chart: Net Interest Margin
4.4.4 Net Operating Margin: - is a measurement of the difference between the interest
incomes generated by banks and the amount of interest paid out to their lenders .it examines how
successfully a firms investment decision is compared to its debt situations. A negative value
denotes that the firm did not make an optimal decision. The equation is
NIM= Interest Income from Loan Interest Expense on Deposit /Total Asset
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Table-12
Net Operating Margin (NOM %)
Year
2009
2010
2011
2012
2013
NOM
4.75
4.37
4.04
4.04
3.40
Growth
100%
92%
85.05%
85.05%
71.57%

Analysis: In this table we see that from 2009 to 2013 net operating margin is decreased.
Chart-12
Net Operating Margin

6.00%
4.00%
NOM
2.00%
0.00%
2009
2010
2011
2012
2013
Chart: Net Operating Margin
4.4.5 Earnings per Share (EPS): The portion of a companys profit allocated to each
outstanding share of common stock. EPS serve as an indicator of company profitability. It tells
an investor how much of the companys profit belongs to each share of stock.
EPS= Net Income after Taxes /No of Shares Outstanding
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Table-13
Earnings per Share (EPS)
Year
2009
2010
2011
2012
2013
EPS
7.83
5.69
4.70
2.88
1.78
Growth
100%
72.66%
60.02%
36.78%
22.73%

Analysis: In this table we see that from 2009-2013 Earnings per Share will be decrease year after
year.
Chart-13
Earning Per Share

10.00%
5.00%
EPS
0.00%
2009
2010
2011
2012
2013
Chart: Earning per Share
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4.5 Impact of Profitability Ratios on Foreign Trade:

Impact between Export & ROE:
Amount in Million
Particulars
2009
2010
2011
2012
2013
Export
76,097
106,943
133,396
143,612
127,091
Return on Equity
23.70%
18.34%
19.03%
12.98%
7.94%
ROE%(Y)
XY
Year
Export(X)
2009
2010
2011
2012
2013
76097
106943
133396
143612
127091
X=587139
Total
23.7
1803498.9
561.69
5790753409
18.34
1961334.62
336.3556
11436805249
19.03
2538525.88
362.1409
17794492816
12.98
1864083.76
168.4804
20624406544
7.94
1009102.54
63.0436
16152122281
Y =81.99 XY=9176545.7 Y=1491.7105 X=71798580299
Assume: Export=X, ROE=Y

Coefficient of Correlation: r=
xy - x.yn
---------------------------------------------------------
9176545.7 -587139*81.995
r=----------------------------------------------------------------------------------------------
-451359.622
r=------------------------------------------------------------------648031.36164873
r=0.6965089171
or,
r = 0.70
Analysis: From this calculation we found that, in 2009-2012 export will be increases but in
2012-2013 export will be decreases. On the other hand, in 2009-2013 return on equity will be
decreases. In that case coefficient of correlation (r) will be negative.
97
ID NO# 136-41-52
Impact between Import & ROA:

Amount in Million
Particulars
2009
2010
2011
2012
2013
Import
96,452
147,704
174,384
168,532
133,219
Return on Asset
2.23%
2.00%
1.81%
1.13%
0.74%
Year
2009
2010
2011
2012
2013
Total
IMPORT(X)
ROA%(Y)
96452
147704
174384
168532
133219
X =720291
XY
2.23
215087.96
4.9729
9302988304
2
295408
4
21816471616
1.81
315635.04
3.2761
30409779456
1.13
190441.16
1.2769
28403035024
0.74
98582.06
0.5476
17747301961
Y=7.91 XY=1115154.22 Y=14.0735 X=107679576361
Assume: Import=X, ROA=Y

Coefficient of Correlation: r=
xy - x. y n
---------------------------------------------------------
1115154.22720291*7.915
r=----------------------------------------------------------------------------------------
24346.142
r=---------------------------------------6108102332.517
r= 0.0000039859
Analysis: From this calculation we found that, in 2009-2011 import will be increases but in
2011-2013 import will be decreases. On the other hand, in 2009-2013 return on asset will be
decreases. In that case coefficient of correlation (r) will be negative.
98
ID NO# 136-41-52
CHAPTER -05
Problems associated with

foreign exchange operation at
Prime Bank Ltd.
99
ID NO# 136-41-52
5. Problems
When I will prepare this report then i will face some problems which are given below:
Problems
Unsatisfied
Demographic
segments
Lack of
performance
Descriptions
The bank should concentrate on the various demographic segments that
are currently not very satisfied with the bank services. Product services
should be tailored for these segments. Appropriate research and surveys
should be designed to find out the requirements of these dissatisfied
segments. On the other hand, the bank should capitalize on the segments
that are currently very satisfied with the services.
The bank is constantly cant expend its performance.
Lack of
evidence
The empirical evidence of the product suggests that it is performing not

well and contributes a good portion to the overall profitability of the
bank.
Customer
preferences
Existing products have been gradually improved according to the choices

of the customers and for their satisfaction.
Not Suitable
Market rate
This is the responsibility of the treasury back-office to check for whether

all deals have been dealt at market rates on daily basis. But it was found
that they sometimes do the deals slight below the market rate basing on
the relationship with the customers.
Lack of
Guarantee
In several cases, for opening L/C, the Corporate Guarantee is not

obtained.
Guilty of loan Although the current offering for the personal loan is not lucrative one,
there is still scope for further improvement which would not be
process
beneficial for the bank as well as the customers.
100
ID NO# 136-41-52
Error of
customer
selection
Though bank takes protective measures so that wrong customer selection

is made but in reality often adverse selection is made. The major
problem that the loan officers face in selecting borrower is the
availability of information about a particular borrower. There are
instances that customers provide fabricated information to prove him/her
a worthy and financially viable customer.
Political
disturbances
It is not favorable for Bank Business in Bangladesh. It is the main

problem of PBL. It is also a problem of all Banking system in
Bangladesh
Competitive
Banking
Market:
Different kinds of commercial Bank are serving in our commercial

Banking Market. Therefore, no single Bank is allowed or capable to
establish personal interest especially due to heavy competitive market.
Company
representativ
e effect:
There are so many representatives working in the market to collect the

sales price directly from the customer of each product daily. So merchant
group, Businessman1 Traders, Agency, Wholesalers and high Depositor
are not capable to Deposit the money in the Bank. Due to this Deposit
system, they hamper it.
High rate of
Government
security:
Practically, the Government security likes Bond, Security, Debenture;

Savings certificate etc. gives high rate of interest than commercial Bank.
So, all the investors are invested to utilize their idle fund to purchase the
Government security due to higher rate of interest.
Credit Sales:
Now a day, Businessperson is bound for credit sales to increase their

sales in the competitive market. For this reason Business organization
need less working capital and Banking companies are losing their
opportunities to invest in Business organization.
Lack of
modem tools
and
techniques:
PBL performing activities by using backdated tools and techniques. It is

fully far from information technology. Though PBL enough strength to
play proactive role in every aspect, it play reactive role.
Lack of
proper
training:
PBL should be arranging adequate training. Though PBL has its own
training center, it is not adequate for its employees. Because, it is not
well furnished to with this modem world.
101
ID NO# 136-41-52
Lack of
Marketing
Activities:
PBL does not promote itself for catering its services to the public or the
Business organization.
Lack of
favorable
market
image:
PBL has a higher book value per share but market value per share is very
low corresponding to its book value.
Insincerity
by employee
Bank should protect its interest by collateral securities of immovable

assets. However in two cases the researcher found that Prime Banks
interest is not protected by collateral securities of immovable assets.
Notarized Power of Attorney empowering the Bank to sell hypothecated
goods was not obtained.
Though Prime Bank is providing a very efficient Foreign Exchange services, there is also room
for improvement to provide their services even better and of international standards. Some
recommendations that the Bank may benefit from are given next chapter.
102
ID NO# 136-41-52
CHAPTER -06
Findings, Policy Implication &

Conclusions
103
ID NO# 136-41-52
6.1 Summary of the Study

Prime Bank Limited is one of the leading private banks in the country. The findings of
the report areIn this report Researcher found that from 2009-2013 Export and its growth rate trend
will be up & down and also Import and its growth rate trend will be up & down.
Researcher found that Foreign remittance will be increases from 2009-2012 and next year
it will be down.
In this report Net Profit after Tax will be increases from 2009-2011. But it will be
decreases from 2012-2013.
In this report, Number of Foreign Correspondent is increased gradually.
Researcher found that Number of Branch is increased gradually.
In 2009-2013 Performance in Profit & Loss will be Up & Down. Also Performance in
Authorized & Paid up capital will be increases year by year.
In PBL Return on Assets will be decreased gradually year by year and Return on Equity
will be down year after year.
The bank use online technology, as a result, the customer can get the fastest service from
the bank.
Net Interest Margin will be Up & Down from 2009-2013. But from 2009-2013 Net
Operating Margin will be decreases and EPS will be decreases year after year.
In this report, Researcher found that Coefficient of Correlation (r) between Export &
ROE and Import & ROA will be negative results. Thats why Export & Import trend will
be negative in recent year.
104
ID NO# 136-41-52
6.2 Policy Implication
Satisfied
Demographic
segments
The bank should capitalize on the demographic segments that are

currently very satisfied with the services.
Improving
performance
The bank is constantly expanding and improving its performance.

Existing products come with new attractive features to their customers.
Availability
of evidence
Customer
preferences
The empirical evidence of the product suggests that it is performing quite

well and contributes a good portion to the overall profitability of the
bank.
New products have been gradually improved according to the choices of
the customers and for their satisfaction.
Guarantee
In several cases, for opening L/C, the Corporate Guarantee is obtained.
Clear of loan
process
Although the current offering for the personal loan is a lucrative one,
there is still scope for further improvement which would be beneficial
for the bank as well as the customers.
Customer
selection
Though bank takes protective measures so that proper customer selection

is made but in reality often adverse selection is made.
Political
Stability
Political Stability is favorable for Bank Business in Bangladesh.
Positive
Banking
Market:
All kinds of commercial Bank are serving in our commercial Banking

Market. So, all banks should follow the rules and regulation of
Bangladesh bank.
105
ID NO# 136-41-52
Low rate of
Government
security:
Practically, the Government security likes Bond, Security, Debenture;

Savings certificate etc. gives low rate of interest than commercial Bank.
Suitable
Market rate
This is the responsibility of the treasury back-office to check for whether

all deals have been dealt at market rates on daily basis.
modern tools
and
techniques:
PBL performing activities by using updated tools and techniques. It is

fully far from information technology.
Proper
training:
PBL should be arranging adequate training. Though PBL has its own
training center, it is adequate for its employees. Because, it is well
furnished to with this modern world.
Marketing
Activities:
PBL does promote itself for catering its services to the public or the
Business organization.
Favorable
market
image:
PBL has a higher book value per share but market value per share is very
high corresponding to its book value.
Bank should protect its interest by collateral securities of immovable

Sincerity by assets. However in two cases the researcher found that Prime Banks
employee
interest is protected by collateral securities of immovable assets.
Notarized Power of Attorney empowering the Bank to sell hypothecated
goods was obtained.
106
ID NO# 136-41-52
6.3 CONCLUSIONS
Bank is a very important and vital for economic development in mobilizing capital and other
resources. PBL is also contributing to the advancement of the socioeconomic condition of the
country. To keep pace with the current market and demand, PBL is following several strategies
and taking new initiatives, offering new products and services to the customers. The bank should
maintain well-structured communication from upper level to lower level. PBL have a strong
position in the competitive market. It is among one of the fastest growing Bank. As the economy
of Bangladesh is increasing so is the foreign trade and PBL Bank like always have played its role
in making sure that things go smoothly. The bank is doing its best to provide better Import,
Export and Remittance services to the customers. Export, Import and Remittance are all showing
positive trends even after the global challenges that we are facing today. But the foreign trade
handled by bank decreased in recent year, this may be because of opening of new branches in
different business centers and the instability in the economy of the world. . According to the
economic cycle, the more export finance, the more employment, the more income, the more
saving and the more investment again. Prime Bank Limited is doing the needful according to the
earlier mentioned economic cycle. Not only PBL but all banking industry should be come
forward to develop and enriched foreign trade procedure and its finance and then it is possible to
demark in the banking industry.
107
ID NO# 136-41-52
Appendix & Abbreviation
108
ID NO# 136-41-52
Appendix
Reports and Brochures
Annual Report of Prime Bank Ltd 2009
Training book of Prime Bank Ltd
Textbooks
David A. & Stephen P. (2000) Human Resource Management; 17th Ed.
Hemple, George H. Bank Management, 2nd edition, 1986, John Wiley & Sons
Hemple, George H; (2008) Bank Management; Publisher, Mirpur, Dhaka.
Websites
www.primebank.com.bd
www.bangladeshbank.org.bd
www.google.com.bd
109
ID NO# 136-41-52
Five Years Performance of Prime Bank Ltd.

Key Financial Data & Key Ratios - PBL
Particulars
Interest income
Interest expenses
Net interest income
Investment income
Commission, exchange and brokerage
Other Operating Income
Operating Income
Operating expenses
Earning before interest, depreciation
and tax
Profit before provision and tax
Provision for loans and assets
Profit after provision before tax
Tax including deferred tax
Profit after tax
Balance Sheet
Authorized capital
Paid-up capital
Total shareholders' equity
Deposits
Long-term liabilities
Loans and advances
Investments
Property, Plant and Equipment
Earning assets
Net current assets
Total assets
Total liabilities
Current ratio
Gearing ratio
Quick ratio
Cash Reserve Ratio
Staturory liquidity Ratio
2009
2010
2011
2012
2013
10,856
8,426
2,430
3,372
1,749
644
8,196
2,907
12,147
7,824
4,323
2,632
2,262
579
9,795
3,618
16,709
12,648
4,061
4,157
2,689
652
11,559
4,132
22,822
17,410
5,411
4,633
2,429
1,018
13,492
4,941
22,011
17,678
4,332
5,583
2,155
813
12,883
5,409
13,175
13,643
19,666
23,024
21,422
5,289
700
4,029
1,805
2,784
6,177
540
5,637
2,535
3,102
7,427
661
6,766
3,132
3,634
8,551
3,216
5,335
2,636
2,699
7,474
4,029
3,445
1,616
1,829
10,000
3,555
11,745
106,956
38,209
89,252
19,934
1,573
109,905
3,435
124,806
113,061
1.05
80.56
1.05
6.04
28.50
10,000
5,776
16,908
124,574
47,918
116,057
20,484
1,695
137,577
7,349
154,342
137,434
1.09
76.98
1.09
6.70
26.00
10,000
7,798
19,095
159,816
63,379
138,848
39,172
3,975
179,537
2,262
199,950
180,856
1.02
77.88
1.01
6.22
32.96
25,000
9,358
20,787
182,053
84,827
160,890
49,670
4,363
212,204
2,735
236,833
216,046
1.02
80.97
1.01
6.06
34.02
25,000
10,293
23,030
201,907
91,424
153,589
56,940
6,407
211,399
15,023
243,869
220,839
1.12
80.67
1.12
6.97
38.39
110
ID NO# 136-41-52
Equity debt ratio (%)

Other Business
Import
Export
Remittance
Guarantee Business
Capital Measures (Consolidated)
Total risk weighted assets
Core capital (Tier-I)
Supplementary capital (Tier-II)
Total capital
Tier-I capital ratio
Tier-II capital ratio
Total capital ratio
Credit Quality
Non-performing loans (NPLs)
NPLs to total loans and advances (%)
Provision for unclassified loans
Provision for classified loans
Share Information
Market price per share (Taka)
No. of shares outstanding (Million)
No. of shareholders (actual)
Earnings per share (Taka)
Dividend:
Cash
Bonus
Effective dividend ratio (%)
Dividend cover ratio (times)
Dividend yield (%)
Market capitalization (Million)
Net asset value per share (Taka)
Price earning ratio (times)
Operating Performance Ratio (%)
Net Interest Margin (NIM)
Net non-interest margin on average
earning assets
Earning base in assets (average)
10.39
12.30
10.56
9.62
96,452
76,097
26,447
13,673
147,704
106,943
28,433
29,000
174,384
133,396
36,890
27,844
168,532 133,219
143,612 127,091
42,443 32,628
29,391 31,170
82,710
9,057
3,112
12,168
10.95
3.76
14.71
183,747
15,791
5,692
21,483
8.60
3.09
11.69
194,380
18,744
5,485
24,229
9.64
2.82
12.46
205,103 222,791
20,664 21,708
5,252
5,104
25,916 26,812
10.08
9.74
2.56
2.29
12.64
12.03
1,149
1.29
1,303
631
1,368
1.18
1,463
642
1,908
1.37
1,725
778
65.30
355.47
10,339
7.83
40%
10%
30%
44.44
1.96
6.13
23,212
33.04
8.34
94.45
577.64
19,748
5.69
40%
5%
35%
49.52
1.42
4.23
54,572
29.27
16.60
44.50
779.81
26,030
4.70
30%
10%
20%
40.21
1.57
6.74
34,702
24.49
9.47
2.95
4.21
3.19
3.61
2.75
2.72
1.50
2.12
1.60
1.48
89.34
88.66
89.51
89.69
88.12
6,168
3.83
2,025
1,949
10.43
7,815
5.09
1,691
3,733
37.00
25.90
935.77 1029.35
23,964 25,632
2.88
1.78
20% 12.50%
10% 12.50%
10%
21.82
13.10
1.44
1.42
5.41
4.83
34,624 26,660
22.21
22.37
12.85
14.57
111
ID NO# 136-41-52
Gross profit ratio

Net interest income as a percentage of
working funds
Profit per employee
Operating profit as a percentage of
working funds
Cost-income ratio
Credit-deposit ratio
Cost of funds on average deposits
Yield on average advance
Return on assets
Return on equity
Return on Capital Employed
Other information
No. of branches
No. of SME branches/centers
Number of ATM
No. of employees
No. of foreign correspondents
Average earning assets
Average total assets
Average deposits
Average loans & advances
Average equity
49.31
55.60
47.75
43.66
42.15
2.07
3.10
2.29
2.48
1.80
2.87
2.89
3.24
3.36
2.76
4.50
4.43
4.19
3.92
3.11
35.47
83.45
8.41
13.16
2.23
23.70
10.59
36.94
93.16
6.39
11.76
2.00
18.34
9.53
35.75
86.88
8.15
13.09
1.81
19.03
9.01
36.62
88.38
8.75
15.17
1.13
12.98
8.10
41.98
76.07
8.80
13.85
0.74
7.94
6.53
84
5
39
1,844
602
105,083
117,622
97,488
82,204
9,221
94
14
43
2,139
621
123,741
139,574
115,765
102,654
14,327
102
17
81
2,292
644
158,557
177,146
142,195
127,452
18,002
113
17
134
2,544
660
195,871
218,392
170,934
149,869
19,941
117
17
151
2,710
661
211,802
240,351
191,980
157,239
21,908
112
ID NO# 136-41-52
ABBREVIATION
A/C:
Account
B/L:
Bill of Lading
BB:
Bangladesh Bank
BIC:
Bank Identify Code
BIC:
Bank Identify Code
BR:
Branch
C & F:
Clearing & Forwarding
CC:
Cash Credit
CCI & E:
Chief Controller of Input & Export
CFR:
Cost & Freight
CRF:
Clean Report Findings
DD:
Demand Draft
EDF:
Export Development Fund
EPB:
Export Promotion Bureau
EPZ:
Export Processing Zone
ERC:
Export Registration Certificate
EXP:
Export Form
FC:
Foreign Currency
FDD:
Foreign Demand Draft
FDR:
Fixed Deposit Receipt
FOB:
Free on Board
IBCT:
Inter Branch Credit Transaction
IMP:
Import Form
113
ID NO# 136-41-52
IRC:
Import Registration Certificate
L/C:
Letter of Credit
LCAF:
Letter of Credit Authorization Form
LIM:
Loan against Imported Merchandise
LTR:
Loan against Trust Receipt
PAD:
Payment against Document
PO:
Payment Order
PSI:
Pre Shipment Inspection
SOD:
Security Overdraft
STD:
Short Term Deposit
SWIFT:
Society for Worldwide Inter-bank Financial
TC:
Travelers Cheque
TIN:
Tax Identification Number
TR:
Truck Receipt
TT:
Telegraphic Transfer
UCPDC:
Uniform Custom & Practice for Documentary Credit.
114
ID NO# 136-41-52

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Thesis

PREPARED BY MD FAZLUL KARIM

PREPARED BY MD FAZLUL KARIM

PREPARED BY MD FAZLUL KARIM

PREPARED BY MD FAZLUL KARIM

PREPARED BY MD FAZLUL KARIM

PREPARED BY MD FAZLUL KARIM

PREPARED BY MD FAZLUL KARIM

Statement of the problem

Objectives of the study

Scope of the study

Methodology of the study

Limitations of the study

CHAPTER -02 : PRIME BANK LTD. A

PREPARED BY MD FAZLUL KARIM

Expansion in the Global Arena

Classification of bank product

Products and Services of Prime Bank Ltd.

Islamic Mode of Operation

Online Branch Banking

One Stop Utility Services Scheme

Operational Processes in Prime Banks Foreign

Concept of Letter of Credit

Types of Letter of Credit

Some Special Letter of Credit

Parties Involved in L/C

Import Procedure through Letter Of Credit

PREPARED BY MD FAZLUL KARIM

Legislation of Import Policy

General Conditions of Import of Goods

Instructions issued by Bangladesh Bank for Opening

Documents Required for Opening of L/C

Margin and Other Charges

Issuing the Letter of Credit

Different Means of Payment

Transmission of Letter Credit Payment

Retirement of the Documents

Delivery of Shipping Documents

Payment of the Foreign Bank Import of Goods

Export Procedure Through L/C Operation of Prime

Documents Required for Export Transaction

Securing the Export Order

Signing the Contract & Receiving Letter of Credit

PREPARED BY MD FAZLUL KARIM

Popular form of Pre Shipment Credit

Charge Documents for P.C

Additional Documents for P.C.

Back to back Letter of Credit

Entitlement of BTB LC as per Import Policy Order

Certification of Exp Form by Authorized Dealer

Making our and Delivery of Shipping Documents

Submitting of Documents to the AD

Foreign Currency Exchange Retention Quota

Shipment on F.O.B. Terms

Short Shipment or over Shipments

Verification of Proceed Realization Certificate

Export Portfolio of Prime Bank Ltd

Foreign Remittance Section of Prime Bank Ltd

Modes of Foreign Remittances

Scenario of Foreign Remittance of Prime Bank Ltd.

PREPARED BY MD FAZLUL KARIM

Some Measures of Improving this Department