Exim bank ltd

At the very beginning I would like to express my deepest gratitude to almighty ALLAH for giving me the strength and the composure to finish the task within the scheduled time.

I am deeply indebted to my internal guide Mr. Shahriyar Anam Head of the Department, Business Administration; The University of Asia Pacific (UAP) for his whole-hearted supervision to me during the practical orientation period. His suggestions and comments to make the report a good one was really a great source of spirit for me.

I am profoundly grateful to Mr. Shah Md. Abdul Bari, (Senior Vice President Human Resources Division, Head Office, EXIM Bank Bangladesh Ltd.) for his kind assistance to provide me the opportunity of the practical orientation in this bank.

My sincere gratitude goes to Mr. Tariqul Islam Choudhury (Senior Assistant Vice Precedent and Manager), Mr. Md. Abu Sufian Mazumder (Executive officer) who gave special attention to me right from the very beginning of my stay at EXIM Bank Ltd. I am very grateful to the officials of Mirpur Branch of EXIM Bank Ltd. who extended their whole hearted cooperation from during my orientation period. I would also like to express my sincere gratitude to Mr. Mohammed Mohshin (junior officer), Finally, I would like to convey my best regards to all officials of the Mirpur Branch, EXIM Bank Ltd.

Lastly, I like to give many special thanks and inexpressible greets to my both senior and fellow UAP students, for giving me good advice, suggestion and for inspiring me in some cases. Thanks for all from the core of my heart.

In the name of Allah, the Beneficent, the Merciful

Date:

Shariyar Anam

Head of the Department

Department of Business Administration

The Univerity of Asia Pacific

Dhanmondi, Dhaka

Subject: Submission of Internship Report on Practical Orientation in EXIM

Bank of Bangladesh Ltd.

Dear Sir:

This is my pleasure to submit my internship report on “Practical Orientation in

Export Import (EXIM) Bank of Bangladesh Limited” which I was assigned. It was

a great opportunity for me to acquire knowledge and experience in respect of the

functions, procedures and operational mechanism of a commercial bank based on

Islami Shariah while working in Mirpur Branch of EXIM Bank Limited.

I believe that the knowledge and experience I have gathered during my internship

period will immensely help me in my future professional life.

I have concentrated my best efforts to achieve the objectives of the internship study

and hope that my endeavor will serve the purpose. However, I will always be ready to

provide any further clarification that you may require.

Sincerely yours,

______________

Seemin MehnoorRegistration no. 03102071The University of Asia Pacific

Banking system of Bangladesh has gone through three phases of development-

Nationalization, Privatization, and Lastly Financial Sector Reform. Export Import

(EXIM) Bank of Bangladesh Limited has started its journey as a private commercial

bank from 1999.

In the period of practical orientation in XIM Bank Ltd. at Mirpur Branch, I was

placed in three vital departments, these were:

General banking,

Investment or credit, and

Foreign exchange.

But I was worked more in General banking and Foreign exchange departments.

General banking is the starting point of all the banking operations. It is the

department, which provides day-to-day services to the customers. It opens new

accounts, remit funds, issue bank drafts and pay orders etc. Provide customer through

quick and sincere service is the goal of the general banking department.

Bank investment or credit is an important catalyst for bringing about economic

development in a country. Without adequate finance, there can be no growth or

maintenance of a stable economy. EXIM Bank, being one of the largest private

commercial bank of the country, has some prejudice to finance directly on priority

basis to industry and commerce sector for strengthening the economic base of the

country. Hence, it is very clear that, EXIM Bank plays an important role to move the

economic wheel of the country. Providing different sorts of credit and schemes like

loan against imported merchandise (LIM), Trust Receipt, Bank Guarantee, Industrial

Loan, IT loan, Consumer Credit scheme, Executives Car Loan, House Finance is the

main spring of the credit department.

Foreign exchange department plays significant roles through providing different

services for the customers. Letters of credit is the key player in the foreign exchange

business. With the globalization of economies, international trade has become quite

competitive. Timely payment for exports and quicker delivery of goods is, therefore, a

pre-requisite for successful international trade operations. To ensure this purpose

EXIM Bank Ltd. transmit L/C through SWIFT (Society for Worldwide Inter-bank

Financial Telecommunication) to the advising bank.

EXIM Bank Limited is providing different sorts LC services like L/C opening,

lodgment, BLC (bills under letter of credit), Back to back LC etc. Foreign exchange

department also provide foreign remittance lie traveler’s cheque, money Gram foreign

demand draft, endorsement of US$ in passport.

On the other hand it was not possible for me to work in the Human Resource

Department but like other all I was assigned in to the Mirpur branch and I was learned

general banking, foreign exchange, and some of investment activities of the bank

instead of Human Resource Management. Although I had tried to give an overview of

EXIM Bank Ltd. HR department and it activities on the basis of Human Resource

Management Components and Human Resource Management Wheel or Model.

1.1 BACKGROUND OF THE STUDY:

It is very important to have a practical application of the knowledge acquired from

any academic course of the study. Only a lot of theoretical knowledge will become

fruitless if it is not applied in the practical life. So we need proper application of our

knowledge to get some benefit from our theoretical knowledge to make it more

fruitful. Such an application can be possible through internship.

The internship program exercise a significant importance as it enables a student to

familiar with the practical business activities. The student work closing with the

people of an organization and learn about the function of that organization. This

program enables a student to develop his analytical skill and scholastic aptitude.

As part of the Internship Program of Bachelor of Business Administration course

requirement, I was assigned for doing my internship in EXIM Bank Limited for the

period of 90 days starting from May 06, 2008 to August 06. 2008. During my intern

period in the EXIM Bank Limited, Mirpur Branch, I worked under different

departments of the bank. I worked under the supervision of Senior Executive Officer

(SEO), Sub-Manager, and under my immediate supervisor in the branch. Their

assistance and guidance help me a lot to completing this report.

1.2 SCOPE OF THE STUDY:As I was sent to EXIM Bank Ltd., Mirpur Branch, the scope of the study is only

limited to this branch. This report covers all areas of banking activities of EXIM Bank

Limited. In the Mirpur Branch that include Customer Service, Remittance, Cash,

Accounts, Investment and Foreign Exchange department. The report limits itself to

understanding the activities of various departments rather than aiming for an

extensive analysis of the entire banking activities handled by EXIM Bank Limited. It

was beyond the scope of this report to study the entire process of each and every

department because of feasibility and time considerations.

INTRODUCTION:

1.3 PROBLEM STATEMENT:Export Import Bank of Bangladesh Limited is an Islamic Bank having 35 branches

and two new branches is going to open soon all over the country with different types

of banking service and products. It is developing and expanding its branches in the

country to gain greater acceptance as an effective and efficient means of

intermediation and to contribute to the overall wealth creation. To gain greater

acceptance, to contribute to the overall wealth creation and compete with commercial

banks, the factors that earn extend foreign exchange business and earn more foreign

currency.

1.4 OBJECTIVES OF THE STUDY:This study is aimed at providing me invaluable practical knowledge with the

consideration of my theoretical knowledge I had gain from BBA program at the

University of Asia Pacific. It will also help me to develop my concept of Islamic

banking system and it operations. The objectives are:

To comply with the entire branch banking procedures.

To make a bridge between the theories and practical procedures in a real

life situation.

To understand the terms that has been taught during my BBA period at the

University in a real life situation.

To analyze the performance of the branch as well as EXIM Bank Limited

as a whole.

To present my observation and suggestions to the bank and to increase

knowledge.

To analyze and understand the Human Resource Management in a

practical situation.

1.5 METHODOLOGY:

This report has been prepared on the basis of experience gathered during the period of

internship from May 06, 2008 to August 06, 2008. For preparing this report, I have

undergone group discussion, collected data and face to face interviewed with the

selected Officers. I also studied different circulars and files of the bank.

I hope these criteria will be enough to find out different picture of financial

performance and Human Resource practice of the selected bank (EXIM Bank Ltd.).

During my study I followed some methodology to find out the fact and feature of the

bank which are given as follows.

Sources of Data/Information

I have collected my information/data from the following sources, which helped me to

make this report. The source has divided by two parts. Such as

Primary Sources

Oral interview of the responsible officers.

Personal experience gained by visiting different desks during

internship period.

Secondary Sources

Official Records of EXIM Bank ltd.

Annual Reports of EXIM Bank ltd

Relevant papers and different books.

Manual of different departments.

Periodical publications. EXIM Bank ltd.

Prior research reports.

Bangladesh Bank Report.

1.6 LIMITATIONS:Despite the diligent efforts given in preparing the report, it succeeded only to skim

through the surface of the ocean on this subject. Therefore the views expressed in this

report are likely to be restricted by limitations. After completing the institutional

experience, practical performance in real life becomes difficult. So, my lack of

experience greatly influenced in preparing this report. On the other hand it was not

possible for me to work in the Human Resource Department, like other all I was

assigned in to the Mirpur branch and I was learned general banking, foreign

exchange, and some of investment activities of the bank instead of Human Resource

Management. But I was tried to collect data on EXIM Bank Ltd. Human Resource

Management from personal oral interview and observation.

Lack of knowledge about banking and financial related terminologies.

It is too much difficult to comment and suggest based on only the annual

report and information supplied by the organization.

In many case the relevant authorities are not aware about internship.

Unwilling to provide data more because of confidentiality.

Lack of collecting essential data & information.

Information related to the Human Resource Management is top secrete.

Complete internship in a general branch instead of Human Resource

Department.

2.1 Background:

EXIM Bank Limited was established in 1999 under the leadership of Late Mr.

Shahjahan Kabir, founder chairman who had a long dream of floating a commercial

bank which would contribute to the socio-economic development of our country. He

had a long experience as a good banker. A group of highly qualified and successful

entrepreneurs joined their hands with the founder chairman to materialize his dream.

In deed, all of them proved themselves in their respective business as most successful

star with their endeavor, intelligence, hard working and talent entrepreneurship.

Among them, Mr. Nazrul Islam Mazumder became the honorable chairman after the

demise of the honorable founder chairman.

This bank starts functioning from 3rd August, 1999 with Mr. Alamgir Kabir, FCA as

the advisor and Mr. Mohammad Lakiotullah as the Managing Director. Both of them

have long experience in the financial sector of our country. By their pragmatic

decision and management directives in the operational activities, this bank has earned

a secured and distinctive position in the banking industry in terms of performance,

growth, and excellent management. The authorized capital and paid up capital of the

bank are Tk. 1000.00 million and Tk 313.87 million respectively.

The bank has migrated all of its conventional banking operation into Shariah based

Islami banking since July/2004.

2.2 Vision & Mission:

Our vision and mission are stated in the following bullets: To be the finest bank in the banking arena of Bangladesh under the Shariah

guidelines.

To maintain Corporate and business ethics.

To become a trusted repository of customers' money and their financial

advisor.

To make our stock superior and rewarding to the customers/share holders.

Profile of Export Import Bank of Bangladesh Limited

To display team spirit and professionalism.

To have a Sound Capital Base.

To provide high quality financial services in export and import trade.

To provide excellent quality Customer service

2.3 Corporate Culture:

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

Here we believe in shared meaning, shared understanding and shared sense making.

Our people can see and understand events, activities, objects and situation in a

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

the purpose of the Bank and the needs of the customers who are of paramount

importance to us. The people in the Bank see themselves as a tight knit team/family

that believes in working together for growth. The corporate culture we belong has not

been imposed; it has rather been achieved through our corporate conduct.

2.4 Social Commitment:

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

and the equity holders are aware of their commitment to the society to which they

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

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

country. We want to make a substantive contribution to the society where we operate,

to the extent of our separable resources.

2.5 Achievement:

It is a great pleasure that by the grace of Almighty Allah, we have migrated at a time

all the branches from its conventional banking operation into Shariah based Islami

banking operation without any trouble. Lot of uncertainties and adversities were there

into this migration process. The officers and executives of our bank motivated the

valued customers by counseling and persuasion in light with the spirit of Islam

especially for the non-Muslim customers. Our IT division has done the excellent job

of converting and fitting the conventional business processes into the processes based

on Shariah. It has been made possible by following a systematic procedure of

migration under the leadership of honorable Managing Director.

2.6 Management Profile:

Mr. Kazi Masihur Rahman Managing Director

Mr. Ekramul Hoque Additional Managing Director

Mr. Md. Sirajul Islam Bhuiyan Mr. Mohammed Haider Ali Miah

Deputy Managing Director Deputy Managing Director

Mr. Karimuzzaman Mr. Sirajul Haque Miah Mr.Md. Fazlur Rahaman

Executive Vice-President ExecutiveVice-President Executive Vice-President

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Mr. Khondoker Rumy Ehsanul Haq Mr. Fazal Akhter

Executive Vice-President Executive Vice-President

Name Designatio

n Place of Posting

Mr. Md. Akhtar Hossain SVP RMG Division, Head Office

Mr. Mohd. Alamgir SVP Regional Manager of Chittagong

Mr. Md. Zakaria Faruq SVP Nawabpur Branch, Dhaka

Mr. Md. Golam Mahbub SVP Board Secretariat, Head Office

Mr. A.Y.M. Naimul Islam SVP Narayanganj Branch, Narayanganj.

Mr. Md. Humayun Kabir SVP Financial Administration Division,

Head Office

Mr. Shah Md. Abdul Bari SVP Human Resources Division, Head

Office

Mr. Md. Muhibbul Abrar

ChoudhurySVP Khatungonj Branch, Chittagong

Mr. Khondoker Nayeemul

Kabir SVP Panthapath Branch, Dhaka

Mr. Md. Feroz Hossain SVP Motijheel Branch, Dhaka

Mr. Shaikh Bashirul Islam SVP International Division, Head Office

Mr. Sheik Moyeen Uddin SVP Investment Division, Head Office

Mr. Md Shahidullah SVP Agrabad Branch, Chittagong

Mr. Moniruzzaman

Chowdhury SVP EXIM Bank Training Institute

Mr. Shahidur Rahman SVP Motijheel Branch, Dhaka

Mr. Md. Muniruzzaman SVP General Service Division, Head

Office

Mr. Md. Shahjahan SVP Imamgonj Branch, Dhaka

Mr. Md. Anisul Alam VP Uttara Branch, Dhaka

Mr. Khorshed Alam

Chowdhury VP New Eskaton Branch, Dhaka

Mr. Md. Zoshim Uddin

Bhuiyan VP Rajuk Avenue Branch, Dhaka

Engr. Shamsur Rahman

Chowdhury, MBA VP

CBS Implementation Project, Head

Office

Mr. Md. Mosharraf Hossain

Mazumder VP

CBS Implementation Project, Head

Office

Mr. Mohammad Hanif VP Jubilee Road Branch, Chittagong

Mr. Md. Nasir Uddin Ahmad VP International Division, Head Office

Mr. S.M. Abu Zaker VP Agrabad Branch, Chittagong

Mr. Abu Hena Md. Mohsinn SAVP Financial Administration Division,

Head Office

Mr. Md. Moidul Islam SAVP Motijheel Branch , Dhaka

Mr. Abdul Jobbar Chowdhury SAVP Moulvibazar Branch, Moulvibazar

Mr. M. Sakhawat Hossain SAVP Narayanganj Branch

Mr. Tariqul Islam Choudhury SAVP Rajuk Avenue Branch, Dhaka

Mr. Md. Zakir Hossain SAVP Uttara Branch, Dhaka

Mr. F.M. Nawaz Ali SAVP Mirpur Branch, Dhaka

Mr. Rafiqur Rahman SAVP Laksham Branch, Laksham

Mr. Kazi Nesar Uddin Ahmad SAVP ICCD, Head Office

Mr. Md. Shah Alam AVP Ashugonj Branch

Mr. Md. Abdur Rahman AVP Motijheel Branch

Mr. Mosleh Uddin Ahmed AVP Shimrail Branch

Mr. Md. Abdul Halim AVP Ashulia Branch

Mr. Md. Rashedul Hasan AVP GSD, Head Office

Ms. Maksuda Khanom AVP Gulshan Branch

Mr. Md. Zakir Anam AVP Bashundhara Branch

Mr. Mefta Uddin Khan AVP Satmasjid Road Branch

Mr. Khandker Md. Mostasir AVP CBS Implementation Project, Head

Office

Mr. Md. Mostafa AVP Kawranbazar Branch

Mr. Md. Shah Azam AVP CBS Implementation Project, Head

Office, Dhaka

Mr. Md. Jashim Uddin AVP Sylhet Branch

Mr. Md. Solaiman Mridha AVP Gazipur Chowrasta Branch, Gazipur

Mr. Hasan Faruk AVP Elephant Road Branch, Dhaka

Mr. Md. Abdul Qaium Khan AVP Information Technology Division,

Head Office, Dhaka

Mr. Md. Mahbub Alam AVP CBS Implementation Project, Head

Office, Dhaka

Mr. Md. Nurul Absar AVP Jubilee Road Branch, Chittagong

Mr. Md. Shahjahan Patwary AVP Agrabad Branch, Chittagong

Mr. Md. Israil Khan AVP International Division, Head Office,

Dhaka

Mr. Mohammad Abul Hashem AVP CDA Avenue Branch, Chittagong

Mr. Md. Aminul Islam AVP SAVAR Branch, Savar

Mr. Md. Mumtaz Ahmed AVP Bogra Branch, Bogra

Mr. Md. Akhteruzzaman AVP Khatungonj Branch, Chittagong

Mr. Md. Osman Ali Miah AVP Rangpur Branch, Rangpur

Mr.Emran Hossain AVP Motijheel Branch, Dhaka

2.7 Shariah board:

The Board of directors has formed a Sharia Supervisory Board for the Bank. Their

duty is to monitor all the Bank’s transactional procedures, & assuring it’s Sharia

compliancy. This Board consists of the following members headed by its Chairman.

The tasks of the Sharia supervisor in summary is replying to queries of the Bank’s

administration, staff members, shareholders, depositors, & customers, follow up with

the Sharia auditors and provide them with guidance, submitting reports & remarks to

the Fatwa & Sharia Supervision Board and the administration, participating in the

Bank’s training programs, participating in the supervision over the AlIqtisad AlIslami

magazine, & handling the duty of being the General Secretary of the Board.

Members of Shariah Council:

Professor Moulana Mohammad Salah UddinMr. Md. Nazrul Islam

Mazumder

Moulana Mohammad Sadequl Islam Mr. A.K.M Nurul Fazal Bulbul

Professor H.M. Shahidul Islam Barakaty Mr. Md. Abdul Mannan

Mr. A.S.M. Fakhrul Ahsan Mr. Zubayer Kabir

Hafez Moulana Mufti Mohammad Khair Ullah Mr. Abdullah Al-Zahir Sawpan

Hafez Quari Moulana Mufti Mohammad Nur

UddinMr. Kazi Masihur Rahman

Shariah Auditing:

This is the civil supervisory aspect that shapes the Bank’s main feature. Its existence

is part of the Sharia Supervision procedures. One of its main tasks is to check the

Sharia compliancy in the Bank’s transactional procedures in accordance to the Fatwas

issued in that regard, under the guidance of the Sharia Supervisor.

The Sharia auditor is assigned the task of revising the Bank’s transactional procedures

throughout the year to check the extent to which the staff members and the different

departments have abided by the regulations, advices, and Fatwas issued by the Fatwa

& Sharia Supervision Board, forums, & banking conferences. As well as, assuring

that all the contracts that states a right for the Bank or an obligation on the Bank is

certified by the Fatwa & Sharia Supervision Board.

Moreover, the Sharia Auditing submits periodic reports to the Sharia Supervisor in

order to be proposed to the Fatwa & Sharia Supervision Board to state what it finds

appropriate in that regard.

Banking with shariah principles:

Export Import Bank of Bangladesh Limited is the 1st bank in Bangladesh who has

converted all of its operations of conventional banking into shariah-based banking

since July/2004. We offer banking services for Muslims and non-Muslims alike

allowing our customers choice and flexibility in their savings and investments. Our

products are approved by our Shariah Board comprising of veteran Muslim scholars

of our country who are expert in all matters of Islamic finance.

The process by which Noriba's investments are designed and executed allows the

Bank to offer a combination of Sharia compliance and capital markets expertise that is

unique throughout the world.

Noriba is committed to the strict adherence to the requirements of the Sharia as a

result of the Bank's sole focus on Sharia-compliant investments and the full

supervision of its financial products and transactions by the Noriba Sharia Board.

Noriba experts specifically design each of the Bank's investment vehicles with the

approval of the Noriba Sharia Board. Once the given product or transaction has been

arranged, the Noriba Sharia Board carefully screens it for compliance before giving

final approval for its implementation. This control mechanism guarantees that all

aspects of Noriba's final products and banking transactions are in adherence with the

guidelines of the Sharia.

2.8 Bank Operational Area:Export and Import Trade Handling and Financing:

As a commercial Bank, we do all traditional Banking business including the wide

range of savings and credit scheme products, retail banking and ancillary services

with the support of modern technology and professional Excellency. But our main

focus is, for obvious reason, on export and import trade handling and the development

of entrepreneurship and patronization of private sectors.

2.9 Branch Information:(EXIM Bank Ltd. have 35 Branches in Bangladesh and two more are in-process to opening)

2.10 Financial Statement:

Export Import Bank of Bangladesh Limited

Financial Administration Division

Head office Dhaka.

Year wise Dividend position of the Bank

Year % Cash dividend % Stock dividend Total

1999 -Nil- -Nil- -Nil-

2000 14.00% -Nil- 14.00%

2001 25.00% 12.50% 37.50%

2002 8.00% 24% 32.00%

2003 40.00% -Nil- 40.00%

2004 -Nil- 40% 40.00%

2005 -Nil- 30% 30.00%

2006 -Nil- 25% 25.00%

2007 7% 25% 32.00%

EXPORT IMPORT BANK OF BANGLADESH LIMITED

Highlights on the overall activities

As at 31 December 2007

Ser. No.

Particulars 2007(Taka)

2006(Taka)

1 Paid up capital 2,142,196,800 1 ,713,757,5002 Total capital 4,569,562,645 3 ,467,368,0683 Surplus/(shortage) of capital 498,916,145 5 51,245,5784 Total assets 51,503,027,985 4 1,793,540,962

5 Total deposits 41,546,568,592 3 5,032,024,6256 Total investment 40,195,239,222 3 2,641,270,3167 Total contingent liabilities and

commitments22,632,654,873 1 8,994,087,363

8 Ratio on investments and deposits 96.75% 93.18%9 Ratio on classified investments

and total investments 1.58% 1.80%

10 Profit after tax and provisions 930,843,607 6 50,292,34211 Classified investments 635,106,791 5 88,173,16812 Provision held against classified

investments 270,763,271 1 83,888,706

13 Surplus/(shortage) of provision - 6 ,950,000 -14 Cost of fund 9.07% 9.17%15 Profit earning assets 42,357,645,536 3 5,161,475,38116 Non-profit bearing assets 9,145,382,449 6 ,632,065,58117 Return on investment (shares and

bonds) 8.77% 6.55%

18 Return on assets (after tax) 2.00% 1.73%19 Income on investment (shares and

bonds) 205,594,883 1 21,460,342

20 Earnings per share 43.45 4 3.48

21 Net income per share 43.45 3 7.9522 Price earning ratio (times) 9.02 7.74

2.11 Share Information of EXIM Bank:

Export Import Bank of Bangladesh Limited

Name of the Company Export Import Bank of Bangladesh Limited

Instrument Code EXIMBANK

Number of shares issued in IPO 31,38,750

Total Number of shares including Sponsors 62,77,500

Face Value Tk.100.00 per share

Premium Tk.30.00 per share

Market lot 50

Date of publication of Prospectus June 28, 2004 in “The Daily Janakantha”

Opening Date for Subscription of Shares July 24, 2004

Closing Date for Subscription of Shares July 28, 2004

Date and Place of Lottery for Allotment of

Shares

August 19, 2004; Bangladesh China Friendship Conference

Center

Number of Allotment Letter Issued 56755

Date of Issuance of Allotment Letter(s) August 21, 2004

Date of listing with DSE September 26, 2004

Date of listing with CSE September 04, 2004

Date of 1st Trading October 16, 2004

Opening price on 1st Trading Date 517.00

Highest price (2004-2005) 805.00

Lowest Price (2004-2005) 450.00

2.12 Product & Services:

Super Savings Scheme Monthly Savings Scheme Monthly Income Scheme

Multiplus Savings Hajj Deposit

2.12.1 Investment / Finance: Corporate Finance

Industrial Finance

Project Finance

Syndicate Investment

Mode of Investment:

Murabaha Quard

Bai Muazzal Local Documentary Bill Purchased

Izara Bil Baia Foreign Documentary Bill Purchased

Wazirat Bil Wakala

2.12.2 Deposit:

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Al-Wadia Current Deposit

Mudaraba Savings Deposit

Mudaraba Short Term Deposit

Mudaraba Term Deposit:

One Month Twelve MonthsThree Months Twenty Four MonthsSix Months Thirty Six Months

Foreign Currency Deposit

Mudaraba Savings Scheme:

Monthly Savings Scheme(Money Grower) More than triple the Deposit in 10 years

(Multiplus Savings)

Monthly Income Scheme(Steady Money) Mudaraba Hajj Deposit

More than Double the deposit in 6 years

(Super Savings)

We emphasize on non-fund business and fee based income. Bid bond/ bid security

can be issued at customer’s request.

Our Bank is posed to extend L/C facilities to its importers / exporters through

establishment of correspondent relations and Nostro Accounts with leading banks all

over the world.

Moreover, Consumers can deposit their Telephone bill of Grameen Phone in all the

branches except Motijheel and the consumers of Palli Buddut somity of Gazipur can

deposit their electricity bill to Gazipur branch.



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2.13 E-cash/ ATM Service:

The bank is currently providing Credit Card Service (MasterCard) to the privileged

customers of the bank in collaboration of Prime Bank. Floating VISA card for both

Debit and Credit card service is under process.

2.14 Society for Worldwide Inter-bank Financial Telecommunication

(SWIFT):Bank Identified Code (BIC): EXBKBDDH

List of branches having Bank Identifier Code (BIC)Sl. No Branch Name BIC

1 MOTIJHEEL BRANCH EXBKBDDH001

2 PANTHAPATH BRANCH EXBKBDDH002

3 AGRABAD BRANCH EXBKBDDH003

4 KHATUNGANJ BRANCH EXBKBDDH004

5 IMAMGANJ BRANCH EXBKBDDH006

6 GULSHAN BRANCH EXBKBDDH007

7 NAWABPUR BRANCH EXBKBDDH010

8 NARAYANGONG BRANCH EXBKBDDH011

9 RAJUK AVENUE BRANCH EXBKBDDH013

10 UTTARA BRANCH EXBKBDDH015

11 JUIBLEE ROAD BRANCH EXBKBDDH018

12 MIRPUR BRANCH EXBKBDDH017

13 KARWAN BAZAR BRANCH EXBKBDDH035

14 BOGRA BRANCH EXBKBDDH021

INTERNATIONAL OPERATION

List of Nostro A/c CIS of January-2002 >Sl. No

Name of Country Name of the Bank Currency Bank Identifier

Code A/C No.

1 U.S.A. American Express Bank Ltd. , New York USD AEIBUS33 739755

2 U.S.A. Standard Chartered Bank , New York USD SCBLUS33 3582-048957-001

3 U.S.A. Mashreqbank psc , New York USD MSHQUS33 70119908

4 U.S.A. Citibank N. A. , New York USD CITIUS33 3615-1783

5 U.S.A. Wachovia Bank N.A. , New York USD PNBPUS3NNYC 2000193008917

6 U.S.A HSBC Bank N.A. , New York USD MRMDUS33 000148849

7 Hong KongUnion De Banques Arabes Et

Francaises (UBAF) Hong Kong Limited, Hong Kong

USD UBAFHKHX 60-044200-001-03-0-53

8 Hong KongUnion De Banques Arabes Et

Francaises (UBAF) Hong Kong Limited, Hong Kong

HKD UBAFHKHX 60-044200-001-26-0-53

9 Germany Commerzbank AG, Frankfurt EUR COBADEFF 400 8701526 00 EUR

10 Germany HypoVereinsbank , Munchen EUR HYVEDEMM 69105530

11 Germany American Express Bank GMBH, Frankfurt EUR AEIBDEFX 018124200

12 U.K. Standard Chartered Bank, London GBP SCBLGB2L 01-7083394-01

13 U.K. HSBC BANK PLC, London GBP MIDLGB22 59180818

14 Japan American Express Bank Ltd., Tokyo JPY AEIBJPJX 313000832

15 Japan Union De Banques Arabes Et Francaises (U.B.A.F.), Tokyo JPY UBAFJPJX 1028157000 1000

16 Japan Sumitomo Mitsui Banking Corporation, Tokyo JPY SMBCJPJT 4324

17 Switzerland Habib Bank AG Zurich, Zurich CHF HBZUCHZZ 1-1-1-20110-1-

124701

18 Switzerland Union Bank of Switzerland AG, Zurich CHF UBSWCHZH80A 230-75605.05A

19 Canada The Bank of Nova Scotia, Toronto CAD NOSCCATT 527120027413

20 India American Express Bank Ltd., Kolkata ACU AEIBINDXCAL 412800726

21 India Citibank N.A., Mumbai ACU CITIINBX 0011440002

22 India Standard Chartered Bank, Kolkata ACU SCBLINBB 322-0-513033-3

23 India Arab Bangladesh Bank Ltd., Mumbai ACU ABBLINBB 300119

24 IndiaThe Hong Kong Shanghai

Banking Corporation Limited., Mumbai

ACU HSBCINBB 019-134980-650

25 India ICICI Bank Limited, Mumbai ACU ICICINBB 000406000235

26 Pakistan NDLC-IFIC Bank Limited, Karachi ACU NIBPPKKA 0060-0034479-

3701

27 PakistanThe Hongkong and Shanghai

Banking Corporation Limited, Karachi

ACU HSBCPKKX 001-032101-190

28 Pakistan Askari Commercial Bank Limited, Karachi ACU ASCMPKKA 020500092-2

29 Sri Lanka Union Bank of Pakistan, Colombo ACU UNBLLKLC 3600-001780-051

30 Nepal Nepal Bangladesh Bank Ltd. ( Kathmandu) ACU NPBBNPKA 011121 D

31 Bhutan Bank of Bhutan Limited, Phuentsholing ACU BHUBBTBT 34016

32 Saudi Arabia National Commercial Bank, Jeddah SAR NCBKSAJE 88321015000105

2.15 EXIM Bank at a Glance:

Figure in crore

Sl. No. Particulars 2004 2005 2006 2007

01. Authorized Capital 100.00 100.00 350.00 350.00

02. Paid-up Capital 62.78 87.90 171.38 214.22

03. Reserve Fund 35.73 57.00 81.09 113.46

04. Deposits 1907.82 2831.90 3503.20 4154.66

05. Investment(General) 1933.20 2604.60 3264.13 4019.52

06. Investment(Shares & Bonds) 154.30 163.30 223.33 245.77

07. Foreign Exchange Business 4931.24 7294.00 9617.51 11790.01

a) Import Business 2678.10 4143.20 4949.67 6139.94

b) Export Business 2241.84 3128.50 4623.46 5579.04

c) Remittance 11.31 22.30 34.38 71.03

08. Operating Profit 83.58 117.58 137.87 190.82

09. Loan as a % of total Deposit 101.97% 91.97% 93.18% 96.75%

10. No. of Foreign Correspondent 200 222 246 246

11. Number of Employees 768 934 1020 1104

12. Number of Branches 28 28 30 35

13. Return on Assets 3.44% 1.65% 1.73% 2.00%

2.16 Photo Gallery:

Signing Ceremony of Core Banking

Software of EXIM Bank

Exim Bank Donates Taka 20 Lac’s to

Ahsaniya Mishon Cancer Hospital

48th Board Meeting of EXIM Bank Review meeting of EXIM Bank

regarding the attainment of goal fixed

for the year 2006

23 rd Meeting of Shariah Council Managers’ Conference, 2006

Scholarship Program of EXIM Bank

Get-Together of Officers’ & Executives of Exim Bank

3.1 INTRODUCTION:General banking department is the heart of all banking activities. This is the busiest

and important department of a branch, because funds are mobilized, cash transactions

are made; clearing, remittance and accounting activities are done here.

3.2 ACTIVITIES OF GENERAL BANKING DEPARTMENT:Since bank is confined to provide the services everyday, general banking is also

known as ‘retail banking’. In EXIM Bank LTD Principal Branch, the following

departments are under general banking section:

Account opening section

Deposit section

Cash section

Remittance section

Clearing section

Accounts section

ACCOUNT OPENING SECTION:

Account opening is the gateway for clients to enter into business with bank. It is the

foundation of banker customer relationship. This is one of the most important sections

of a branch, because by opening accounts bank mobilizes funds for investment.

Various rules and regulations are maintained and various documents are taken while

opening an account. A customer can open different types of accounts through this

department. Such as:

I. Al –Wadia (Current) account.

II. Mudaraba Savings (SB) account.

III. Mudaraba Short Term Deposit (MSTD)

ACTIVITIES OF GENERAL BANKING AND MY UNDERSTANDING

TYPES OF ACCOUNTS WITH TERMS AND CONDITIONS:

I. Al- Wadia (Current) Account:

Current account is purely a demand deposit account. There is no restriction on

withdrawing money from the account. It is basically justified when funds are to be

collected and money is to be paid at frequent interval.

Some Important Points are as follows-

Minimum opening deposit of TK.1000/- is required;

There is no withdrawal limit.

No interest is given upon the deposited money;

Minimum Tk.1000/= balance must always maintain all the time.

II. Mudaraba Savings (SB) Account:

This deposit is primarily for small-scale savers. Hence, there is a restriction on

withdrawals in a month. Heavy withdrawals are permitted only against prior notice.

Some Important Points are as follows-

Minimum opening deposit of Tk.5000/= is required;

Minimum Tk. 1000/= balance must always maintain all the time;

Withdrawal amount should not be more than 1/4th of the total balance at a time

and limit twice in a month.

If withdrawal amount exceed 1/4th of the total balance at a time no interest is

given upon the deposited money for that month.

III. Mudaraba Short Term Deposit (MSTD) Account:

Normally various big companies, organizations, Government Departments keep

money in MSTD account. Frequent withdrawal is discouraged and requires prior

notice. The deposit should be kept for at least seven days to get interest. The interest

offered for MSTD is less than that of savings deposit. Interest is calculated based on

daily minimum product and paid two times in a year. Interest rate is 4.50%.

ACCOUNTS OPENING PROCEDURE:

Step 1

The account should be properly introduced by Any one of the

following:

An existing Current Account holder of the Bank.

Officials of the Bank not below the rank of an Assistant officer.

A respectable person of the locality well known to the

Manager/Sub-Manager of the Branch concerned.

Step 2Receiving filled up application in bank’s prescribed form mentioning

what type of account is desired to be opened

Step 3

The form is filled up by the applicant himself / herself

Two copies of passport size photographs from individual are taken,

in case of firms photographs of all partners are taken

Applicants must submit required documents

Application must sign specimen signature sheet and give mandate

Introducer’s signature and accounts number – verified by legal

officer

Step 4 Authorized Officer accepts the application

Step 5 Minimum balance is deposited – only cash is accepted

Step 6 Account is opened and a Cheque book and pay-in-slip book is given

DOCUMENTS REQUIRED FOR OPENING ACCOUNT:

□ Individual / Joint Account:

1. Introduction of the account.

2. Two photographs of the signatories duly attested by the introducer.

3. Identity (copy of passport).

4. Joint Declaration Form (For joint a/c only).

5. Employee’s Certificate (in case of service holder).

□ Partnership account:



3. Partnership letter duly signed by all partners (Sign should be similar as

stated in Partnership Deed).

4. Partnership Deed duly certified by Notary public.

5. Registration (If any).

6. Updated Trade license.

□ Proprietorship account:



3. Valid copy of Trade License.

4. Rubber stamp.

5. TIN number certificate.

6. Identity (Copy of passport).

7. Permission letter from DC/ Magistrate (in case of newspaper)

□ Limited company


2. Two photographs of the signatories duly attested by the Introducer.

3. Valid copy of Trade License.

4. Board resolution of opening A/C duly certified by the

Chairman/Managing director.

5. Certificate of Incorporation.

6. Certificate of Commencement (In case of Public limited company).

7. Certified (joint stock) true copy of the Memorandum and Article of

Association of the Company duly attested by Chairman or Managing

director.

8. List of directors along with designation & specimen signature.

9. Latest certified copy of Form – xii (to be certified by register of joint

stock companies) (In case of Directorship change).

10. Rubber Stamp (Seal with designation of each person)

11. Certificate of registration (In case of Insurance Company – Obtained

from department of Insurance from the Peoples Republic of BD).

□ Club / societies account:


2. Two photographs of the Signatories duly attested by the introducer.

3. Board Resolution for Opening A/C duly certified by President/

Secretary.

4. List of Existing Managing Committee.

5. Registration (if any).

6. Rubber Stamp.

7. Permission letter from Bureau of N.G.O. (In case of N.G.O. A/C).

3.3 Deposit Section:

Deposit is the lifeblood of a bank. From the history and origin of the banking system

We know that deposit collection is the main function of a bank.

Accepting deposits:

The deposits that are accepted by EXIM Bank like other banks may be classified in to,

a) Demand Deposits

b) Time Deposits

Demand deposits:

These deposits are withdrawn able without notice, e.g. current deposits. EXIM Bank

accepts demand deposits through the opening of:-

a) current account

b) Savings account

c) Call deposits from the fellow bankers

Time deposits:

A deposit which is payable at a fixed date or after a period of notice is a time deposit.

EXIM Bank accepts time deposits through Fixed Deposit Receipt (FDR), Short Term

Deposit (STD) and Bearer Certificate Deposit (BCD) etc.

While accepting these deposits, a contract is done between the bank and the customer.

When the banker opens an account in the name of a customer, there arises a contract

between the two. This contract will be valid one only when both the parties are

competent to enter into contracts. As account opening initiates the fundamental

relationship & since the banker has to deal with different kinds of persons with

different legal status, EXIM Bank officials remain very much careful about the

competency of the customers.

Fixed Deposit:

The Local Remittance section of EXIM Bank also issues FDR.

They are also known as time deposit or time liabilities. These are deposits, which are

made with the bank for a fixed period, specified in advance. The bank need not

maintain cash reserves against these deposits and therefore, the bank offers higher of

interest on such deposits.

Opening of fixed Deposit Account: The depositor has to fill an account form

where in the mentions the amount of deposit, the period for which deposit is to be

made and name/names is which the fixed deposit receipt is to be issued. In case of

a Joint name EXIM Bank also takes the instructions regarding payment of money

on maturity of the deposit. The banker also takes specimen signatures of the

depositors. A fixed deposit account is then issued to the depositor acknowledging

receipt of the sum of money mentioned there. It also contains the rate of interest

and the date on which the deposit will fall due for payment.

Term Deposits: These rates are not negotiable. In this table we can find out the

percentage that is given by the bank for specific period of time to the customer.

Fixed deposit: 3 (three) month

SL no. Range of amount Rate of Interest

01 TK 10000.00-Above 12.50%

Fixed deposit: 6 (six) month


01 TK 10000.00-Above 12.75%

Fixed deposit: 12 (twelve) month


01 TK 10000.00-Above 13%

Payment of interest: It is usually paid on maturity of the fixed deposit. EXIM

Bank calculates interest at each maturity date and provision is made on that

“miscellaneous creditor expenditure payable accounts” is debited for the accrued

interest.

Encashment of FDR: In case of premature FDR< EXIM Bank is not bound to

accept surrender of the deposit before its maturity date. In order to deter such a

tendency the interest on such a fixed deposit is made cut a certain percentage less

the agreed rate. Normally savings bank deposit is allowed.

Loss of FDR: In case of lost of FDR the customer is asked to record a GD

(general diary) in the nearest police station. After that the customer has to furnish

an Indemnity Bond to EXIM Bank a duplicate FDR is then issued to the customer

by the bank.

Renewal of FDR: In EXIM Bank, the instrument is automatically renewed within

seven days after the date of its maturity if the customer does not come to encash

the FDR. The period for renewal is determined as the previous one

3.4 Cash Section:

Banks, as a financial institution, accept surplus money from the people as deposit and

give them opportunity to withdraw the same by cheque, etc. But among the banking

activities, cash department play an important role. It does the main function of a

commercial bank i.e. receiving the deposit and paying the cash on demand. As this

department deals directly with the customers, the reputation of the bank depends

much on it. The functions of a cash department are described bellow:

Functions of Cash Department:

Cash Payment

1. Cash payment is made only against cheque

2. This is the unique function of the banking system which

is known as “payment on demand”

3. It makes payment only against its printed valid Cheque

Cash Receipt

1. It receives deposits from the depositors in form of cash

2. So it is the “mobilization unit” of the banking system

3. It collects money only its receipts forms

□ Cash packing:

After the banking hour cash is packed according to the denomination. Notes are

counted and packed in bundles and stamped with initial.

□ Allocation of currency:

Before starting the banking hour all tellers give requisition of money through

“Teller cash proof sheet”. The head teller writes the number of the packet

denomination wise in “Reserve sheet” at the end of the day, all the notes

remained are recorded in the sheet.

3.5 REMITTANCE SECTION

Carrying cash money is troublesome and risky. That’s why money can be transferred

from one place to another through banking channel. This is called remittance.

Remittances of funds are one of the most important aspects of the Commercial Banks

in rendering services to its customers.

Types of remittance:

Between banks and non banks customer

Between banks in the same country

Between banks in the different centers.

Between banks and central bank in the same country

Between central bank of different customers.

The main instruments used by the EXIM Bank of remittance of funds are

Payment order ( PO)

Demand Draft ( DD)

Telegraphic Transfer (TT)

So the basic three types of local remittances are discussed below

Points Pay Order Demand Draft TT

Explanation

Pay Order gives the payee the right to claim payment from the issuing bank

Demand Draft is an order of issuing bank on another branch of the same bank to pay specified sum of money to payee on demand.

Issuing branch requests another branch to pay specified money to the specific payee on demand by Telegraph /Telephone

Payment from

Payment from issuing branch only

Payment from ordered branch

Payment from ordered branch

Generally used to Remit fund

Within the clearinghouse area of issuing branch.

Outside the clearinghouse area of issuing branch. Payee can also be the purchaser.

Anywhere in the country

Payment Process of the paying bank

Payment is made through clearing

1. Confirm that the DD is not forged one.

2.Confirm with sent advice

3.Check the ‘Test Code’

4.Make payment

1.Confirm issuing branch

2.Confirm Payee A/C

3.Confirm amount

4.Make payment

5.Receive advice

Charge Only commission

Commission + telex charge

Commission +

Telephone

3.6 CLEARING SECTION:

Cheques, Pay Order (P.O), Demand Draft (D.D.) Collection of amount of other banks

on behalf of its customer are a basic function of a Clearing Department.

Clearing:

Clearing is a system by which a bank can collect customers fund from one bank to

another through clearing house.

Clearing House:

Clearing House is a place where the representatives of different banks get together to

receive and deliver cheque with another banks.

Normally, Bangladesh Bank performs the Clearing House in Dhaka, Chittagong,

Rajshahi, and Khulna & Bogra. Where there is no branch of Bangladesh Bank, Sonali

bank arranges this function.

Member Of Clearing House:

EXIM Bank LTD. is a scheduled Bank. According to the Article 37(2) of Bangladesh

Bank Order, 1972, the banks, which are the member of the clearinghouse, are called

as Scheduled Banks. The scheduled banks clear the cheque drawn upon one another

through the clearinghouse.

Types of Clearing:

A. Outward Clearing: When the Branches of a Bank receive

cheque from its customers drawn on the other Banks within the local clearing zone for

collection through Clearing House, it is Outward Clearing.

B. Inward Clearing : When the Banks receive cheque drawn

on them from other Banks in the Clearing House, it is Inward Clearing.

Types of clearing house: There are two type of clearing house: Those

are

1) Normal clearing house

2) Same day clearing house

1. Normal clearing house:

1) 1st house: 1st house normally stands at 10 a.m. to 11a.m

2) 2nd house: 2nd house normally stands after 3 p.m. and it is known as return

house.

2. Same day clearing house:

1) 1st house: 1st house normally stands at 11 a.m. to 12 p.m.

2) 2nd house: 2nd house normally stands after 2 p.m. and it is known as return

house.

Who will deposit cheque for Clearing: Only the regular customers i.e. who have

Savings, Current, STD & Loan Account in the bank can deposit cheque for collection

of fund through clearing house.

Precaution at the time of cheque receiving for Clearing, Collection of LBC, OBC

& Transfer:

1) Name of the account holder same in the cheque & deposit slip.

2) Amount in The cheque & deposit slip must be same in words & in figure

3) Date in the cheque may be on or before (but not more than six months back)

clearing house date.

4) Bank & Branch name of the cheque, its number & date in the Deposit slip.

5) Cheque must be signed.

6) Signature for confirmation of date, amount in words / in figure Cutting &

Mutilation of cheque.

7) Cheque should be crossed (not for bearer cheque).

8) Account number in the deposit slip must be clear.

9) Depositor’s signature in the deposit slip.

Return house:

Return House means 2nd house where the representatives of the Bank meet after 3

p.m. to receive and deliver dishonored cheque, which placed in the 1 st Clearing

House.

Cheque may be dishonored for any one of the following reasons:

1) Insufficient fund.

2) Amount in figure and word differs.

3) Cheque out of date/ post- dated.

4) Payment stopped by the drawer.

5) Payee’s endorsement irregular / illegible / required.

6) Drawer’s signature differs / required.

7) Crossed cheque to be presented through a bank.

8) Other specific reasons not mentioned above.

The dishonor cheque entry in the Return Register & the party is informed about it.

Party‘s signature required in the return register to deliver the dishonor cheque. After

duration, the return cheque is sent to the party’s mailing address with Return Memo.

If the cheque is dishonored due to insufficiency of funds than EXIM Bank charges.

25/=as penalty.

Responsibility of the concerned officer for the Clearing Cheque:

1) Crossing of the cheque.

2) (Computer) posting of the cheque.

3) Clearing seal & proper endorsement of the cheque.

4) Separation of cheque from deposit slip.

5) Sorting of cheque 1st bank wise and then on branch wise.

6) Computer print 1st branch wise & then bank wise.

7) Preparation of 1st Clearing House computer validation sheet.

8) Examine computer validation sheet with the deposit slip to justify the

computer posting

9) Copy of computer posting in the floppy disk.

3.7 Bills Collection: In modern banking the mechanism has become complex as far as smooth transaction

and safety is concerned. Customer does pay and receive bill from their counterpart as

a result of transaction. Commercial bank’s duty is to collect bills on behalf of their

customer.

Types of Bills for Collection

i. Outward Bills for Collection (OBC).

ii. Inward Bills for Collection (IBC).

Outward Bills for Collection (OBC)OBC means Outward Bills for Collection .OBC exists with different branches of

different banks outside the local clearing house. Normally two types of OBC:

1) OBC with different branches of other banks

2) OBC with different branches of the same bank

Procedure of OBC:1) Entry in the OBC register.

2) Put OBC number in the cheque.

3) “Crossing seal” on the left corner of the cheque & “ payees account will be

credited on realization “ seal on the back of the cheque with signature of the

concerned officer.

4) Dispatch the OBC cheque with forwarding.

5) Reserve the photocopy of the cheque, carbon copy of the forwarding and

deposit slip of the cheque in the OBC file.

Commission for collection:

Up to 1 lac ---------------------------------------------- 0.15%

Above 1 lac---------------------------------------------- 0.10%

Above 5lac ---------------------------------------------- 0.05%

Inward bills for collection (IBC)When the banks collect bills as an agent of the collecting branch, the system is known

as IBC. In this case the bank will work as an agent of the collection bank. The branch

receives a forwarding letter and the bill.

Procedure of IBC:

1. IBC against OBC: To receive the OBC cheque first we have to give entry in

the IBC Register .The IBC number should put on the forwarding of the OBC

with date.

2. Deposit of OBC amount: OBC cheque amount is put into the “sundry deposit-

sundry Creditors account”, prepare debit & credit voucher of it . If the OBC

cheque is honored, send credit advice (IBCA) with signature & advice number

of the concern branch for the OBC amount.

3. Again place in the clearing house or send the OBC cheque with Return Memo

to the issuing branch according to their information.

3.8 ACCOUNTS SECTION:Accounts Department is called as the nerve Centre of the bank. In banking business,

transactions are done every day and these transactions are to be recorded properly and

systematically as the banks deal with the depositors’ money. . Improper recording of

transactions will lead to the mismatch in the debit side and in the credit side. To avoid

these mishaps, the bank provides a separate department; whose function is to check

the mistakes in passing vouchers or wrong entries or fraud or forgery. This

department is called as Accounts Department. If any discrepancy arises regarding any

transaction this department report to the concerned department.

Besides these, the branch has to prepare some internal statements as well as some

statutory statements, which are to be submitted to the Central Bank and the Head

Office. This department prepares all these statements.

Workings of this department:

Recording the transactions in the cashbook.

Recording the transactions in general and subsidiary ledger.

Preparing the daily position of the branch comprising of deposit and

cash.

Preparing the daily Statement of Affairs showing all the assets and

liability of the branch as per General Ledger and Subsidiary Ledger

separately.

Recording inters branch fund transfer and providing accounting

treatment in this regard.

Preparing the monthly salary statements for the employees.

Preparing the weekly position for the branch which is sent to the Head

Office to maintain Cash Reserve Requirement (C.R.R)

Preparing the monthly position for the branch which is sent to the Head

Office to maintain Statutory Liquidity Requirement (S.L.R)

Preparing the budget for the branch by fixing the target regarding profit

and deposit so as to take necessary steps to generate and mobilize

deposit.

Recording of the vouchers in the Voucher Register.

Packing of the correct vouchers according to the debit voucher and the

credit voucher

4.1 INTRODUCTION

H.E. Evitt defined “Foreign Exchange” as the means and methods by which rights to

wealth expressed in terms of the currency of one country are converted into rights to

wealth in terms of the currency of another country.

Foreign Exchange Department is international department of the bank. It deals with

globally and facilitates international trade through its various modes of services. It

bridges between importers and exporters. Bangladesh Bank issues license to

scheduled banks to deal with foreign exchange. These banks are known as Authorized

Dealers. If the branch is authorized dealer in foreign exchange market, it can remit

foreign exchange from local country to foreign country. This department mainly deals

with foreign currency. This is why this department is called foreign exchange

department.

Foreign exchange is the means and methods by which rights to wealth in a country’s

currency are converted into rights to wealth in another country’s currency. In banks

when we talk of foreign exchange, we refer to the general mechanism by which a

bank converts currency of one country into that of another. Foreign Exchange

Department (FED) is the international department Bangladesh Bank issues license to

scheduled banks to deal with foreign exchange. These banks are known as Authorized

Dealers. If the branch is authorized dealer in foreign exchange market, it can remit

foreign exchange from local country to foreign countries. So EXIM Bank, Principal

branch is an authorized dealer.

There are three kinds of foreign exchange transaction:

1. Import

2. Export

3. Remittance.

ACTIVITIES OF FOREIGN EXCHANGE DEPARTMENT AND MY UNDERSTANDING

4.2 IMPORT BUSINESS

To import, a person should be competent to be and importer’. According to Import

and Export Control Act, 1950, the Office Of Chief Controller Of Import and Export

provides the registration (IRC) to the importer. In an international business

environment, buyers and sellers are generally unknown to each other. So seller of

goods always seeks security for the payment of his exported goods. Bank gives export

guarantee that it will pay for the goods on behalf of the buyer if the buyer does not

pay. This guarantee is called Letter of Credit. Thus the contract between importer and

exporter is given a legal shape by the banker by ‘Letter of Credit’.

LETTER OF CREDIT

Definition

A letter of credit is a letter issued by a bank (know as the opening or the issuing bank)

at the instance of its customer (known as the opener) addressed to a person

(beneficiary) undertaking that the bills drawn by the beneficiary will be duly honored

by it (opening bank) provided certain conditions mentioned in the letter gave been

complied with.

Parties to the L/C

Importer Who applies for L/C

Issuing Bank It is the bank which opens/issues a L/C on behalf of the

importer.

Confirming

Bank

It is the bank, which adds its confirmation to the credit and it,

is done at the request of issuing bank. Confirming bank may

or may not be advising bank.

Advising or

Notifying Bank

It is the bank through which the L/C is advised to the

exporters. This bank is actually situated in exporter’s country.

It may also assume the role of confirming and / or negotiating

bank depending upon the condition of the credit.

Negotiating It is the bank, which negotiates the bill and pays the amount

Bank of the beneficiary. The advising bank and the negotiating

bank may or may not be the same. Sometimes it can also be

confirming bank.

Accepting Bank It is the bank on which the bill will be drawn (as per

condition of the credit). Usually it is the issuing bank.

Reimbursing

Bank

It is the bank, which would reimburse the negotiating bank

after getting payment – instructions from issuing bank.

4.3 STEPS FOR IMPORT L/C OPERATION – 8 STEPS OPERATION

Step 1 - Registration with CCI&E:

o For engaging in international trade, every trader must be first registered with

the Chief Controller of Import and Export(CCI & E) .By paying specified

registration fees to the CCI & E. the trader will get IRC/ERC (Import/Export

Registration Certificate), to open L/C with bank, this IRC is must

Step 2 - Determination terms of credit:

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

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

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

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

shipping documents etc.

Step 3 -Proposal for Opening of L/C:

To have an import L/C limit an importer submits an application to department to

EXIM Bank. The proposal contains the following particulars:

o Full particulars of the bank account

o Nature of business

o Required amount of limit

o Payment terms and conditions

o Goods to be imported

o Offered security

o Repayment schedule

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

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

provided by the banker along with the following documents:

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

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

3. Demand Promissory Note 9. IMP form

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

receipt.

5. Tax Identification number 11. Membership certificate

6.Import registration certificate 12. Rate fluctuation undertaking

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

o Taking filled up application form the importer.

o Collects credit report of exporter from exporter’s country through his foreign

correspondence there.

o Opening bank then issues credit by air mail/TELEX/SWIFT followed by L/C

advice as asked by the opener through his foreign correspondent or branch as

the case may be, at the place of beneficiary. The advising bank advises the L/C

to the beneficiary on his own form where it is addressed to him or merely hand

over the original L/C to the beneficiary if it is so addressed.

Step 6 – Shipment of goods and lodgment of documents by exporter:

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

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

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

1. Bill of Exchange 6. Packing List

2. Bill of Lading 7. Advice Details of Shipment

3. Commercial Invoice 8. Pre-shipment Inspection Certificate

4. Certification of Origin 9. Vessel Particular

5. A certificate stating that each packet

contains the description of goods over the

packet.

10.Shipment Certificate

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

bank:

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

discrepancy found, it informs the importer. If importer accepts the fault, then opening

bankers call importer retiring the document. At this time many thing can happen.

These are indicated in the following:

o Discrepancy found but the importer accepts - no problem occurs in

lodgment.

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

importer protest and send back all the documents to the exporter and request

his to make in the specified manner. Here banker is not bound to pay because

the documents send by exporter is not in accordance with the terms of L/C.

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

case bank is obligated to pay the price of exported goods. Since importer did

not pay for bill of exchange, this payment by bank is one kind of credit to the

importer and this credit in banking is known as PAD.

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

request bank to clear - In this case banks clear the goods and takes delivery

of the same by paying customs duty and sales tax etc. So, this expenditure is

debited to the importer’s account and in banking it is called LIM.

Step 8 - Retirement:

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

retirement of the import bills or for the disposal of the shipping document to clear the

imported goods from the customs authority. The importer may instruct the bank to

retire the documents by debiting his account with the bank or may ask for LTR (Loan

against Trust Receipt).

4.4 ACCOUNTING PROCEDURE IN CASE OF L/C OPENING:

When the officer thinks fit the application to open a L/C, giving the following entries-

creates the following charges-

Particulars Debit/ Credit Charges in TakaCustomer’s A/C DebitL/C Margin A/C CreditCommission A/C on L/C Credit 50%VAT Credit 15% on commissionSWIFT Charge Credit 3000/=Data max Credit 1000/=Stamp Credit 350-470/=Postage Credit 300/=DHL/Courier Credit 1500

Amendment of L/C:

After opening of L/C some time’s alteration to the original terms and conditions

become necessary. These amendments involve changes in

a. Unit price

b. Extension of validity o the L/C

c. Documentary requirements etc.

Such amendments can be affected only if all the concerned parties agree i.e. the

beneficiary, the importer, the issuing bank and the advising bank.

For any amendment the importer must request the issuing bank in writing duly

supported by revised indent/ Proforma invoice. The issuing bank then advises the

required amendment to the advising bank. L/C amendment commission including

postage is charged to the clients A/C.

Loan against Trust Receipts (LTR):

o Advance against a Trust Receipt obtained from the Customers are allowed

to only first class tested parties when the documents covering an import

shipment or other goods pledged to the Bank as security are given without

payment. However, for such advances prior permission/sanction from

Head Office must be obtained.

o The customer holds the goods or their sale-proceeds in trust for the Bank,

till such time, the loan allowed against the Trust Receipts is fully paid off.

o The Trust Receipt is a document that creates the Banker’s lien on the

goods and practically amounts to hypothecation of the proceeds of sale in

discharge of the lien.

Loan Against Imported Merchandise (LIM):

Advance (Loan) against the security of merchandise imported through the Bank may

be allowed either on pledge or hypothecation of goods, retaining margin prescribed on

their Landed Cost, depending on their categories and Credit Restriction imposed by

the Bangladesh Bank. Bank shall also obtain a letter of undertaking and indemnity

from the parties, before getting the goods cleared through LIM Account.

Payment Procedure of Import Documents:

This is the most sensitive task of the Import Department. The officials have to be very

much careful while making payment. This task constitutes the following

Date of Payment:

Usually payment is made within seven days after the documents have been received.

If the payment is become deferred, the negotiating bank may claim interest for

making delay.

Preparing Sale Memo:

A sale memo is made at B.C rate to the customer. As the T.T & O.D rate is paid to the

ID, the difference between these two rates is exchange trading. Finally, an Inter

Branch Exchange Trading Credit Advice is sent to ID.

Requisition for the Foreign Currency:

For arranging necessary fund for payment, a requisition is sent to the International

Department.

Transmission of Message:

Message is transmitted to the correspondent bank ensuring that payment is being

made.

4.5 EXPORT BUSINESS

The goods and services sold by Bangladesh to foreign households, businessmen and

Government are called export. The export trade of the country is regulated by the

Imports and Exports (control) Act, 1950. There are a number of formalities, which an

exporter has to fulfill before and after shipment of goods. The exports from

Bangladesh are subject to export trade control exercised by the Ministry Of

Commerce through Chief Controller of Imports and Exports (CCI & E). No exporter

is allowed to export any commodity permissible for export from Bangladesh unless he

is registered with CCI & E and holds valid Export Registration Certificate (ERC). The

ERC is required to be renewed every year. The ERC number is to be incorporated on

EXP forms and other documents connected with exports. The formalities and

procedure are enumerated as follows:

1. Obtaining exports LC: To get export LC form exporter issued by the

importer.

2. Submission of export documents: Exporter has to submit all necessary

documents to the collecting bank after shipping of goods

3. Checking of export documents: After getting the documents banker used to

check the documents as per LC terms.

4. Negotiation of export documents: If the bank accepts the document and pays

the value draft to the exporter and forward the document to issuing bank that is

called a negotiating bank. If the bank does buy the LC then the bank normally

act as collecting bank.

5. Realization of proceeds: This is the period when the issuing bank has

realized the payment.

6. Reporting to the Bangladesh bank: As per instruction by Bangladesh bank

the bank has to report to respective department of Bangladesh bank by

mentioning latest payment.

7. Issue to proceeds realization certificate (PRC): bank has to issue proceed

realization certificate of export LC to the supplier / exporter for getting cash

assistance

EXPORT OPERATION

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 exports 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

EXIM BANK are readymade garment exporters. They open export L/Cs here to

export their goods, which they open against the import L/Cs 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.

As an advising bank: It receives documents from the foreign importer and hands it

over to the exporter. Sometimes it adds confirmation on the L/C on request from the

Opening Bank. By adding confirmation, it assumes the responsibility to make

payment to the exporter.

As Negotiating Bank: It negotiates the bills and other shipping documents in favor of

the exporter. That is, it collects the proceeds of the export-bill from the drawee and

credits the exporter’s account for the same. Collection proceed from the export bill is

deposited in the bank’s NOSTRO account in the importer’s country. Sometimes the

bank purchases the bills at discount and waits till maturity of the bill. When the bill

matures, bank presents it to the drawee to encash it.

In our country, Export and Import operation of bank is very much related with one

another because of use of Back to Back and maturity of payment for Back-to-Back

L/C is set in such that it can be paid out of export proceeds. .

BACK-TO-BACK L/C

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

involves two separate L/Cs. One is master Export L/C and another is Back-to-Back

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

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

known as Selling L/C.

Features of Back-to-Back L/C:

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

It is opened based on Export L/C.

It is a kind of Export Finance.

Export L/C is at Sight but back to Back L/C is at Usance.

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

Application is registered with CCI&E

Applicant has bonded warehouse license.

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

relative Master L/C.

Usance period will be up to 180 days.

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

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

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

profit, import L/C is paid out.

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

In EXIM Bank Principal Branch, following papers/ documents are required for

opening a back-to-back L/C-

1. Master L/C

2. Valid Import Registration Certificate (IRC) and Export Registration

Certificate (ERC)

3. L/C Application and LCAF duly filled in and signed

4. Performa Invoice or Indent

5. Insurance Cover Note with money receipt

6. IMP Form duly signed

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

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

1. Textile Permission

2. Valid Bonded Warehouse License

3. Quota Allocation Letter issued by the Export Promotion Bureau (EPB) in

favor of the applicant for quota items.

Checklist of exports L/C:

Following defective points are usually found in the Master L/C. So, the bank officials

so much carefully check these points. These are:

1. Name of the Advising Bank.

2. Name of Transferring Bank

3. Form of Doc. credit:

Name of Issuing Bank

Documentary Credit No. and issuing date

Date of shipment

Expiry date and place

4. Applicant/ for order of/ On Account.

5. Beneficiary/ Favoring

6. Amount

7. Availability of Credit

8. Partial shipment/ Transshipment

9. Payment condition /Draft Sight

10. Category.

11. Description of goods:

Item

Total Qty

Unit price

12. B/L Clause

13. Reimbursement clause.

14. UCPDC Clause

15. Net FOB value.

Payment of back-to-back L/C:

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

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

L/C under EDF:

Exporter development Fund is created by Bangladesh Bank to give

encourages to the exporter in Bangladesh.

Generally Back-to-Back L/C is a L/C that is here bill of exchange is payable

after some maturity date say 90 or 120 days after the date of

acceptance/negotiation. But some foreign seller may require sight payment.

Here import L/C matures first. In that case Bangladesh Bank gives the fund

to the bank to pay the price of imported goods in favor of the local purchaser

of raw materials. When export proceeds come, first Bangladesh Bank loan to

the importer is adjusted and remaining part goes to the importer of raw

materials.

Negotiation of exports documents:

The most common method of financing exporters is negotiation of documents under

L/C. It is a post-shipment credit. Here the bank acts as a negotiating bank. After the

shipment of the goods, the exporter submits the relative documents to the branch for

negotiation. The documents are to submit within the period mentioned in the L/C.

after approval of negotiation of the bill the full particulars of the documents are

entered into the Foreign bill Purchased (F.B.P) register. The documents are sent to the

L/C opening branch with a forwarding letter. The branch claim reimbursement from

the issuing bank or from the reimbursing bank, giving clear instructions to credit the

proceeds of the bill to the EXIM Bank head office NOSTRO A/C maintained with the

named correspondent bank abroad under telex intimation to the Principal branch and

Head Office (International Division).

Negotiation stands for payment of value to the exporter against the documents

stipulated in the L\C. If documents are in order, EXIM Bank purchases (negotiates)

the same on the basis of banker- customer relationship. This is known as Foreign

Documentary Bill Purchase (FDBP).

If the bank is not satisfied with the documents submitted to EXIM Bank gives the

exporter reasonable time to remove the discrepancies or sends the documents to L/C

opening bank for collection. This is known as Foreign Documentary Bill for

Collection (FDBC)

Presentation of export documents for negotiation/Purchase:

After shipment, exporter submits the following documents to EXIM Bank for

negotiation.

Bill of exchange

Bill of Lading

Invoice

Insurance Policy/Certificate

Certificate of Origin

Inspection Certificate

Consular Invoice

Packing List

Quality Control Certificate

G.S.P. certificate.

Foreign documentary bills for collection (FDBC):

EXIM Bank forwards the documents for collection due to the following reasons,

If the documents have discrepancies.

If the exporter is a new client.

FDBC signifies that the exporter will receive payment only when the issuing bank

gives payment. EXIM Bank make regular follow-up with the L/C opening Bank in

case of any delay in getting payment.

Settlement of Local Bills:

1. The settlement of local bills is done in the following ways, -

2. The customer submits the L/C to EXIM Bank along with the documents to

negotiate

3. EXIM Bank official scrutinizes the documents to ensure the conformity with

the terms and conditions.

4. The documents are then forwarded to the L/C opening bank.

5. The L/C issuing bank gives the acceptance and forwards an acceptance letter.

6. Payment is given to the customer on either by collection basis or by

purchasing the document.

Mode of payment of export bill under L/C:

As per UCPDC 500, 1993 revision there are four types of credit. These are as follows:

Sight Payment Credit:

In a Sight Payment Credit, the bank pays the stipulated sum immediately against the

exporter’s presentation of the documents.

Deferred payment Credit:

In deferred payment, the bank agrees to pay on a specified future date or event, after

presentation of the export documents. No bill of exchange is involved. Payment is

given to the party at the rate of D.A 60-90-120-180 as the case may be. But the Head

office is paid at T.T clean rate. The difference between the two rates us the exchange

trading for the branch.

Acceptance credit:

In acceptance credit, the exporter presents a bill of exchange payable to himself and

drawn at the agreed tenor (that is, on a specified future date or event) on the bank that

is to accept it. The bank signs its acceptance on the bill and returns it to the exporter.

The exporter can then represent it for payment on maturity. Alternatively he can

discount it in order to obtain immediate payment.

Negotiation Credit:

In Negotiation credit, the exporter has to present a bill of exchange payable to him in

addition to other documents that the bank negotiates.

4.6 FOREIGN REMITTANCE

This bank is authorized dealer to deal in foreign exchange business. As an authorized

dealer, a bank must provide some services to the clients regarding foreign exchange

and this department provides these services.

The basic function of this department are outward and inward remittance of foreign

exchange from one country to another country. In the process of providing this

remittance service, it sells and buys foreign currency. The conversion of one currency

into another takes place at an agreed rate of exchange, which the banker quotes, one

for buying and another for selling. In such transactions the foreign currencies are like

any other commodities offered for sales and purchase, the cost (convention value)

being paid by the buyer in home currency, the legal tender.

Remittance procedures of foreign currency:

There are two types of remittance:

I. Inward remittance

II. Outward remittance.

I. Inward Foreign Remittance:

Inward remittance covers purchase of foreign currency in the form of foreign T.T.,

D.D, and bills, T.C. etc. sent from abroad favoring a beneficiary in Bangladesh.

Purchase of foreign exchange is to be reported to Exchange control Department of

Bangladesh bank on Form-C.

II. Outward Foreign Remittance:

Outward remittance covers sales of foreign currency through issuing foreign T.T.

Drafts, Travelers Check etc. as well as sell of foreign exchange under L/C and against

import bills retired.

4.7 Activities of this department:

1. Issuance of TC, Cash Dollar /Pound

2. Issuance of FDD, FTT & purchasing, Payment of the same.

3. Passport endorsement.

4. Encashment certificate.

5. F/C Account opening &filing.

6. Opening of Export FC retention Quota A/C& maintain.

7. Maintenance of ledger of Cash Dollar, FC Deposit A/C & TC.

8. Maintain FBC register &follow up FBC.

9. Opening of Student file &Maintain.

10. Preparation of all related statement, Voucher & posting.

11. Preparation of Weekly, Monthly, Yearly Statement for Bangladesh Bank

returns timely.

12. Attending all related correspondence to other Bank or Institutions.

Modes:

The remittance process involves the following four modes

Cash Remittance

Dollar/ Pound

Sell Bank sell Dollar / Pound for using in abroad by the purchaser. The maximum amount of such sell is mentioned in the Bangladesh Bank publication of ‘Convertibility of Taka for Currency Transactions in Bangladesh’.

Purchase Bank can purchase dollar from resident and non – resident Bangladeshi and Foreigner. Most dollars purchased comes from realization of Export Bill of Exchange.

Traveler’s Cheque

(TC)

Issue of TC TC is useful to traveler abroad. Customers can encash the TC in abroad from the drawee bank. TC is alternative to holding cash and it provides better security than holding cash in hand.

Buying

Of TC

If any unused leaf of TC is surrendered bank buys it from the customer. All payments are made in local currency. Banks generally buy only those TC.

Telex Transfer

Outward TT

It remits fund by tested TT via its foreign correspondence bank in which it is maintaining its NOSTRO Account.

Incoming TT

It also makes payment according to telegraphic message of its foreign correspondence bank from the corresponding VOSTRO Account.

Foreign Demand Draft

Bank issue Demand Draft in favor of purchaser or any other according to instruction of purchaser. The payee can collect it for the drawee bank in which the Issuing bank of Demand Draft holds its NOSTRO Account. Bank also makes payment on DD drawn on this bank by its foreign correspondence bank through the VOSTRO Account.

In these processes of remittance, bank must have to make profit as a business

institution. Profit is made in two ways:

A. Commission charged

B. Difference in the buying and selling rate.

Miscellaneous Services by This Department:

Student File: Students who are desirous to study abroad can open file in the

Bank. By opening this file, bank assures the remittance of funds in abroad for study.

F.C Accounts: Foreign Currency Accounts opened in the names of

Bangladeshi nationals or persons of Bangladeshi origin working or self – employed

abroad can now are maintained as long as the account holders desires

RFCD: Stands for Resident Foreign Currency Accounts. Persons ordinary

resident in Bangladesh may maintain foreign currency accounts with foreign

exchange brought in at abroad. Balance of such accounts is freely remittable abroad.

Formalities for opening foreign currency (FC) Account:

The AD may without prior approval of the Bangladesh Bank open Foreign Currency

(FC) account in the name of:

1. Bangladesh national residing abroad.

2. Foreign nationals residing abroad/ in Bangladesh and also foreign firms

3. Registered abroad and operating in Bangladesh and abstract foreign

missions and their expatriate employees.

4. Resident of Bangladesh nationals working with the foreign / international

organization operating in Bangladesh provided their salary in paid in

foreign currency.

Foreign exchange earned through business done or service rendered in Bangladesh

cannot be put into these accounts.

No payment in foreign currency (FC) may be made to any resident in Bangladesh out

of the foreign currency (FC) account.

All citizens of Bangladesh and other persons are residing to Bangladesh who became

the owner of any foreign currency (FC).

Papers required:

Application duly billed in and signed.

Photograph (two copies).

Passport photocopy.

Work permit from board investment. ( in case of foreign nationals).

Rate of exchange:

It means the price of one currency expressed in terms of another currency. Rate of

exchange is the rate by which the relation among different foreign currencies is

established in terms of local currency of that country. Value at which one country

currency can be converts into another’s country.

In exercise of the power conferred by section three of exchange regulation ACT 1947,

Bangladesh has issued license to certain bank to deal in foreign exchange is called

authorized dealer.

Though I was assigned in a general branch at Mirpur I was unable to figure out the

whole HR Management of EXIM Bank Ltd. But I was able to asses their some policy

and procedures of Human Resource management (HRM) by observation and personal

interview. These policies and procedures are familiar to me because I had already

learned from my university courses. I will describe some important points of HRM

related to by observation and describe the situation in EXIM Bank Ltd. Those policies

and procedures are mentioned briefly bellow according to HRM components and

HRM Model:

Human resource management (HRM) is concerned with ‘people’ dimension in

management. Since every organization is made up of people, acquiring their services,

developing their skills, motivating them to high levels of performance, and ensuring

that they continue to maintain their commitment to the organization are essential to

achieving organizational objectives.

Those organizations that are able to acquire, develop, stimulate, and keep outstanding

workers will be both effective and efficient. Those organizations that are ineffective

or inefficient risk the hazard of stagnating or going out of business. Survival of an

organization requires competent managers and workers coordinating their efforts

toward an ultimate goal. While successful coordination cannot guarantee success,

organizations that are unsuccessful in getting such coordination from managers and

workers will ultimately fail!

To look HRM more specifically, that it is a process consisting of four functions-

acquisition, development, motivation, and maintenance-of Human Resource (HR). In

less-academic terms, we might describe these four functions as getting people,

preparing them, activating them, and keeping them.

THE HUMAN RESOURCE MANAGEMENT (HRM) AND

THE HUMAN RESOURCE DEPARTMENT OF EXIM BANK:

Figure: Human Resource Management (HRM) Components.

External influences: Important environmental influences HRM practices-government

regulations, labor unions, management practices, an Equal Employment Opportunity

(EEO). It has been argued that these forces have a major impact on HRM by

constraining the decision-making discretion of mangers. Who can be hired and fired,

how personnel information is disseminated, what equipment can and cannot be used,

what methods can be used for evaluating jobs and employee performance, and how

wage rates are determined are just a few of the issues that have constrained many, if

not most, organizations.

Acquisition of Human Resources: It is here that management ensure that is has the

right number and kind of people, at the right places, at the right times, capable of

External Influences

DevelopmentEmployee TrainingManagement DevelopmentCareer Development

AcquisitionHuman Resource

PlanningRecruiting

-Internal-External

Employee Socialization

MaintenanceSafety and HealthEmployee/Labor

relations

MotivationJob DesignPerformance EvaluationsRewardsJob EvaluationCompensation/BenefitsDiscipline

effectively and efficiently completing the work required so that the organization can

achieve its overall objectives.

If human resource planning uncovers the need to hire additional employees, one must

discover potential applicants. These potential applicants must be screened to identify

job applicants who are likely to be successful if hired.

The acquisition function is completed when the selected applicants cants have been

placed in the organization’s culture and their work environment. The organization’s

culture conveys how things are done and what matters. When employees have

adapted to the organization’s culture, they have “learned the rope” or “Socializing the

New Employee.”

Development of Human Resources: Competent employees will not remain

competent forever. Some are minimally qualified upon entering the organization but

require additional training or education. Others enter the organization capable of

performing at an optimal level, but their skills become obsolete over time. And, of

course, organizations change over time, and management must ensure that there is an

appropriate match of individual abilities with organizational needs fro future. Each of

these is considered in the development function.

Employee training gives individuals specific skills that they will use on the job;

management development looks at practice for ensuring a continual flow of managers.

When human resources have been developed effectively, one can expect to have

competent employees with up-to-date skills ad knowledge.

Motivation of Human Resources: High performance depends on both ability and

motivation. Many employees with extraordinary talent do not perform satisfactorily

because they will not exert the necessary effort. Therefore, we desire to have capable

employees who are highly motivated.

If a person performs effectively, extrinsic factors such as job design, working

conditions, job security, and supervision must be seen as satisfactory. But that alone is

not enough. Many people also look for intrinsic factors such as achievement,

recognition, and responsibility from their work. For individuals who place high value

on intrinsic factors, the absence of these factors can reduce one’s willingness to exert

high degrees of effort.

But other forces can influence motivation. The performance appraisal process and its

outcome will affect an employee’s motivation. People expect there work to be

objectively evaluated. If they think their efforts will be unfairly judge, motivation will

decrease. Furthermore, there rewards or punishments that follow the appraisal will

influence motivation.

At this juncture, if we have effectively motivated the individual who has up-to-date

skills and knowledge we can expect to have a competent employee who desire to

exert a high level of effort.

Maintenance of Human Resources: The objective of the last major function is to

retain people who are performing at high levels. This requires that the organization

provide safe and healthful working conditions and satisfactory labor relations. If these

activities are performed effectively, we can expect to have competent employees who

are committed to the organization and satisfied with there job.

Research and the Future: The effective management of human resources depends

on refining HRM practices to changing conditions. Research allows the manager to

keep abreast of the latest findings in HRM and provides a framework by which

solution to unique HRM problems can be found. This is true we cannot bound Human

Resource Management in any boundary because it deals with human beings most

unpredictable create in the world. But we can manage human Resources by

continuous change and bringing dynamism in our HR policies. The successful

manager will be at the forefront of these changes with new and relevant HRM

practices.

On the basis of above discussion we can now understand the basic importance of

HRM in an organization. We can understand how should it maintain and what are

basic process should be followed to keep HRM up-to-date, etc. From this discussion I

want to conclude this chapter with comparison of EXIM Bank HR department with

my theoretical knowledge.

Using these Human Resource Management (HRM) Components we can say that

EXIM Bank Ltd. has a very good culture for employee socialization. EXIM Bank Ltd.

Has a proper HR planning for the organization. EXIM Bank Ltd. HR department is

well concern about there management, employees training and development. They are

also has a well defined career path in the organization. EXIM Bank Ltd. Provide a

handsome package of compensation varied according to position fro there

management team and employees. They frequently evaluate employee’s performance

through branch manager’s information. EXIM bank is followed national various rules

and regulations for a healthy and safe work environment for their employees.

Now we will see from the HRM Wheel or Model point of view the status of EXIM

Bank Ltd. Next:

Figure: Human Resource Management Model or Wheel

Human Resource AreasOutputs:Quality work lifeProductivityReadiness for change

Personnl Research&

Information Systems

Focus: assuring a personnel information base.

Selection & staffing

Focus: matching people and their career needs and capabilities with jobs and career path.

Compensation/Benefits

Focus: assuring compensation and benefits fairness and consistency.

Employee Assistance

Focus: providing personal problem solving, counseling to individual employee.

Union/Labor Relation

Focus: assuring health union/organization relationship.

Training & Development

Focus: identifying, assessing and – through planned learning – helping develop the key competencies which enable individuals to perform current or future jobs. Organization

development

Focus: assuring healthy inter and intra-unit relationships and helping groups initiate and manage change.

Organization/Job Design

Focus: defining how tasks, authority and systems will be organized and integrated across organization units and in individual jobs.

Human Resource Planning

Focus: determining the organization’s major Human Resource needs, strategies and philosophies.

First of all let see according to the HRM Wheel or Model what the status of EXIM

Bank Ltd. HR department is:

Point of consideration Proper use Moderate

use

No use

Training and Development

Organization and Development

Organization/Job Design

Human Resource Planning

Selection and Staffing

Personnel Research and Information System

Compensation/Benefits

Employee Assistance

Union/Labor Relations N/A N/A N/A

From the above table we can understand that EXIM Bank Ltd. is following Training

and Development, Organization/Job Design, and Human Resource Planning properly.

On the other hand Organization and Development, Selection and Staffing, and

Personnel Research and Information System are followed moderately in the

organization. Selection and Staffing are partly biased by directing body and other

related stake holders. Personnel Research and Information system is created and

updated based on branch information. Compensation and Benefits are paid well

compare to other peer groups but some times it given based on HR manager, branch

manager’s willingness. Employees are suffering if they had done any fault or there

have an influence of branch manger on compensation and benefits. That is why I

consider these factors as moderately followed by the bank.

At last only Employee Assistance from the all components of a sound HRM model is

ignored by the EXIM Bank Ltd. In the EXIM Bank Ltd. There have no such system to

give assistance to any employee for his or her personal problems. That is why this

factor considered as a no use factor.

In banking sector, especially in private banking sector of country there is nothing like

such typical trade union or labor union that is why it is not applicable in this case.

From the above discussion we can easily conclude that EXIM Bank Ltd. has a well

organized HR department, but it has some short comings. If they can over come from

these short comings there HR department can support the whole organization very

promptly towards there goal.

EXIM Bank’s General Banking & Foreign Exchange Department mission is to

actively participate in the growth and expansion of our national economy by

providing credit & foreign exchange facility to viable borrowers, efficiently delivered

and competitively priced. The following general policy guidelines govern the

implementation of the business strategy of EXIM Bank with respect to credit &

foreign exchange risk.

EXIM Bank Ltd. Has a well established HR department, consisting lots of

talented personnel.

HR department of EXIM Bank Ltd. Provides a better planning and

compensation package to their employees which well enough compare to its

peer group.

Personnel Research and Information system is created and updated based on

branch information.

How tasks, authority and systems will be organized and integrated across

organization units and in individual jobs. All of these are well designed in this

organization.

This Bank helps that customer who is engage in export & import business.

Foreign Exchange operations of EXIM Bank are more dynamic and less time

consuming than other banks.

It is does not extend any credit facility against cheque or pledge of goods.

General banking side provides different types of deposit & credit department

extended loan facilities to the general customer.

FINDINGS OF THE STUDY

It is follows the Islamic rules in every part of general banking.

Most of the Loan products of EXIM Bank of similar types. This Bank makes

loan only to reputable clients who are involved in legitimate business activities

and whose income and wealth are derived from legitimate sources.

This Bank does not extend credit where it does not have the industry

knowledge or highly specialized skills needed to properly evaluate the

proposal.

Bank requires that borrowers have a source of repayment established at the

inception of the credit, and that any exception must be specifically addressed

in the approval of credit.

It is engages primarily in the extension of credit in Bangladesh Taka or in the

same currency as the collateral.

This Bank unsecured lending practices favor extensions of credit for short

term, self-liquidating transactions.

This Bank extends venture capital to start up business or to businesses, which

are entirely dependent on new technologies, but is considered with extreme

caution and also secured by first class or other acceptable collateral.

It has been only eight years that EXIM bank in service. That is why one cannot expect

that the bank would perform like any other banks that are in service decades or so.

EXIM Bank Limited is undoubtedly a successful bank. By this study I have gathered

some practical knowledge about banking activities of EXIM Bank, in Bangladesh and

other relevant matter. Policy guidelines have been established and will continue to be

developed from time to time taking into consideration economic makeup and market

requirement. If the limitations can be removed it will become more successful than at

present. So I would like to recommend on the basis of my understanding removing its

limitations as follows:

Human Resource Department:

o HR department should develop such a system through which they can assess

employees without any influence. Or they can develop self assistance system

where employees will provide information to the HR department individually

monthly.

o EXIM Bank Ltd. Running a well designed recruiting process but they should

follow an influence free and fair judgmental decision to recruit any new

employee.

o HR department should develop a system for personal problem solving,

counseling to individual employee it will help to get and retain maximum

motivated employees then ever. After it employees will feel that they are a

significant part of the organization rather then just an ordinary employee.

o HR department should organize regular training facilities based on employees

need or demand.

General Banking Department

o If the entire general Banking system is fully computerized then they satisfied

the customer by provide fast service.

RECOMMENDATIONS:

o If they establish networking system with their branches then it can easily

transfer data within short time.

o If they cancel the introducer system then they can collect more deposit through

new account and it also satisfied the customers.

o It can also take policy of advertising to communicate with the target audience.

Foreign Exchange Department

o To attract more clients EXIM Bank has to create a new marketing strategy,

which will increase the total export and import business.

o Effective and efficient initiatives are necessary to recover the default loans.

o Attractive incentive package for the exporter will help to increase the export

and accordingly it will diminish the balance of payment gap of EXIM Bank.

o Long-term training very much required for the foreign exchange officials.

o Bank can provide foreign markets reports, which will enable the exporter to

evaluate the demand for their products in foreign countries.

o This department shall only remain engaged with the documentary aspects of

international Trade like opening L/C for all types of import and negotiation of

export bills.

o The request of credit facilities in the form of L/Cs, PADs & PCC shall be

assessed by a separate department (Credit department) for approval of the

credit lines in the account shall convey to the foreign trade department the

operational condition of the facilities to them for execution.

o The primary documentation and completion of other securities shall also be

done by a section of credit department before conveying the credit to trade

department.

Other

o EXIM Bank should give more attention to advertisement to create more

attraction among their customer, which is collect, more deposit and increase

investment scope.

Lot of new commercial bank has established in last few years and the bank has made

this banking sector very competitive. So, banks have to organize their operations and

do their operations according to their need of market. Banking sector is no more

depends on traditional system o banking.

We moved a long way from the time when the banks were deposit taking and money

lending institution. The old concepts, attitude and methods in banking have undergone

a marked change all over the world. Modern banking is an outcome development

driven by changing financial activities and lifestyle. Bangladesh has not lagged

behind. Banks are required to participate in the nation building activities and act as

agent for bringing about socioeconomic changes.

As an internee of EXIM Bank Bangladesh, Mirpur branch I have truly enjoyed my

internship from the viewpoint of learning and experience. I am confident that three

months internship program in EXIM Bank Bangladesh will definitely help me to

realize career in the job market.

During the course of my practical orientation I have try to learn the practical banking

to realize my theoretical knowledge what I have gathered and going to acquired from

my various courses. It is great pleasure for me to have practical exposure it couldn’t

be possible for to compare the theory with practice.

Through the department s and sections are covered in the internship program , it is not

possible to go to the depth of each activities of branch because of time limitation. So

objective of the internship program have not been fulfilled with complete satisfaction.

However, highest effort has been given to achieve the objectives f the internship

program.

So in conclusion it can be said that every organization has its positive as well as

negatives and EXIM Bank Bangladesh limited existence of the later one is les then the

earlier one and as the management is determined to reach the pick of success it seems

that in near future the negatives will be eliminated. Eight is a short span of time and

the organization, which can be established itself as one of the most reputed private

commercial bank in the country within a short period deserves special credits and

CONCLUSION:

with their able leaders EXIM Bank will the highest level of success very shortly. I

wish the banks all success prosperity in their field.

At last it can be said that, EXIM Bank Bangladesh limited is the first growing bank

and its contribution in our economy is also considerable. We hope that EXIM Bank

will expand its services by expanding its branch all over the country.

So in conclusion it can be said that every organization has its positive as well as

negatives and EXIM Bank Bangladesh limited existence of the later one is les then the

earlier one and as the management is determined to reach the pick of success it seems

that in near future the negatives will be eliminated. Eight is a short span of time and

the organization, which can be established itself as one of the most reputed private

commercial bank in the country within a short period deserves special credits and

with their able leaders EXIM Bank will the highest level of success very shortly. I

wish the banks all success prosperity in their field.

At last it can be said that, EXIM Bank Bangladesh limited is the first growing bank an

its contribution in our economy is also considerable. We hope that EXIM Bank will

expand its services by expanding its branch all over the country.

BIBLIOGRAPHY

Mulla, Md. Abul Hasanat; The Bank Companies Act 1991, Helena Prokashani,

Dhaka, 1997

Chowdhury, L.R., A Textbook On Foreign Exchange, Fair Corporation, Dhaka, 2000.

Farooqi, Q.G.M., Charging of Securities, Talk Synopsis.

Gordon, E. & Natarajan, K., Banking: Theory, Law & Practice, Himalaya

Publishing House, Mumbai, 1996.

Choudhury, T.A., Modes of Payment in International Trade, Reading Materials on

International Trade & Finance (E-102), Bangladesh Institute of Bank Management

(BIBM), 2000.

(Choudhury, T.A., An Overview of Banks and Their Services, Reading Materials

on Theory & Practice of Banking (B-101), Bangladesh Institute of Bank

Management (BIBM), 2000.

Pavel, Asaduzzaman; Practical Orientation Report On United Commercial Bank

Limited; December 24,1997; 1st batch, MBM program, BIBM

Booklets published by EXIM Bank.

EXIM Bank Bangladesh limited annuls Report 2005.

EXIM Bank Bangladesh limited annuls Report 2006.

EXIM Bank web site (www.eximbankbd.com)

Export policy order: 2003-2006.

Guidelines for Foreign Exchange Transaction of Bangladesh bank – 1996

Import policy order: 2003-2006.

http://www.eximbankbd.com/

Prospectus of EXIM Bank Bangladesh limited.

EXPORT IMPORT BANK OF BANGLADESH LIMITEDBalance Sheet

as at 31 December 2007PROPERTY & ASSETS Notes

2007 2006Cash 3In hand (including foreign currencies) 4 17,038,832 2 36,122,796With Bangladesh Bank and Sonali Bank (including foreign currencies) 4 ,198,001,365 3 ,082,999,752

4 ,615,040,197 3 ,319,122,548Balance with other banks and financial institutions 4In Bangladesh3 77,934,754 9 45,738,588Outside Bangladesh 9 15,100,915 4 73,605,876

1 ,293,035,669 1 ,419,344,464Money at call and short notice - -Investments (shares and bonds) 5Government securities 2 ,250,000,000 2 ,000,081,900Others 2 07,716,314 2 33,172,388

2 ,457,716,314 2 ,233,254,288

Investments 6General investments 3 8,214,429,999 3 0,567,133,959Bills discounted and purchased 1 ,980,809,223 2 ,074,136,357

4 0,195,239,222 3 2,641,270,316

Fixed assets 7 2 00,702,928 1 78,431,761Other assets 8 2 ,741,293,655 2 ,002,117,585Non-banking assets - -Total assets 5 1,503,027,985 4 1,793,540,962TAKA

EXPORT IMPORT BANK OF BANGLADESH LIMITEDBalance Sheet

as at 31 December 2007LIABILITIES & CAPITAL

Notes 2007 2006LiabilitiesBorrowing from other banks, financial institutions and agents 9 5 00,000,000 -Deposits and other accounts10Al wadeah current deposits and other accounts 4 ,778,629,437 3 ,463,314,632Bills payable 7 43,645,368 3 16,705,918Mudaraba savings bank deposits 2 ,209,666,103 1 ,684,526,998Mudaraba term deposits 3 3,682,916,577 2 9,479,565,759Call deposits - -Foreign currency deposits 1 31,711,107 8 7,911,318

4 1,546,568,592 3 5,032,024,625

Other liabilities 11 5 ,413,930,707 3 ,649,831,258Total liabilities 4 7,460,499,299 3 8,681,855,883Capital/shareholders' equityPaid up capital 12 2 ,142,196,800 1 ,713,757,500Proposed cash dividend - 3 42,751,500Proposed issue of bonus shares 13 - 8 5,687,800Share premium 14 9 4,162,500 9 4,162,500Dividend equalisation account 15 6 2,775,000 6 2,775,000Statutory reserve 16 1 ,134,639,838 8 10,880,421Retained earnings 17 6 08,754,548 1 ,670,358Total shareholders' equity 4 ,042,528,686 3 ,111,685,079

Total liabilities and shareholders' equity 5 1,503,027,985 4 1,793,540,962Off balance sheet itemsContingent liabilities:Acceptance and endorsements - 18Letters of guarantee 18.1 1 ,866,915,726 1 ,574,148,312Irrevocable letters of credit 18.2 9 ,260,231,000 7 ,452,716,000Bills for collection 18.3 1 ,412,114,208 1 ,308,859,198Other contingent liabilities 18.4 1 0,093,393,939 8 ,658,363,853Total contingent liabilities 2 2,632,654,873 1 8,994,087,363Other commitments - -Total off balance sheet items 22,632,654,873 1 8,994,087,363Taka

The annexed notes 1 to 38 form an integral part of these financial statements.Managing Director As per our annexed report of same dateDate:........................... Pinaki & CompanyChartered Accountants

EXPORT IMPORT BANK OF BANGLADESH LIMITEDProfit and Loss Account

for the year ended 31 December 2007Particulars Notes

2007 2006Investment income 20 4,943,468,082 3,808,085,566Profit paid on deposits, borrowings, etc. 21 (3,587,536,228) (2,953,607,619)Net investment income 1,355,931,854 854,477,947Income from investment in shares/securities 22 124,378,550 120,461,375Commission, exchange and brokerage 23 1,042,456,394 882,976,105Gain on sale of investment in shares 81,216,333 998,967Other operating income 24 216,439,446 155,041,956Total operating income 2,820,422,577 2,013,956,350Salaries and allowances 25 515,785,817 330,992,966Rent, taxes, insurance, lighting, etc. 26 83,969,332 72,158,724Legal expenses 27 1,819,276 3,090,674Postage, stamp, telegram and telephone 28 42,088,151 39,201,661Audit fees 235,125 382,875Stationery, printing, advertisement, etc. 29 32,647,994 28,883,882Managing Director's remuneration 4,887,000

3,919,032Managing Director's fees 144,000 196,500Directors' fees 30 2,177,217 1,578,096Depreciation on and repairs to Bank's property 31 57,349,344 44,748,138Other expenses 32 171,115,272 110,130,729

Total operating expense 912,218,528 635,283,277Profit before provisions 1,908,204,049 1,378,673,073Provision for investment 33 176,243,963 179,182,138Provision for off balance sheet exposure 113,163,000 -Profit before tax 1,618,797,086 1,199,490,935Provision for tax 687,953,479 539,032,593Deferred tax - 10,166,000Profit after tax 930,843,607 650,292,342Retained earnings brought forward 1,670,358 42,989,805Transfer from provision for diminution in value of share - 4,963,123Adjustment for (under)/over provision for tax made in earlier years - (27,244,800)

1,670,358 20,708,128

Profit available for appropriation 932,513,965 671,000,470Appropriations:Statutory reserve 323,759,417 240,890,812Issue of bonus shares - 428,439,300 323,759,417669,330,112Retained earnings carried forward 608,754,548

1,670,358Earnings per ordinary share 34 43.45 43.48Taka

The annexed notes 1 to 38 form an integral part of these financial statements.Managing Director Director Director DirectorAs per our annexed report of same dateDate:........................... Pinaki & CompanyChartered Accountants

EXPORT IMPORT BANK OF BANGLADESH LIMITEDHighlights on the overall activities

as at 31 December 2007Particulars

2007 2006

1 Paid up capital 2,142,196,800 1 ,713,757,500

2 Total capital 4,569,562,645 3 ,467,368,068

3 Surplus/(shortage) of capital 498,916,145 5 51,245,5784 Total assets 51,503,027,985 4 1,793,540,9625 Total deposits 41,546,568,592 3 5,032,024,6256 Total investment 40,195,239,222 3 2,641,270,3167 Total contingent liabilities and commitments 22,632,654,873 1 8,994,087,3638 Ratio on investments and deposits 96.75% 93.18%9 Ratio on classified investments and total investments 1.58% 1.80%10 Profit after tax and provisions 930,843,607 6 50,292,34211 Classified investments 635,106,791 5 88,173,16812 Provision held against classified investments 270,763,271 1 83,888,70613 Surplus/(shortage) of provision - 6 ,950,00014 Cost of fund 9.07% 9.17%15 Profit earning assets 42,357,645,536 3 5,161,475,38116 Non-profit bearing assets 9,145,382,449 6 ,632,065,58117 Return on investment (shares and bonds) 8.77% 6.55%18 Return on assets (after tax) 2.00% 1.73%19 Income on investment (shares and bonds) 205,594,883 1 21,460,34220 Earnings per share 43.45 4 3.4821 Net income per share 43.45 3 7.9522 Price earning ratio (times) 9.02 7.74Taka