Internship Report FOREIGN EXCHANGE BUSINESS OF NCC BANK LIMITED -A Study on Jubilee Road Branch, Chittagong (This internship report is submitted for the partial fulfillment of the degree of Masters of Business Administration with a major in Finance & Banking) Prepared by Didarul Alam ID No: R-121137 Program: RMBA Semester: Autumn-2012 Internship Duration: Submission Date: 1
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Internship Report
FOREIGN EXCHANGE BUSINESS OF NCC BANK LIMITED-A Study on Jubilee Road Branch, Chittagong
(This internship report is submitted for the partial fulfillment of the degree of Masters of Business Administration with a major in Finance & Banking)
Prepared by
Didarul AlamID No: R-121137Program: RMBA
Semester: Autumn-2012
Internship Duration: Submission Date:
Department of Business AdministrationFaculty of Business Studies
International Islamic University Chittagong
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Internship Report
FOREIGN EXCHANGE BUSINESS OF NCC BANK LIMITED-A Study on Jubilee Road Branch, Chittagong
(This internship report is submitted for the partial fulfillment of the degree of Masters of Business Administration with a major in Finance & Banking)
Supervised by
Mr. Muhammad Mahbubur RahmanAssociate Professor
Department of Business Administration
Prepared by
Didarul AlamID No: R-121137Program: RMBA
Semester: Autumn-2012
Internship Duration: Submission Date:
…………………………………….Signature of Supervisor
Department of Business AdministrationFaculty of Business Studies
International Islamic University Chittagong
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To
The Dean
Faculty of Business Studies
International Islamic University, Chittagong
Subject: Submission of Internship Report.
Dear Sir,
It is my pleasure to submit my Internship Report on ‘Foreign Exchange Business of
the NCC Bank Ltd Jubilee Road Branch, as a part of my MBA final examination.
Though it’s a new experience for me, I tried my best to gather relevant information for preparing a complete paper on this subject. Without the sincere co-operation and proper guidance of you, it was not possible for me to prepare the report. For this act of kindness I am grateful to you. This paper is not totally free from mistake due to some unavoidable limitations. I hope you accept it with gracious consideration.
Thank you
Sincerely Yours,
DidarulAlam
ID-R121137
MBA (major in Finance & Banking)
Trimester: Autumn-2012
IIUC
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Acknowledgements
At the very beginning, I would like to express my deepest gratitude to the almighty Allah, the merciful and the benevolent who have enabled me to complete this report.It is indubitably an immense contentment on my part to have the opportunity to submit this internship report after 7 weeks of practical orientation in National Credit and Commerce Bank Ltd. (NCCBL), Jubilee Road Branch, Chittagong.
It was not an easy task to fit in a situation where I was never before. But I have I got an amiable and affable working atmosphere there. With the kind supervision of my honorable internship supervisor teacher and some cordial officials in the bank I was able to complete my internship program smoothly.
That’s why at the outset, I would like to convey my deepest gratitude to my honorable supervisor Mr. Muhammad Mahbubur Rahman, Associate Professor Department, of Business Administration, International Islamic University, Chittagong. I have been fortunate that I received encouragement and cooperation from him. I would not be able to complete this study without his counsel and kind cooperation.
I am very much indebted to Mr. Abdur Rahman Vice President and Manager, Jubilee Road Branch, NCCBL to give permission to do internship in the NCC Bank Ltd, Jubilee Road Branch, Chittagong.
I also want to render my special thanks to Mr. A.K.M..Humayun Kabir, Asstt.Vice President for his valuable guidance, support, co-operation, encouragement and advice throughout the internship program.
I also want to give thanks to Mr.Shaha Alam Head of the Foreign Exchange Department, Mr.Shahidul Alam, Senior officer of Foreign Exchange And Mr. DidarulAlam senior officer of Import section of foreign Exchange Department who helped me very much during my internship period.
Finally, I would like to express my gratitude to all the Executives and Officers of NCC Bank Ltd, Jubilee Road Branch who have given me their precious time.
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Executive Summary
The internship program is a partial fulfillment requirement of one year MBA program by which a student can gather practical knowledge. The aim of this program is to connect practical knowledge and theoretical knowledge. I was decisive to serve a financial institution and I got chance to placement in NCC Bank Ltd, jubilee Road branch Chittagong. To fulfillment of internship, time is not sufficient to prepare report on “Foreign Exchange Business of NCC Bank Ltd” at Jubilee Road Branch Chittagong.
The main objective of the study is to Analysis the Foreign Exchange Business of the NCC Bank Jubilee Road branch, Chittagong. To discuss the rules and regulations, Foreign Exchange Mechanisms are also in the way attaining the main goal. In this study primary data as well as secondary data has used. Primary data collected by personal interview and observation .The secondary data collected by bank annual report &web site, different training materials and articles etc.
This report has contained comprising with introductory chapter, Organizational overview, and foreign exchange business and performance evaluation of the Branch. Organizational overview parts includes different information related with introduction NCC bank, management, mission, vision, product & services, rendered by the company for the customer. The foreign exchange business discusses the rules and regulation, activities of import and export procedure, remittance, foreign exchange operation mechanism. The performance Analysis has presented regarding Foreign exchange business which exists Import and Export performance, Remittance, L/C opening, major importing and exporting country etc.
Finding of the Report have been presented that NCC Bank Jubilee Road Branch mostly deals in Import related business rather than export. Most of the clients are highly satisfied with the service provided by the officials in the branch and the find it best in comparison to other banks. The foreign exchange is running its operation by efficient hands and at the same time some minor problems have been identified from different sector of the department.
The report has been conducted by some Recommendation that identified problem and evaluation should be implemented to save the time, cost, difficulties and increase best performance of the bank.
Finally, the report concluded that proper financial system of a country can contribute towards the development of its economy. In our country, Banks are leading in the financial system. Certainly NCC Bank Jubilee Road Branch is mobilizing it’s all resources on this track to achieve maximum possible contribution to the nation. And the Foreign Exchange Department is performing this task is very efficient way.
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CHAPTER 01
1.1 INTRODUCTION
Bangladesh is a developing country. The common scene of Bangladesh now is that its
economic condition is improving and it is taken forward by the Banks of Bangladesh.
Commercial banking industry is one of the most important financial intermediaries
which are playing a great role to generate savings and it makes sure the proper
investment of the savings in different sector of our economy.
Commercial banks are cooperating different types of business in various ways which
is ensuring prosperity of business which ultimately means prosperity of economy as a
whole. By, now it has been proved that literally bank is the heart of all commercial
activities in Bangladesh and one of the most flourishing sector of our country. And,
foreign exchange business can help expansion of our economy. That’s why the banks
are now giving the maximum importance in financing Export, Import, and Remittance
business enormously.
This report concentrates on the overall performance of Foreign Exchange & Foreign
Trade in NCC Bank Ltd, Jubilee Road Branch Chittagong. From the very
beginning of taking birth, this Branch is playing an outstanding role for the betterment
of the Import & Export market in this country.
1.2 RATIONALE OF THE STUDY
The rationale of the study is to assess the banking system of National Credit &
Commerce Bank Limited (NCCBL). NCCBL’s banking service is one of the finest
services among the banking industry. With the state-of-the-art technology, efficient
employees and diversified services NCCBL is facilitating the banking operation for
Bangladeshi national. The benefit of the existence of NCCBL’s banking service in
this country is enormous because, NCCBL has countrywide operation with worldwide
network which facilitates the trade function of domestic exporter and importer with a
great professionalism and care. This also increases the opportunity for this country’s
entrepreneurs to expose in the industrial growth of the country with finance of
NCCBL. The increased financial growth of the bank over the year attributes the trust
and reliability of depositors and investors on NCCBL’s banking service. Simply, this
is one of the most important indicators of the superior performance of NCCBL.
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In a situation of low rate of economic growth, high rate of inflation, unemployment,
the analysis of the status of contribution indicators of NCCBL banking operation to
the economy of Bangladesh is of immense significance.
1.3 OBJECTIVES OF THE STUDY
The main objective of the study is analyze the Foreign Exchange Business of NCCBL
Jubilee Road Branch, Chittagong. In line with the broad objective, the detailed
objectives of the study may be spelled out as follows:
To know about the Foreign Exchange Business of NCC Bank Ltd.
To discuss about the Export Business procedure of the sample bank.
To discuss about the Import Business procedure of the sample bank
To analyze the financial performance of Foreign Exchange Business of the
sample branch.
1.4 METHODOLOGY OF THE STUDY
The study is based on both primary and secondary data sources which have been mentioned below-
Primary Sources :
Face to Face conversation with the respective officers and staffs
In-depth study of selected cases.
Interview with the Clients.
Secondary Sources:
Annual Report of NCCBL
Official Website of NCCBL
NCC Bank Training Books, Catalogs
Relevant Books, Research Papers, News Papers and Journals
Internet and various study selected reports
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1.5 SCOPE OF THE STUDY
Through a reliable report demands an effective comparison between different
branches of bank, this could not materialized due to paucity of time. However, an
exhaustive endeavor is taken by studying depth of National Credit & Commerce Bank
Ltd (NCCBL), Jubilee Road Branch, Chittagong keeping in view of several
departments of the branch.
1.6 LIMITATIONS OF THE STUDY
From the beginning to end, the study has been conducted with the intention of making
it as a complete and truthful one. However, many problems appeared in the way of
conducting the study. During the study, it was not possible to get know all about the
account opening systems and its procedures covered by the bank although the
financial statements and other information regarding the study have been considered.
The study considers following limitations-
Banking sector and its operation is a complex issue.
Authoress lack of in-depth knowledge and analytical ability for writing such
report on this issue pose problems for the report preparation.
Getting required information from busy officials within limited time period is
hamper the data collection.
This report suffers from a narrow data range for analysis.
Changing environment from the educational area to the professional area.
Banking sector is a large area and the time period for study in this area was
short
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CHAPTER 02
2.1 PROFILE OF NCC BANK LTD
As Banking structure is changing day by day and the far-reaching program of
economic reform is carried out towards efficient utilization of scarce resources and
the development of private entrepreneurship, in the vast changing business
environment, financial intermediaries are gradually being left to be guided by market
forces rather than regulations. Competition is strengthened by the entry of new and
innovative providers of financial services through the development of Money Market
and Capital Market. Under the ongoing financial liberalization program, the NCC
Bank Ltd emerged as a fast growing leading and prominent bank in the private sector
to operate on the commercial arena of Bangladesh. The bank has been sponsored by a
group of renowned personalities from the field of trade, commerce and industries
including some eminent entrepreneur. Highly skilled professionals having wide
experience in domestic and international banking manage the bank. The NCC Bank
Ltd has already occupied a challenging position among its competitors after achieving
success in all areas of banking operation. It offers all kind of commercial, corporate
and personal banking services covering almost all segments of the society. To serve
the customers through capacity building across multi delivery channel is one of the
main strategies of the NCCBL. The bank is gradually expanding branch for coming
nearer to its customers for providing various convenient services. Thus, in the local
market the operation of the NCCBL is highly appreciated for its customer oriented
focus.
2.2 HISTORICAL BACKGROUND OF NCCBL
At the first leg of the decade of 1980s, the Government of Bangladesh changed its
policy regarding Banking Business, which was until then restricted to the public
sector only besides a few number of foreign banks. With the change of policy, the
country witnessed advent of banks in private sector. This shift in policy also paved the
Way of establishing non-banking finance company to build up capital market of the
country.
At that time on 25th November 1985 National Credit Limited here in after called NCL
was established and incorporated as a public limited company in order to operate as a
financial company with its registered Head Office at 7-8, Motijheel C/A, Dhaka-1000.
The aim of the company was to mobilize resources from within and invest them in
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such a way so as to develop country’s industrial and trade sector and playing a
catalyst role in the formation of capital market as well. The NCL faced severe setback
in 1992 in respect of business and came on the verge of collapse. However, with the
initiative of Boards of Directors and Management and with the permission of the
Central Bank, NCL was converted to a full-fledged private commercial bank in the
name and style of National Credit and Commerce Bank Limited hereinafter called
NCCBL on 17th May, 1993 with authorized capital TK 75.00 crore and paid up capital
TK 39.00 crore. Day by day NCC Bank has achieved a standard position among all
financial institution as a full-fledge commercial bank.
2.4 MISSION & VISION OF NCCBL
Mission: To mobilize financial resources from within and abroad to contribute to
Agricultures, Industry & Socio-economic development of the country and to
Pay a catalytic role in the formation of capital market.
Vision: To become the Bank of choice in serving the Nation as a progressive and
Socially Responsible financial institution by bringing credit & commerce
Together for profit and sustainable growth.
2.5 GOAL OF NCCBL
General goal: To Share a significant portion of the banking sector by utilizing
available manpower and state of the art technology for
maximizing the shareholders wealth.
Long term goal: To maximize the wealth of shareholders.
Short term goal: To earn satisfactory rate of return on investment by providing
wide range of banking services.
2.6 PHILOSOPHY OF NCCBL
At present, the bank has as many as 84 branches across the country and it is
committed to become equal service providers compatible with the norms of
commercial schedule bank. It renders all types of personal, commercial and corporate
banking services to its customers within the purview of the Bank Companies Act,
1991 and in line with the directives and policy guidelines laid by down, by
Bangladesh bank.
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2.7 OBJECTIVES OF NCCBL
The NCCBL has been established with the objective of providing efficient and
innovative banking services to the people of all sections of our Society One of this
bank is that it is backed by the disciplined and strongest Institution of Bangladesh.
The bank has extensively in the country’s industrial and agricultural sectors in the
coming days. The bank is committed to contribute as such as possible within its
limitations for the economic growth and for ensuring value of its available resources.
2.8 BRANCH NETWORK OF NCCBL
NCC is the Private bank in Bangladesh. There are 84 branches all over the country. Among them 34in Dhaka Division, 33 branches in Chittagong Division, 3 branch in Khulna Division, 6 branches in Sylhet Division , 7 branch in Rajshahi Division and 1 branch in Barisal Division .
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National Credit & Commerc
e Bank Ltd.
National Credit & Commerc
e Bank Ltd.
Khulna 3
Khulna 3
Barisal 1
Barisal 1
Dhaka 34
Dhaka 34
Chittagong 33
Chittagong 33
Sylhet 6
Sylhet 6Rajshahi
7Rajshahi
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Figure: Total Branch of the National Credit and Commerce Bank Limited
2.9 ORGANIZATIONAL STRUCTURE OF NCCBL
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Managing Director (MD)Managing Director (MD)
Deputy Managing Director (DMD)Deputy Managing Director (DMD)
Senior Executive Vice President (SEVP)Senior Executive Vice President (SEVP)
Executive Vice President (EVP)Executive Vice President (EVP)
Senior Vice President (SVP)Senior Vice President (SVP)
Vice President (VP)Vice President (VP)
Senior Assistant Vice President (SAVP)Senior Assistant Vice President (SAVP)
Assistant Vice President (AVP)Assistant Vice President (AVP)
Senior Principal Officer (SPO)Senior Principal Officer (SPO)
Principal Officer (PO)Principal Officer (PO)
Senior Officer (SO)Senior Officer (SO)
Officer (G-1)Officer (G-1)
Junior Officer (JO)Junior Officer (JO)
Assistant Officer (AO)Assistant Officer (AO)
2.10 EXECUTIVE STRUCTURE OF JUBILEE ROAD BRANCH
2.11 DEPARTMENTS OF JUBILEE ROAD BRANCH Several departments are in Jubilee road branch to support for smooth running of the banking operation.
Departments of Jubilee Road BranchDepartments of Jubilee Road Branch
Accounts OpeningAccounts Opening
ExportExport
ImportImport
Foreign RemittanceForeign Remittance
Vice President (VP)
Assistant Vice President (AVP)
Senior Principal Officer (SPO)
Senior Officer (SO)
Principal Officer (PO)
Officer (G-1)
Junior Officer (JO)
Assistant Officer (AO)
Others
2.12Products & Services of NCCBL Deposit Products
Current A/C
Savings Bank Deposit A/C
Short Term Deposit A/C
Term Deposit A/C
Premium Term Deposit A/C
Instant Earnings Term Deposit A/C
Special Savings Scheme
Special Fixed Deposit Scheme
NFCD
RFCD
Money Double Program
Loans and Advance Products
1. Commercial and Trade Financing
2. Long Term (Capital) Financing
3. House Building Financing
4. Retail and Consumer Financing
5. SME Financing
6. Agricultural Financing
7. Imports and Export Financing
8. Working Capital Financing
Cards
1. ATM Card
2. Credit Card (Local, International and Dual)
Remittance Products
1. Special Interest rate on Savings and Term Deposits
2. Wage Earners Welfare Deposit Pension Scheme
3. Loans for Real Estate (Land purchase and House construction/renovation)
4. Advance against Regular Remittance
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ServicesBrokerage House
1. Member, Dhaka Stock Exchange Ltd.
2. Full Service Depository Participant
Treasury Service
1. Primary Dealer of Govt. Approved Securities
Remittance Service
1. Correspondence arrangement with more than 330 Financial Institutions all over
the World
For Wage Earners Remittance we have Agency arrangement with 12 reputed Exchange Houses covering major Locations of our Expatriates
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2.13PERFORMANE OF NCC BANK LTD Five Years Financial Highlights Taka in MillionParticulars 2008 2009 2010 2011 2012Authorized Capital 2500.00 2500.00 2500.00 5000.00 10000.00
Paid up Capital 1201.79 1352.01 1757.62 2284.90 4501.25Reserve fund & other Reserve 1215.58 1995.36 2863.63 4371.62 5771.09
Equity Fund 2417.37 3326.52 4621.25 6656.52 10272.34
3.4.6 Advising L/C When export L/C is transmitted to the bank for advising, the bank sends an Advising
Letter to the beneficiary depicting that, L/C has been issued.
3.4.7 In Land L/C ILC means LJC within the same country. These types of L/Cs are opened when the
seller does not believe the buyer though they are of the same country and also in the
cases where the sales contract is of a big amount.
3.4.8 Bills Negotiation The beneficiary (exporter) receives the letter of credit from advising bank. After
proper shipment of goods as per terms and conditions of the L/C, required documents
like Commercial Invoice Bill of Lading and bill of exchange are presented to the
negotiating bank by the beneficiary for negotiation. For sight L/C, if the documents
are in order as per L/C then the negotiating bank negotiates the drafts making
payment to the beneficiary. Then the negotiating bank forwards the drafts along with
the shipping documents to the L/C opening bank
3.5 EXPORT FINANCING
An exporter is one who exports the goods to another customer whether n domestic
country or in abroad. In exporting the stipulated goods he nay requires financing. So
export financing may be required at two stages-
Pre-shipment credit.
Post shipment credit,
3.5.1 Pre-shipment Credit Pre shipment credit, as the name suggests, Is given to finance the act of an exporter
prior to the actual shipment of the goods for export. The purpose of such credit is to
meet working capital needs starting from the point of purchasing of raw materials to
final shipment of goods for export to foreign country. Before allowing such credit to
exporters the bank takes into consideration about the credit worthiness, export
performance of the exporters, together with all other necessary information require for
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sanctioning the credit in accordance with the existing rules and regulations. Pre credit
is given for the following purposes-
Cash for local procurement and meeting related expenses.
Procuring and processing of goods for export.
Packing and transporting of goods are export.
Payment of Insurance premium.
Inspection fees
Freight charges etc.
An exporter can obtain credit facilities against lien on the irrevocable, confirmed and
unrestricted export letter of credit in farm of the followings-
Packing credit (PC).
Back-to-Back letter of credit.
Export Cash Credit (Hypo).
Export Cash Credit (Pledge).
3.5.2 Packing Credit (PC) Packing Credit is essentially a short-term advance granted by a Bank to an exporter
for assisting him to buy, process, manufacture, packing and ships the goods. This type
of credit is sanctioned for the transitional period starting from dispatch of goods till
the negotiation of the export documents. Exporter can get PC up to 10% of the Export
L/C value and has to be liquidated by negotiation / purchase of Bills of Exchange. The
drawings of P.C are required to be adjusted fully once within a period of 180 days.
Charge Documents for PC
Banker should obtain the Following charge documents duly stamped prior to
disbursement-
Demand Promissory Note
Letter c Arrangement
Letter of Lien of Packing Credit (On special adhesive stamp)
Letter of Disbursement
Packing Credit Letter
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3.5.3 Back-to-Back Letter of Credit A Back-to-Back letter of credit, a new L/C (an Import L/C) is opened on the basis of an original L/C (an Export L/C). Under the Back-to-Back concept, the seller as the Beneficiary of the First L/C offers it as a ‘security to the advising Bank for the issuance of the second L/C. The Beneficiary of the Back-to-Back L/C may be located inside or outside the original Beneficiary’s country. As per instruction of the central bank commercial banks are rendering Back-to-Back L/C at nil margins.
Ready-made garment industries and specialized textile units are allowed the facility of importing fabrics and other materials needed for manufacture of garments/ specialized textiles against back-to-back L/C arrangement,
Back-to-Back L/C is of two types-
Foreign back-to-back L/C.Inland back-to-back L/C.
A Back-to-Back L/C is opened against an irrevocable L/C opened bank having reasonable period of validity to cover shipment of merchandise after completion of
validity to cover shipment of merchandise after completion of the manufacturing
process. The export L/C is lien marked with the back-to-back L/C issuing branch,
import t is opened on issuance basis covering usance of not more than 180 days. The
Import L/C is opened for 8O% of the value of Export L/C. The payments normally
made form the proceeds or export bills negotiated after shipment.
Payment of Back-to-Back L/C
In case Back-to-Back L/C 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. For Back-to-Back L/C, opener has to pay interest at LIBOR rate
(London Inter Bank Offering Rate). Generally LIBOR rate fluctuates from 5% to 7%.
3.5.4 Export Cash Credit (Hypothecation) Under this arrangement the bank sanction the loan to the 1st class exporter, as there is no security against this loan. The letter of hypothecation creates a charge against the merchandise in favor of the bank but neither the ownership nor the possession is passed to it.
3.5.5 Export Cash Credit (Pledge) Under this arrangement the bank advance loan to the exporter against pledge of raw
materials or exportable goods. The exporter surrenders the physical possession of
goods under banks control till the payment of dues is made. If the exporter does not
able to pay the loan the bank can sell the exportable goods to recover the credit.
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3.5.6 Post-shipment Credit This type of credit refers to the credit facilities, extended to the exporters by the banks
after shipment of the goods against export documents. Necessity for such credit arises,
as the exporter cannot afford to wait for a long time for without paying
manufacturers / suppliers. Before extending such credit, it is necessary on the Part of
banks to look into carefully the financial soundness of exporters and buyers as well as
other relevant documents connected with the export in accordance with the rules and
regulations in force, Banks in our country extend post shipment credit to the exporters
through —
Foreign Documentary Bills Purchased (FDBP).
Local Documentary Bills Purchased (LDBP).
3.5.7 Foreign Documentary Bills Purchased (FDBP) In case of Deferred L/C the payment usually received after a certain period that is
90,120180 days later. In that case party (exporter) sometimes wants to negotiate the
bills to the negotiating bank, for incise or need of money. In FDBP bank negotiates
the bills & documents to adjust the Packing Credit (PC) or back to-back L/C payment
and gives the rest amount to the client in cash or by crediting his account. In this
process the negotiating bank collect acceptance letter from the payment bank and
purchase the export bills at a usance rate of currency. FDBP is created only for the
foreign documents. For this purpose, NCCBL maintains a separate register named
FDBP Register. This register contains the following information —
DateReference number (FDBP)Name of the draweeName of the collecting bankConversion rateBill amount both in forei9n currency & Taka.Export L/C number
3.5.8 Local Documentary Bills Purchased (LDBP) It created only for the local export documents. Local exporters are usually small one
and act ns backward linkage industry to the large foreign exporters. So, in case of
deferred L/C (Usually done in Textiles/ Garments) the exports want to negotiate the
bills for quick receiving of payments. The negotiating bank checked the documents
thoroughly and transferred the discounted value of Bills by converting it into
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Bangladeshi Taka at a ruling usance rate. This temporary liability is adjustable from
the proceeds of the bills.
3.6 REMMITANCE
Remittance means sending of fund from one place to another place, When fund in
transferred to or received from foreign country it is called foreign remittance. The
word Foreign Remittance means sending/ transferring of fund through a bank from
one place to another between two countries.
“Foreign Remittance” means purchase and sale of freely convertible foreign
currencies as admissible by “Foreign Exchange Regulations Act-1947” and
“Guidelines for Foreign Exchange Transaction – VOL. 1&2” of the country. Purchase
of foreign currencies constitutes inward foreign remittance and sale of foreign
currencies constitutes out ward foreign remittance.
3.6.1Local Remittance
Local remittance is the process of transfer money one place to another place through bank within the country of a bank
Mode of Local Remittance
Advice: Advice is an instrument for transferred fund from one branch to another in order to perform its internal activities. This is one kind of order payment.
Payment Order (PO): Payment Order is an instrument which makes the order of payment to a certain institution from a particular bank.
Demand Draft (DD): This is an instrument through which customer’s money is remitted to another person/ firm / organization in outside the clearinghouse area from branch of one bank to an outstation branch of the same bank or to a branch of another bank.
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Telegraphic Transfer (TT): This is a mode of transfer of customer’s money from a branch of one bank to another branch of the same bank through telegraphic.
3.6.2 Foreign remittance
Foreign remittance is the process of transfer of money from one country to another country via bank
Mode of Foreign Remittance
Channels Country
Habib Qatar Qatar
Al Fardan Middle East
Dhaka Janata Italy
UAE Exchange LLC UAE
Federal Exchange Middle East
Placid Express USA
KAYMAKS England
First solution England
Wall street UAE
Money Gram Worldwide
Xpress money Worldwide
Arab National Bank KSA
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3.6.3 Country Wise Remittance Performance Figure In million Country 2008 2009 2010 2011 2012 (%) of
As on 30th November, 2012 branch’s total import stood at $ 1041.848 Million, in the year of 2011 it was $1390.5 million and at the end of the 2010 it was 1221.6million.
Year 2010 2011 2012
Import 1221.6 1390.5 1041.484
Graphical Representation Figure in million
Analysis:
From the above graphical presentation we can see that import of the bank is fluctuating over the three years. But in 2011 the import of the Branch was 1390.5 million & in the year of 2012 the branch total import was 1041.484 which is represents that the import of the branch is reducing.
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4.2.2 Export
As on 30th November, 2012 branch’s total export $891.7million stood at the end of 2011 it was $149.95million & at the end of year 2010 it was 225million.
Year 2010 2011 2012
Export 225 149.5 891.7
Graphical Representation Figure in million
Analysis:
At the year of 2012 the total export volume is increased by 742.2 million against at the end of year 2011. Which shows the export of the branch is rapidly increased.
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4.2.3 Number of L/C
The total number of L/C issued by the branch 2012 is 533 and at the year of 2011 the number of total L/C was 594
Year 2010 2011 2012
Number of L/C 601 594 533
Graphical Representation Figure in million
Analysis: From the above graphical presentation we can easily understand that in the year of 2010 the total number of L/C was the highest among the three years but remaining two years number of L/C is decreasing where as it is sharply decreased in the year of 2012.
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4.2.4 Remittance
At the end of year 2012 the Brunch received total remittance 182.64 million; at the end of 2011 it was 152.68million and at the end of 2010 it was 142.28million.
Year 2010 2011 2012
Remittance 142.28 152.68 182.64
Graphical Representation Figure in million
Analysis:
From the above graph we can say that the remittance of the branch is gradually increased over the three years in the year of 2012 it was 182.64million which represents that it was the highest among the three years.
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CHAPTER 05
5.2 Findings of the Study
After analyzing the performance and during the organizational attachment of internship program the following findings have been found out:
The position of NCC Bank Ltd in import business and remittance is not as
higher as some other banks operation in Bangladesh. This might be keeping
NCCBL away from deriving the dominant position among the banks in
Bangladesh.
In this modern technological era banks of this country are still relying on lots
of paper works which are possible to accomplish electronically. In
Bangladesh, NCC Bank Ltd also doing lots of manual tasks in order to comply
with local systems. Specifically, Foreign Exchange Department of NCCBL in
this country is still maintaining different forms, registers etc. Remittance
Department preparing advice for inter branch transaction with register in order
to serve the purposes of local corporate clients and comply with different
domestic rules and regulations.
Management of NCC Bank Ltd introduces “Flora” software to the employee
for better service. But it’s not properly ready yet. Some times problems create
on data storing and finding records by using Flora.
The advertisement of National Credit and Commerce Bank Limited (NCCBL) in TV,
Newspaper, or in any mass media is not available.
National Credit and Commerce Bank Limited (NCCBL) does not update their website
properly as a result the client or customer can not get details about the bank.
Booth facility of the bank is not sufficient.
Training facility is not sufficient especially of the lower level officer.
For better marketing of the bank products, the bank doesn’t have a dedicated team of
officials who will only concentrate on marketing.
Recovery of classified loans is very slow, as because the bank doesn’t have individual
recovery unit.
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5.3 Recommendations
NCC Bank Ltd should increase their investment in Trade Services and
branches into the major areas so that they can lead the highest position among
banks in Bangladesh.
Online banking must need to be fast enough for quick service to the client.
Banks need to modify and develop the Flora Software Service for avoiding
further blunder in service.
NCCBL can provide an effective training program for the junior level officer
as though they can perform their task efficiently..
Continuous advertisement need to be circulated in electronic and print media
to inform and make popular of the National Credit and Commerce Bank
Limited (NCCBL).
National Credit and Commerce Bank Limited (NCCBL) is a reputed bank in
Bangladesh so they should be up dated their website regularly.
National Credit and Commerce Bank Limited (NCCBL) has to create a new
marketing strategy which will attract more client, as a result number import
and export business increase.
National Credit and Commerce Bank Limited (NCCBL) can introduce debit
card facilities.
National Credit and Commerce Bank Limited (NCCBL) need to launch their
own ATM booth, so that their customers can withdraw cash at a low
commission.
58
Conclusion
The banking sector plays an important role in modern society and private banks are
more competitive, diversified and dynamic compare to traditional banking system.
Every day new competitors are entering into the industry with better innovative ideas,
products and services. In banking sector National Credit and Commerce Bank Limited
is a name of trust, now it is an icon of best services.
Foreign Exchange section is the busiest section in this branch. This department is
increasing their business and earning profit every year for well communication of
V.P. and Foreign Exchange In-charge with their clients. The bank has to introduce
new services for the clients so that they may achieve competitive advantage over
other commercial banks. The adjustment of Loans against L/C is satisfactory enough.
The consistent performance of the bank over the last few years is the evidence of the
strengths of the bank, efficiency of management team, and uphill struggle of
employees. Despite the existence of deficiencies in some areas, the overall
performance of NCCBL was outstanding among the banking industry in Bangladesh.
The bank has to overcome the shortcomings in the near future and offer new
innovative services in order to retain its position as a leader amongst banks year after
year.
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References
Books & Guidelines
Chowdhury, L.R .(2000), A Text Book on Foreign Exchange (pp. 3-7), Fair
Corporation, Dhaka.
Foreign Exchange Guideline - NCC Bank Ltd
Guideline for Foreign Exchange Transaction (Volume 1) – Bangladesh Bank
Guideline for Foreign Exchange Transaction (Volume 2) – Bangladesh Bank
Maheshwari S.N. & Maheshwari S.K.(2001), Banking Law and Practice (sec
4, p. 11), Kalyani Publishers, New Delhi.
NCC Bank Training Book - NCC Bank Ltd
Publications
Annual reports of NCC Bank Ltd
Financial Statements of NCC Bank Ltd
Websites
www.bangladesh-bank.org , accessed on 16 June 2011
ABP Accepted Bill for PaymentB/L Bill of LadingBB Bangladesh BankB/E Bill of ExchangeB.C Bill of CollectionC&F Clearing & ForwardingCAD Cash Against Documents.CRF Clean Report FindingsCCI&E Chief Controller of Import & ExportCFR Cost & FreightCIB Credit Information BureauCIF Cost Insurance & Freight DD Demand DraftDP Note Demand Promissory NoteDLC Documentary Latter of CreditEPB Export Promotion BureauEXP Export FormERC Export Registration CertificateFC Foreign CurrencyFDD Foreign Demand DraftFOB Free On BoardFDBP Foreign Documentary Bill Purchase.HS Code Harmonized Commodity Description & Coding System HO No Objection CertificateIBC Inward Bills for CollectionICC International Chamber of CommerceIMP Import FormIRC Import Registration CertificateL/C Letter of CreditLCAF Letter of Credit Authorization FormLIBOR London Inter Branch Offering Rate.MTDR Mudaraba Term Deposit ReceiptMPI Murabaha Post ImportOBC Outward Bills for CollectionOFDBC Outward Foreign Documentary Bill for Collection.PO Payment OrderPAD Payment Against DocumentPSI Pre Shipment InspectionSWFT Society for Worldwide Inter-Bank Financial Telecommunication TC Travelers ChequeTIN Tax Identification NumberTR Trust ReceiptTT Telegraphic TransferTM Travel & Miscellaneous FormUCPDC Uniform Custom &Practice for Documentary Credit