1.

1Origin of the report:

As a prerequisite for the Bachelor of Business Administration Degree of Shaikh

Burhanuddin Post Graduate College, I was required to complete an internship in a
suitable business organization and submit a report on my findings. I had been selected
to work as an Internee in Jamuna Bank Limited, period of 3 months from 26
November 2017 to 26February 2018. After discussion and getting consent, I started to
work on “Foreign Exchange Operation of Jamuna Bank Limited. Without practical
exposure, theory can never be fruitful. For this reason, B.B.A program has been
designed in such a way that a student can get practical knowledge. A student needs to
go for practical orientation in some organization where his/her duty is to bear all the
some things from operations and activities of that branch This internship report is
generated under the supervision of Munmun Hussain, Lecturer, Department of
Business Administration, Shaikh Burhanuddin Post Graduate College.

1.2Objectives of the report:

1. Primary Objective

2. Secondary Objective

Primary Objective:

The primary and major objective of the study is to explore the foreign exchange
operations of Jamuna bank limited in light of the experience and knowledge during
the internship period.

Secondary Objective:

More specifically, this study entails the following aspects:

1. To examine foreign exchange activities of Jamuna Bank Limited

2. To evaluate foreign exchange operational performance of Jamuna Bank Limited

3. To analyze competitiveness of Jamuna Bank Limited

1
1.3 Methodology of the report:

There are certain boundaries to cover the report, to achieve the objectives of the
report. In this report I tried to analyze the Foreign exchange Operation of Jamuna
Bank Limited. For this purpose I have collected primary and secondary data. In the
preparation of the report I have used Annual report and different journal. I also
conduct face to face conversation with employees of Jamuna Bank Limited.

1.4 Sources of Data:

Both primary and secondary source of data are used to complete this study. These two
sources are explained below:

Primary sources:

1. Personal Interview – Face-to-face conversation and in depth interview with

the respective officers of the branch.
2. Personal observation – Observing the procedure of banking activities followed
by each department.
3. Practical work exposures on different areas of the branch.
4. Informal conversation with the clients or customers.

Secondary sources:
1. Annual report (20013-2016) of Jamuna Bank Ltd.
2. Periodicals Published by Bangladesh Bank.
3. Different publications regarding Banking functions and foreign exchange
operation
4. Internet is also used as a theoretical source of information.

1.5 Scope of the report:

As I was sent to Jamuna Bank Limited, Moulvi bazarBranch, the scope of the report
is only to this branch. The report covers details about Jamuna Bank
Limited(especially Foreign Exchange Operation).

2
1.6 Limitations of the Report:

To provide current information and to make the report read-worthy, support from
various sources is essential. In spite of having my wholehearted effort, I could not
collect some information required at the time of the Report. So this report is not free
from the following limitation:

1. Lack of previous experience to prepare this type of report and it is totally new
to me as an intern.
2. Learning all the banking foreign exchange functions within just three months
is really difficult.
3. Another limitation of this report is Bank’s policy of not disclosing some data
and information for obvious reason, which could be very much helpful.
4. Time was very limited to prepare the report
5. Employees were very busy to give their valuable time

3
2.1 An overview of Jamuna Bank Limited:

Jamuna Bank Limited (JBL) is a Banking Company registered under the Companies
Act, 1994 of Bangladesh with its Head Office currently at Hadi Mansion, 2, Dilkusha
C/A, Dhaka-1000, Bangladesh. The Bank started its operation from 3rd June 2001.

The Bank provides all types of support to trade, commerce, industry and overall
business of the country. JBL's finances are also available for the entrepreneurs to set
up promising new ventures and BMRE of existing industrial units. The bank was
established by a group of local entrepreneurs who are well reputed in the field of
trade, commerce, industry and business of the country.

The Bank offers both conventional and Islamic banking through designated branches.
The Bank is being managed and operated by a group of highly educated and
professional team with diversified experience in finance and banking. The
Management of the bank constantly focuses on understanding and anticipating
customers' needs. Since the need of customers is changing day by day with the
changes of time, the bank endeavors its best to devise strategies and introduce new
products to cope with the change. Jamuna Bank Ltd. has already achieved tremendous
progress since its beginning. The bank has already built up reputation as one of
quality service providers of the country.

At present the Bank has real-time Online banking branches (of both Urban and Rural
areas) network throughout the country having smart IT-backbone. Besides traditional
delivery points, the bank has ATMs of its own, sharing with other partner banks and
consortium throughout the country.

4
2.2 Corporate Information:

1. Name of the Company Jamuna Bank Limited

2. Legal Form Jamuna Bank Limited (JBL) is a Banking Company
registered under the Companies Act,
3. 1994 with its Head Office at Hadi Mansion, 2,
4. Dilkusha C/A, Dhaka-1000.
5. Corporate Slogan “Your Partner for Growth”
6. Date of Commencement 2nd April 2001
7. Registered Office 2, Dilkusha C/A, Dhaka - 1000, Bangladesh
8. Telephone 9555141, Ext.130
9. Tele-fax Fax: 880-2-9565762
10. SWIFT Code JAMUBDDH
11. Ownership Public Limited Company
12. Banking software used FLORA
13. Technology used Member of SWIFT
14. E-mail [email protected]
15. Web Page www.jamunabankltd.com
16. Auditors: Syful Shamsul Alam & Co.Chartered Accountants
17. Tax Consultant: Howladar, Yunus & Co.Chartered Accountants
18. Chairman MdSirajul Islam Varosha
19. Managing Director Mr. Shafiqul Alam
20. Company Secretary M.A. Rouf
21. Chief Financial Officer Ashim Kumar Biswas

2.3 Vision of Jamuna Bank Limited:

To become a leading banking institution and to play a pivotal role in the development
of the country and service so that sustainable growths, reasonable return and
contribution to the development of the country can be ensured with motivated and
professional work-force. Jamuna Bank’s aim is to satisfy customers with high quality
service that reflects the global image as the premier international bank, to become a
leading banking institution and to play a pivotal role in the development of the
country.

5
2.4 Mission of Jamuna Bank Limited:

The Bank is committed to satisfying diverse needs of its customers through an array
of products at a competitive price by using appropriate technology and providing
timely service so that a sustainable growth, reasonable return and contribution to the
development of the country can be ensured with a motivated and professional work-
force.

The bank has some mission to achieve the organizational goals. Some of them are as
follows as:

1. Jamuna Bank Limited provides high quality financial services to strengthen

the well-being and success of individual, industries and business communities.
2. Its aim to ensure their competitive advantages by upgrading banking
technology and information system.
3. JBL intends to play more important role in economic development of
Bangladesh and its financial relations with the rest of the world by interlining
both modernistic and international operations.
4. JBL encourages investors to boost up share market.
5. The bank creates wealth for the shareholders.
6. The bank believes in strong capitalization.
7. It maintains high standard of corporate and business ethics.
8. Jamuna Bank Limited extends highest quality of services, which attracts the
customers to choose them first.
9. The bank creates wealth for the shareholders.

2.5 Objectives of Jamuna Bank Limited:

The primary objective of Jamuna Bank Limited is to provide credit facilities to the
customers and entrepreneurs. Many other objectives are:

1. To establish relationship banking and improve service quality through

development of Strategic Marketing Plans.
2. To remain one of the best banks in Bangladesh in terms of profitability and
assets quality.

6
3. To introduce fully automated systems through integration of information
technology.
4. To ensure an adequate rate of return on investment.
5. To keep risk position at an acceptable range (including any off balance sheet
risk).
6. To maintain adequate liquidity to meet maturing obligations and
commitments.
7. To maintain a healthy growth of business with desired image.
8. To maintain adequate control systems and transparency in procedures.
9. To develop and retain a quality work-force through an effective human
Resources Management System.
10. To ensure optimum utilization of all available resources.
11. To pursue an effective system of management by ensuring compliance to
ethical norms, transparency and accountability at all level

7
2.6 Organizational structure of Jamuna Bank Limited:

Table 1: Organizational structure

8
2.7 Products and Services of Jamuna Bank Limited:

Jamuna Bank Ltd. offers all kinds of Commercial Corporate and Personal Banking
services covering all segments of society within the framework of Banking Company
Act as well as rules and regulations laid down by our central bank. Diversification of
products and services include Corporate Banking, Retail Banking and Consumer
Banking right from industry to agriculture, and real state to software. They have
mainly three types of products as mentioned bellow

1. Deposit Scheme
2. Loan Scheme
3. Islamic Banking

Deposit scheme:

Bank is the largest mobilize of surplus domestic savings. For poverty alleviation, we
need self-employment, for self-employment we need investment and for investment
we need savings. In the other words, savings help capital formations and the capital
formations help investments in the country. The investment in its turn helps
industrialization leading towards creation of wealth of the country. And the wealth
finally takes the country on road to progress and prosperity. As such, savings is
considered the very basis of prosperity of the country. The more the growth of
savings, the more will be the prosperity of the nation. The savings rate in Bangladesh
is one of the lowest in the world. In order to improve the savings rate, Financial
Institutions responsible for mobilization of savings should offer attractive Savings
Schemes so that the marginal propensity to save increases. The savings do not, of
course, depend only on the quantum of income but largely depend on the habit of
savings of the people.

Jamuna Bank has formulated the following Savings Schemes

1. Contributory Savings Scheme

2. Monthly Benefit Deposit Scheme
3. Education Savings Scheme
4. Fixed Deposit Scheme
5. Short Term Deposit

9
 6. Lakhopati Deposit Scheme
7. Double Benefit Deposit Scheme
8. Foreign Currency Account
9. Resident Foreign Currency Deposit Account
10. Non-resident Foreign Currency Deposit Account
11. Non-resident Taka Account
12. Non-resident Investors Taka Account
13. House Building Deposit Scheme
14. Prime Millionaire Scheme

Loan scheme:

The loans are allowed to individual/firm/industries for a specific purpose but for a
definite period and generally repayable by installments fall under this head. These
types of lending are mainly allowed accommodating financing under the categories

(i) Large & Medium Scale Industry and (ii) Small & Cottage Industry

Very often term financing for (i) Agriculture (ii) Others.

Islamic Banking:

Jamuna Bank Limited has started its operation as a Conventional Bank in April 1995.
But pretty soon afterwards, within few months, the Bank has taken up the
Challenge.To start Islamic Banking Operations. The Challenge is not so much as in
operating Islamic Banking but in maintaining both the forms in Parallel. From its
inception as an Islamic Bank the bank has proven itself to be worthy of its slogan of
‘Bank with a Difference’, through successful operation of Islamic Banking. There are
two Islamic banking brunches of Jamuna Bank.

Jamuna Bank provides four services under Islamic Banking:

1. Deposit
2. Investment
3. Foreign Trade
4. Remittance and Fund Transfer

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Deposit schemes for NRBs and their beneficiaries:

1. NRB monthly saving 6.NRB millionaire deposit scheme

scheme
2. NRB monthly benefit 7.NRB monthly position deposit scheme
scheme
3. NRB double growth 8.NRB pension term deposit scheme
benefit scheme
4. NRB triple growth 9.NRB home travel deposit scheme
benefit scheme
5. NRB kotipoti deposit 10.NRB property deposit scheme
scheme

Service Products:

1. ATM Services

2. Remittance Service

3. Locker Service

4. Online Banking

5. Internet Banking

6. Phone Banking

7. Mobile Banking

8. SWIFT

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Retail Banking:

Retail
Banking

Unsecured
Secured Loan
Loan

Personal
Personal Loan SME
Loan/overdraft

Table 2: Retail Banking

2.8 Principal activities of Jamuna bank Limited:

The principal activities of the bank are to provide all kind of commercial bank
activities encompass a wide range of services including excepting deposits, making
loans, discounting bills, conducting money transfer and foreign exchange transactions
and performing other related services such as safe keeping, collections, issuing
guarantees, acceptances and letters of credit to its customers through its branches in
Bangladesh.

2.9 Performance of Jamuna Bank Limited:

Jamuna Bank Limited Ltd. was incorporated as a public Limited company on the 2nd
June 1999 under Company Act 1994. The Bank started commercial banking
operations effective from 3rd August 1999. During this short span of time the Bank
has been successful to position itself as a progressive and dynamic financial
institution in the country. The Bank widely acclaimed by the business community,
from small business/entrepreneurs to large traders and industrial conglomerates,
including the top rated corporate borrowers from forward-looking business outlook
and innovative financing solutions.

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2.10 Present Capital structure of Jamuna Bank Limited:

The Bank is guided in accordance with the policies and principles of the Government
of the People’s Republic of Bangladesh. Jamuna Bank has an authorized capital of
Tk. 10,000 Million only and paid up capital of Tk. 10,000 Million only which is fully
paid by the government. Invest them for the betterment of our economy.

Figure 1: Capital structure

2.11 Human resources of Jamuna Bank Limited:

The need for efficient Human Resources was appreciated by Jamuna Bank
Management long back in 1994 when JBL -a finance company formed by the
sponsors in the private sector at the initiative of the Government —was converted into
a full-fledged commercial bank. It was felt that definite policies in this regard are
required. The bank, therefore, strived for appropriate policies in the area of Human
Resource in the past several Years. As a result, certain policies have, in the process,

13
historically evolved. Though these policies have been revised, amended and modified
suitably from time to time, yet it was felt that the present policies require drastic
changes in view of the wide ranging changes in the sector.

2.12 Branch of Jamuna Bank Limited:

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3.1 Foreign Exchange Operation:

Foreign exchange refers to the process or mechanism by which the currency of one
country is converted into the currency of another country. According to Foreign
Exchange Regulation Act (FERA) 1947, "Anything that conveys the right to wealth in
another country is foreign exchange. Foreign exchange means and includes all
deposits, credits and balances payable in foreign currency as well as foreign currency
instruments such as drafts, TCs. Bill of Exchange, promissory Notes and Letters of
Credit payable in any foreign currency. "
In terms of international trade, liquidity is the ease in which foreign currency is
converted into domestic currency. Foreign Exchange markets, such as the New York
Jamuna Exchange, match buyers and sellers to bring about speedy, orderly
transactions. Businesses rely on Foreign Exchange markets to buy currency that is
spent to obtain overseas goods. Corporations will also look to Foreign Exchange
markets to convert international earnings back into the domestic currency. Businesses
all around the world are increasingly depending on buying and selling from other
countries. Although the international trade environment has changed substantially
over the last 100 years, the risks have essentially remained the same. Jamuna Bank is
ready to assist you with your trade documentation and adherence to exchange control
regulations.
The acronym SWIFT stands for the Society for Worldwide Interbank Financial
Telecommunication. The ISO has designated SWIFTas the BIC registration authority.
When assigned to a non-financial institution, the code may also be known as a
Business Entity Identifier or BEI (ISO 9362).In case of travelling out of the country
either for business or holiday, Customers can buy Traveller's Cheques directly from
JBL.
Letter of credit means any arrangement whereby a Bank (the issuing Bank) is
committed (on behalf of the buyer/applicant) to pay certain amount at the seller’s
disposal under some agreed conditions. The three major types of L/C are:
1. Cash L/C: It also called L/C at sight means payment should be done as soon as
shipping documents reach to the advising bank. Normally banks get 5 days’ time for
checking the documents.

15
2. Deferred L/C: In case of this payment are made on the maturity date of the L/C. In
case of this L/C it is written on the L/C that the payment will be made after 90 or 180
or 45 days of the shipment.
3. Back to back L/C: In case of this L/C, payment is made by another valued L/C. It
is mostly used in RMG sector where exporters are needed to import something from
the same party in business.

3.2 Terms used in Foreign Exchange Operation:

Foreign Exchange:
Foreign exchange refers to the process or mechanism by which the currency of one
country is converted into the currency of another country. According to Foreign
Exchange Regulation Act (FERA) 1947, "Anything that conveys the right to wealth
in another country is foreign exchange. Foreign exchange means and includes all
deposits, credits and balances payable in foreign currency as well as foreign currency
instruments such as drafts, TCs. Bill of Exchange, promissory Notes and Letters of
Credit payable in any foreign currency. ".

Liquidity:
In terms of international trade, liquidity is the ease in which foreign currency is
converted into domestic currency. Foreign Exchange markets, such as the New York
Jamuna Exchange, match buyers and sellers to bring about speedy, orderly
transactions.

International Trade:

Businesses rely on Foreign Exchange markets to buy currency that is spent to obtain
overseas goods. Corporations will also look to Foreign Exchange markets to convert
international earnings back into the domestic currency.

Imports and Exports:

Businesses all around the world are increasingly depending on buying and selling
from other countries. Although the international trade environment has changed
substantially over the last 100 years, the risks have essentially remained the same.
Jamuna Bank is ready to assist you with your trade documentation and adherence to
exchange control regulations.

16
SWIFT:

Electronic payments are the most commonly used method of transferring any
currency. These payments are most commonly used for imports and exports, but
holidaymakers may also use them. They are done using SWIFT, a worldwide
electronic payment and receipts network.

Traveler’s Cheques:

If you are travelling out of the country either for business or holiday, you can buy
Traveler’s Cheques directly from us.

Letter of credit (L/C):

Letter of credit means any arrangement whereby a Bank (the issuing Bank) is
committed (on behalf of the buyer/applicant) to pay certain amount at the seller’s
disposal under some agreed conditions.

L/C Terms:

Each and every clause in the L/C must be complied with meticulously and ensure the
following –

1. Documents are not stale

2. Documents are negotiated within the L/C validity. If credit expires on a recognized
bank holiday its life is automatically valid onto the next working day.This is to be
stipulated on the documentary schedule.

3. Documents value does not exceed the L/C value.

17
Drafts:

Draft is to be examined as under

1. Draft must be dated

2. It must be made out in the name of the beneficiary bank to be endorsed to the order
of the bank
3. Bank must verify the signature of the drawer
4. Amount must be tallied with the invoice amount
5. It must be marked as drawn under L/C No, date, issued by, bank.

Invoice:
It is to be scrutinized to ensure the followings –
1. Invoice is addressed to the importer
2. Full description of merchandise as per L/C
3. Price, quantity, quality must be as per L/C terms
4. Must be language in the language of L/C
5. No other charges are permissible in the invoice beyond the stipulation on the L/C
6. The amount of draft and invoice must be same and within the L/C value
7. Required number of invoice must be submitted
8. Shipping mark and number of packing list must be identical
9. Invoice value must not be less than the value of declared in EXP form.
10. Must be correct on the basis of price, quantity as appear L/C

3.3 Scenario of foreign exchange business in Bangladesh:

1. Foreign Exchange Regulation (FER) Act, 1947 (Act No. VII of 1947) enacted on
11th March, 1947 in the then British India provides the legal basis for regulating
certain payments, dealings in foreign exchange and securities and the import and
export of currency and bullion. This Act was first adapted in Pakistan and then, in
Bangladesh. The Act is reproduced at Appendix-1. Bangladesh Bank is responsible
for administration of regulations under the Act. Appendix 4 provides a list of
Bangladesh Bank's offices and their jurisdictions.

18
2. Basic regulations under the FER Act are issued by the Government as well as by
the Bangladesh Bank in the form of Notifications which are published in the
Bangladesh Gazette. Notifications issued by the Bangladesh Government and the
erstwhile Government of Pakistan and the Bangladesh Bank and the erstwhile State
Bank of Pakistan is reproduced at Appendices 2 and 3. Directions having general
application are issued by the Bangladesh Bank in the form of notifications, foreign
exchange circulars and circular letters.

3. Authorized Dealers (ADs) in foreign exchange are required to bring the foreign
exchange regulations to the notice of their customers in their day-to-day dealings and
to ensure compliance with the regulations by such customers. The ADs should report
to the Bangladesh Bank any attempt, direct or indirect, of evasion of the provisions of
the Act, or any rules, orders or directions issued there under.

4. Bangladesh Bank issues licenses normally to scheduled banks to deal in foreign

exchange if it is satisfied that the bank applying for this license has adequate
manpower trained in foreign exchange.

5. Licenses with limited scope are also issued to persons or firms to exchange foreign
currency notes, coins and travellers' cheques in places where money changing
facilities are required.

6. ADs, on their own, are free to buy and sell foreign currencies forward in
accordance with tile internationally established practices however, in all cases the
ADs must ensure that the cover is intended to neutralize the risks arising from definite
and genuine transactions.

7. All remittances from Bangladesh to a foreign country or local currency credited to

on resident Taka accounts of foreign banks or convertible Taka account constitute
outward remittances of foreign exchange.

8. Lacking of experience related to foreign exchange policy.

9. Lacking of skill manpower.

10. Lacking of proper knowledge about foreign exchange policy and related items.

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3.4 Foreign Exchange Department of Jamuna Bank Limited:

Foreign exchange department deals with foreign currency and the transactions of it.
The major job of this department is listed below:

1. Letter of credit (for Export & Import).

2. Dollar/Travelers cheque (TC) endorsement.
3. Foreign Remittance.
4. Foreign Currency Account.

3.5 Functions of Foreign Exchange Department:

Foreign Exchange Department performs many functions to facilitate the foreign
exchange transactions. These are:
1. Facilitating Import Trade
2. Facilitating Export Trade
3. Providing Funded and Non-funded Credit Facility
4. Provide Non Commercial Remittance
5. Maintaining Foreign Currency Account
6. Selling of Foreign Currency Bond
7. Preparation and Submission of Statement

3.6Foreign Exchange Regulations of Jamuna Bank Limited:

Local Regulations: Foreign exchange transactions are controlled by the following
rules and regulations:
1. Foreign Exchange Regulation Act 1947
2. Bangladesh Bank issue foreign exchange circular time to time to control the import
and remittance business.
3. Ministry of commerce issues exports-Import Policy guidelines. Bangladesh Bank
published two volumes in 1996.
International Regulation: There are also some international regulations, influencing
foreign exchange transactions. Few of them are discussed below:
1. International Chamber of Commerce is a world-wide non-governmental origination
of thousands of companies. It was founded in 1919; ICC has issued publications like
UCPDC that is being followed by all the member countries.
2. There is also an international court of arbitration to solve the international business

20
disputes.
3. World Trade Organization is another international trade organization established in
1995.
4. General Agreement on Tariff & Trade was established in 1948 after completion of
its 8th round the origination has been abolished & replaced by W.T.O. This
origination has vital role in international trade through its 124 member countries.

3.7 Foreign Exchange Classification:

The procedures used to exchange currency in international trade are called foreign
exchange system, banks plays vital roles in this procedures world widely. The
Bangladeshi banks provide foreign exchange services under, foreign exchange Act,
1947 is for dealing in foreign exchange business, and Import and Export Control Act,
and 1950 is for Documentary Credits. JBL has also become a member of SWIFT in
2001, which provides a fast, secured & accurate communication network for financial
transaction such as letter of credit, fund transfer etc. Foreign exchange department
plays a vital role to earn the banks maximum profit. As an authorized dealer under
regulations of BB, JBL at Moulvi bazar Branch provides the three types services. This
department is classified according these are shown as a diagram in below:
Foreign Exchange

Import
Classification

Export

Remittance

Table 3: Foreign exchange classification

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3.8 Import section:

Import is the flow of goods and services purchased by economic agent staying in the
country from economic agent staying abroad. We can simplify Import as a means
purchase of goods and services from the foreign country into Bangladesh. Normally
consumers, firms and government of Bangladesh import foreign goods to meet their
various necessities. Import sections helps business and other people to import goods.
In international environment, buyers and sellers are most cases unknown to each
other. So seller always seeks guarantee that for the payment of his goods exported.
Here is the role of bank. Bank gives export guarantee that it will pay for the goods on
behalf of the buyer. This guarantee is called Letter of Credit. Thus the contract
between importer and exporter is given a legal shape by bankers by its” LETTER OF
CREDIT”. When a buyer goes to import same goods from a foreign buyer, he request
his bank makes payments to the exporter of goods. And the bank recovers the amount
from the importer.

3.9 Import mechanisms:

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

export control act, 1950, the officer of chief controller of import and export provides
the registration (IRC) to the importer. After obtaining this, this person has to secure a
letter of credit authorization (LCA) from Bangladesh Bank then a person becomes a
qualified importer. He is the person who request or instructs the opening bank to open
an L/C. He is also called opener or applicant of credit. Import and Export (control)
Act 1950 regulate the Import and Export trade of the country . There are a number of
formalities which on Importer has to fulfill before Import goods.

3.10 Import registration certificate:

The first thing one need to carry on a business of import is called Import Registration
Certificate. But registration is not required for import goods. Which do not involved
remittance of foreign exchange like medicine; reading materials etc. can be imported
without registration by the users within monetary limit. Documents to be required for
Import Registration Certificate are as follows-

1. Income Registration Certificate

22
2. Nationality Certificate

3. Certificate from chambers of Commerce and Industry Registered Trade Association

4. Bank Solvency Certificate

5. Copy of Trade License

6. Requisite fees

On receiving application, the respective CCI&E officer will scrutinize the documents
and conduct physical verification and issue demand note to the prospective importers
to furnish the following papers through their nominated bank –

1. Original copy of treasury deposited as IRC fees

2. Assets certificate

3. Affidavit from 1st class Magistrate

4. Rent receipt

5. Two passport size photograph

6. Partnership deeds in case of partnership firms

7. Certificate of Registration and articles of Association in case of limited company

After scrutinizing and verifying the nominated bank will forward the same to the
respective CCI&E office with forwarding schedule in duplicate through Banks
representative. CCI&E then issue Import registration Certificate to the applicant.

3.11 Import components:

The function of this section is mainly to deal with various components such as:

1. Letter of Credit (L/C)

2. Payment against Document (PAD)

3. Payment against Trust Receipt (PATR)

4. Loan against Imported Merchandise (LIM)

23
3.12 Import procedures:
The procedures, which follows at the time of Import areas, follow —
1. The buyer and the seller conclude a sale contract provided for payment by
documentary credit.
2. The buyer instructs his Bank (the issuing Bank) to issue a credit in favor of the
seller / Exporter / Beneficiary.
3. The Issuing Bank then send message to another Bank (Advising Bank /Confirming
Bank) usually situated in the country of seller, advice or confirms the Credit Issue.
4. The Advising / confirming Bank then informs the seller through his Bank that the
Credit has been issued.
5. As soon as the seller receives the credit, if the credits satisfy him the he can reply
that, he can meet its terms and conditions, he is in position to load the goods and
dispatch them.
6. The seller then sends the documents evidencing the shipment to the „! Bank where
the Credit is available (nominated Bank). This can be the ^ issuing Bank or
Confirming Bank; Bank named in the Credit as the paying, accepting and Negotiating
Bank.
7. The Bank then checks the documents against the credit. If the documents meet the
requirements of the credit, the Bank then pay, accept or negotiate according to the
terms of credit. In the case of credit available by negotiation, Issuing Bank will
negotiate with recourse. The Bank, if other than the issuing bank, sends the
documents to the issuing Bank.
8. The issuing Bank checks the document and if they found that the document has
meet the credit requirements, they realize to the buyer upon payment of the amount
due or other terms agreed between him and the issuing Bank.

3.13 Payment Procedure of the Import Documents:

This is the most sensitive task of the import department. The officials have to be very
much careful while making payment. The task constitute the followings-
1. Date of payment- Usually payment is made within seven days after the documents
have been received. If the payment is become differed, the negotiating bank may
claim interest for making delay.

24
2. Preparing sale memo- a sale memo is made at B.C rate to the customer. As the TT
& 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.
3. Requisition for foreign currency- for arranging necessary fund for payment a
requisition is sent to the ID.

3.14 Export Section:

By the term Export, we mean that carrying of anything from one country to another.
On the other hand Banker’s define Export as sending of visible things outside the
country for dale. Export Trade plays a vital role in the development process of an
Economy. With the Export earning, we meet our Import Bills.
The export trade of the country is regulated by the Import and Export (Control) Act,
1950. There are some formalities, which an exporter has to fulfill before and after
shipment of goods. No exporter is allowed to export any commodity from
Bangladesh unless he/she is registered with Chief Controller of Export & Import
(CCI&E) and holds valid Export Registration Certificate (ERC). The ERC is
required to be renewed every year and this task is generally done by the bank. As per
instruction by Bangladesh Bank, the bank has to report respective department of
Bangladesh bank by mentioning latest payment.

3.15 Export Procedure:

The export procedures are given below:

1. Receiving the order

2. Asking to open L/C

3. Booking of freight

4. Exchange rate

5. Procurement of goods

6. Getting the goods insured

7. Shipments of good

25
8. Preparing export paper

9. Securing payments

10. payment transaction

Registration of Exporters

For obtaining ERC intending Bangladeshi exporters are required to apply to the
controller/joint controller/deputy controller Assistant controller of import and exports
Dhaka/Chittagong/comilla/Rajshahi/Sylhet/Barishal/BograDinajpur/Rangpur in the
prescribed form along with the following documents:

1. Nationality and Asset certificate

2. Memorandum and Article of Association and Certificate of incorporation in case of

limited company.

3. Bank Certificate

4. Income Certificate

5. Trade license etc.

Securing the order

After getting ERC certificate the exporter may proceed to secure the export Order. He
can do this contacting the buyers directly or through agent. In this purpose the
exporter may get help from:

1. License officer

2. Buyers local agent

3. Export promoting organization
4. Bangladeshi mission export
5. Chamber of commerce
6. Trade fair etc.

26
Signing the contract:
After communicating buyer exporter has to get contracted (writing or oral) for
exporting exportable items from Bangladesh detailing commodity, quantity, price,
shipment, insurance and marks, inspections and arbitration etc

Receiving letter of credit:

After getting contract for sell exporter should ask the buyers for letter of
credit(L/C)clearly starting terms and condition of export and payments. The
followings are the main points to be looked into for receiving/collecting export
proceeds by means of documentary credit
1. The terms of the L/C are in conformity with those of the contract
2. The L/C is an irrevocable one, preferably confirmed by the advising bank
3. The L/C allows sufficient time foe shipment and negotiation

Procuring the material:

After making the deal and on having the L/C opened in his favor the next step for the
exporter is to set about the task of procuring or manufacturing the contracted
merchandise.

Shipments of goods:
Then the exporter should take the preparation for export arrangement for delivery of
goods as per L/C and incomer’s prepare and submit shipping documents for
payment/acceptance negotiation in due time.

Documents for shipping :

EXP form Insurance Document

ERC (valid) Invoice
L/C copy Other Documents
Customer Duty Certificate Bills of exchange
Shipping instruction Certificate of origin
Transport Document Quality controll certificate

27
Document submission:
In this step exporter with who confined with JBL will prepare export related
documents and submit those document to JBL foreign exchange authorized branch
for negotiation on. According to those documents JBL collects proceeds from the
former issuing banks.

3.16 Export financing by JBL:

Financing exports constitution important part of banks activities. Exporters require
financial services at four different stages of their export operation. During each of
these phases exports need JBL provides different types of financial assistance
depending on the nature of the exports contracts are as follows:

1. Pre-shipment credit
2. post shipment credit

pre-shipment: pre-shipment credit as the name suggests is given to finance the

activities of an exporter prior to the actual shipment of the goods for export.JBL
provides different types of pre-shipment credit its worthy customers for the
following purpose.
1. Cost production purchase
2. Packing including any special packing
3. Cost of special inspection or tests required by the exporter
4. Internal inspection cost
5. Export duty or tax duty etc.

For pre-shipment finance JBL Authorized foreign exchange branch must consider
the following factors related to exporters such as:
1.Honesty Integrity and capital of the borrower
2 .Exporter experience in the line
3. Security offered
4. The margin and the rates of interest
5. The banks previous experience about the exporter.
An exporter can obtain credit facilities against lien on the irrevocable confirmed and
unrestricted export letter of credit in form of the followings from JBL but pc and
BTB L/C.
28
Is most common pre-shipment credit provided by JBL:
1. Export cash credit (hypothecation)
2. Export cash credit (pledge)
3. Export cash credit against trust receipt
4. Packing credit
5. Back to back L/C

1.Export cash credit (hypothecation):

Here JBL only charge document and L/C or contract bank normally insist on the
exporter in furnishing collateral security. The letter of hypothecation creates charge
against merchandise in favor of JBL but neither the ownership nor the possession is
passed to it.

2.Export cash credit pledge:

JBL provides such credit facility to exportable goods or raw materials. Here pledged
goods are kept in JBLs control and failure of the exporter to honor his commitment.
JBL can sell the pledged merchandise for recovery the advance.

3.Export cash credit against trust receipt:

In this case JBL provides credit limits is sanctioned against trust receipt. It’s also
unlike JBL pledge facility is allowed by JBL only to the first class party and
collateral security is generally obtained in this case.

4. Packing Credit:
It is one kind of credit sanctioned by the export department to meet the exported
goods shipment timely. Packing credit is granted to pay salary, wage& other related
factory expenses of processing the imported products. The bank will give the facility
after deduction of back-to-back. Here it is to be mentioned that packing credit and
the amount of money as packing credit must be mentioned in the documents,
otherwise Bank will not grant the packing credit.

Charge documents for PC:

Responsible officer of JBL should obtain the following charge document duly stamp
prior to disbursement:

29
1. Demand promissory note
2. Letter of arrangement6
3. Letter of lien of packing credit
4. Letter of disbursement
5. Packing credit letter

Additional documents for PC:

1. Letter of partnership along with registeredpartnership deeds in case of partnership
account.
2. Resolution of the board of directors along with a memorandum &articles of
association in case of accounts of limited companies. In case of corporation
resolution of the board meeting along with charter is needed.
3. Personal guarantee of all the partners in case of partnership account and all the
directors in case of limited companies.

5. Back To Back L/C (BTB L/C):

1. Back To Back L/C Opens: It is a secondary letter of credit opened by the advising
bank in favor of a domestic/foreign supplier on behalf of the beneficiary original
foreign L/C. As the original letter of credit of bank by import letter, it is called Back-
to-Back L/C. The second L/C is opened on the strength of the original L/C for a
smaller amount.
2. Back To Back L/C (Foreign): When the B-To-B L/C is opened in a foreign
country supplier it is called B-To-B L/C (Foreign). It is generally payable within 120
days at site.
3. Back L/C (Local): When the Back-to-Back L/C is opened for local purchase of
materials; it is called Back-to-Back L/C (Local). It is generally payable within 90
days at site.

Procedures for Back To Back L/C:

1. Exporter should make application for Back to Back LAC

2. Export L/C or Master L/C under is lien
3. Opening of Back to Back L/C
4. Terms and conditions for Back to Back L/C
5. That the customer has credit line facility

30
6. That L/C is issued as per UCPDC 500
7. That on the Export L/C a negotiating clause is present
8. That there is no provision for blank endorsement of B/L
9. That payment clause is there on the L/C issuing bank ensuring payment.

Consideration for Back To Back L/C:

1. Whether client can manufacture within time period.
2. The unit price of the finished pro-forma invoice should be considering while
allowing margin.
3. Consider the expiry date and shipment date.
4. Onsite inspection whether manufacturing is carried out.

Payment under Back To Back L/C:

Deferred payment is made in case of BTB L/C as 60, 90,120, 180 date of maturity
period. Payments will be given after realizing export proceeds from the L/C issuing
bank from the abroad.

3.17 Advising Export L/C of Jamuna Bank Limited:

International Transfer of goods from Bangladesh is made through the media of L/C
issued by the foreign bank at the request of importers in favor of Exporters in
Bangladesh. Such Export L/C are en-routed through the banks who have
correspondent relationship with the former. The foreign correspondent of Jamuna
bank Ltd may advise the L/Cs in the following manner:
1. By shot telex followed by Airmail or
2. By full telex
3. By Airmail
The branch shall take reasonable care to check apparent authenticity of the L/Cs,
which, it advises. If the apparent authenticity cannot be established it must inform it
to the issuing bank without delay. If the branch elects not to advise the L/Cs, it must
so inform the issuing bank.

31
3.18 Transfer L/Cs:
The branch at the request of the original beneficiary (First Beneficiary )may execute
transfer of L/Cs to the subsequent Beneficiary(second beneficiary). For doing so, the
first beneficiary must maintain an accounting relationship with the branch and the
branch will verify his/her signature on the request letter. A letter of credit can be
transferred only if it is expressly stated as –transferable by the issuing bank and
transfer is not restricted to any other bank. The L/C can be transferred only on the
terms and conditions specified in the original L/C with the exception of L/C amount,
unit price, expiry date, presentation time of documents and shipment validity, any of
all of which may be reduced. In addition, the name of first beneficiary can be
submitted for that of the applicant, but if the name of the applicant is specially
required by the original L/C to appear in any documents other than the invoice, such
requirement must be fulfilled.
A transferable credit can be transferred once only i.e. second beneficiary cannot
transfer the L/C to any subsequent third beneficiary. However a credit can be
transferred to more than one second beneficiary and when transfers are made in part
it should be verified that the original L/C permits part shipment and the aggregate of
such transfer must nit exceed the original L/C value. In our country transfer is made
by using the photo9copy of the original L/C with the following notation:

We do here by transfer full value of US$........Against the export L/C

No……..Dated…….
For US$......in favor of M/S…….of……..For execution of full quantity of goods or
following export order/styles.

Order/Style Items Quantity Unit price Shipment Service

No. Validity Charge
Payable

The negotiating or collecting Bank is requested to remit the above mentioned service
charges to our A/c. No…… with…….Bank……Branch at time o0f negotiation of
export documents @ prevailing O.D sight (export) on the date of negotiation.

32
3.19 Accounting Treatment for opening Export L/C:
In different stages of Export L/C the different accounting treatment is taken by JBL,
foreign Exchange authorized branch, which are recorded in different register i.e. L/C
register PAD, Due date register, BTB L/C register, BTB bills register and
performance register etc. The followings recording process is generally maintained
by JBL foreign exchange authorized branch in case of Export L/C. When Export L/C
is open then no voucher is passed but when pc is taken then following voucher is
passed:

Date Particulars Ref Debit( Tk) Credit (Tk)

no
Pc
A/C……………………..Dr
Cd A/C…………………..Cr
Packing Voucher
As packing credit is provider to the customers so JBL will deposit the packing credit
amount to the parties current account.

When BTB L/C is opened then following voucher is passed:

Date Particulars Ref Debit(Tk) Credit(Tk)

No
Customers liability against
BTB L/C………………….Dr
Banker’s liability against
BTB L/C…………………Cr
CD A/C…………………. Dr
I/A on commission……….Cr
I/A on service charge……Cr
I/A on swift………………Cr
I/A on stamps……………Cr
I/A on Miscellaneous……Cr
BTB L/C open

33
When BTB L/C is opened then parties liability is transferred to JBL so banker’s
liability against BTB L/C is credited and different charges is taken from party so
amount of different charges is transferred from party account to Income account.

When documents under BTB L/C is received lodgment is made and due date is
realized then vouchers as passed as follows:

Date Particular Ref Debit(TK) Credit(TK)

no
Bankers liability again BTB
L/C………………………Dr
Customers liability against
BTB L/C………………...Cr

Customers liability against

BTB bills…………………Dr
Bankers liability against BTB
bills………………………..Cr
CD account………………..Dr
Income a/c………………..Cr
BTB L/C is received lodgment made but due date is realized
When documents against BTB L/C are received then bankers liability on BTB L/C
is reduced and bankers liability for BTB is increased and income is also increasedfor
lodgment process when due date arises:

Date Particulars Ref Debit (TK) Credit(TK)

no
Bankers liability against BTB
bills ………………………Dr
Customers liability against BTB
bills……………………….Cr
Due date arises
When due date appears bankers liability against BTB bills is decreased by JBL and
customers liability against BTB bills increased by passing above voucher.

34
For BTB payment following treatment will be given:

Date Particulars Ref Debit(TK) Credit(TK)

no
FC held….…………………Dr
Head Office………………..Cr
Head office.………………..Dr
I/A on exchange gain………Cr
I/A on commission ………..Cr
I/A on vat………………….Cr
I/A on PO…………………..Cr
I/A on postage……………Cr
BTB payments
For payment the amount of foreign currency is at first send to head office lower rate
and at time of payment currency is bring at higher rate the amount is distributed in
different income account and difference between the higher and lower rate is traded
as foreign exchange.

3.20 Discrepancy:
After the shipment of goods, the exporter submits export documents to authorized
dealer for negotiation of the same. Here authorized dealer is exporter’s bank. The
banker is to ascertain that documents are strictly as per the terms of L/C before
negotiation of the export bill; the banker should scrutinize and examine each and
every document with great care & must be go through the original L/C in the time of
scrutiny. Any kind of lacking can be classified as major or minor. There may be
some discrepancies which are removable. If the discrepancies are minor, the export
bill against submission of indemnity. Documents with discrepancy should be
negotiated. With the permission of the exporter, such documents are to be sent on
collection.

35
3.21 Negotiation:
At the time of negotiation the checklist or required documents are as follows –
1. Commercial Invoice 8 copies (4 original)
2. Custom Invoice of Importer’s Country
3. Packing List 8 copies (4 original)
4. Original Certificate of Origin
5. Inspection Certificate by the Agent of Importer
6. Acknowledgement Letter
7. Frightful Letter etc.
All the documents are found strictly as per terms and conditions of L/C i.e. if the
documents are free from discrepancies or if the discrepancies are covered by
Indemnity of the party, bank has to negotiate the Export Bill for negotiation of cash
export bills, the O.D buying rate prevailing on the date of negotiation is applied
conversion of the foreign currency into Bangladesh currency. All transactions are
reported through F.E the head office credits the FBNA Account by debit the balance
with foreign Banks abroad Account after the process of the bill is realized. After
negotiation of the export bills, the documents are to be sent abroad (normally to the
L/C Issuing Bank) as per the instructions of L/C & claim reimbursement of the
proceeds from the bank as mentioned in the L/C..T sent daily to the international
division Head Office, Dhaka. On receipt of the F.E.T

Risk in Negotiation:
If the Bank failed to indemnify any discrepancy in documents prepared by the
Exporter and if bank paid the demanded amount, bank will face huge loss. At that
time, the Negotiating Bank personally try to contact with party and if they agree to
deliver the required documents then the bank may get rid out from huge loss
otherwise not. So, Banker-Customer relationship is very important in this regard.
Bank need to be very careful at the time of negotiation.

36
Banks Profit through Negotiation:
A question can arise that if the risks involved there, why banks will go for
negotiation. Because –
1. At first, through negotiation bank will earn a certain commission from the party
without involving any fund.
2. Bank will earn US$ from reimbursing bank from the foreign and bank is also
earning commission from that.
3. If the payment make overdue, on that time branch of the concerned bank will earn
interest from that amount.

3.22Reporting of Bangladesh Bank:

At the end of the every month reporting of Bangladesh Bank is mandatory regarding
the whole month export operation, the procedures in this respect is as follows —
1. To fill-up the E-2/P-2 schedule of S-l category. The whole month import amount,
quantity, goods category, country, currency, etc. all are mentioned. Respective IMP
forms are attached with the schedule to fill E-3/P-3 for all invisible payment.
2. Original IMP is forwarded to Bangladesh Bank with mentioning invoice value
3. Duplicate IMP is skipped with the bank along with the bill of entry.

3.23 Procedure for collection of Export Bill:

There are three types of procedures regarding collection of Export Bill-
1. Foreign Documentary Bill for Collection (FDBC)
2. Foreign Documentary Bill for Purchase (FDBP)
3. Local Documentary Bill for purchase (LDBP)

Foreign Documentary Bill for Collection (FDBC):

Exporter can collect the bill through negotiating bank on the basis of collection.
Exporter in this case, will submit all the documents to the negotiating bank for
collection of bill from importer. The exporter will get money only when the issuing
bank gives payment. In this connection bank will scrutinize all the documents as per
terms and conditions mentioned in L/C.

37
Foreign Documentary Bill for Purchase (FDBP):
When exporter sale all the export documents to the negotiating bank is known as
Foreign Documentary Bill Purchase (FDBP). In this case, the exporter will submit all
the documents to the bank. The bank gives 60-80% amount to the exporter against
total L/C value.
Local Document Bill for Purchase (LDBP):
Incoming of L/C customer come with the L/C to negotiate
1. Documents given with L/C.
2. Scrutinizing documents as per L/C terms and conditions.
3. Forward the documents to L/C opening bank.
4. L/C issuing bank give acceptance and forward acceptance letter.
5. Payment given to the party by collection basis or by purchasing documents.

3.24 Secure Over-Draft (SOD) Export:

Secured Overdraft is one kind of credit facility enjoying by the exporter from the
export section. It is generally given to meet the back-to-back L/C claim. Sometimes
it is given to the exporter by force for meet the back-to-back L/C claim due to delay
of Master L/C payment.

3.25 Foreign Remittance:

Foreign remittance is the transfer of foreign currency from one country to another
country. Actually foreign remittance is purchase and sale of freely convertible
foreign currencies as permissible under exchange control regulations of the conntry.
Foreign exchange is very important for the country as valuable foreign exchange is
involved in the transfer mechanism.

Types of Remittance:
There are two types of foreign remittance:
1. Foreign Inward Remittance
2. Foreign Outward Remittance

38
 Foreign Remittance
Inward Remittance

Outward
Remittance

Table 4: Foreign Remittance

1 Foreign Inward Remittance:

Remittance comes from foreign countries to our country is called foreign inward
remittance. To the bankers or Ads inward remittance means purchase of foreign
currency by authorized dealers. Generally, inward remittance are received by draft,
mail transfer, TT, purchase of foreign bills and traveler Cheques ,export bills,
basically ,these are the formal channels of receiving inward remittance .A local bank
also receives indenting commission of local firm also comes under preview of
inward remittance.

Inward Remittance:
1. Telegraphic Transfer (TT)
2. Mail Transfer (MT)
3. Foreign Draft (FD)
4. Travelers Cheques (TC)
5. Payment Order.
6. Foreign Currency Notes

39
Collection procedure:
1. To make in foreign bills collection register
2. To prepare forwarding schedule in Quadruplicate
3. To prepare voucher on realization of proceeds payment procedure
4. To check up the custom declaration
5. To consult purchase agreement
6. To obtain the signature of TC and to verify the same with the previous
7. Signature of the beneficiary on the TC
8. To make entry register for TC and draft purchased
9. To prepare vouchers and EFT schedule

3. Foreign Outward Remittance:

Remittance from our country to foreign countries is called outward foreign
remittance. Sales of foreign currency by the authorized dealer or formal channel may
be addressed as outward remittance. The authorized dealer must utmost caution to
ensure that foreign currencies remitted or released by them are used only for the
purposes for which they are released. Outward remittance may be made by
appropriate method to the country to which remittance is authorizes. Most outward
remittance is approved by authorized dealer on behalf of Bangladesh Bank.
1. Telegraphic Transfer (TT)
2. Mail Transfer (MT)
3. Foreign Draft (FD)
4. Travelers Cheques (TC)
5. Payment Order
6. Foreign Currency Notes
Outward remittance in favor of beneficiaries outside Bangladesh may be made in any
of the following manners.

Formal Channel:
Fund transfer from one country to another country through official channels i.e.
banking channel, post office, and other private service channels such as-western
money order, neon money order etc.

40
Informal Channel:
Fund transfer from one country to another country through hand by hand or over
telephone in an unofficial channel like as Handy .Remittance collected by informal
Handy rings operating in middle east countries and UK are also used to finance
illegal trade and transaction.
Some foreign Remittance links of Jamuna bank:
Name Preferred Browser
Placid Mozilla firebox only
Xpress money Any Browser
Western Union Any Browser
Ria Internet Explorer

3 Local Remittance Section:

The commercial bank remittance facilities to its customers is to enable then top
avoid this rising out of profit or loss in cash carrying cash money to one palace to
another or making payment to someone is another places. Banks take this risk limit
the fund on behalf of the customers to save them from any awkward happening
through the network of their branches and ensure payment to the beneficiary in
exchange of a little bit benefit known as Commissions.

Mail
Transfer

Local Telegraphic
Pay Order
Remittance Transfer

Demand
Draft

Table 5 : Local Remittance Section

41
3.26Assessment of total Foreign Exchange Business of jamuna
Bank Limited:

The performance of foreign exchange business of Jamuna Bank Limited

can be visualized from the following data in Table. Here, five years data of
foreign exchange business are presented.

Content 2012 2013 2014 2015 2016

Foreign Exchange 130578 123861 133099 149104 173828
Business
RE: Annual report (2012-2016)

Table 6: Foreign Ecxhange Business (In Million)

200000

150000

100000
Foreign Exchange
50000
Business
0
2012 2013
2014
2015
2016

Foreign Exchange Business

Figure 2: Foreign Exchange Business
Analysis: From the graph we can see in 2012 the total Business of Foreign
Exchange was 130578. The next year the total business decreased by 6717.But in year
2014, 2015, and 2016 it increased gradually from 133099 to 173828.

42
3.27 Import Performance of Jamuna Bank Limited:
Content 2012 2013 2014 2015 2016
Import 57705 52751 59910 70296 87480
RE: Annual Report (2012-2016)
Table 7: Import Business (In Million)

100000

50000
Import Business

0
2012 2013
2014
2015
2016

Import Business
Figure 3: Import Business

Analysis: The total import Business handled by the bank in 2012 was 57705
million which was greater than from the year 2013.From 2013 to 2016 the import
business are increasing trend over 3 years .It indicates that the bank is financing
huge amount to help in import materials and machineries. It also collects remittance
by Western money union, express money, AL Ansari and other ways and provides
customer service. In 2016 the import business of jamuna bank stood at 87480
million with a growth rate of 24.4%

43
3.28Export Performance of Jamuna Bank Limited:

Content 2012 2013 2014 2015 2016

Export 68844 64251 64989 67081 74318
RE: Annual report (2012-2016)

Table 8: Export Business (In Million)

75000

70000

65000

60000 Export Business

55000
2012 2013
2014
2015
2016

Export Business
Figure 4: Export Business
Analysis: In the year 2016 the export business was 74318 million. In 2016 the
export performance increased by 7237 than 2015. In the year 2016 the export
business of the bank stood at 74318 million with a growth of 10.78% comparison
with the previous year.

44
3.29 Foreign Remittance Performance of Jamuna Bank Limited:

Content 2012 2013 2014 2015 2016

Foreign Remmittance 4026 6859 8200 11727 12030
RE: Annual report (2012-2016)

Table 9: Foreign Remmittance Business (In Million)

15000

10000

5000 Foreign Remmittance

Business
0
2012 2013
2014
2015
2016

Foreign Remmittance Business

Figure 5 Foreign Remittance

Analysis: From the graph we can see the remittance following upward trend from
year 2012 to 2016.Bank received 12030 million as wage earners remittance in the
year 2016 with a growth rate of 2.58%.In 2015 the foreign remittance of jamuna
bank stood at the highest of 43%.

45
3.30 Foreign exchange risk management:
Foreign Exchange Risk is the potential change in earnings due to unfavorable
movement in exchange rates. The Bank’s foreign exchange risk is considered at a
Group level since an effective overview of such risk is a critical element of the
Bank’s asset/liability risk management. The Board of Directors defines its risk
tolerance levels and expectations for foreign exchange risk management and
ensures that the risk is maintained at prudent levels. Generally, the bank is less
exposed to foreign exchange risk as all the transactions are carried out on behalf
of the customers against LC commitments and other remittance requirements. The
Back Office of Treasury Department is totally segregated from the Front Office and
is responsible for currency transactions, deal verification and limit monitoring and
settlement of transactions separately. The Bank continuously revalues all foreign
exchange positions at market rate as per the guidelines of Bangladesh Bank. All
outstanding entries in Nostro Accounts are reviewed on a regular basis and are
timely reconciled.
Identification of management problems regarding foreign exchange department
1. Foreign exchange department’s workers are less efficient in prompt dealing.
2. Lack of expertise on remittance activities in the foreign exchange department.
3. Shortage of employee in foreign exchange departments. As a result the existing
employees have too much pressure.
4. Presence of chaos in dealings with customers.

46
3.31 SWOT Analysis of JBL:
SWOT analysis is very helpful to measure and evaluate a stated objective within a
very short time. Hence this approach has been adopted in this paper. After monitoring
closely and working proactively in the Foreign Exchange Department of Jamuna
Bank Ltd. The following Strength, Weakness, Opportunities, Threat has been found-

Strength

Weakness
Swot Threat
Analysis

Opportunity

Table 10: SWOT Analysis

Strengths:
1. JBL Bank provides its customers excellent quality of service. It gives the first
priority to customer satisfaction.
2. The financial strength of JBL Bank is very strong.
3. There are large numbers of customers in JBL Bank because of its reputation.
4. JBL Bank bears a good brand image because of its product, quality and services all
are goods.
5. JBL Bank utilizes state of the art technology to ensure consistent quality and
operation. All branches are equipped with SWIFT System.

47
Weaknesses:
1. The ATM booth is insufficient in JBL bank. It is very big weaknesses of JBL Bank
limited.
2. Lack of Strong Initiative to Explore Investment Opportunity through Research and
Marketing.
3 Promotional activities of JBL bank are limited. They should aware of increasing
their promotional activities.
4 Delegation of authority is centralized which makes the employee to realize less
responsibility. Thus the employee morale is deteriorated.
5 The credit proposal evaluation process is lengthy. Therefore sometimes valuable
clients are lost and the bank becomes unable to meet the target.
6 No substantive use of annual report (performance evaluation of the
(employee).Hence the employee becomes ineffective.
Opportunities:
1. Emergence of e-banking will open more scope for JBL to reach the clients not only
in Bangladesh but also in the global banking arena. A proper blend of Banking and
information technology might give the bank leverage to its competitors. There are
ample opportunities for JBL Bank to go for product innovation in line with the
modern day need. The bank has yet to develop credit card facility, lease financing and
merchant banking.
2 It can recruit more efficient and experienced persons to give fast and efficient
service to the customers.
3. Government of Bangladesh has rendered its full support to the banking sector for a
sound financial status of the country, as it has become one of the vital sources of
employee it the country now. Such government concern will facilitate and support the
long term vision of JBL Bank.
Threats:
1. The worldwide trend of merging and acquiring in financial institution is causing
concentration. The industry and competitors are increasing in power their respective
areas.

48
2. Supply Gap of Foreign Currency. Frequent devaluation of Taka exchange rate
fluctuations and particularly South-East Asian currency crisis adversely affects the
business globally.
3. Political crisis and decaying country image as exporter.
4. Rapid increase of private sector Bank in number and size.
5. The common attitude of Bangladeshi clients is default.
6. Multinational as well as the fast growing local banks with modern products and
services are capturing huge market within short period a resulting to switch over the
existing customers of the bank.

49
4.1The findings obtained from the study on Foreign Exchange
Business of Jamuna Bank Limited are follows:
1. There are three types of modes of foreign exchange market, which are: Export
Finance, Import Finance & Foreign Remittance. Foreign Exchange section of
Jamuna Bank Limited Branch does all the operations out of above-mentioned
foreign exchange activities vastly.
2. With limited network of branches at home, volume of export-import business
including homebound remittances is increased day-by-day.

3. The Bank’s financing of import business increased from Taka 57547 million in

2013 to Taka 59910 million in 2014 register. In 2016 the import business of JBL
stood at 87480 million with a growth rate of 24.4%On the other hand, Bank’s
export finance increased to Taka 5474 million from (2012-2016).
4. Reuter’s services are being used at the head office for offering the best exchange
rates to its customers as well as for other treasury functions.
5. The major part of the foreign exchange departments income come from the import
L/C, than export L/C and a negligible part of the income come from the remittance.
6. The time series equation indicates the export business of Jamuna Bank Limited will
be increased by Tk.3680.41 million per year.
7. The time series equation indicates that the import business of the bank will be
increased by Tk.8391.98 million per year.
8. The time series equation indicates the remittance business of the bank increased by
Tk. 454.70 million per year.
Bank Jamuna Limited has already established a favorable reputation in the banking
industry of the country. It is one of the leading private sector commercial banks in
Bangladesh. The bank has already shown a tremendous growth in profits and deposits.
After the analyzing the data collected for the study the following findings have been
drawn:

1. Jamuna Bank’s main foreign exchange operations are opening import/export letter
of credit, foreign bank guarantee, Add confirmation for L/C, Reimbursement of L/C,
Foreign Student Account Processing, Money exchange etc. Within these almost 80%
profit of foreign exchange operation are generated from import L/C, 8% from export

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L/C, 5% from student account processing and the rest comes from other foreign
exchange service.

2. Another empirical finding of Jamuna bank foreign exchange operation is that this
bank doesn’t operate back to back L/C which is one of the major types of letter of
credit mostly needed in RMG sector. Jamuna bank also doesn’t do business operation
with Basic bank and agriculture bank.

3.The consistency and increasing growth trend of the above JBL performance
indicators has increased depositors' confidence as well as good will/reputation of the
bank to a great extent and these have contributed to increase the shareholders value.

4. The Bank’s Human resources Development strategy is to build up quality

manpower with conceptual/managerial Knowledge, skills through
designing/arranging of continuous in-house and outside training programs.
5. It focuses on customer-friendly marketing approaches by offering various efficient
deliveries of personalized banking services at the clients door steps and caters to the
ever-growing financing needs of clientele at a competitive price.

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4.2Recommendations:
As an internee of Jamuna Bank Ltd I have some recommendations. These are:
1. Letter of Credit (L/C) opening system for the importer should be easier.
2. The Bank should develop an effective database needed for analyzing Foreign
Exchange Business.
3. More specifically, the Bank should develop sectors wise export-financing facilities.
4. Changes in industry trends may directly affect business so that it can no longer
completely profitable. Therefore, the Bank should keep information about the
environment of each industry in which its customers operate.
5. To attract more clients Jamuna Bank Limited has to create a new marketing
strategy, which will increase the total export import business.
6. Attractive incentive-package for the exporter will help to increase the Export and
accordingly it will diminish the balance of payment gap of Jamuna Bank Limited.
7. Foreign exchange operations of other banks are more dynamic and less time
consuming. Jamuna Bank Limited should take some initiatives to compete with those
banks.
8. Today’s and tomorrow’s business world is more challenging. To face the challenge
bankers must have knowledge about different economic and business variable. So the
bank must recruit business graduate like BBA and MBA holders in foreign exchange
department.
9. The bank should arrange more training programs for their officer’s quality training
will help the official to enrich them with more recent knowledge of foreign exchange
activities.
10. In foreign Exchange department it is required to communicate with foreign bank
and international division more frequently and quickly. To make the process easily
modern communication media like e-mail , fax ,should be used.
11. Update banking software should be used to give better service to the customers.
12. The valuation of the property should be calculated by the surveyors.
13. Manpower should be increased in foreign exchange department.
14. For selling their product the this branch need strong marketing to sell their
products.

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4.3 Conclusion:
Jamuna Bank Limited (JBL) is serving the market with almost full range of
services. As the number of branches implies, still Bank has limited operation in our
country, but it should also be noted that within the next few years from its
establishments, it will be achieved higher position in the foreign exchange
activities.
The bank is following a certain traditional strategy about foreign exchange and it is
doing well. This strategy is quite satisfying customers and it has positive impact on
its profit trend. But with this modern age, the bank should improve its foreign
exchange operations strategy. If it improve its strategy, than it can attract more
customers towards this Bank and it will have more positive impact towards its
foreign exchange profit trend.
Foreign exchange is always a prominent site of business for all commercial banks.
Country’s economic growth largely depends on this sector. Bangladesh is also
economically dependent on foreign exchange business. There are some rules and
regulation and other factors (political, economic, demographic) that influences this
sector. Government should identify the lacking and take preventive steps to smooth
this lucrative path of business.

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