Chapter - 01

Introductory Issues

1
 a) Introduction

Padma Islami Life Insurance Limited believe in ensuring a working

environment where management and employees put combined effort
towards the growth of the company and accepts new challenges in a
diversified environment. Acknowledgment of success is ensured here to
motivate our staff.

This is a guidance of all employees (Other than those employed for specified
period for development work with specific target for business) of the
Company regarding their obligations, rights and responsibilities. It is the
intention of the Management not to run the Company solely as Business
House but transform it as a Service Oriented Institution.

The success of the company depends on the potentiality of its work force
and their potentiality depends up on their financial and mental well being.
Keeping in view this principle, the Company has determined the pay scales
to different categories of Officers and employees and has since placed all its
regular officers and employees in the relevant position and scales
commensuration their duties and capabilities.

It is the Company’s policy to reward its members of staff adequately on the

basis of their performance. It is hoped that with strict discipline and dedicate
each and every Officer/employee will contribute his/her very best to the
Company. Each individual will grow with the growth of the Company.

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The Padma Islami Life Insurance ltd. human  Resource  practices 
determine  to  ensure  every employees  growth  with  highest potentiality
by  providing  a  healthy  &  competitive  work  environment  where  the 
employee  gets opportunity to excel their knowledge & skills .It also ensures
the appropriate career opportunities in line with the capabilities &
performance through Padma Islami Life Insurance Performance
Management Process.

Finally, recommendation was provided to make the HR system more

effective and efficient for the organization. If PILIL follows the HR system
thoroughly then it will be always in upper hand to retained best employees
in the organization in the future.

b) Statement of the Research problem

Bangladesh is a small country with a very low per capita income. Here
people still struggle for the basic need fulfillment. In this kind of situation
people are really struggle to maintain the insurance policy in the country like
Bangladesh. Government also trying to involve low income people too by
suggesting the insurance companies to plan for insurance policy for these
people.

In view of the above fact, it was my aim to find out whether the insurance
companies are maintaining the quality and standard which they promise to
provide by selecting the right person for the selected position and whether
they assure the facilities which they agreed ti provide to its employees. The
background of this research is those factors which lead the development of
the Insurance business in Bangladesh.

Thus it is evident that this is an area where in-depth research study

should be undertaken. This is why; I have become interested to study
on “HRM practice of padma islami life insurance ltd”.

c) Research Objectives:
The main objective of this internship report is to examine the human
resource practice, of Padma Islami Life Insurance Company Ltd. in
the light of main objective, the specific objectives of the study are
noted below:

3
 To highlight the internship experience at Padma Islami Life Insurance
Company Ltd.(PILIL).
 To provide an organizational overview of Padma Islami Life
Insurance Company Ltd.(PILIL).
 To examine the recruitment and selection practices of PILIL.
 To evaluate the training practices of PILIL.
 To provide an insight into compensation and benefit practices of
PILIL.
 To reveal the performance appraisal practices of PILIL.
 To identify the human resource problems & provide their
recommendations.

d) Research methodology used:

Methodology is a very vital part prior to preparing a report. The study
was performed mainly on the basis of data collection from secondary
sources. Maximum data have been collected from office records of
Padma Islami Life Insurance Ltd. Furthermore, few data have been
collected through interview of the few officials related with human
resource management practices at Padma Islami Life Insurance Ltd.
Unstructured interview were conducted of officials of the Padma Islami
Life Insurance Ltd.

Collected data are sorted & re-arranged for the purpose of study and
presented with various tables, graphs, & Chart.
Data Collection:
Sources of Secondary data:

4
a) Corporate Profile of Padma Islami Life Insurance Ltd..
b) Different Text book and Journals.
c) HR manual, HR policy, different printed HR Documents of Padma
Islami Life Insurance Ltd.
d) Various reports and articles related to study.
e) Periodic bulletins published by Padma Islami Life Insurance Ltd.
f) Web base support from the internet.

Data Analysis
After collecting all necessary data, data have been analyzed and
tabulated descriptively. Some statistical tools and Graphical presentation
have been made in this study for analyzing the collected data and for
classify those to interpret them clearly.

e) Scope and Importance of the study:

The Report covers the background, functions relating to HRM
Practices of Padma Islami Life Insurance Ltd. It aims at acquaint with
the identification of problems regarding HRM practices, recruitment
& selection practices, training practices, compensation & benefit
practices, performance appraisal practices of the Padma islami life
insurance ltd.

f) Problems faced during the study:

The researcher has faced various problems in conducting this study.

Source of these are noted below:
a) Limitation of time: A BBA Internship report has to be completed
within a semester of four months. It is rather difficult to complete a
report within this time frame, because the research topic has to be

5
 selected, necessary data need to be collected and analyzed
systematically. Finally the report has to be completed by following a
prescribed format.

b) Unavailability of relevant data: The researcher faced problem in

collecting thee needed data from the Organization, because the
concerned executives are to remain busy in their official works.
Moreover, strategic information is not provided because of
confidentiality.
c) Lack of our practical knowledge, so shortcoming may be available in
the paper.
d) Organization is not disclosing any information earlier, which will be
published in future.

6
Chapter 03
Overview of the First Security Islami Bank Limited.

3.1 Historical Background of First Security Islami Bank Limited:

First Security Islami Bank Limited is a private institution incorporated

on 12 May, 1999 as a public limited company with the Register of
Joint Stock Companies under Companies Act 1994. It has commenced
banking operation from 14 July 1999 by obtaining license in 2 July
1999 from Bangladesh Bank under section 31 of the Banking
Company’s act 1991.
The Bank is pledge-bound to serve the customers and the community
with utmost dedication. The Padma focus is on efficiency,
transparency, precision and motivation with the spirit and conviction
to excel feelings of the promoters to reach out to the people of all
walks of life and progress together as First Security Islami Bank

7
Limited in both value and image. The name First Security Islami Bank
Limited is derived from the insight and long nourished towards
prosperity in a spirit of oneness.
“Third Generation Private Commercial Bank”
First Security Islami Bank Limited is a private sector commercial
bank dedicated in the business line of taking deposits from public
through its various saving schemes and lending the fund in various
sectors at a higher margin. However, due attention is given in respect
of risk undertaking, risk hedging and if not appropriately hedged,
reflection of the same in pricing. The banks financing concentrate in
both, working capital finance and long-term finance. First Security
Islami Bank Limited has major concentration of financing in medium
and large industries. Since the short-term finance carries low risk
compared to long-term finance; the financing strategy of First
Security Islami Bank Limited will assist the bank to keep the risk at
minimal.
While financing the industrial sector, the major concentration of the
bank appeared to be in the textile and RMG sector; both the above
sectors cover 30.89% of the total portfolio. First Security Islami Bank
Limited also involved in cements, construction and transport sector
financing.

In the investment portfolio, First Security Islami Bank Limited has

substantial investment in quoted and non-quoted shares of different
organization including some very prospective financial institutions.
The bank has shown its acumen in reducing its exposure from ship
scrapping sector, steel re-rolling where the bank had investment

8
earlier. With the increase in exposure to RMG, the bank has increased
its non-funded business income substantially. With an age of only 13
years, theFirst Security Islami Bank Limited. has taken initiative to
launch IT based banking products like ATM facilities, E-banking etc
that are praiseworthy.
First Security Islami Bank Limited is one of the fastest growing Banks
among all the Private Commercial Banks (PCBs) in Bangladesh. The
Sponsor - Directors of the Bank are successful group of prominent
local and non-resident Bangladeshi investors who have earned high
credentials and excellent reputation in their respective fields of
business at home and abroad. The company philosophy-"We Make
Things Happen" has been precisely the essence of the legend of
bank's success.
3.2 Vision, Mission Statement, Objectives, Goals:
3.2.1 The Vision of First Security Islami Bank Limited:
The purpose of the Bank is to become” the bank of Choice” in the
communities the bank serve. Bank accomplishes this by offering to
their customers the financial services they expect while providing a
return to their owners. In accomplishing this mission, the bank has
now been free from all the natures of a problem bank through
fulfilling all the conditions set by the central bank.
3.2.2 The Mission Statement of First Security Islami Bank
Limited:
Philosophically, a bank is a financial institution, which accepts
depositors’ money from safekeeping and contracts with the depositors
to lend this money at interest to individuals who are in need of its use
and who can give ample security that the loans will be paid. From the
profits made from lending money at interest the banker agrees to pay

9
 the legitimate depositors a fixed sum of interest besides safe- guarding
the deposits.
3.2.3 The Objectives and Goals of First Security Islami Bank
Limited:
First Security Islami Bank Limited people, products and processes are
aligned to meet the demand of its discerning customers. Their goal is
to achieve a distinct foresight and offer full range of banking and
investment services for personal and corporate customers backed by
the state-of-the-art-technology and a team of highly motivated
professionals. The team ofFirst Security Islami Bank Limited expects
to rise from the heart of Bangladesh as a stronger force in the market
they serve. They are committed to their goals of creating superior
shareholder value in their quest for excellence as they grow and
mature into a banking veteran. The primary objective ofFirst Security
Islami Bank Limited is to deliver a quality that demonstrates a true
reflection of their vision – Excellence in Banking. Besides this, the
objectives ofFirst Security Islami Bank Limited are to conduct
transparent and high quality business operation based on market
mechanism within the social and legal framework. The bank’s motto
is to generate profit with qualitative business as a sustainable ever-
growing organization and enhance fair returns to the shareholders.

3.2.4 The Corporate Values of First Security Islami Bank

Limited:

 Customer focus

 Integrity

10
 Quality

 Teamwork

 Respect for the individual

 Responsible citizenship

11
3.3 Operational Network:
First Security Islami Bank Limited operational network is divided into
One region, Chittagong region, Rajshahi region, Narayangonj region,
Sylhet region, etc. Some of the FSIBL branches within the one region
includes – Amin Bazar branch, Banani branch, Baridhara branch,
Dhanmondi branch, DEPZ branch, Local office, Mohakhali branch,
Foreign Exchange branch, Uttara branch, Islamic Banking branch,
Imamgonj branch, Mirpur branch, Gulshan branch, Karwan Bazar
branch, Bangshal branch, etc. Some of the FSIBL branches within the
Chittagong region includes– Agrabad branch, Cox’s Bazar branch,
Feni branch, Comilla branch, Jubilee Road branch, Hathajari branch,
Khatungonj branch, Islamic Banking branch, etc. Some of the FSIBL
branches in the Narayangonj region includes – Narayangonj branch,
Madhabdi branch, B.B. Road branch, etc. In the Sylhet region some of
the branches of FIBL includes – Habiganj branch, Moulovibazar
branch, Laldighirpar branch, etc. Some of the FSIBL branches in the
Rajshahi region are – Belkuchi branch, Rajshahi branch, Bogra
branch, Rangpur branch, Dinajpur branch, etc. Some of the other
branches includes – Barisal branch, Jessore branch, KDA Avenue
branch, Kishorgonj branch, Faridpur branch, etc. Besides these there
are few SME Service Centers at CEPZ, Goran and Shewrapara, two
Off-shore Banking Units at DEPZ and CEPZ and some bill/cash
collection booths at other areas.
3.4 Product and Services:
FSIBL has launched a number of financial products and services since
its inception. These products and services are categorized in five
sectors i.e. Retail Banking, Corporate Banking, SME Banking,
Foreign Trade Business & E-banking.

12
  Loans & Advances
• Retail Loans
• Consumer Credit Scheme
• Lease Finance
 Deposit Products • Car Loan Scheme
• Current Deposit (CD) Accounts • Home Loan Scheme
• Savings Bank Deposit (SB) Accounts • Doctors’ Credit Scheme
• Special Notice Deposit (SND) • Any Purpose Loan (Personal Loa
• Fixed Deposit Receipt (FDR) Scheme)
• Scheme Deposits • House Furnishing Loan
• Monthly Saving Scheme (MSS) • Overseas Employment Loan Scheme
• Double Benefit Deposit Scheme (DBDS) • Cottage Loan
• Family Maintenance Deposit Scheme • Education Loan
(FMDS) • Rural Development Scheme
• Quarterly Benefit Deposit Scheme
(QBDS)  Corporate Loans
• 1.5 Times Benefit Deposit Scheme • Short Term Finance
(1.5TBDS) • Long Term Finance
• Advance Benefit Deposit Scheme (ABDS) • Real Estate Finance
• Education Planning Deposit Scheme • Import Finance/Trade Finance
(EPDS) • Work Order Financing/Constructio
• Super Benefit Deposit Scheme (SBDS) Business
• School Banking • Export Finance
• Structured Finance
• Loan Syndication

 SME financing

 CHAKA (Term Loan)

 SAMRIDDHI (Continuous Loan) FSIBL Card
 MOUSUMI (Short Term Seasonal • Debit Card
Loan) • Credit Card (Local Card, International
 ANANNYA (Women Entrepreneur's Card, Dual Currency Card)
Loan) • FSIBL Pre-Paid Card (Student Card, Hajj
 SANCALOK (A mix of Term, Time & Card, Travel card)
Continuous Loan)
 UNMESH (Trade Finance)
Other Services
• Online Banking
 Agriculture loan • Mobile Banking (OK BANKING.)
13
 NABANNO (Krishi / Polli Loan) • Off-Shore Banking
 SAKTI (ETP / Bio-Gas / Solar • NRB Banking
Energy Loan) • SMS Banking
• Locker Service
  Foreign Trade Business

3.5 Departments of First Security Islami Bank Limited

In branch level, FSIBL has three departments. These areas-
1. General Banking
2. Credit Department
3. Foreign Exchange Department
3.5.1 Major Functions of General Banking
 Account opening
 Issuance of Demand Draft/Telegraphic Transfer/Pay Order/Fixed
Deposit Revenue
 Interbank Transaction, Inter Branch Credit
3.5.2 Major Functions of Credit Department
 Credit Proposals and Credit Processing
 Documentation and Loan Disbursement
 Overview on all returns
3.5.3 Major Functions of Foreign Exchange Department
 Opening of L/C (Back To Back, Local/ Foreign)
 Purchase of foreign bills
 Negotiating of foreign bills
 Payment against Import Bill
 Export guarantees
 Endorsement of Traveling

14
Chapter – 04
Procedural Aspects of Trade Financing By
First Security Islami Bank Limited.

4.1 Import Procedure:

Imports are purchase of goods and services from foreign country by
the consumers, firms and Government in Bangladesh. The importer
must obtain an Import registration Certificate (IRC) from the CCI&E.
The importer functioning is to be made according to the terms of

15
 Import & Export Act-1950, and other regulatory circulars of Ministry
of commerce and Industries.
The overall import procedure is illustrated briefly as follows:
 Step 1: The importer obtain IRC from the CCI&E;

 Step 2: The importer contacts with the seller outside the country to
obtain the pro-form Invoice from him or his agent with in the country
(Indenter)

 Step 3: If the importer accepts the indent/pro-forma invoice, he makes

an agreement with the seller detailing the term and conditions of the
import;

 Step 4: Importer opens L/C his bank in favor of the seller and offers to
take necessary steps regarding the L/C.

 Step 5: The Issuing bank asks another bank to advice it to the seller;

 Step 6: The advising bank advises the L/C to the seller;

 Step 7: After Issuing Bank receives the documents and reimburses the
payment by his reimbursing bank provided that the delivered
documents are according to the L/C and there is no discrepancy;

 Step 8: The Issuing Bank receives the documents and reimburses the
payment by his reimbursing bank provided that the delivered
documents are according to the L/C and there is no discrepancy;

 Step 9: The importer collects the documents from the bank and release
the goods.
The above described import procedure is usually maintained but the
payment procedure of the advising may be different if there is any
clause regarding the movement of the L/C.

16
 4.2 Flow Chart of Opening L/C for Import:

document duly signed L/C application form LCA form

Documents
IMP form
submitted
authority
bytothe
debit
importer
account.
by the importer indent/ PI/ Insurance c

Banker examines the liability position of the importer from different departments and whether

Credit Thesis of the exporter asked from the negotiation bank.

L/C is opened and sent to advising bank through swift.

Original IRC submitted to the bank

TIN certificate
Trade License (up to date) copy
Positive or Negative Membership certificate of chamber of Commerce

17
 4.3 Documents Required for Opening of L/C:
 L/C application and agreement Form (Bank's prescribed application
form) with adhesive stamp.
 Letter of Credit authorized Form (LCAF)
 CIB.(Credit Information Bureau)
 Pro-forma Invoice (Approved by BRTC in case of Mobile Set)
 Import Registration Certificate. Tax Identification Number, VAT
(IRC renew)
 Membership Certificate.
 Last year income tax assessment.
 Harmonized System Code (HS Code)
 Charged Documents.
Under Charged Documents the following letters are required:
 Demand Promissory Note.
 Letter of Disbursement
 Letter of Agreement
 Letter of Authority.
 Letter of Undertaking
 Letter of Continuity.
 Letter of Revival.
 Letter of Guarantee. (Signature without Seal)
Some Exemption:
 No IRC required for importation of capital machinery for setting up
new industry. Only BOI approval required.
 Country of origin” issued by government/competent body. Trade body
CO is not required in case of importation of raw materials for Coal &
RMG industry.

4.4 Margin and Other Charges:

18
 Before issuing Letter of Credit, bank asks the applicant to deposit
Letter of Credit margin according to the terms of sanction and other
necessary charges which includes commission, handling charges,
foreign correspondence charge, telex/SWIFT charge etc, as per terms
and conditions of sanction. Margin charged against any particular
Letter of Credit depends upon the Item or Goods of the import.
Margin varies between nil to 100%. Generally the higher value of
margin, the higher it means that Bangladesh Bank discourages to
import that goods or items.

4.5 Credit Report:

If the amount of L/C exceeds US $10,000 then NCCBL takes the
credit Thesis of the beneficiary to ensure the worthiness of the supply
of goods.
4.6 Export Mechanism:
Export means lawfully carrying out of anything from one country to
another country for sale. In our country the import & export trade are
regulated by the Imports & Exports (control) 1950. Under the export
policy of Bangladesh the exporter has to get the valid export
registration certificate (ERC) from chief controller of Export &
Import (CCI&E). The ERC is required to renew every year. The ERC
number is to be incorporated on export. Form & other paper
connected with exports. The goods and services sold by Bangladesh to
foreign country called export. In broader aspect the major
responsibility that are performed here are —
 L/C Advising.
 Documents Collection.
 Documents negotiation.
 Export financing.

4.7 Documents Required For Export Transaction:

There are two types of document for export transaction. They are
Substantive Document and auxiliary document. The name of the
documents under these two categories is given below:

19
1. Substantive Document:
a. Draft or bill of exchange.
b. Commercial Invoice.
c. Bill of Lading or Airway Bill.
d. Marine Insurance Policy.
2. Auxiliary Document:
a. Packing List.
b. Consular Invoice.
c. Certificate of Origin
d. Quality Control Certificate.
e. GSP Certificate.
f. Inspection Certificate.

Other documents and formalities:

 For Export of jute, jute goods, tea and tobacco, an exporter, in
addition to Export Registration Certificate, needs a separate license to
be issued by the concerned agencies.
 Sanitary certificate is required for all livestock and plants and plant
products (except fruit and vegetable) certifying that they are free of
injurious insects, pests and diseases.

4.8 Documents for Export L/C:

These documents should be submitted to the bank for negotiation-
1. Export L/C
2. EXP form
3. Commercial invoice
4. Bill of Exchange
5. Certificate of origin
6. Bill of Lading
7. Packing list
8. Inspection certificate
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CHAPTER-05
Export & Import Financing Programs of First Security Islami
Bank Limited

5.1 Import Financing:

Import financing can be divided into two types:
21
 Pre Shipment Finance
 Post Shipment Finance
 Pre shipment Finance:
This type of finance refers to the facilities extended to the importers in
the form of Letter of Credit. Actually Banks do not invest any fund at
this stage of financing. But from the definitions of Letter of Credit we
understand that by Opening L/C on behalf of the customer, Bank
undertakes to make payments to the supplier of goods against the L/C
subject to submission of certain documents. Normally bank allows the
customer to open L/C against certain margin i.e., without having full
coverage of the L/C value. As such Letter of credit is a sort of direct
finance of the customer.

Before allowing Pre shipment finance, a bank normally considers:

1. Credit worthiness
2. Import performance
3. Import Regulation
4. Marketability of goods.

 Post Import Finance:

NCCBL’s foreign Exchange provide three types of Post Import
Finance for the clients
 Payment Against Documents (PAD)

 Loan Against Import Merchandise (LIM)

 Loan Again Trust Receipt (LTR)

These are described in below:

 Payment against Documents (PAD): Advance against Import Bills
originates from the lodgment of shipping documents received foreign
correspondent against letter of credit established by the bank on behalf
of its clients. PAD is created for 30 days at interest of 15% of L/C. If
importer does not take the documents within these days then bank
may sell the imported goods to recover the given credit.

 Loan against Import Merchandise (LIM): Advances allowed for

retirement of shipping documents and resell of goods imported
22
 through L/C taking effective control over the goods by pledge fall
under this type of advance. When the importer failed to pay the
amount payable the exporter against import L/C, then NCCBL gives
Loan against Imported Merchandise ((LIM) to the importer. The
importer will bear all the expenses i.e. go down charges, insurance
fees, etc. and the ownership of the goods is retaining to the bank and
the outstanding under PAD or Bills of Exchange (B/F) is transferred
to Loan against Imported Merchandise (LIM) account. Normally part
delivery is not allowed white on LIM account.

 Loan Again Trust Receipt (LTR): This is excluded by the Borrower(s)

to release shipping documents for taking delivery of merchandise,
which is hypothecated, to bank. The goods are handed over to the
importer under trust with the arrangement that sale proceeds should be
deposited to liquidate the advances within a given period. The
borrower(s) agree to take delivery of the merchandise as the banks
agent(s) arid acknowledge(s) that the bank remains owner of the
goods and they will holding the goods on behalf of the bank as
trustees until complete repayment of the debts to the bank. Usually the
loan is granted the basis of trust and is allowed 60-90 days time to
make payment. For giving these types of loan, officer makes loan
proposal and sends it to H/O for approval. After getting approval from
H/O, bank grants loan in the form of LIR. It’s needless to say that
bank only deals with the documents, not with goods & services in
case of foreign exchange business.

5.2 Import Financing Portfolio ofFirst Security Islami Bank

Limited.
Import financing portfolio consists of the goods or items are being
imported through the bank, total letter of credit opened by the bank,
volume of goods etc.
In Our Country fast moving consumer goods to Capital machinery are
imported. There are basically two types of importer. They are as
follows:

23
a. Industrial Importer: Industrial importer basically imports raw
materials for further processing. They sell the finished goods to the
abroad or in Bangladesh. Other than raw materials they imports
“Capital Machinery” for different industrial purpose.
b. Commercial Importer: Commercial importers import finished
goods. They import those goods directly for selling into the market.
But they are very limited in number. Through this branch the majority
of the goods imported are raw materials by the industrial users.
5.3 Export Financing:
Financing exports constitutes an important part of a bank's activities.
An exporter is one who exports the goods to another customer
whether in domestic country or in abroad. In exporting the stipulated
goods he nay requires financing. So export financing may be required
at two stages-
1. Pre-shipment credit.
2. Post shipment credit

5.4 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 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.

24
 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).

These types of are described in below:

 Packing Credit: 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

 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.

25
 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 is opened on issuance basis covering usance of not more than
180 days. The payments normally made from the proceeds or export
bills negotiated after shipment. Import L/C is opened for 75% of the
value of Export L/C. The payments normally made from the proceeds
or export bills negotiated after shipment.
Payment of Back-to-Back L/C
Client gives the payment of the BTB L/C after receiving the payment
from the importers. But in some cases, client sells the bills to the
NCCBL. But if there is discrepancy, the NCCBL sends it for
collection. In case of BTB L/C, NCCBL gives the payment to the
beneficiary after receiving the payment from the finished product (i.e.
exporter). Bank gives the payment from DFC Account (Deposit
Foreign Currency Account) where Dollar is deposited in national rate.
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%.

 Export Cash Credit (Hypothecation): Under this arrangement the

bank sanction the loan to the 1 st class exporter, as there is no security
against this loan. The letter of hypothecation creates a charge against

26
 the merchandise in favor of the bank but neither the ownership nor the
possession is passed to it.

 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.
5.5 Post-Shipment Credit:
This type of credit refers to the credit facilities, extended to the
exporters by the banks after shipment of the goods against export
documents. Necessity for such credit arises, as the exporter cannot
afford to wait for a long time for without paying manufacturers /
suppliers. Before extending such credit, it is necessary on the Part of
banks to look into carefully the financial soundness of exporters and
buyers as well as other relevant documents connected with the export
in accordance with the rules and regulations in force, Banks in our
country extend post shipment credit to the exporters through —
 Negotiation of documents under L/C
 Foreign Documentary Bill Purchase (FDBP).
 Local Documentary Bills Purchased (LDBP).
These are described in below:
 Negotiation of documents under L/C: The exporter presents the
relative documents to the negotiating bank after the shipment of the
goods. A slight deviation of the documents from those specified in the
L/C may raise an excuse to the issuing bank to refuse to
reimbursement of the payment already made by the Negotiating bank.
So, the Negotiating bank must be careful, prompt, systematic and
indifferent while scrutinize the documents relating to the export.
 Foreign Documentary Bill Purchase (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

27
 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 —
 Date
 Reference number (FDBP)
 Name of the drawee
 Name of the collecting bank
 Conversion rate
 Bill amount both in forei9n currency & Taka.
 Export L/C number

 Local Documentary Bills Purchased (LDBP): It created only for the

local export documents. Local exporters are usually small one and act
as backward linkage industry to the large foreign exporters. So, in
case of deferred L/C (Usually done in Textiles/ Garments) the
exporters 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
Bangladeshi Taka at a ruling usance rate. This temporary liability is
adjustable from the proceeds of the bills.

5.6 Export finance Portfolio of First Security Islami Bank

Limited:
Export Portfolio consists of the items exported, the value of export
bills that First Security Islami Bank Limited gets from issuing banks
from foreign countries as well as Bangladesh. Various sorts of
commodities are exported abroad throughFirst Security Islami Bank
Limited. But Readymade Garments consist of most of the foreign
exports. Other exported items are shrimp, jute and jute goods, leather
28
 tobacco, ceramic tiles, fresh vegetables, tempered coated glass, bone
crust, betel- nut etc.
There are two modes of export payments that are practiced in foreign
trade worldwide.
These are:
 Sight Bill: In this bill the exporters are paid at sight for the products
they just exported.

 Usance Bill: In this bill the exporter gets payment after a certain
period of time depending on the L/C terms and condition. This bill is
usually for raw materials or semi finished products that are exported
from Bangladesh and once the goods reach in final destination they
are employed for further processing.

Foreign Export: In the branch foreign export activities play a vital

role in the export division. About 75% of the total export comes from
this section. At this branch majority of the foreign exports are “Ready
Made Garments.”

Local Export: Local export indicates that goods are exported within
the boundaries of Bangladesh. Local exports consist 25% of the total
export as it is not very common practice in Bangladesh. “Yarn and
Accessories” are the main commodities of the local export at this
branch.

29
CHAPTER-06
Export & Import Financing Performance of First Security Islami
Bank Limited

30
6.1 Import financing performance of First Security Islami Bank
Limited:
Import section is the most wide and strong sector in foreign Trade
division.The import business of the bank is sham is in the table for the
last 5 years
Year 201 201 201 201 201
2 3 4 4 6
Amou 294 367 403 526 706
nt 41 47 03 39 17
(Tk.

Figure6.1 Import Financing of First Security Islami Bank Limited

from 2011-2015

31
 Import financing of First security islami
Bank Limited .
80000
70000
70617
60000
50000 52639
40000
40303
30000 36747
29441
20000
10000
2012
0 2013 2014 2015 2016
2008 2009 2010 2011 2012

The import business of bank is increasing over time. It was tk 29441

million in 2011 and reached to tk 70617 million in2015. The growth
of import business of the bank will better be explained with the help
of following table.

6.2Growth Analysis of Import

Table 6.1 Growth Analysis of Import in First Security Islami
Bank Limited
YEAR GROWTH RATE
2012-2013 24.81%
2013-2014 9.67%
2014-2015 30.69%

32
2015-2016 34.15%

6.3 Import Performance in graph

Figure 6.2 Growth Analysis Performance in graph

Import
40.00%
35.00%
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
2008-2009 2009-2010 2010-2011 2011-2012
2012-2013 2013-2014 2014-2015 2015-2016

From the graph, we see that the growth rate is maximum in the year
2015. With a fall in 2011-2012, it continued to rise until 2014-2015.
Maximum import growth achieved in 2014-2015 was 34.15%.
Reasons for such growth are many a few of them are government
facilities, loans and advances. The minimum growth of import was
9.67%, which was in 2013-2014. The fall because of policy change by
newly elected government, reassigns, etc.

33
6.4 Performance of Import L/C opened at First Security Islami
Bank Limited
Table 6.2The Performance of L/C opened at the bank is sham is in
the table for the last 5 years:-
Year 20 20 20 20 20
12 13 14 15 16
No 19 21 23 27 31
of 0 4 4 4 4
L/C
Amo 29 36 40 52 70
unt 44 74 30 63 61
(in
1 7 3 9 7
milli
on
take)
Figure 6.3 Performance of L/C opened

Year No of L/C Amount (in million take)

70617

52639
29441 36747 40303

2012 190 2013 2014 2015 2016

214
2008 234
2009 274
2010 314
2011
1 2012
2
3
4
5

Explanation:
At L/C opened increased gradually year by year. It is observed that in
the year 2015 the number of L/C is 314 but in the year 2011, 2012,

34
2013 & 2014 the number of L/C is 190,214,234 & 274 respectively.
Therefore, value of import rises with the rise in of L/C opened.

6.5 Export Financing of First Security Islami Bank Limited.

Year 201 201 201 201 201

1 2 3 4 5
Amo 164 195 288 418 513
unt 90 02 82 01 16
(Tk. Source: Annual Thesis 2016
Figure 6.4 the export financing of the bank is sham is in the table
for the last 5 years:-
55000

50000 51316

45000

40000 41801

35000

30000
28882
25000

20000
19502
15000 16490

10000

50002012 2013 2014 2015 2016

2008 2009 2010 2011 2012

35
The export business of bank is increasing over time. It was tk 16490
million in 2011 and reached to tk 51316 million in2015. The growth
of import business of the bank will better be explained with the help
of following table

6.6 Growth Analysis of Export Financing

Table 6.5 Growth Analysis of Export in First Security Islami
Bank Limited
YEAR GROWTH RATE

2012-2013 18.27%

2013-2014 48.09%

2014-2015 44.73%

2015-2016 22.78%

6.7 Performance analysis of export in graph:

Figure 6.5 Performance analysis of export in graph

36
 60.00%

50.00%
48.10%
44.23%
40.00%

30.00%
Export
22.76%
20.00%
18.26%

10.00%

0.00%
2008-2009 2013-20142009-2010
2012-2013 2010-2011
2014-2015 2015- 2011-2012
2016
From the graph, we see that in the year 2012-2013 the export
financing performance is maximum than the year 2011-2012, 2012-
2013, 2013-2014. In 2014-2015, export growth was maximum which
is 48.09% . But in the following years, the export growth fall. In
2013-2014 it was 44.23% and fall to 22.78% in 2014-2015.

6.8Remittance of First Security Islami Bank Limited

20 20 20 20 20
12 13 14 15 16
Year
Amount 15 22 26 28 36
(Tk. 90 66 44 43 89
In 5 9 7 3 0
Million)

37
 Figure 6.8 the Remittance of the bank is sham is in the table for
the last 5 years:

40000

35000 36890

30000
26447 28433
25000
22669

20000
15905
15000

10000
2012 2013 2014 2015 2016
5000
2008
2009
2010
2011
2012

The Remittance of Southeast bank is increasing day by day. In 2011,

it was 15905 million and reached to 36490 million in2015. Therefore,
we see there has been an inflow remittance.
6.9 Remittance Growth Rate of First Security Islami Bank Limited
TABLE 6.4 Last 5 Years Remittance Growth Rate in First Security
Islami Bank Limited
YEAR GROWTH RATE

2012-2013 42.53%

2013-2014 16.67%

2014-2015 7.50%

2015-2016 28.33%

38
6.10 Remittance growth rate trend in First Security Islami
Bank Limited
Figure6.7 6.5 The growth rate of remittance trend in First
Security Islami Bank Limited for the year 2012 to 2016
45.00%
42.53%
40.00%
35.00%
30.00% 28.33%
25.00%
20.00%
16.67%
15.00%
10.00%
7.50%
5.00%
0.00%
2012-2013
2008-2009 2013-2014
2009-2010 2014-2015 2015-2016 2011-2012
2010-2011

As seen, remittance business first fall for first 3 years and then rises in
2014-2015. Remittance growth was minimum in 2013-2014
amounting to 7.50% and than in the following year that is in 2014-
2015, it increased to 28.33%.

39
Chapter 7
Trade Financing Risks Faced
By
First Security Islami Bank Limited.

7.1 Foreign Exchange Financing Risk Analysis:

Foreign exchange (FX) involves a risk factor that is often overlooked
by small and medium-sized enterprise (SMEs) that wish to enter,
grow, and succeed in the global market-place. Although most SME
exporters prefer to sell in U.S. dollars, creditworthy foreign buyers
today are increasingly demanding to pay in their local currencies.
Form the view point of a U.S exporter who chooses to sell the foreign
currencies, FX risk is the exposure to potential financial losses due to
devaluation of the foreign currencies against the U.S dollars.
However such an approach may result in losing export opportunities
to competitors who are willing to accommodate their foreign buyers

40
 by selling in their local currencies. This approach could also result in
the nonpayment by foreign buyers who may find impossible to meet
U.S dollar-demonic-noted payment obligations due to the devaluation
of the local currency against the U.S. dollar. While coverage for
nonpayment could be covered by export credit insurance, such “what-
if” protection is meaning lees if export oppor- tunites arelost in the
first place because of the “payment in U.S. dollars only” policy.
Selling in foreign currencies, if FX risks successfully managed or
hedged, can be a viable option for U.S. exporters who wish to enter
and remain competitive in the global marketplace.

7.2 RISK ANALYSIS

Managing risk is a key component in any business situation. At
FSIBL we can provide your business with the tools and solutions to
indentify risks and then minimize the impact on your business.
Whatever your goals, you ANZ relationship manager will work with
work with you to indentify the risks and introduce you to ANZ
specialists who will develop risk management solutions.

7.3 TRADE FINANCING RISK

We provide trade risk solutions that aim to mitigate trade risk and give
your business assurance and protection when importing and exporting.
There are a number of trade risks involved in import export
transactions
 Payment risk – that contracted payment are not received by the buyer
or their bank
 Delivery risk – that the buyer does not obtain delivery of the goods
after making payment to the seller
 Performance risk – that either the buyer or seller in a contract may not
perform according to their agreed undertakings
 Foreign exchange risk – relating to fluctuations in currency exchange
rates (see our dedicated foreign exchange section).

41
 ANZ’s trade risk management solutions are used where one party to a
transactions. This provides confidence that contractual obligations
will be honored.
SOLUTIONS INCLUDE
 Bank guarantees
 Standby letters of credits
 Documentary credits
 Bid bonds
 Performance bonds.
Any customer with a commercial contract expressed in foreign
currency is exposed to foreign exchange risk and can benefit from
ANZ solutions.
ANZ’s foreign exchange risk solutions include
 Foreign currency accounts
 Foreign exchange contracts
 Foreign currency options.
7.4 FOREIGN TREAD RISK & SOLUTIONS
Foreign currency exchange risks are an important factor for anyone
trading in international currencies. Importers and exporters can be
greatly affected by fluctuations in foreign currency from one day to
the next.
WHAT IS FOREIGN TREAD RISK?
Businesses without commercial contracts expressed in domestic
currency (or fixed by an agreed rate of exchange) are fully exposed to
exchange risk. Exchange risk may arise because of exchange rate
movements in the period from the original commercial contract to the
time of settlement of the domestic equivalent of the foreign currency
amount.
The risk is misunderstanding e.g., risk of disagreements over
payment terms or quality conditions; risk of having to undertake a
legal action in foreign, biased forum.
Solutions:
 Substantial credit checking of computer parties; demanding references
 Negotiating firmly for minimum legal protection, or refusing deal

42
 Well-drafted contracts and general terms and conditions, including
provision for choice of law/forum, arbitration
 Specify Inciters 1990
 Well-researched and well-prepared contract negotiations.

Chapter-8
Problems & Recommendations Regarding Trade Finance By First
Security Islami Bank Limited.

43
 8.1 Problems, Analysis and Findings:
Responding to the ever changing trends and increased demand for
Consumer Banking, Corporate Banking, SME Banking and Foreign
Trade Finance activities, the Private Commercial Banks are
competing against each other for attracting and retaining corporate
clients and customers by evolving their strategies, structures, product
and service offerings that will best fit and serve their clients and keep
their banking business growing and prospering throughout the time.
After analysis of the instruments of Foreign Trade Finance used by
CPC Trade Operations, some problems are faced import and export
finance by FIBL which are describe blow.
1) Problems of Import Finance:
 Since banks deal in documents only, goods may not be the same as
those specified in the credit.
 Issuing banks are obliged to pay even though the conditions of goods
may be poor.
 L/C commissions are relatively costly.
 Line of credit or application is necessary before an importer can open
an L/C, and this may cause extra inconvenience and is time-
consuming.
2) Problems of Export Finance:
 It is comparatively costly.

44
 Sometimes, the terms and conditions cannot be fulfilled, such as
unreasonable shipment date and expiry date, adding on L/C the clause
of “restriction of a designated vessel to be informed by L/C
amendment”.
 The goods are shipped before receiving payment, and so it is not 100
percent safe.

First Security Islami Bank Limited, I have found few strengths and
weaknesses which are described below.
8.2 Strengths of Foreign Trade Financing at First Security Islami
Bank Limited:
 First Security Islami Bank Limited has a wide network of branches
operating in different regions of the country like – One Region,
Chittagong Region, Narayangonj Region, Sylhet Region, Rajshahi
Region, etc. Moreover, it has two Off-shore Banking Units at DEPZ
and CEPZ along with Small Medium Enterprise Service centers at
CEPZ, Goran and Shewrapara. These branches are equipped with well
trained bankers and professionals who perform their duties and
responsibilities with efficiency to satisfy their customers.
 CPC Trade Operations is divided into specialized departments for
export and import trade financing activities and collection and
checking of the documents by the expertise scrutiny team. The
employees in each department work as team players and help each
other in maximizing the efforts to get the required tasks done ahead of
time.
 The employees of CPC Trade Operations are strictly supervised and
monitored by the supervisor in charge of Trade Operations who
always exhibits friendly behavior and advises regarding the proper
utilization of the instruments of foreign trade financing.
 The customers and clients are given top most priority by the officers
and they always tries to solve any discrepancies or problems that may
arise because of some mistakes in the operational process at the
quickest possible time which helps in creating long-lasting
relationships with the customers.

45
 CPC Trade Operations uses cutting edge technology like Corporate
Banking Softwares (Flex Cube, Forex, EFTN, SWIFT Alliance

import/export bill settlement happens within the allotted time

mentioned in the contracts.
 The bank always keeps its database up to date by giving online
Thesising to Bangladesh Bank about the inward and outward
remittances that were affected through foreign exchange transactions
associated with the importers and exporters.

T
ly
Messenger) that helps them complete their tasks within a short period
of time and with increased accuracy. The use of these softwares
makes the whole process of Letter of Credit much easier and the

 First Security Islami Bank Limited strictly follows all the rules and
regulation mentioned under Import Policy Order, Export Policy Order
and the rules related with foreign trade financing and the use of the
instruments of foreign trade finance.
 The bank offers flexibility to the importers and exporters by keeping
different options open for the uses of Letter of Credit instrument as

sn
per demanded by their clients considering different scenarios. It also

x
ra
provides flexible line of credits to the customers that will facilitate
them in their financing of foreign trade activities.

8.3 SWOT Analysis for Foreign Exchange Department at FSIBL.

SWOT Analysis: SWOT analysis is the detailed study of an
organization exposure and potential in perspective of its Strength,
Weakness, Opportunity and Threats. These facilities the organization
to make their existing line of performance and also for see the future
to improve their performance in comparison to their competitors. As

p
o
itu
though this tool, an organization can also study its current option, it
can also be considered as an important tool for making changes in the
strategic management of the organization.

46

e
IA
S
g
W
k
E
cF
O
ti
h
 Strengths:
1. Existence of strict and standard Foreign exchange department.

2. Young Enthusiastic workforce.

3. Experienced manpower in Foreign in foreign exchange department.

4. Strong financial position.

5. Membership with SWIFT.

 Weakness:
1. Small number of rural branches for distributing remittances
2. Lack of trained and highly educated officers.
3. Absence of modern equipment in banking needs.
4. Lack of proper media presence.
5. Lack of advertisement of the Foreign exchange banking
6. Some officials are having attitude problem at workspace.
7. Small number of rural branches for distributing remittances
8. CIB Thesis is not available from Bangladesh bank.
9. Political instability.

 Opportunities:
1. Country wide Network

47
2. More Experienced and Managerial Know-How
3. Can recruit fresh graduates and train them to bring up a team of
talented officers.
4. Can take initiative for introducing Islamic Banking system.
5. Increasing trend of sending remittance.

 Threats:
1. Govt. policies are not in favor of the private banks.
2. Up Coming Bank.
3. Moderate levels of Customer Satisfaction.
4. Effects of the World Economic Slums.
5. Fluctuations of exchange rate.
6. Foreign banks used highly modern technology.
7. Regulation restriction.

8.4 FINDINGS

 The growth of export import business has significantly been

increased year by year due to reputation of good relation with
importer and exporter and also for sound import export
operation.
 While handling the foreign exchange transaction bank always
follow the rules and regulations of UCPDC-600, but practically
bank face many problems which are not integrated by UCPDC-
600.

48
 Sometimes Pre-shipment inspection certificates are not required
by the bank, which creates fraud and forgery in case of import.
 In case of Export L/Cs, sometimes customers insist to give their
payments though their documents are found discrepant. In some
cases, Bank has to give payment to these customers for different
reasons, which create loss for the bank
 FSIBL Agrabad branch has need adequate number of skilled
manpower in foreign exchange department.
 FSIBL fully maintains national and international rules and
regulations in their export import business.
 The bank has only some selected clients in foreign exchange
department.
 Most of the Export Clients are relating to export readymade
garments.
 Some of the officer in FSIBL Agrabad branch, work maximum
hours with a heavy workload. So it means unfair with some employee.
 There are insufficient ATM booths, which may create the customer
dissatisfaction.
8.5 Recommendation:
Technology is evolving at a fast rate and with that the business world
is also changing and to keep on track with such changes CPC Trade
Operations needs to utilize sound technological support for using the
latest software and building healthy information systems. CPC Trade
Operations needs to update its operations for ensuring smooth service
of Foreign Trade Finance. Some of the changes that could be
undertaken are as follows –
 Electronic Archiving to reduce the number of paper based files and
the records that are kept in hard copies can be stored in the server.
This will save quite a lot of time as the employees will not have to

49
 search for related documents but can access the server at any point of
time for getting the necessary information.

 Internal Info System for providing accurate and timely information

automatically and it will facilitate the employees in retrieving any
information they need for their regular operations.

 CPC Trade Operations can assign an Internal Audit Team for

checking and controlling mismatches and errors. This will ensure the
conformity and compliance of the operations of CPC.

 Research and Development Team should be formed that will work on

formulating new strategies and techniques by implementing which
CPC Trade Operations will become the most effective Unique Selling
Proposition (USP) ofFirst Security Islami Bank Limited.

 First Security Islami Bank Limited (FSIBL) has to create a new

marketing strategy which will attract more client, as a result
number import and export business increase.

50
Chapter - 09
Conclusion

09 Conclusions:
As a Private Commercial Bank, First Security Islami Bank Limited
has had a significant contribution to the banking sector as well as the
economy of Bangladesh. Since the commencement of First Security
Islami Bank Limited, it is continuously striving for excellence in
banking by offering innovative products and services to the clients
ranging from Consumer Banking, Corporate banking, SME Banking,
Islamic Banking services to foreign trade financing. Considering the
importance of the trade operations First Security Islami Bank Limited
had centralized all of its export and import related operations by
establishing CPC Trade Operations in the year 2009. From the very
beginning of its operations CPC has centrally dealt with all import
Letter of Credits, export bills, import payment settlements with the
help of well trained personnel who are expert in foreign trade
financing. Besides this, CPC Trade Operations is equipped with the
latest technologies like Corporate Software’s that facilitates quick

51
processing of the import and export transactions. The proper use of
the instruments of foreign trade financing, abidance to the rules and
regulations and strict monitoring has ensured effective and efficient
functioning of the trade activities leading to long lasting ties with the
importers and exporters which is helping the expansion of trade
financing. In the long run CPC Trade Operations will have huge
contribution to the economy of Bangladesh through facilitating the
inward and outward flows of foreign currencies into and out of the
country.
Despite stiff competition among Banks in their operation in
Bangladesh, both foreign and local, FSIBL has achieved satisfactory
progress in areas of its operation and earned impressive success in
operation over the previous year. The Bank will hope to achieve a
satisfactory level of progress in all areas of its operation including
target of profitability during the year 2012.
First Security Islami Bank Limited is doing its business successfully
for more than 13 years, which indicates their well performance in
foreign exchange. Because of their well performing foreign exchange
the bank has been able to reduce its bad debt every year. The bank
provides their best services such as Money gram, U.A.E Exchange,
and placid Express.
FSIBL provides different facilities. It has SWIFT facilities. Very few
bank in our country offer this. This branch facilitates different Margin
and commission on L/Cs for different customers. FSIBL adopt online
banking, which bank operates for their customers’ facilities. But this
bank has some lacking in their foreign exchange business. Some of
the time the Pre-shipment inspection certificates are not wanted by the
bank, which creates fraud and forgery in case of import against
master, export L/C. This bank does not practice revocable L/C. And

52
they have not adequate number of skilled manpower in foreign
exchange department.
The more effectively banks handle foreign exchange business, the
more likely they will become productive. For this purpose, FSIBL
needs to exert concerted efforts of undertake intensive research in the
field of product designing. This essentially requires employing
dedicated experts who have a genuine interest in foreign exchange
business and are well conversant with foreign delegates. The bank
may make strong lobby with central bank of Bangladesh and the other
commercial banks. This will make FSIBL distinguished from other
banks.

53
 Chapter - 10

References

10 References:
1. Procedure of IRC & ERC [WWW] Office of the Chief Controller of
Imports & Exports. Available from:
http://www.ccie.gov.bd/index.php?cmd=about_ccie&id=10
[Accessed: 19/11/16].

54
2. [WWW] Board of Investment Bangladesh. Available from:
http://www.boi.gov.bd/ [Accessed: 19/11/16].
3. (2012) Bonded Warehouse Facilities [WWW] Customs Bond
Commissionerate. Available from: http://www.cbc.gov.bd/
[Accessed: 19/11/16].
4. (2013) Annual Thesis [WWW]First Security Islami Bank
Limited. Available from:
http://www.Onebankltd.com/oldsite/upload/full.Thesis.pdf
[Accessed: 29/11/16].
5. Short History of Banking [WWW] Board of Investment
Bangladesh. Available from:
http://www.boi.gov.bd/index.php/investment-climate-info/finance-
and-banking#short-history-of-banking [Accessed: 29/11/16
6. [WWW]First Security Islami Bank Limited. Available from:
http://fibl bd.com/ [Accessed: 29/11/15]
7. (2012) LCAF [WWW] Bank Banker Banking. Available from:
http://bankbankerbanking-
bd.com/2012/08/22/lcaf/ [Accessed: 07/12/16].
8. Begum, F. (2014) Export Development Fund for non-traditional
exports [WWW] The Financial Express. Available from:
http://www.thefinancialexpress-bd.com/2014/02/14/18674/print
[Accessed: 08/12/16].
9. (2012) Guidelines for Foreign Exchange Transactions [WWW]
Foreign Exchange Policy Department, Bangladesh Bank. Available
from:
http://www.bangladesh-bank.org/aboutus/regulationguideline/gudfore
xtransvol2.pdf [Accessed: 08/12/16].
10.Bangladesh Electronic Funds Transfer Network (BEFTN) [WWW]
Bangladesh Bank. Available from:
http://www.bangladesh-bank.org/fnansys/paymentsys/eft.php
[Accessed: 08/12/16].
Acronyms used in this Thesis
AD Authorized Dealer
ABP Accepted Bill for Payment
B/L Bill of Lading

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BB Bangladesh Bank
B/E Bill of Exchange
B/C Bill of Collection
C&F Clearing & Forwarding
CAD Cash Against Documents
CRF Clean Thesis Findings
CCI&E Chief Controller of Import & Export
CFR Cost & Freight
CIB Credit Information Bureau
CIF Cost Insurance & Freight
DD Demand Draft
DP Demand Promissory Note
Note
DLC Documentary Letter of Credit
EPB Export Promotion Bureau
EXP Export Form
ERC Export Registration Certificate
FC Foreign Currency
FDD Foreign Demand Draft
FOB Free On Board
FDBP Foreign Documentary Bill Purchase
HS Harmonized Commodity Description & Coding
Code system
HO No Obligation Certificate
IBC Inward Bills for Collection
ICC International Chamber of Commerce
IMP Import Form
IRC Import Registration Certificate
L/C Letter of Credit
LCAF Letter of Credit Authorization
LIBOR London Inter-Bank Offer Rate
MTDR Mudaraba Term Deposit Receipt
MPI Murabaha Post Import
OBC Outward Bills for Collection
OFDBC Outward Foreign Documentary Bill for Collection
PO Payment Order
PAD Payment Against Document
PSI Pre Shipment Inspection
SWIFT Society for Worldwide Inter-Bank Financial
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 Telecommunication
TC Travelers Cheque
TIN Tax Identification Number
TR Trust Receipt
TT Telegraphic Transfer
TM Travel & Miscellaneous Form
UCPDC Uniform Custom & Practice for Documentary
Credit

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