“FOREIGN EXCHANGE ACTIVITIES”
OF AGRANI BANK LIMITED
(Conducted on behalf of AGRANI Bank, Hatkhola branch,Dhaka)
EXPORT IMPORT BANK OF BANGLADESH LIMITED
STAMFORD UNIVERSITY BANGLADESH
INTERNSHIP REPORT TITLE:
“Foreign Exchange Activities of AGRANI BANK Limited ’’
SUPERVISED BY:
Nigar Sutana Senior Lecturer Stamford !niversit" Bangadesh #e$artment of Business Administration
SUBMITTED BY:
A%rar Amin I#& BBA'()(*)++, Batch& )(-#. /a0or& Accounting
#ate of Su%mission& 1('(2'3(*+ LETTER OF TRANSMITTAL
#ate& Se$tem%er 1(4 3(*+ 5o4 Nigar Sutana Senior Lecturer #e$artment of Business Administration Stamford !niversit" Bangadesh Subjec: Su%mission of Internshi$ re$ort
#ear /adam4 It is m" $easure to su%mit m" internshi$ re$ort tited as !"F#$e%&' e(c)*'&e Ac%+%%e, #- A&$*'% B*'. L%/%e0""6hich I 6as assigned %" "ou as a $art of Internshi$ $rogram for the com$eteness of Bacheor degree of BBA #e$artment in Stamford !niversit" Bangadesh7 It is a $easure to 6or8 at Agrani Ban8 for the $eriod of three months I 6as $aced in the Saes and service de$artment from August* st 3(*+ at 9at8hoa Branch4 #ha8a7 It is a 6orth6hie ex$erience and earning area for me to %uid u$ m" career in the %an8ing sector7 5his ex$erience 6i he$ me to deveo$ $rofessionaism and has given me the chance to 8no6 a%out the overa %an8ing activities as 6e as created a $ositive attitude to6ards the %usiness 6ord7 I have tried m" eve %est to gather information that according to m" %eief is reevant and resourcefu7 It 6as a great o$$ortunit" for me to a$$" some theoretica 8no6edge in the $ractica $ur$ose7 I have aso tried m" %est to give some suggestions for the %etterment of the saes and service centre in the customer service de$artment and I ho$e that I 6as %eing a%e to satisf" their needs through m" 6or87 It 6i %e a $easure to carif" if an"thing is necessar" regarding this re$ort and I than8 "ou for ao6ing me the o$$ortunit" to underta8e this tas8 6ith "our sincere guidance and coo$eration7 I ex$ress m" ac8no6edgement and gratitude for assigning me to such a s$ecia stud"7
:our most o%edient student4 111111112222222222222 A%rar Amin I#& BBA'()(*)++, #e$artment of Business Administration Stamford !niversit" Bangadesh7
Ce$%-%c*e
5his is certified that the Internshi$ re$ort on the Foreign exchange Activities of Agrani Ban8 Limited is su%mitted for the a6ard of the degree of Bacheor of Business Administration in Accounting to the Stamford !niversit" Bangadesh is an authentic research carried out %" A%rar Amin under m" su$ervision7
9e is $ermitted to su%mit the Internshi$ re$ort ; I 6ish him ever" success in ife7
<<<<<<<<<<<7 Nigar Sutana -Internshi$ Su$ervisor. Senior Lecturer #e$artment of Business Administration Stamford !niversit" Bangadesh7
Dec3*$*%#'
I am a student of Business Adminidtration 4 Stamford !niversit" Bangadesh4 here%" decare that=4 the re$ort entited to me is an srcina 6or8 done %" me under the su$ervision of Nigar Sutana4 Senior Lecturer of the #e$artment of Business Administration of Stamford !niversit" Bangadesh7
No $art of this re$ort has %een su%mitted %" me for an" degree4 di$oma4 tite or recognition %efore7
<<<<<<<<<<<<7 Name& A%rar Amin I# No& BBA'()(*)++, Batch No& )(-#. /a0or& Accounting #e$artment of Business Administration Stamford !niversit" Bangadesh
PREFACE
Internshi$ is the integra and %asic re>uirement of a %usiness stud" $rograms7 Because it is the $ractica im$ication of theoretica 8no6edge 6hich 6e have %een taught in our %usiness su%0ects to gain further 8no6edge and ex$erience a%out $rofessiona %usiness activities7 It e>ui$s us 6ith the necessar" 8no6edge4 s8is and vaues of %usiness cuture 6hich are %asic re>uirement of the %usiness $rofessiona and 6hich aso he$s ne6 graduates students to $erform $rofessiona" as the" get first ste$ in their $rofessiona ife7 For this reason I 6as $aced at Agrani Ban8 Limited4 9at8hoa Branch #ha8a 6here I have done m" three months Internshi$7 #uring m" three months Internshi$ $eriod I have gained a ot of 8no6edge a%out %an8ing o$erations under the su$ervision and guidance of m" Internshi$ su$ervisors7 #uring m" 6hoe duration I 6as rotated in a the different areas of the %ranch and 6as thorough" %riefed a%out the $rocedure of a the %an8ing o$erations %" the concerned staff7 5his re$ort that I have $re$ared on the Foreign exchange Activities of Agrani Ban8 Limited 6as initiated as $art of the Internshi$ ?rogram7 /" Internshi$ re$ort contains a the 8no6edge 6hich I have earnt there7
ACKNO4LEDGEMENT
A re$ort %oo8 of thesis $a$er re>uires a ot of information from various sources and to ma8e such 8ind of re$ort needs a ot of assistance7 So to $re$are a re$ort %" coecting data of various 8inds has to %e done %" de$ending u$on man" $eo$e7 So4 I did aso de$end u$on others to coect a the reevant information and data on the $erformance of reative fieds7 First of a I 6oud i8e to $ut across m" gratitude to /R7 Khae8ur @aman /anaging #irector of Agrani Ban8 Limited4 for authoriing me to com$ete the tas8 and etaccording me 8no6to athe those information for 6hich I 6asto %eing a%e to $re$are this re$ort re>uirement7 I have aso ta8ed the concerned officers of Agrani Ban8 Limited4 9at8hoa Branch 6ho 8ind" $rovide me information reating to the tas87 /r7 SC?4/r7 AC?4/R7x AC?4/# /d7 SED7Aiur Rahman4E7D4/r E7D /R Ahsan Ahmed Dfficer4 /R 9at8hoa Branch /anager the" a he$ed in a $roductive manner from a as$ects7 I am aso than8fu to the /anager4 Genera /anager4 and Assistant Genera /anager for their imitess coo$eration and su$ervision7 I aso ex$ress a dee$ de%t of a$$reciation to the em$o"ees of Agrani Ban8 Limited4 9at8hoa Branch7 I uttered a 6hoehearted than8funess to m" su$ervisor N%&*$ Su3*'* -Senior Lecture.4 #e$artment of Business Administration4 Stamford !niversit" Bangadesh 6ho has given me the o$$ortunit" and directions to $re$are such a meaningfu thesis $a$er7 I am aso satisfied to 6or8 under her su$ervision and care7 Aso it 6oud %e rather incom$ete 6ithout ex$ressing than8s to the interna and externa su$ervisors again and again7 5hen I aso 6oud i8e to than8 x an senior student of our Stamford !niversit" in the #e$artment of BBA of the ,1 rd %atch 6ho aso he$ed me a ot %" $roviding me 6ith accurate and resourcefu Information according to m" to$ic 6hich 6as great" needed in $re$aring this re$ort7 Last"4 and most im$ortant" I ex$ress m" immense gratefuness to A3/%&)5 A33*)4 the creator and mercifu 6ho has given me the strength4 6isdom $atience4 courage and endurance to com$ete this re$ort successfu" in time7
EXECUTIVE SUMMARY
Ac$#'5/, *. 3. 1. ,.
A & Account A# & Authoried #eaer BB & Bangadesh Ban8 BL & Bi of Lading
). BDE & Bi of Exchange +. I;E & ash redit & hief ontroer of Im$ort ; Ex$ort . ## & #emand #raft H. #? Note & #emand ?romissor" Note 2. ER & Ex$ort Registration ertificate *(. E? & Ex$ort Form **. F & Foreign urrenc" *3. F## & Foreign #emand #raft *1. F#R & Fixed #e$osit Recei$t *,. IB5 IBA && Inter Inter Branch Branch redit redit 5 Adv ice *). ransaction *+. IB#A & Inter Branch #e%it Advi ce *. I/? & Im$ort Form *H. IR & Im$ort Regist ration ertificate *2. L & Letter of redit 3(. LA & Letter of redit Autho riation 3*. LI/ & Lone Against Im$or t /erchandise 33. L5R & Lone Against 5rust Recei$t 31. LB & Loca Bi oection 3,. DB & Dut6ard Bi for o ection 3). ?A# & ?a"ment Against #ocument 3+. ?D & ?a"ment Drder 3. ?SI & ?re Shi$ment Ins$ection 3H. SD# & Secured Dverdraft 32. & Short 5ermfor #e$osit 1(. S5# SIF5 & Societ" ord6ide Inter%an8 Financia 5eecommunication 1*. 5 & 5raveer’s he>ue 13. 5IN & 5ax Identifi cation Num%er 11. 5R & 5ruc8 Recei$t 1,. 55& 5eegra$hic 5ransfer 1). /5 & /ai 5ransfer 1+. L#B & Loca docum entar" %i coecti on 1. L#B? & Loca docum entar" %i $urchase
I
LIST OF TABLES SERIAL ND7
5I5LE DF 5ABLES
?AGE ND
II
LIST OF GRAPHICAL PRESENTATION
SERIAL ND7
5I5LE DF GRA?9S
?AGE ND
III TITLE OF THE TOPIC: !"FOREIGN EXCHANGE ACTIVITIES OF AGRANI BANK LIMITED”
TABLE OF CONTENTS CHAPTERS
PAGES
CHAPTER67 INTRODUCTION 8GENERAL OVERVIE49:
*7* Bac8ground of the stud"<<<<<<<<<<<<<<<<<<< *73 D%0ectives of the stud" <<<<<<<<<<<<<<<<<<<7 *71 /"thoog" of the stud" <<<<<<<<<<<<<<<<<<< *717*&?rimar" Sources<<<<<<<<<<<<<<<<<<<<<77 *7173& Secondar" sources <<<<<<<<<<<<<<<<<<<<7 *7, Sco$e of the Stud" <<<<<<<<<<<<<<<<<<<<<7 *7) Limitations of the Stud" <<<<<<<<<<<<<<<<<<<< *7+ /anagement and Drganiationa structure of Agrani Ban8 Ltd<<<<< *7 Agrani Ban8 at a gance<<<<<<<<<<<<<<<<<<<<<
CHAPTER6 8AN OVERVIE4 OF BANKING SECTOR IN BANGLADESH9:
37* #efinition of Ban8<<<<<<<<<<<<<<<<<<<<<<<<<7 373 D%0ective of Ban8<<<<<<<<<<<<<<<<<<<<<<<<<7 371 9istorica Bac8ground of Ban8ing Institution of Bangadesh<<<<<<<<77 -According to ord Ban8ing ?ers$ective of Bangadesh'*23.<<<<<<<< A ist of Ban8ing Institutions of Bangadesh<<<<<<<<<<<<<<<<7 37, Ban8ing D$eration in Bangadesh<<<<<<<<<<<<<<<<<<< 37) Foreign Exchange o$erations of Ban8ing in Bangadesh<<<<<<<<<<7 CHAPTERS
PAGES CHAPTER6; 8LITERATURE REVIE4.&
17*hat is meant %" Foreign Exchange ?7777777777777777777777777777777777777777777777777777777777777777 173 Foreign Exchange D$erations of Agrani Ban8 Ltd<<<<<<<<<<
171 #ifferent Foreign Exchange Services of ABL<<<<<<<<<<<< 17, Functions of Foreign Exchange #e$artment of ABL<<<<<<<<< -Exam$es of Foreign Exchange 5ransactions.& ;2<8A9 I/=#$: <<<<<<<<<<<<<<<<<<<<<<<<<< 17)7*& Forms of Letter of credit<<<<<<<<<<<<<<<<<<< 17)73& 5"$es of Letter of redit<<<<<<<<<<<<<<<<<<<< 17)71& ?arties of Letter of redit<<<<<<<<<<<<<<<<<<<< 17)7,& ontents of Letter of redit<<<<<<<<<<<<<<<<<< 17)7)& #ocumentar" of Letter of redit<<<<<<<<<<<<<<<<< 17)7+& ?a"ment against #ocument -?A#.<<<<<<<<<<<<<<<<
;2>8B9 E(=#$: <<<<<<<<<<<<<<<<<<<<<<<<<<< 17+73& Service $rovided %" Ban8 against Ex$ort L<<<<<<<<<<<<<77 17+73& Ex$ort Registration ertificate -ER.<<<<<<<<<<<<<<<<7 17+71& Bac8 to %ac8 L<<<<<<<<<<<<<<<<<<<<<<<<77 17+7,& Kinds of Bac8 to %ac8 L<<<<<<<<<<<<<<<<<<<<< 17+7)&Service $rovided %" Agrani %an8 against Bac8 to %ac8 L<<<<<<<< 17+7+& Loca #ocument Bi oection -L#B.<<<<<<<<<<<<<<< 17+7&Ste$s in L#B<<<<<<<<<<<<<<<<<<<<<<<<<7 17+7H& Loca #ocument Bi ?a"ment -L#?.<<<<<<<<<<<<<<<77
17+72& Ste$s in L#?<<<<<<<<<<<<<<<<<<<<<<<<< ;2?8C9 Re/%*'ce: <<<<<<<<<<<<<<<<<<<<<<<<< 177*& Foreign Remittance<<<<<<<<<<<<<<<<<<<<<<< 1773& Kinds of Remittance<<<<<<<<<<<<<<<<<<<<<<< 1771& /one" 5ransfer %" Remittance om$an"<<<<<<<<<<<<<< 177,& /one" transfer %" Exchange house<<<<<<<<<<<<<<<<<
17H Re$orting S"stem of Foreign Exchange 5ransactions& 17H7*& Re$orting and monitoring of Bangadesh Ban8<<<<<<<<<<<< 17H73& Re$orting %" the Internet<<<<<<<<<<<<<<<<<<<<
CHAPTERS
PAGES
CHAPTER6@ 8AN OVERVIE4 OF AGRANI BANK LIMITED9:
,7* 9istorica Bac8ground of Agrani Ban8 Ltd<<<<<<<<<<<<<< ,73 Board of #irectors of Agrani Ban8 Ltd<<<<<<<<<<<<<<<<
,71 Cision of Agrani Ban8 Ltd<<<<<<<<<<<<<<<<<<<<77 ,7, /ission of Agrani Ban8 Ltd<<<<<<<<<<<<<<<<<<<< ,7) D%0ective of Agrani Ban8 Ltd<<<<<<<<<<<<<<<<<<< ,7+ ?roduct and Services of ABL<<<<<<<<<<<<<<<<<<< ,7 Ban8 D$erationa Area of ABL<<<<<<<<<<<<<<<<<<77 ,7H Achievement and /iestones of ABL<<<<<<<<<<<<<<<< ,7H7*& ommitments of ABL<<<<<<<<<<<<<<<<<<<<77 ,7H73& ore Caues of ABL<<<<<<<<<<<<<<<<<<<<< ,7H71& Dther Caues and Features of ABL<<<<<<<<<<<<<<<< ,72 List of Branches of ABL<<<<<<<<<<<<<<<<<<<<< ,7*( a$ita and reserves of ABL<<<<<<<<<<<<<<<<<<<
,7** Drganiationa Structure of ABL<<<<<<<<<<<<<<<<< -According to the 9ierarch" of the Drganiation.
,7*3 ?rofita%iit" ?osition of Agrani Ban8& For the ast ) "ears<<<<<<<< Jith Gra$hica ?resentation -3(**4 3(*34 3(*14 3(*, ; 3(*).
,7*1 5ota Assets ?osition of Agrani Ban8& For the ast ) "ears<<<<<<<< Jith Gra$hica $resentation -3(**4 3(*34 3(*14 3(*, ; 3(*).
,7*, 5ota Lia%iit" ; Sharehoder’s e>uit" ?osition of ABL& For the ast ) "ears<<<<<<<<<<<<<<<<<<<<<<<<<
Jith Gra$hica ?resentation -3(**4 3(*34 3(*14 3(*, ; 3(*).
ontent 3(** 3(*3 3(*1 3(*, 3(*) Ex$ort ,+31,7+ ))2(7,3 Im$ort+,+)7+3 +3,(7 2)1)27,) -Source& Annua Re$ort of ABL 3(*,'3(*). CHAPTERS
PAGES
CHAPTER6< AN FOCUS ON FOREIGN EXCHANGE ACTIVITIES OF AGRANI BANK:
(ASSESSMENT ! THE RE"RT # $EARNINGS THR%GH TAS&) )7* #efinition of Foreign of Foreign Exchange<<<<<<<<<<<<<<<< )73 ontents of Foreign Exchange<<<<<<<<<<<<<<<<<<<<<< )71 D%0ectives of Foreign Exchange<<<<<<<<<<<<<<<<<<<<< )7, $rocesses of Foreign Exchange D$erations<<<<<<<<<<<<<<<<<
-Areas of Interest and Assessment of the Re$ort.& <<<<<<<<<<<<<<<77 )7) Dvera Foreign Exchange D$erations underta8en %" Agrani Ban8 Ltd<<<<<77 )7+ Foreign Exchange D$erations of ABL from the ast ) "ears<<<<<<<<<<7 -3(**4 3(*34 3(*14 3(*,4 3(*). )7 5ota Foreign Exchange scheme of Agrani Ban8 at a gance<<<<<<<<<<7 )7H Assessment of the Re$ort<<<<<<<<<<<<<<<<<<<<<<<< )72 Learning’s through tas8s<<<<<<<<<<<<<<<<<<<<<<<<7
CHAPTER6> PERFORMANCE EVALUATION OF AGRANI BANK LIMITED:
(THR%GH ANA$'SIS # !INDINGS) +7* Ana"sis of Foreign Exchange activities of Agrani Ban8<<<<<<<<< +73 #ifferent Ana"sis to evauate Agrani Ban8’s ?erformance& <<<<<<<7 o o o
SD5 Ana"sis<<<<<<<<<<<<<<<<<<<<<<< Ratio Ana"sis<<<<<<<<<<<<<<<<<<<<<<<< BG Gro6th /atrix<<<<<<<<<<<<<<<<<<<<<
-ith Gra$hica ?resentation. +71 Findings and #iscussion from Learning<<<<<<<<<<<<<<<<
CHAPTER6? RECOMMENDATION AND CONCLUSION
:
7* Recommendations to Im$rove Dvera Ban8’s ?erformance and Foreign Exchange D$erations of ABL<<<<<<<<<<<<<<< 73 oncusion<<<<<<<<<<<<<<<<<<<<<<<<<< B%b3%#&$*=)%e, *'0 Re-e$e'ce,:
CHAPTER67 INTRODUCTION 727 BACKGROUND OF THE STUDY 5his re$ort is $re$ared in order to com$ete the %acheor degree of BBA in the #e$artment of Business Administration of Stamford !niversit" Bangadesh7 In this re$ort4 I have tried to furnish a sorts of $ractica deaings that are conducted in case of handing various t"$es of activities in Foreign Exchange D$eration4 the theoretica as$ects4 that is 6hat shoud %e the $rocedures and re>uirements maintained from first to
ast4 and actua $ractices as 6e as the utimate gain for the %an8 in conducting financia activities are main" discussed here to assess overa deaings of the Agrani Ban8 Limited7 So the $ur$ose and o%0ective of this re$ort can %e summaried as foo6s& *. 3. 1. ,.
5o 8no6 ho6 the ris8 reducing s"stem in genera %an8ing4 5o examine %an8’s $erformance4 5o examine foreign remittance of the seected Ban84 5o identif" $ro%ems regarding transaction4
). 5o suggest $ro%a%e measures in order to sove $ro%ems7
72 OBECTIVES OF THE STUDY 5he re$ort tited as Foreign Exchange Activities of Agrani Ban8 Ltd7 is $re$ared to fufi the re>uirement of the internshi$ $rogram of the BBA degree in #e$artment of Business Administration in Stamford !niversit" Bangadesh7 5his re$ort is a $artia re>uirement of BBA $rogram7 Before $re$aration this re$ort three months organiationa attachment $eriod has %een com$eted successfu"7 5he Ban8s $rovide different t"$es of $roduct and services to its counter $arts i8e4 Foreign Exchange services or finance or investing that resuts 5ransaction of currenc"7 5o do this4 the" aso need the foo6ing& a$ita4 assets and other resources7 5hese eements of %usiness resuts4 changes in their ca$ita4 assets and other factors 6hich effects direct" in the %an8’s $erformance7 5his re$ort 6i %e he$fu to understand the $erformance of the Agrani Ban8 Limited4 com$are to some other oca Ban8s and as 6e their strengths and 6ea8nesses7 As a resut 6e can easi" ran8 the Ban8s $osition 6hich 6i give us the idea of Ban8s ca$a%iities7
72; MYTHOLODGY OF THE STUDY
D** ,#u$ce,: oections of facts are genera" treated as data7 5here are t6o t"$es of data from 6hich I have coected information to $re$are this re$ort7 #ata coected %" t6o 6a"s that is4 *717*7 P$%/*$5 S#u$ce,: 5he $rimar" #ata are those 6hich are coected for the first time and this ha$$en to %e srcina in character7 S#u$ce, #- P$%/*$5 D**: o o o o o
Executives4 officers4 stuffs of the %ranch ; head offices7 ustomers or cients of the %ranch7 ?ractica #es86or8 Statements of %ranch7 And ast" conduction surve" and $ersona intervie6 method through >uestionnaire7
*71737 Sec#'0*$5 ,#u$ce,: Secondar" source on the other hand are those 6hich are aread" %een coected %" someone ese and 6hich have aread" %een $assed through the statistica $rocess7 S#u$ce, #- Sec#'0*$5 D**&
Secondar" source for this $articuar stud" 6as coected from& o o o o o o o
o
Administration #e$artment of ABL e%site of ABL Annua re$orts of ABL Bangadesh Ban8 im$ort ex$ort contro acts and $oicies7 Guideine for foreign exchange transaction'%" Bangadesh government7 /anua %oo8s and /againes #ifferent directories and $eriodicas Ban8ers guide7 Etc7
72@ SCOPE OF THE STUDY 5he main sco$e of the stud" is to o%tain a cear idea a%out foreign exchange %usiness of our %an8ing o$eration4 of Arani Ban8 Ltd7 that is' 9o6 L is o$ened and ho6 the im$ort ex$ort is done7 5he foo6ing are some the ist of Foreign Exchange #e$artment o$erations of ABL& o
o
o
I/=#$: Im$ort oan and guarantees ?re'shi$ment advances E(=#$: #ifferent service $rovided %" %an8 against ex$ort L -i7e7. urrent de$osit Account -#. IR -Im$ort registration certificate. /ortgage 5IN Num%er7 Bi of exchange Bi of Lading ?ac8ing List ertificate of Drigin Ins$ection ertificate Insurance #ocument eight List An" other documents as $er L Insurance $oic"7etc L D$ening Re/%6*&e :#ifferent 8inds of remit'age?rovided %" ABL-i7e7. Foreign Remittance 55 /ai 5ransfer -/5. Foreign demand draft -F##. Im$ort $a"ment 5raveer’s che>ue Ex$ort che>ue ash doars redit card -Internationa. Seing and ?urchasing of #oars Loan Faciities Jdescri%ed in detais in the Sanction of L D$ening of etter of credit -L. Advance %is Bis for coection ?urchase of foreign %is Negotiating of foreign %is4etc7
/ore ever this re$ort is $re$ared to 8no6 ho6 Agrani Ban8 Ltd7 arries out their Foreign Exchange Activities 6hich is ex$ained in detai in the ater $art of the re$ort7 5he other sco$es are as foo6s'
a. 5o fufi the re>uirement of other B7B7A $rogram of Stamford !niversit" Bangadesh7 %. 5o evauate the $erformance of the Agroni Ban8 imited according to its foreign exchange activities and its im$ort ; ex$ort7 c. Business areas i8e remit'age4 etc7 d. 5o recommend a%out foreign exchange %usiness of the Agroni Ban8 imited7 e. And ast" to understand a cear idea of the Foreign exchange o$erations of Agrani Ban8 Ltd7
72< LIMITATION OF THE STUDY Ever" $ro0ect has some imitations7 I faced some usua constraints during the course of m" internshi$7 5he ex$erienced $ro%ems that have4 to some extent affected the $resentation of this re$ort are $resented %eo6& As I have com$eted m" internshi$ in Agrani Ban8 Limited4 9at8hoa Branch4 I have en0o"ed a ver" 6e decorated environment and comforta%e $ace7 5he officers 6ere ver" co'o$erative %ut the" are too %us" to give me time to get 8no6edge a%out $ractica activities7 /oreover the" have to dea in a ver" com$etitive environment %ased on mone" reated activities7 An" mista8e from me ma" ham$er their $erformance and good6i in the %an8ing Sector7 For these reasons I 6as de$rive of having $ractica 8no6edge7 Short time duration and ac8 of $ractica 8no6edge are the main imitations of the stud"7 5he other imitations are as foo6s& *7 Bus"ness of 5he Administration ' Since the re$resentatives of the ABL are ver" %us"4 in some case I coud not communicate 6ith them $ro$er"7 37 Fears to #iscosure ' 5he administration aso feared to discose the confidentia data reated to the $art" and various forms and documents7 Lac8 of Ex$erience ' Ex$erience ma8es a man efficient7 I am not ex$erienced enough to com$ete the stud" %ecause I am a $erson of ne6 hand on such stud"7 5hat is 6h" inex$erience creates o%staces to foo6 the s"stemic a$$roach and ogica research methodoog"7 17 Lac8 of $ersonne ' Lac8 of $ersonne in the foreign exchange division of the %ranch7 So the" are a6a"s %us" a%out their o6n 6or87 And it is ver" difficut to ta8e information from them as the" are' a7 Ban8s officias4 for securit" reasons4 decined the re>uest for $roviding information in some crucia issues as in some of the fieds of %an8ing are sti not covered %" our courses4 there 6as difficut" in understanding some of their activities7 %7 Another imitation of this re$ort is Ban8’s $oic" of not discosing some data and information for confidentia reason4 6hich coud %e ver" much usefu7
CHAPTER6
AN OVERVIE4 OF BANKING SECTOR IN BANGLADESH 27 De-%'%%#' #- B*'.: A bank is a fnancial institution licensed to receive deposits and make loans. Banks may also provide fnancial services, such as wealth management, currency exchange and sae deposit boxes. There are two types o banks commercial!retail banks and investment banks. "n most countries, banks are regulated by the national government or central bank. An establishment authori#ed by a government to accept deposits, pay interest, clear checks, make loans, act as an intermediary in fnancial transactions, and provide other fnancial services to its customers.
2 Objec%+e, #- B*'.:
Aims and o%0ectives of Ba8 are as foo6s& A core feature of a sta%e financia s"stem is that firms must %e a%e to fai in an order" fashion that is 6ithout excessive disru$tion to the financia s"stem4 6ithout avoida%e interru$tion to the critica economic functions that these firms $rovide4 and 6ithout ex$osing tax$a"ers to osses7 5his $rinci$e under$ins the Financia Sta%iit" Board’s internationa standard for effective resoution regimes -the Ke" Attri%utes.4 agreed %" G3( eaders in 3(**7 5he arrangements for the resoution of faiing %an8s4 %uiding societies and investment firms in the !nited Kingdom are designed to com$" 6ith the Ke" Attri%utes7 If a firm 6ithin sco$e of the resoution regime fais4 the Ban8 6i aim to ensure that the adverse effects of that faiure are minimised4 for exam$e so that& access to de$osits $rotected %" the Financia Services om$ensation Scheme -FSS. is maintained& around M*7*trn of retai de$osits are hed %" individuas at %an8s and %uiding societies4 the ma0orit" of 6hich are i8e" to %e $rotected %" FSS customer $a"ments continue to fo6& in the !K4 $a"ments of around M1((%n are transferred each da" through %an8s on %ehaf of retai and %usiness customers4 for exam$e to com$ete house $urchases and to $a" saaries and %is credit and other critica functions continue to %e $rovided to the 6ider econom" and the ris8 of disorder" Ofire'saes’ of the firm’s assets4 or termination of its derivatives contracts4 is minimised7
Because the resoution regime grants the Ban8 $o6ers to affect the $ro$ert" rights of sharehoders4 creditors and counter$arties4 the Act sets out the o%0ectives 6hich the Ban8 must have regard to 6hen resoving a firm7 5hese are to&
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ensure the continuit" of %an8ing services in the !nited Kingdom and of critica functions
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•
•
$rotect and enhance the sta%iit" of the financia s"stem of the !nited Kingdom $rotect and enhance $u%ic confidence in the sta%iit" of the financia s"stem of the !nited Kingdom $rotect $u%ic funds4 incuding %" minimising reiance on extraordinar" $u%ic financia su$$ort $rotect de$ositors and investors covered %" the !K financia services com$ensation scheme -FSS. $rotect4 6here reevant4 cient assets and avoid interfering in $ro$ert" rights4 in contravention of the Euro$ean ourt of 9uman Rights7
5he Ban8 must consider each of these o%0ectives 6hen choosing 6hich toos to use and in resoving a firm4 %ut the" are not ran8ed in an" $articuar order7
2; H%,#$%c*3 B*c.&$#u'0 #- B*'.%'& I',%u%#' #- B*'&3*0e,) 8Acc#$0%'& # 4#$30 B*'.%'& Pe$,=ec%+e #- B*'&3*0e,)67?9
After the Li%eration ar and the eventua inde$endence of Bangadesh4 the Government of Bangadesh reorganied the #ha8a %ranch of the State Ban8 of ?a8istan as the centra %an8 of the countr"4 naming it Bangadesh Ban87 5his reorganiation 6as done $ursuant to Bangadesh Ban8 Drder4 *234 and the Bangadesh Ban8 came into existence retroactive" from *+ #ecem%er *2*7 5he *2* /u0i% regime $ursued a $ro'sociaist agenda7 In *234 the government decided to nationaie a %an8s in order to channe funds to the $u%ic sector and to $rioritie credit to those sectors that sought to reconstruct the 6ar'torn countr" main" industr" and agricuture7 9o6ever4 government contro of the 6rong sectors $revented these %an8s from functioning 6e7 5his 6as com$ounded %" the fact that oans 6ere handed out to the $u%ic sector 6ithout commercia considerations %an8s had $oor ca$ita ease4 $rovided $oor customer service and ac8ed a mar8et'%ased monetar" instruments7 Because oans 6ere given out 6ithout commercia considerations4 and %ecause the" too8 a ong time to ca a oan non'$erforming4 and once the" did4 recover" under the erst6hie 0udicia s"stem 6as so ex$ensive4 oan recover" 6as a%"sma" $oor7J,J) hie the government made a $oint of intervening ever"6here4 it didn’t set u$ a $ro$er reguator" s"stem to diagnose such $ro%ems and correct them7 9ence4 %an8ing conce$ts i8e $rofita%iit" and i>uidit" 6ere aien to %an8 managers4 and ca$ita ade>uac" too8 a %ac8seat7 In *2H34 the first reform $rogram 6as initiated4 6herein the government denationaied t6o of the six nationaied commercia %an8s and $ermitted $rivate oca %an8s to com$ete in the %an8ing sector7 In *2H+4 a Natonal Co**on on Mone+, Bankn and Credt 6as a$$ointedJ) to dea 6ith the $ro%ems of the %an8ing sector4 and a num%er of ste$s 6ere ta8en for the recover" targets for the nationaied commercia %an8s and deveo$ment financia institutions and $rohi%iting defauters from getting ne6 oans7 :et the efficienc" of the %an8ing sector coud not %e im$roved7 J, 5he Financia Sector Ad0ustment redit -FSA. and Financia Sector Reform ?rogramme -FSR?. 6ere formed in *22(4 u$on contracts 6ith the ord Ban87 5hese $rograms sought to remove government distortions and essen the financia re$ression7J) ?oicies made use of the /cKinnon'Sha6 h"$othesis4 6hich stated that removing distortions augments efficienc" in the credit mar8et and increases com$etition7 J, 5he $oicies therefore invoved %an8s $roviding oans on a commercia %asis4 enhancing %an8 efficienc" and imiting government contro to monetar" $oic" on"7 FSR? forced %an8s
to have a minimum ca$ita ade>uac"4 to s"stematica" cassif" oans and to im$ement modern com$uteried s"stems4 incuding those that hande accounting7 It forced the centra %an8 to free u$ interest rates4 revise financia a6s and increase su$ervision in the credit mar8et7 5he government aso deveo$ed the ca$ita mar8et4 6hich 6as aso $erforming $oor"7 FSR? ex$ired in *22+7 After6ards4 the Government of Bangadesh formed a Ban8 Reform ommittee -BR.4 6hose recommendations 6ere arge" unaddressed %" the then'government7
#efination and List of Ban8ing Institutions of Bangadesh are as foo6s& 72Ce'$*3 B*'. 8B*'&3*0e,) B*'.9:
?ursuant to Bangadesh Ban8 order4*23 the Government of Bangadesh recognied the #ha8a %ranch of the state %an8 of the countr" and named it Bangdesh Ban8 6ith retros$ective effect from *+4#ecem%er *2*7 2S*e6O'e0 C#//e$c%*3 B*'.:
5he Ban8ing s"stem of Bangadesh is dominated %" the 1 nationaised commercia %an8 6hich together controed more than ),P of the de$osits and o$erated 11HH %ranches -1,P of the tota. as of #ecem%er 1*43((,75he ist of Nationaised commercia %an8s are sho6n %eo6 aong 6ith other %an8s in the chart7 ;2P$%+*e C#//e$c%*3 B*'.,:
?rivate %an8s are the highest gro6th sector due to the disma $erformances of government %an8s -a%ove.7 5he" tend to offer %etter service and $roducts7 @2S=ec%*3%e0 De+e3#=/e' B*'.,:
Dut of the s$eciaied %an8s4 t6o -Bangadesh Krishi Ban8 and Ra0shahi Krishi !nna"an Ban8. 6ere created to meet the credit needs of the agricutura sect or 6hie the other t6o -Bangadesh Shi$a Ban8 -BSB. ; Bangadesh Shi$a Rin Sangtha -BSRS. are for extending term oans to the industria sector75he S$eciaied %an8s are isted %eo6 in the chart&
S2L2 NO2
*7
P$%+*e C#//e$c%*3 F#$e%&' C#//e$c%*3 B*'., B*'., Brac8Ban8Limited itiBan8
S=ec%*3%,e0 De+e3#=/e' B*'., KarmashanstanBan8
37 17 ,7
EasternBan8Limited #utch Banga Ban8 Ltd7 #ha8aBan8Ltd7
BangadeshKrishiBan8 Sonai Ban8 @anata Ban8
)7 +7 7 H7
IsamiBan8Ltd7 ?u%aiBan8Ltd7 !ttaraBan8Ltd7 IFIBan8Ltd7
27 *(7 **7 *37 *17 *,7 *)7 *+7 *7 *H7 *27 3(7 3*7 337 317
Nationa Ban8Ltd7 Ban8Afaah 5he it" Ban8 Ltd7 !nited ommercia Ban8 NBan8Ltd7 ?rime Ban8Ltd7 Southeast Ban8 Ltd7 DneBan8Ltd7 EximBan8Ltd7 /ercantie Ban8 Ltd7 B# ommercia Ban8 /utua 5rust Ban8 Ltd7 First Securit" Isami Ban8 5he ?remier Ban8 Ltd7 Ban8AsiaLtd7 5rustBan8 Ltd7
3,7 3)7 3+7 37
Sha0aa Isami Ban8 Ltd7 @amuna Ban8 Ltd7 IB Isami Ban8 Ltd7 ABBan8Ltd7
9SBBan8 Standard hartered Ban8 ommerciaBan8of -e"on. StateBan8ofIndia 9a%i%Ban8 NationaBan8of?a8istan ooriBan8
Ru$aiBan8 AgraniBan8
5a%e& A ist of Ban8ing Institutions of Bangadesh -since *23.
2@ B*'.%'& O=e$*%#' %' B*'&3*0e,):
#ifferent Ban8ing D$erations $erformed %" Ban8s of Bangadesh are as foo6s& 72 C*=%*3 A0eu*c5 M*'*&e/e':
ommercia %an8s have to ma8e decisions a%out the amount of ca$ita the" need to hod for three reasons7 First4 %an8 ca$ita he$s %an8 faiure4 a situation in 6hich the %an8 cannot satisf" its o%igations to $a" its de$ositors and other creditors and so goes out of %usiness7 Second the amount of ca$ita affects returns for the o6ners of the %an877 And third4 a minimum amount of %an8 ca$ita-%an8 ca$ita re>uirements.is re>uired %" reguator" authorities. 2 A,,e *'0 3%*b%3%5 M*'*&e/e':
Asset management invoves a commercia %an8 in ac>uisition of assets that have a o6 rate of defaut and diversification of asset hodings to increase $rofit7 Dn the other hand4 ia%iit" management means ac>uisition of funds at o6 cost to increase $rofits7 ?rudent management of funds has %een the under"ing $rinci$e of Ban8 Asia’s o$erations7 5his %an8 is amost %aanced in managing asset and ia%iit" $ortfoios7 5he %an8 has increased its de$osits to t87*H4 )(( miion in 3(() from t87*14,* miion in the $revious "ear7 5he Loans and advances during the $eriod increased to t87*4H( miion in 3(() from t87**4H+* in the $revious "ear7 ;2 L%u%0%5 M*'*&e/e':
A commercia %an8 ma8es decision to maintain sufficient i>uid assets to meet the %an8s o%igation to de$ositors7 5he Ban8 has an Asset Lia%iit" ommittee -ALD. 6hich is res$onsi%e for managing short'term and ong'term i>uidit" and ensuring that the Ban8 has ade>uate i>uidit" at a times at o$tima funding cost7 ALD revie6s i>uidit" re>uirement of the Ban84 the maturit" of assets and ia%iities4 de$osit and ending $ricing strateg" and the i>uidit" contingenc" $an7 5he Asset Lia%iit" ommittee aso monitors Baance Sheet ris87 5he Baance Sheet ris8 is defined as $otentia changes in earnings due to change in rate of interest4 exchange rates4 6hich are not of trading nature7
@2 T$e*,u$5 O=e$*%#',:
Ban8 of Bangadesh has %een $artici$ating in the oca mone" mar8et as 6e as foreign currenc" mar8et in a $rudent 6a"7 5he Ban8’s investment treasur" %is and other securities is t8733) miion7 An amount of t87**(, miion 6as $aced at ca and short notice as of end 3(() against $revious "ear’s 22( miion7 <2 I'e$'*3 C#'$#3:
5he interna contro s"stem of the %an8 is designed to ensure that a the units o$erate 6ithin rues set %" the reguator" authorities and Ban8s’ o6n $oicies and reguations7 /easures are ta8en to ensure that ethica standards are maintained4 accounting rues and $rocedures are o%served4 and efficienc" in %usiness $rocess and safeguarding of assets are ensured7 the Stear Ban8ing Soft6are sets the $eri$her" 6ithin 6hich de$artment heads and %ranch managers can o$erate7 In ine 6ith our o%0ective to6ards $revention of mone" aundering a the reevant de$artments are instructed to %e vigiant4 to $revent such activities4 and reguar 6or8sho$s are hed in this regard7 >2 R%,. /*'*&e/e':
Bangadesh Ban8 %eieves that ris8 is an integra $art of it’s %usiness and the main roe of their ris8 management $rinci$e is to find the o$tima %aance %et6een ris8 and return7 Bangadesh Ban8 has underta8en a $ro0ect to insta a ore Ris8 /anagement S"stem in ever" %an87 5he" are in the $rocess of instaing the same in res$ect to Asset ia%iit" /anagement4 redit Ris8 management4 Foreign exchange ris8 management4 interna contro and com$iance and Anti mone" aundering7 5he Ban8 aso contros asset aocation through imiting ex$osure to industr" sector and setting cient imit7 /aturit" grou$ing of asset and ia%iit" is aso monitored to ensure that the %an8’s $ortfoio remain 6ithin acce$ta%e ris87 5he %usiness inteigence re$orts generated %" Stear Soft6are ao6 %etter and more effective monitoring of oan $ortfoio than %efore7 5"$es of ris8s associated 6ith %an8ing o$erations are sho6n %eo6& A9 C$e0% R%,.:
redit ris8 is one of the ma0or ris8s faced %" the Ban87 5his can %e descri%ed as $otentia oss arising from the faiure of a counter $art" to $erform 6ith agreed terms 6ith the
Ban87 5o assess and to mitigate the credit ris84 the management has im$emented R/ manua4 6hich is considered an im$ortant too for retaining the assets >uait" $erforming7 5herefore4 Ban8’s credit ris8 management functions have %een designed to address a these issues incuding ris8 arises from go%a changes7 5he Ban8 has segregated duties of the officers executives engaged in the credit reated activities7 A se$arate de$artment has %een formed at or$orate Dffice 6hich is entrusted 6ith the tas8s of maintaining effective reationshi$ 6ith the customers4 mar8eting of credit $roducts4 ex$oring ne6 %usiness o$$ortunities4 etc7 /oreover4 credit a$$rova4 administration4 monitoring and recover" functions have %een segregated7 For this $ur$ose4 three se$arate units have %een formed 6ithin the redit #e$artment7 5hese are -i. redit Ris8 /anagement !nit4 -ii. redit Administration !nit and -iii. redit /onitoring and Recover" !nit7 B9 F#$e%&' E(c)*'&e R%,.:
Foreign exchange ris8 is defined as the $otentia change in earnings arising due to unfavora%e change in exchange rates7 5he foreign exchange ris8 of the Ban8 is minima as a the transactions are carried out on %ehaf of the customers against L commitments and other remittance re>uirements7 No s$ecuative deaing on Ban8’s accoun t 6as conducted during the "ear7 5reasur" front office conducts dea for commercia $ur$ose and %ac8 office of treasur" 8ee$s record and $ass entries in %oo8s of account7 5he main ris8s in treasur" and foreign exchange are exchange rates ris84 fund management and i>uidit" ris87 As $er Bangadesh Ban8’s guideines4 the 5reasur" #e$artment 6as o$erationa" and $h"sica" divided into front office and %ac8 office to mitigate the ris87 Se$arate tee$hone and fax ines 6ere instaed at the deaing room to meet Bangadesh Ban8’s guideines7 C9 M#'e5 L*u'0e$%'& R%,.:
/one" aundering ris8 is defined as the oss of re$utation and ex$enses incurred as $enat" for %eing negigent in $revention of mone" aundering7 For mitigating the ris8s4 the Ban8 has nominated a hief om$iance Dfficer at or$orate Dffice and Branch om$iance Dfficers at %ranches4 6ho inde$endent" revie6 the transactions in the accounts to verif" sus$icious transactions7 Kno6 :our ustomer -K:. $oic" and 5ransaction ?rofie -5?. format has %een introduced7 5he reguator" re>uirements are %eing com$ied 6ith and the guideines in res$ect of K: are foo6ed for o$ening of
ne6 accounts7 5raining has %een $roviding continuous" to a the categor" of officers and executives for deveo$ing a6areness and s8i for identif"ing sus$icious activities7 In addition4 the ?resident ; /anaging #irector has $rovided a /essage on Anti /one" Laundering -A/L. $oic"7 5he management has circuated a ustomer Acce$tance ?oic" to the mem%ers of the staff for guidance7
I'e$'*3 C#'$#3 *'0 C#/=3%*'ce R%,.:
D$erationa oss ma" arise from errors and omissions4 fraud and forgeries due to ac8 of $ro$er interna contro and com$iance cuture7 /anagement through the Interna ontro and om$iance #e$artment ensures contros in a o$erationa areas of the Ban87 Interna ontro and om$iance #e$artment underta8es $eriodica and s$ecia audit and ins$ection of the %ranches and de$artments at or$orate Dffice for identif"ing and revie6ing the o$erationa a$ses and com$iance of statutor" re>uirements as 6e as Ban8’s o6n guideines7 5he Audit ommittee of the Board aso revie6s the Audit and Ins$ection re$orts of the Interna ontro and om$iance #e$artment7 5he Ban8 has introduced Ris8 Based Interna Audit -RBIA. and audit rating over its %ranches from 3((+ and $re$ared com$rehensive audit manua 6hich have %een a$$roved %" the Board of #irectors7
Cu$$e' S$ucu$e #- b*'.%'& %',%u%#' %' B*'&3*0e,): E,*b3%,)/e'
Bangadesh Ban84 the centra %an8 and a$ex reguator" %od" for the countr"Qs monetar" and financia s"stem4 6as esta%ished in #ha8a as a %od" vide *2*7 the Bangadesh Ban8 Drder4 *23 -?7D7 No7 *3 of *23. 6ith effect fromcor$orate *+ #ecem%er At $resent it has ten offices ocated at /oti0hee4 Sadarghat4 hittagong4 Khuna4 Bogra4 Ra0shahi4 S"het4 Barisa4 Rang$ur and /"mensingh in Bangadesh tota man$o6er stood at )H( -officias 12H*4 su%ordinate staff *H3+. as of 1* /arch 3(*)7 Bangadesh Ban8 -BB. has %een 6or8ing as the centra %an8 since the countr"’s inde$endence7 Its $rime 0o%s incude issuing of currenc"4 maintaining foreign exchange reserve and $roviding transaction faciities of a $u%ic monetar" matters7 BB is aso res$onsi%e for $anning the Government’s monetar" $oic" and im$ementing it there%"7 5he BB has a governing %od" com$rising of nine mem%ers 6ith the Governor as its chief7 A$art from the head office in #ha8a4 it has nine more %ranches4 of 6hich t6o in #ha8a and one each in hittagong4 Ra0shahi4 Khuna4 Bogra4 S"het4 Rang$ur and Barisa7 Bangadesh Ban84 the centra %an8 and a$ex reguator" %od" for the countr"Qs monetar" and financia s"stem4 6as esta%ished in #ha8a as a %od" cor$orate vide the Bangadesh Ban8 Drder4 *23 -?7D7 No7 *3 of *23. 6ith effect from *+ #ecem%er *2*7 At $resent it has ten offices ocated at /oti0hee4 Sadarghat4 hittagong4 Khuna4 Bogra4 Ra0shahi4 S"het4 Barisa4 Rang$ur and /"mensingh in Bangadesh tota man$o6er stood at )H( -officias 12H*4 su%ordinate staff *H3+. as of 1* /arch 3(*)7 Fu'c%#', 5he Bangadesh Ban8 $erforms a the functions that a centra %an8 in an" countr" is ex$ected to $erform7 Such functions incude maintaining $rice sta%iit" through economic and monetar" $oic" measures4 managing the countr"’s foreign exchange and god reserve4 and reguating the %an8ing sector of the countr"7 Li8e a other centra %an8s4
Bangadesh Ban8 is %oth the government’s %an8er and the %an8er’s %an84 a “ender of ast resort=7 Bangadesh Ban84 i8e most other centra %an8s4 exercises a mono$o" over the issue of currenc" and %an8notes7 Exce$t for the one' and t6o'ta8a notes4 it issues a other denominations of Bangadeshi ta8a7 5he ma0or functiona areas incude & •
Formuation and im$ementation of monetar" and credit $oicies7
•
Reguation and su$ervision of %an8s and non'%an8 financia institutions4 $romotion and deveo$ment of domestic financia mar8ets7
•
/anagement of the countr"Qs internationa reserves7
•
Issuance of currenc" notes7
•
Reguation and su$ervision of the $a"ment s"stem7
•
Acting as %an8er to the government 7
•
/one" aundering $revention7
•
oection and furnishing of credit information7
•
Im$ementation of the Foreign Exchange Reguation Act7
•
/anaging a de$osit insurance scheme 7
CHAPTER ; LITERATURE REVIE4 Agrani Ban8 Limit ed -ABL. is esta%ished in *237 It is a state o6ned %an87 It is formed %" the com$osition of ex'9a%i% Ban8 td and ex'ommerce Ban8 td7 5here are six section of ABL -Sen$ara %ranch. in GB' ash4 com$uter4 account o$ening4 cearing4 Accounts and oca remittance7 5he re$ort indicates de$th ratio ana"sis and financia $erformance of the "ear 3((24 3((H4 3(( of Agrani Ban8 Limited7 9ere aso cacuate financia ratios i8e Li>uidit"4 Asset /anagement4 de%t /anagement4 ?rofita%iit"4 /ar8et Caue7 acuate these ratios for strong ana"sis and tr" to give a current and essentia recommendation7
;272 4)* %, /e*' b5 F#$e%&' E(c)*'&e
In a %an8 6here $eo$e can do transaction in foreign currenc" is caed foreign exchange7 An" 8inds of doar transaction are done %" this section7 ABL’s foreign exchange section is 6or8ing 6ith the head office interna division7 5he fu $rocess is governed %" Bangadesh %an87 An" 8ind of transaction in foreign currenc" is a sensitive issued7 ;22 F#$e%&' E(c)*'&e O=e$*%#', #- A&$*'% B*'. L0:
Foreign trade can %e easi" defined as a %usiness activit"4 6hich transcends nationa %oundaries7 5hese ma" %e %et6een $arties or government ones7 5rades among nationas are a common occurrence and norma" %enefit %oth the ex$orter and im$orter7 In man" countries internationa trade4 accounts for more than -3(P. of their nationa incomes7 In ever" internationa trade transactions4 there must %e&
An agreed $roducts or services7 A saes contract7 #eiver" detais7 Shi$$ing and deiver" detais7 5erms of $a"ment7 Re>uired documentation7 Insurance cover7
Foreign trade can usua" %e 0ustified on the $rinci$e of com$arative advantage7 According to this economic $rinci$e4 it is economic $rofita%e for a countr" to
s$eciaied in the $roduction of that commodit" in 6hich the $roducers has the greater com$arative advantage and to ao6 the other countr" to $roduce that commodit" in 6hich it has the esser com$arative advantage7 It incudes the s$ectrum of goods4 services4 investment4 technoog" transfer etc7 5his trade among various countries causes for cose in8age %et6een the $arties deaing in trade7 5he %an8 6hich $rovides such transactions is referred to as rendering internationa %an8ing o$erations7 Internationa trade demands a fo6 of goods from seer to %u"er and of $a"ment from %u"er to seer7 And this fo6 of goods and $a"ment are done through etter of credit -L.7 ;2;2 F#$e%&' E(c)*'&e Se$+%ce, #- A$*'% B*'. L02
ABL is rendering various 8inds of services in internationa transaction of their cients7 Some are descri%ed %eo6& ' *7 L D$ening: Bangadesh is main" an im$ort oriented countr"7 So4 L is a ver" im$ortant im$ort document 6hich is issued %" Ban87 In internationa mar8et t6o $arties are not 8no6n to each other7 5he im$orters of Bangadesh give an L to ex$orters of foreign countr" to give the assurance of $a"ment7 ABL is o$ening L in favor of their cients7 37 Ex$ort $rocessing& hen ex$orter’s foreign document comes to ABL4 ABL coect $a"ment from foreign %an8 for its $art"7 ABL $urchase %i if their $art" need ear" cash7 17 Bac8 to Bac8 and Loca L& In against of ex$ort L ABL give the faciit" to o$en Bac8 to Bac8 and Loca L7 ,7 #oar sae and $urchase& ABL saes doar against $ass$ort7 5he rate of exchange is given %" Bangadesh Ban8 6hich is changing ever" da"7 8A9 L#*' -*c%3%%e,:
Loan faciit" is given to cients to he$ in foreign exchange7 #ifferent t"$es of oan faciit" are given %eo6& Sanction of L& 8B9 Cu,#/e$,:
ABL is a 6e 8no6n %an8 is foreign exchange %usiness7 It is he$ing the %usiness and $eo$e 6or8ing a%road from the ver" %eginning7 5he 8inds of $arties of ABL in foreign exchange are as foo6s& *. 3. 1. ,. ). +.
Im$orter’s of %ic"ce $arts Im$orter’s of chemica Im$orter’s of fresh fruits Im$orter’s of $arts ; ca$ita machiner" Im$orter’s of garments accessories Ex$orter’s of garments items
. ?eo$e 6or8ing a%road H. Resident ; Non'resident Bangadeshi ?eo$e 2. Government $arties 6or8ing a%road *(. ?eo$e traveing from Bangadesh and to Bangadesh
;2@2 Fu'c%#', #- F#$e%&' E(c)*'&e De=*$/e': *9 I/=#$:
D$ening etter of credit -L.7 Advance of %is7 Bis for coection7 Im$ort oan and guarantees7
b9 E(=#$:
?re'shi$ment advances7 ?urchase of foreign %is7 Negotiating of foreign %is7 Ex$ort guarantees7 Advising confirming etters'etter of credit7 Advance for deferred $a"ments ex$orts7 Advance against %is for coection7
c9 Re/%*'ce,: F#$e%&' Re/%*'ce, Issue of ##4 /54 55 etc7
?a"ment of ##4 /54 55 etc7
Issues and enhancement of traveer’s che>ue7
Sae and enhancement of foreign currenc" notes7
Non'resident accounts7
Some other functions of Foreign Exchange #e$artment of ABL are isted %eo6& *. etter of credit -L. 3. D$ening Advance of %is 1. Bis for coection ,. Im$ort oan and guarantees ). ?re'shi$ment advances +. ?urchase of foreign %is . Negotiating of foreign %is H. Ex$ort guarantees 2. Advising confirming etters'etter of credit *(. Advance for deferre d $a"ments ex$orts **. Advance against %i s for coection
*3. Issue of ##4 /54 55 etc7 *1. ?a"ment of ##4 /54 55 etc7 *,. Issues and enhancem ent of traveer ; che>u e7 *). Sae and enhanceme nt of foreign currenc" notes7 *+. Non'resident accounts7 8E(*/=3e, #- F#$e%&' E(c)*'&e T$*',*c%#',9: ;2<8A9 IMPORT @272 I/=#$ Bu,%'e,,
For the ver" %eginning the %an8 has em%ar8ed on extensive foreign exchange %usiness 6ith a vie6 to faciitating internationa trade transactions of the countr"7 5he %an8 has B#5 *)2, crore im$ort financing as of #ecem%er 1*4 3(*1 6hich is )72+P of nationa figure7 9ere from 3((2 to 3(**4 the amount of it is increasing4 %ut next t6o "ears these are decreeing7 Im$ort main" confined to consumer goods4 ca$ita machineries and industria ra6 materias4 machineries and industria ra6 materias7 Ye*$
A/#u' #- I/=#$ 8BDT %' c#$e9
3((2 3(*(
)1 *+23
3(** 3(*3 3(*1
3+H *+2+1 *)2,
5a%e& *( Im$orts
I/=#$
*--)
*-'-
'%)$$$%& *-'''($)*
*-'*
*-'&
'()(& *(+$$
Gra$h& ,7*73 Im$ort Business
9ere the amount of im$ort 6as increasing from 3((2 to 3(** the next t6o "ears 6ere o6er due to some unavoida%e reasons7 Foreign exchange can $erform %etter4 if im$ort 6oud ma8e in greater7
;2<27: I/=#$ P$#ce0u$e,:
?erforma Invoice Indent7
/em%ershi$ certificate from a recognied ham%er of ommerce and Industr" or 5o6n Association or registered 5rade Association7 Letter of redit Authori ation -LA. Form $ro$er" fied in >uintu$icate signed %" the im$orter7
L a$$ication du" signed %" the im$orter7
Dne set of I/? Form7
Insurance over Note 6ith mone" recei$t7
A %an8 account 6ith the %ranch7
Im$ort Registration ertificate -IR.7
5ax ?a"er’s Identification Num%er -5IN.7
CA5 Registration ertificate -for ommercia Im$orters.7
In case of $u%ic sector4 atte sted $hotoco$" of aocation etter issued %" the aocation authorit"4 Administrative /inistr" or #ivision s$ecif"ing the source4 amount4 $ur$ose4 vaidit" and other terms and conditions against the im$orts7 An" such documents as ma" %e re>uired as $er instruction issuedto are issued %" the hief ontroer of Im$orts ; Ex$orts -I;E. from time to time7
I/=#$e$
Pub3%c Sec#$ -Govt7 Drgans7 ; or$oration.
P$%+*e Sec#$
C#//e$c%*3 I'0u,$%*3 8$* 8-%'%,)e0 /*e$%*3, P$#0uc,9 /*c)%'e$59 Source& Ex$ort and Im$ort Section of ABL7
5a%e& )
Acu*3 U,e$,
5"$es of Im$orters
#efinition of Im$ort L& Dn %ehaf of the im$orter if the %an8 underta8es to ma8e $a"ment to the foreign %an8 is 8no6n as documentar" credit7 A etter of credit is 8no6n as instrument issued %" %an8 to a customer $acing at the etters dis$osa such agreed sums in foreign currenc" as sti$uated7 An im$orter is a countr" re>uests his %an8 to o$en a credit in foreign currenc" in favor of his ex$orter at a %an8 in the etters countr"7 5he etter of credit is issued against $a"ment of amount %" the im$orter or against satisfactor"7 ABL $rovides different services to the im$orter of Bangadesh7 5o get im$ort faciit" the $art" must have foo6ing re>uirements' urrent de$osit Account -#.& IR -Im$ort registration certificate. /ortgage 5IN Num%er7
;2<2: F#$/, #- Lee$ #- C$e0%&
A etter of credit -L. ma" %e t6o forms7 5hese as foo6s& Insurance $oic"7-5K7.In miions.
Revoca%e etter of credit Irrevoca%e etter of credit Revoca%e L& If an" etter of credit can %e amendment or change of an" cause or canceed %" consent of the ex$orter and im$orter is 8no6n as revoca%e etter of credit7 Irrecovera%e L& If a etter of credit cannot %e changed or amendment 6ithout the consent of the im$orter and ex$orter is 8no6n as irrevoca%e etter of credit7 ontent 3(** 3(*3 3(*1 3(*, 3(*) Im$ort 2+*)7* **2((7*, *)+,1,7) *+3+(,7+* 332++7+( -Source& Annua Re$ort of Agrani Ban8 Ltd7 3(*,'3(*).
;2<2;: T5=e, #- 3ee$ #- c$e0%:
Letters of redit are cassified into various t"$es according to the method of settement em$o"ed7 A credits must cear" indicate in ma0or categories7 *. 3. 1. ,. ). +.
Sight $a"ment credit #eferred $a"ment credit Acce$tance credit Negotiation credit Red cose credit Revoving credit
. 5ransfera%e Stand%" credit H. credit
;2<2@: P*$%e, # * Lee$ #- C$e0%:
A etter of credit is issued %" a %an8 at the re>uest of an im$orter in favor of an ex$orter from 6hom he has contracted to $urchases some commodit" or commodities7 5he im$orter4 the ex$orter and the issuing %an8 are $arties to the atter of credit7 5here are one or more than one %an8s that are invoved in various ca$acities and at various stages to $a" an im$ortant roe in the tota o$eration of the credit mentioned %eo6& *. 5he D$ening Ban8 3. 5he Advising Ban8 1. 5he Bu"er and the Beneficiar" ,. 5he ?a"ing Ban8 ). 5he Negotiating Ban8 +. 5he onfirming Ban8 ;2<2<: C#'e', #- )e Lee$ #- C$e0% Au)#$%*%#' 8LCA9:
Ban8s norma" issued etter of credit Authoriation on forms 6hich cear" indicate the %an8s name and extent of the %an8s o%igation under the credit7 5he contents of the LA are incuded foo6ing information& i7 ii7 iii7 iv7
v7 vi7
Name of the %u"er& ho is aso 8no6n as the accounted since it is for his account that the credit has %een o$ened Name of the seer& ho is aso 8no6n as the %eneficiar" of the credit /oment of the credit& hich shoud %e the vaue of the merchandise $us an" shi$$ing charges intent to %e $aid under the credit Ex$iration date& hich is s$ecified the atest date document ma" %e $resented7 In this manner or %" incuding additiona" a atest date4 the %u"er ma" exercise contro over the time of shi$$ing7 #ocuments re>uired& hich 6i norma" incude commercia invoice consuar or customer invoice4 insurance $oicies as certificate7 Genera descri$tion of the merchandise& hich %rief" and in a genera manner du" descri%es the merchandise covered %" a etter of credit
;2<2>: D#cu/e'*$5 Lee$ #- C$e0% 8I/=#$ E(=#$9:
#ocumentar" etter of credit is such 8inds of commercia etter 6hich a %an8 issue on %ehaf of foreign seer -ex$orter. according to the direction of the -im$orter. $urchaser7 5he documents sho6n under are 8no6n as ex$ort documents from the im$orter’s side& *. Bi of exchange& 5he %i of exchange is that $articuar instrument through 6hich $a"ment is effected in trade interna and internationa7 5he $a"ment for the goods is recovered %" the seer through the medium of a %i of exchange dra6n on the %u"er for the amount de$ending on the contract7 It is a negotia%e instrument7 3. Bi of ading& A %i ading is a document of tite to goods entiting the hoder to receive the goods as %eneficiar" or endorsee and it is 6ith the he$ of this document on recei$t from the ex$orter that the im$orter ta8es $ossession of the goods form the carr"ing vesse at the $ort of the hoder7 Air6a" %i Rai6a" recei$t& hen goods to %e trans$orted are sma in %u8 or re>uiring s$eed" deiver" or those are $erisha%e in nature on the dea is in %et6een the neigh%oring countries then mode of trans$orts other then shi$$ing ma" %e resorted to far the carriage of the goods Air6a"s %i Rai6a" recei$t ta8e $ace of Bi of ading de$ending on the nature of the goods7
ommercia invoice& It is the seer’s %i for the merchandise7 It contains a descri$tion of goods4 the $rice $er unit at a $articuar
ocation4 vaue %i of the goods4 num%er $ac8ingetc7 s$ecifications4 of sae4 attertota of credit of ading 5here is no terms standard form for a commercia invoice7 5he invoice is made out %" the seer under his signature in the name of the %u"er and must %e su%mitted in a set of at east 1 co$ies7 Insurance $oic"& In the internationa trade insurance $oic" is a must to cover the ris8 of oss on consignments 6hie the" are on seas4 roads4 and air6a"s7 5he insurance is the res$onsi%iit" of the %u"er -consignee. under FAS FDB and F contracts and of the Seer -consignor. under IF contract7 5he $oic" must %e of the t"$e as s$ecified in the reative credit7
1. ertificate of srcin& 5his is a certificate issued %" a recognied authorit" in ex$orting countr" certif"ing the countr" of srcin of the goods7 It is usua" %" the cham%ers of commerce7 Some time4 it is certified %" oca consu or 5rade Re$resentative of the im$orting countr" as $er terms7 a. ?ac8ing ist& 5he ex$orter must $re$are an accurate $ac8ing ist sho6ing item %" item4 the contents of the consignment to ena%e the receiver of the shi$ment to chec8 the contents of the goods4 num%er and mar8s of the $ac8age4 >uait"4 $er $ac8age net 6eight4 gross 6eight4 measurement etc7 %. eighting and /easurement& Issued %" recognied authorit" -i8e cham%ers of commerce and industr". in ex$orting countr" certif"ing correct 6eighting and measurement of the goods7 Bi of Entr"& A %i of entr" is a document
6hich contains the $articuars of the im$orted goods as 6e as the amount of customs dut" $a"a%e7
;2<2?: P*5/e' *&*%', D#cu/e', 8PAD9:
Ban8s dea in documents and not in goods7 If the shi$$ing document against the L is in order then the L o$ening %an8 must have to $a"ment to the foreign %an8 6ithin 1 da"s or 3 hours according as !niform ustoms and ?ractice for #ocumentar" redit -!?#. )(( of revision If the shi$$ing documents have an" discre$anc"4 then the L o$ening %an8 informed to the negotiating %an8 6ithin 7 Dther6ise4 the shi$$ing documents have not discre$anc"7 If the im$orter have not ade>uate funds in the %an8 account then the %an8 $a"ment to the foreign %an8 against the shi$$ing documents7
;2>8B9 EXPORT: @272; E(=#$ Bu,%'e,,
5he tota ex$ort %usiness handed %" the %an8 amounted to t87 H,) crore as of #ecem%er 1*4 3(*1 6hich is 17,+P of nationa figure7 From 3(*3 to 3(*14 ex$ort is decreasing than others $revious "ears7 /a0or ex$ort items 6ere read"made garments4 shrim$s4 tea ; non' traditiona items7 Ye*$ 3((2 3(*( 3(** 3 (*3 3 (*1
A/#u' #- E(=#$ 8c#$e %'BDT29 ,,+* +,,1 21*( HH1H H,) 5a%e& ** Ex$orts
'---)--+--$--(--%----&--*--'---
(' *--)
(& *-'-
)&'*-''
++&+ *-'*
$+% *-'&
Gra$h& ,7 *71 Ex$orts
9ere the condition of ex$ort is same to im$ort %usiness7 So %oth ex$ort and im$ort are fo6ing in the same trend7 5he a%ove gra$h sho6s the simiar $erformance in that %usiness7 Ex$ort %usiness is more im$ortant to sustain %etter foreign exchange $erformance7 Ex$ort L is issued %" a foreign %an8 favoring Bangadeshi ex$orts through our %an8s having corres$ondent reationshi$ 6ith them7 ABL $rovides different services to the ex$orter of Bangadesh7 5o get ex$ort faciit" the $art" must have foo6ing re>uirements'
• • • •
urrent de$osit -#. ER -Ex$ort registration certificate /ortgage 5IN Num%er7 Insurance $oic"7 %ac8 to %ac8' -)P of ex$ort L. ash credit'2(P in -F#B?. ?ac8ing credit -?. ' 2(P of ex$ort L
Ex$ort advance ; oan faciit" is sanctioned %" head office7 According to the $ros$ect of $art" the" ta8e the oan decision -5K7 In miions.
ontent 3(( 3((H 3((2 3(*( 3(** Ex$ort ,+31,7+ ))2(7,3 +,+)7+3 +3,(7 2)1)27,) -Source& Annua Re$ort of ABL 3(*,'3(*).
;2>27: Se$+%ce P$#+%0e0 b5 B*'. *&*%', E(=#$ LC:
A7 Advising of ex$ort L& 5he advising %an8 getting the im$ort L sent %" the issuing %an8 ocated a%road 6i advise the L to the %eneficiar" 6ithout an" engagement or res$onsi%" on their $art7 It 6i see the foo6ing on"& •
•
Authenticit" of L -5est agreed in case of 5eex L and signature verified in case air /erchandise s$ecified in the L7 is $ermissi%e and causes incor$orated in the L are not against countr"’s reguations7
B7 Add onfirmation of Ex$ort L& Ban8 ma" add additiona confirmation to ex$ort L 6here there is s$ecific instruction from the L issuing %an8 to do so7 Additiona confirmation of L gives the seer a dou%e assurance of $a"ment7 Ban8’s re>uirement of adding confirmation& i7 ii7 iii7 iv7 v7
Issuing Ban8 shoud %e a re$uted %an87 redit ine Arrangement 6ith the L issuing %an87 L cause is to %e acce$ta%e to confirming %an8 A$$rova from the com$etent authorit" for adding confirmation of ex$ort L onfirmation charges are to %e recovered as $er rues7
7 Negotiating of Ex$ort L& #ocuments $a$ers to %e su%mitted %" ex$orter to %an8 for negotiation coection against ex$ort L7 5he ex$orters su%mit the documents to %an8 as $er re>uirement of %an87 List of ex$ort documents is as foo6s& • • • • • • • •
Bi of exchange Bi of Lading ?ac8ing List ertificate of Drigin Ins$ection ertificate7 Insurance #ocument eight List An" other documents as $er L
;2>2: ERC 8E(=#$ $e&%,$*%#' ce$%-%c*e9:
Ban8 must scrutinie a the documents sti$uated in the credit 6ith reasona%e care to ascertain 6hether the" confirm 6ith the terms of the credit4 the %an8 ma" negotiate and $a" the vaue of ex$ort %i to the ex$orter at&
D# %u"ing rate -Sight #raft. !sage rate -For #A Bi. A$$ro$riate rate -For #? Bi. A7 F#B& If the ex$ort document is not $urchase %" ABL it is caed Foreign #ocumentar" Bi oection7 At the maturation data of ex$ort %i ABL coect the $a"ment for $art"7 5he coection $rocess is same as L#B7 Dn" the $ostage charge is high7 5he $ostage charge is 587 H(( 6ithin SAAR countries 6ithin Asia 587*)(( and outside Asia is 587 3(((7 B7 F#B?& If the ex$orter need mone" %efore that the maturation of ex$ort document7 9e She can sae it to ABL7 It is caed Foreign #ocumentar" Bi ?urchase7 5he ste$s of F#B? are discussed 6ith an exam$e7 Let4 5anim Enter$rise is a $art" of ABL 6ho ex$ort shirt to hina at T3(((('7 In AAA Centures Ltd7 %u"s it and their %an8 is Ban8 of hina7 5he Ste$s are as& a. ABL is receiving a L of T 3(((( from Ban8 of hina7 %. ABL inform 5anim Enter$rise a%out L7 c. 5anim Enter$rise 6hat the mone" right no67 So the" sae to ABL and get 2(P of $a"ment7 ABL gives an F#B? No7 d. hen ABL receive $a"ment from Ban8 of hina4 ABL charge 5anim Enter$rise& Interest *1P ?ostage charge -587H(( -SAAR.4 587*)(( Asia.4 587 3((( -Dutside Asia. Ex$end charge 5873)( 9anding charge 587)((7 . /DNE: BAK& After these cost is deducted from rest of *(P L amount7 5anim Enter$rise gets mone" %ac8 against their %i7 hen %i is $urchased4 ABL creates a F#B? -T3((((x2(PU*H4(((. 6i %e given to 5anim Enter$rise right no67
;2>2;: B*c. # B*c. L#c*3 LC:
In against of ex$ort L4 A BL give the facii t" to o$en %ac8 to %ac8 and oca L7 If the ex$orter ex$orts the garments $roducts as shirt4 then he has to aso $urchase the %ottom4 ogo4 tag4 "earn etc7 for the shirt7 And in this case4 if the ex$orter has not enough mone" to $urchase that4 then the %an8 6oud he$ the ex$orter to $urchase the accessories %" ien of the L7 5here are four $arties in %ac8 to %ac8 L or oca L&
Be'e-%c%*$5
A==3%c*'
B*c. # B*c. *'0 L#c*3 LHC
O=e'%'&H I,,u%'& B*'. 8ABL
Ne%*
5a%e& ?arties of Bac8 to Bac8 L or Loca L Bac8 to %ac8 L is ver" $o$uar in Bangadesh7 hat is %ac8 to %ac8 L 5o define 6e can sa" Bac8 to Bac8 is the situation 6here the end user o$ens a L in favor of the im$orters4 the im$orters than as8s his her %an8 for a com$anion L to %e issued to the su$$ier7 5herefore4 the srcina L acts as the financia %asis for the second L7 /an" %an8s do not oo8 favora%e u$on this t"$e of financing of other o$tions are avaia%e7 5he diagram sa"s that the a$$icant gives order to $urchase accessories to the %eneficiar" through Agrani Ban84 and ABL o$ens the L and sends it to the %eneficiar"Qs negotiating %an87 After receiving the ra6 materias4 a$$icant ma8es $a"ment to the negotiate %an8 through o$ening %an87 5he %eneficiar" receives the $a"ment from the negotiate %an87 5he tota $rocess of Bac8 to Bac8 L from o$ening to $urchasing is given %eo6&
.203 cie n hh 0. r rnebenefci e 1a
o!und / e r sv o t g ee h m t . !u c eo / r mw c l ee rc y u
c wu i hc r ar e ae s d eh ! e / e s c t h i p ht a h t e se v a n t m e n
5a%e& H 5ota ?rocess of Bac8 to Bac8 L from o$ening to $urchasing
;2>2@: K%'0, #- B*c. # B*c. LC:
Bac8 to Bac8 L can %e divided into the foo6ing t6o t"$es& *. Foreign Bac8 to Bac8& ABL issue or advice this 8ind of L7 It is o$ened against a master L to do %usiness a%oard7 ?a"ment is given in other countr"7 3. Loca %ac8 to %ac8 L& is o$ened against a master L to $a" the oca %usinessman 6ithin Bangadesh7 Loca L can %e divided into t6o t"$es' It is the L norma" o$en for a %an8 acce$tance7 No master L is needed7 Sometime $eo$e 6ant a %an8 guarantee7 It is one of them7 It can %e at sight and ma" %e defer7 It is used to do %usiness in Bangadesh7 It is o$ened against a master L7 ABL receive a %ig amount of $rofit from %ac8 to %ac8 L7 ABL is not a m"sterious entit"7 5he" are %usiness $eo$e 0ust i8e the im$orters ;am$ ex$orter7 5he" are in the %usiness of ending mone" for the $ur$ose of financing attractive $ro$osas7 5he suggestions the" ma8e can save considera%e ex$ense and 5im of internationa %usinessman7 ABL can 6or8 as advising %an8 or issuing %an87
;2>2<: Se$+%ce P$#+%0e b5 A&$*'% B*'. *&*%', B*c. T# B*c. LC: 79 L#B -Loca #ocumentar" Bi oection.
9 L#B? -Loca #ocumentar" ?urchased. 5hese are used in o$ened in favor of nationa’s $art"&
In %ac8 to %ac8 L foo6ing imit of oan faciities is given' • • •
2(P oan against master L is given )P can %e received o$ening %ac8 to %ac8 L Rest *)P is given 6hen %an8 receive ex$ort document7
For exam$e against T 34 ((4((( masters L4 T *4 H(4((( oan faciities is given7 T*4 )(4((( is given 6hen L is o$ened T 1(4((( is given after receiving documents7 ;2>2>: LDBC: 8L#c*3 D#cu/e'*$5 B%33 C#33ec%#'9:
Loca documentar" %i coection is a service of ABL to coect the %i of their $art" for $a"ment7 hen ABL is advising %an8 the" can coect $a"ment against the document7 hen in %ac8 to %ac8 L ABL is advising %an87 After the maturation $eriod ABL coect the" ?a"ment %" L#B7
;2>2?: STEPS IN LOCAL DOCUMENTARY BILL COLLECTION :8 LDBC9
5he $rocedure is as foo6ing& *. Ex$orter $resents the documents to ABL for coection from im$orter 6ithin 1 da"s of shi$ment7 5he document contains' a. 5rac8 recei$t7 %. ommercia invoice7 c. ?ac8ing ist7 d. #eiver" recei$t e. ountr" of origin7 3. Bi of exchange7 ABL sends the documents to issuing %an8 for coection7 1. ABL uses a controing no or L#B No7 If %ac8 to %ac8 L is not on sight the issuing %an8 6i not give the $a"ment to ABL on receiving da"7 So an acce$tance is sent to ABL4 sa"ing that the $a"ment 6i %e made after maturation $eriod7 It ma" %e 2( da"s4 *3( da"s etc7 After that the" ABL get $a"ment %" $a" order7 ,. ABL 6i send the $a" order for cearing7 ). After $a"ment is received %" ABL through cearing ABL 6i coect change and give the mone" to $art" 6hich is o$ened in favor of nationa’s $art"7 Exam$e&
harges Advicecharge ommission
587)(( 5871('587*(((
?ostage charge
587 3(
In %ac8 to %ac8 L foo6ing imit of oan faciities is given' • • •
2(P oan against master L is given )P can %e received o$ening %ac8 to %ac8 L Rest *)P is given 6hen %an8 receive ex$ort document7
For exam$e against T 34 ((4((( masters L4 T *4 H(4((( oan faciities is given7 T*4 )(4((( is given 6hen L is o$ened T 1(4((( is given after receiving documents7 Loca documentar" %i coection is a service of ABL to coect the %i of their $art" for $a"ment7 ;2>2: LDBP: 8L#c*3 D#cu/e'*$5 B%33 P*5/e'9:
hen ABL is advising %an8 the" can coect $a"ment against the document7 hen in %ac8 to %ac8 L ABL is advising %an87 After the maturation $eriod ABL coect their $a"ment7 5he $rocedure is as foo6ing& *7 Ex$orter $resents the documents to ABL for coection from im$orter 6ithin 1 da"s of shi$ment7 5he document contains the foo6ing $rocedures& a. %. c. d. e. f.
5rac8 recei$t7 ommercia invoice7 ?ac8ing ist7 #eiver" recei$t7 ountr" of origin7 Bi of exchange
37 ABL sends the documents to issuing %an8 for coection7 17 ABL uses a controing no or L#B No7 ,7 If %ac8 to %ac8 L is not on sight the issuing %an8 6i not give the $a"ment to ABL on receiving da"7 So an acce$tance is sent to ABL4 sa"ing that the $a"ment 6i %e made after maturation $eriod7 It ma" %e 2( da"s4 *3( da"s etc7 )7 After that the" ABL get $a"ment %" $a" order cearing7 +7 ABL 6i send the $a" order for $a"ment7 7 After $a"ment is received %" ABL through cearing ABL 6i coect change and give the mone" to $art"7 -harges& Advice charge 587 )((4 ommission 587 1(' 587 *(((4 ?ostage charge 587 3(. Loca documentar" %i $urchase is a great source of $rofit for ABL7 9ere 6hen the ex$ort documents comes the $art" 6ant to get $a"ment 6ithout 6aiting for the maturation date7 So ABL4 finance for that da" and charge interest7 For exam$e' at 5extie /is Ltd7 Ex$orts finished shirt to S6eden and %u" cothes from /S Sushi chemicas of Bangadesh7 9ere at 5extie /is Ltd’s %an8 is AB %an8
and /S Sushi chemicas %an8 is ABL7 So in this case the $arties invoved are as if Sushi chemicas 6ant to get $a"ment %efore the %i maturation4 ABL can $urchase the %i7 It is caed L#B?7 ;2>2: Se=, %' LDBP:
*. At first a $art" %rings a document of %ac8 to %ac8 L to ABL7 5he officer chec8s the documents7 9eshe em$hasie on 6hich contains the foo6ing& Name of t6o $arties7 • • •
3. 1.
,. ).
!S# T or other currenc" D$ening data7 Issuing %an8 sends an Oad vice of ac ce$tance’ to ABL7 ?art" ma8es foo6ing documents& a. Bi of exchange7 %. 5rac8 recei$t7 c. ommercia invoice7 d. ?ac8ing ist7 e. #eiver" chaan7 f. #eiver" recei$t7 g. ountr" of srcin7 Next $art" comes for seing the %i to ABL4 6ith a documents7 5he $art" coects the voucher and receives $a"ment rest of7 the amount 6hich 6as not $urchased %" ABL7 ABL cut the cost of $art" from it7
;2?8C9 REMMITANCE: 5he 6ord Remittance comes from the 6ord “remit= 6hich means to transmit mone" or fund7 In %an8ing terminoog"4 the 6or8 remittance means transfer of fund one $ace to another7 hen mone" transferred from one countr" to another countr" is caed Foreign Remittance -57K. in miions7 ontent Remittance
3(** 1,17H
3(*3 *(713
3(*1 *,3H7,H
3(*, 3,)3711
3(*) 1(1+7,3
ontent 3(** 3(*3 3(*1 3(*, 3(*) Ex$ort ,+31,7+ ))2(7,3 +,+)7+3 +3,(7 2)1)27,) -Source& Annua Re$ort of ABL 3(*,'3(*)
;2?27: K%'0, #- Re/%*'ce:
A 8ind of remittance comes to the head office server of ABL SIF5 is used to transfer mone"7 hen remittance comes to the head office it is sent to different %ranches for fina $a"ment7 Remittance can come ; go in foo6ing 6a"s7
• • • • • • • •
Foreign -55.7 /ai 5ransfer -/5.7 Foreign demand draft -F##.7 Im$ort $a"ment7 5raveer’s che>ue7 Ex$ort che>ue7 ash doars7 redit card -Internationa.7
;2?2: F#$e%&' Re/%*'ce:
Foreign remittance means the foreign currenc" coming into the countr" and going outside the countr"7 In6ard foreign remittance increase the countr"’s image and out6ard foreign remittance is not ver" good for countr"’s econom"7 5he $ur$ose of foreign remittance is to transfer foreign mone"7 ABL $a"s an im$ortant roe in foreign remittance transfer7 It is the first %an8 6hich has contract 6ith ES5ERN !NIDN /DNE: 5RANSFER7 ABL transfers foreign remittance to serve foo6ing $ur$ose'
•
Fami" maintenance Indenting commission Reaiation of ex$ort $rocess #onation /edica treatment Educationa $ur$ose "ssue o 11, 4T, TT etc.
•
?a"ment of ##4 /54 55 etc7
•
Issues and enhancement of traveer’s che>ue7
•
Sae and enhancement of foreign currenc" notes7
•
Non'resident accounts7
• • • • • •
ABL has achieved $ositive gro6th in remittance %usiness though remittance info6 in our countr" so6ed do6n ast "ear %ecause of continuous recession in our 6ord7 e received
foreign remittance for !S# *4+337)H miion in the "ear 3(*1 6ith a gro6th rate of *17+H $ercent out of !S# *4,3711 miion of "ear 3(*37 Li8e "ear 3(*34 aso in 3(*1 Agrani Ban8 Limited has %een secured as the first among the State D6ned ommercia Ban8s and stood second among the %an8s of Bangadesh7 Dur contri%ution to the nationa figure of remittance %usiness is **7 1 $ercent for the "ear ended on 1* #ecem%er 3(*1 and it is the highest in the ast five "ears of ABL7 ABL’s eas" %ut instant onine remittance distri%ution s"stem has ena%ed to achieve this deveo$ment in this $ortfoio7 Agrani’s contri%ution in $ers$ective of go%a achievement in foreign remittance sector is given %eo6& Ye*$
G3#b*3
ABL
C)*'&e%'Pe$ce'*&e
3((2
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7) 273* 27+( *(7( **71
5a%e& *3 Go%a Foreign Remittance of ABL '(--'---
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Gra$h& ,7 *7, Foreign Remittances
Foreign remittance 6as increasing "ear to "ear due to %etter $erformance of foreign corres$onds7 In the go%a $ers$ective4 it $ositioned %etter %ased on ast five "ears $erformances7
A&$*'% B*'. L02
F#$e%&' E(c)*'&e De=*$/e'
I/=#$ De=*$/e'
E(=#$ De=*$/e'
Re/%*'ce De=*$/e'
5a%e& , Foreign Exchange #e$artment
;2?2;: M#'e5 T$*',-e$ b5 Re/%*'ce C#/=*'5:
ABL has contact 6ith onine mone" transfer com$anies7 5he" have -)(&)(. ?rofit sharing ontracts7 5he receiver need not to an" give change to %an87 5he onine om$anies are' • • • • • • •
estern !nion7 /one" gram7 $ress mone" $a"ment7 ash ex$ress7 Ex$ress mone"7 ?oro%hu Ex$ress7 ABL >uic8 $a" etc7
estern !nion mone" transfer is ver" $o$uar in Bangadesh7 ABL is first to contract 6ith estern !nion7 As a resut in6ard remittance can come to Bangadesh in a minuet from an"6here of the 6ord7 ?eo$e can coect from an" %ranch of ABL from Bangadesh7 For it the receiver don’t need an" %an8 account 6ith ABL and the" don’t need to $a" mone"7 ith an" %ranch of ASA the $eo$e can coect mone" 6hich is ver" he$fu for viage $eo$e7 Ste$s for mone" coection& ?eo$e can send mone" from an" estern !nion agent of the 6ord7 5he" de$osit the mone" and ta8e a recei$t and /one" 5ransfer ontroing Num%er -/5N.7 5he sender informs the receiver the foo6s&
a7 %7 c7 d7
Amount of mone" Sender’s name Receiver’s name ountr"’s name
;2?2@: M#'e5 T$*',-e$ b5 E(c)*'&e H#u,e:
Agrani Ban8 Limited maintains a strong net6or8 6ith the Dverseas Exchange om$anies and Ban8s in different $arts of the 6ord ensuring %etter remittance services for its customers7 Agrani Ban8 has remittance arrangements 6ith different %an8 and exchange houses in various countries throughout the 6ord7 5he %an8 has earned the confidence and re$utation as a reia%e organiation of $a"ing hard earned mone" of the ex$ert" Bangadesh to their %eneficiaries in the countr" safe" and >uic8"7 ;2?2@ Ou*$0 Re/%*'ce
5he term VDut6ard remittance sV incude not on" remittance i7e7 sae of foreign currenc" %" 557 /54 #rafts4 5raveers he>ue4 %ut aso incudes $a"ment against im$orts into Bangadesh and oca currenc" credited to Non'resident 5a8a Accounts of foreign %an8s or onverti%e 5a8a Account7 56o forms are used for Dut6ard Remittance of foreign urrenc" such as&
I/? Form& A out6ard remittance on account of im$orts is done %" form I/?7
57/7 Form& For a other out6ard remittances from 57/7 is used7
;2?2< I'*$0 Re/%*'ce
5he termV In6ard RemittanceV incudes not on" $urchase of Foreign urrenc" %" 554 /54 #rafts etc7 %ut aso $urchases of %is4 $urchases of 5raveerQs che>ue7 56o forms as $rescri%ed %" Bangadesh Ban8 are used for $urchase of Foreign urrencies such as7 E? Form& Remittances received against ex$orts of goods from Bangadesh are done
%" form E?7 Form & In6ard remittances e>uivaent to !ST3(((' and a%ove are done %" FormV V7 9o6ever4 decaration in Form is not re>uired in case of remittances %" Bangadesh Nationas 6or8ing a%road7
So 6e can see that there are t6o t"$es of foreign remittance& M#0e #- F#$e%&' Ou*$0 Re/%*'ce
M#0e #- F#$e%&' I'*$0 Re/%*'ce
Foreign
5eegra$hic 5ransfer -55.7
/ai 5ransfer -/5.7
-F55.7 Foreign /ai 5ransfer -F/5.7
Foreign #emand #rafts -F##.7
Foreign #emand #rafts -F##.7
?a"ment Drder -?D.7
5raveers he>ue -5.7
5raveers he>ue -5.7
Foreign urrenc" Notes
Foreign urrenc" Notes7
5eegra$hic
5ransfer
5a%e& + 5"$es of Foreign Remittance
In a%road Agrani Ban8 Ltd7 o6ned exchange houses are&' • • •
Boa8a Exchange ?vt7 Ltd7 Singa$ore7 Gof over sea’s Exchange o7 LL7 Dman7 ABL /one" 5ransfer S#N4 B9# /aa"sia7
Dther %an8 and exchange house of Agrani Ban8 Limited are as foo6ing&' Seria No ; ountr" names are isted in the foo6ing& *7 Austraia Nationa Austraia Ban8 Ltd7 37 S6iterand !nited Ban8 of S 6iterand AG -!BS.7 17 German" ommerce %an8 A7G7 ,7 German" Standard hartered Ban84 G/B97 )7 Ita" !naccredited Itaian S?A7 +7 !7K Lo"ds 5SB Ban8 ?c7 7 !7K7 9SB Ban8 !K ?c7 H7 @a$an the Ban8 of 5o8"o'/itsu%ishi Ltd7 27 @a$an !nion #e Ban>uets Ara%s’ E5 FranWoise’s -!BAF.7 *(7 !7S7A Ban8 of America NA7 **7 !7S7A @?/organ hase Ban87 *37 !SA 9SB Ban8 !SA7 *17 !7S7A Standard hartered Ban87 *,7 *) !7S7A iti%an8 NA7 *)7 !7S7A iti%an8 NA7 *+7 !7S7A achovia Ban8 NA7 *7 anada Ban8 of Nova Scotia7 *H7 Singa$ore Standard hartered Ban87 *27 Bhutan Ban8 of Bhutan7 3(7 India Standard hartered Ban87 3*7 India State Ban8 of India7 337 India Sonai Ban8 Ltd7 317 India AB Ban8 Ltd7 3,7 Ne$a Ne$a Ara% Ban8 Ltd7 3)7 /"anmar /"anmar Foreign trade Ban87 3+7 ?a8istan 9SB Ban87 37 3H ?a8istan !nited Ban8 Ltd7
3H7 Sri Lan8a Standard hartered Ban8 Ltd7
Agrani Ban8 has remittance arrangements 6ith different %an8 and exchange houses in various organiation of $a"ing hard' earned mone" of the ex$ert" Bangadesh to their %eneficiaries in the countr" safe" and >uic8"7 ith the $assage of time4 ABL earned the confidence and trust of the 6age earners and successfu" handing a siea%e voume of remittances4 6hich is de$icting a gradua increasing trend7 In 3((24 foreign remittance %rought through BL 6as !S# 3,)3711 miion sho6ing an increase of !S# *(317H) miion over the $revious "ear4 6hich registered an attractive gro6th of **P $ercent7
;2 8REPORTING SYSTEM OF FOREIGN EXCHANGE9 ;227: Re=#$%'& M#'%#$%'& #- B*'&3*0e,) B*'.:
5o fu contro of foreign Exchange Bangadesh Ban84 has man" controing form and information s"stem for a commercia %an87 ABL aso has to foo6 it7 ABL has man" t"$e of re$orting form and one I5 s"stem to inform Bangadesh Ban8 a%out doar transaction7 #ecaration forms are isted in the foo6ing& *. I/? form& hen im$ort L is issued %" a %an8 or ABL4 I/? form is needed to 8ee$ a record and inform to Bangadesh Ban87 3. LA form& It is + co$ies from *st co$" are used to re$ort Bangadesh Ban87 Second co$" is to get the deiver" of $roduct7 1. I form& 5hird co$" is for form is no6 this record 8e$t %" Bangadesh Ban87 Fifth and Sixth co$" is 8e$t in foreign exchange L fie of ABL7 ,. E? Form& Ex$ form is used in ex$ort i8e I/? form is used in im$ort7 5o get Ex$ for $art" have to sho6 L and contract i8e $reformed invoice commercia invoice etc7 Ex$ form has to %e verified %" customs and then ex$orter shi$s the goods7 5/ form is used to se cash doar7 In case of cash doar is going out Bangadesh Ban8 need a re$orting /5 form7 hen remittance is coming in Bangadesh a contract form given %" ABL to Bangadesh Ban87
;22: Re=#$%'& b5 )e I'e$'e:
*7 Foreign currenc" transaction s"stem& At the month end ho6 much im$ort4 ex$ort4 foreign remittance comes and goes out is re$orted %" this soft6are $rogram7 At first the officer 6i give the $osting4 then ma8e schedue4 chec8ed %" foreign exchange head that statement is created and sent to Bangadesh Ban8 6ith different coored $ages7 5he month
end statements shoud %e su%mitted 6ithin date ) of a month4 6rong $osting is $unisha%e 6orth 587 )4 ((4((( for the Branch and 587 *(4 ((4((( for the officer7 37 L /onitoring S"stem& It is an ever"da" $rogram governed %" Bangadesh Ban87 hen L is o$ened foreign exchange officer give the $osting in a 1 ste$ L monitoring s"stem %" internet7 A the monitoring4 re$orting is governed %" Bangadesh Ban8 %ecause foreign has the $recise im$act on the econom"7
CHAPTER @ AN OVERVIE4 OF AGRANI BANK LIMITED @27 H%,#$%c*3 B*c.&$#u'0 #- )e A&$*'% B*'. L0:
Agrani Ban8 -Bengai&
. is a state'o6ned commercia %an8 of Bangadesh
esta%ished in *237 It’s head>uarter is situated at /oti0hee in #ha8a4 the ca$ita cit" of Bangadesh7 It started functioning as nationaied commercia %an8 ta8ing over assets and ia%iities of the erst6hie 9a%i% Ban8 Ltd and commerce Ban8Ltd7 function in the East ?a8istan7 It has %een $rivatied on *)th Novem%er 3(( and emerged as Agrani Ban8 Limited -ABL. ta8ing over assets4 ia%iit" and good6i of Agrani Ban87 Agrani Ban8 Limited has %een incor$orated as a ?u%ic Limited om$an" on /a" *4 3(( vide @oint Stoc8 om$anies Agrani Ban8 Limited4 a eading commercia %an8 6ith 2( outets strategica" ocated in amost a the commercia areas throughout Bangadesh4 overseas exchange houses and hundreds of overseas orres$ond ents4 came into %eing in *23 immediate" after the emergence of Bangadesh as an inde$endent state7 It started functioning as nationaied commercia %an8 ta8ing over assets and ia%iities of the interest 6hie 9a%i% Ban8 td7 and commerce Ban8 td7 functioning in the East ?a8istan7 Ag rani Ban8 Limited is governed %" the %oard of directors consisting of **-eeven. mem%ers headed %" a chairman7 5he %an8 has circe offices4 1( divisions in head office4 )3 ona offices and H+ %ranches incuding *( cor$orate and ,( A# -authoried deaer. %ranches7 5he cor$orate and A# %ranches are authoried to dea in foreign exchange %usiness7 5he authoried ca$ita of the Ban8 is 587 H((4(((4(((7 Agrani Ban8 Limited4 a eading commercia %an8 6ith H+ outets strategica" ocated in amost a the commercia areas throughout Bangadesh4 overseas Exchange 9ouses and hundreds of overseas orres$ondents4 came into %eing as a ?u%ic Limited om$an" on /a" *4 3(( 6ith a vie6 to ta8e over the %usiness4 assets4 ia%iities4 rights and o%igations of the Agrani Ban8 6hich emerged as a nationaied commercia %an8 in *23 immediate" after the emergence of Bangadesh as an inde$endent state7 Agrani Ban8 Limited started functioning as a going concern %asis through a Cendors Agreement signed %et6een the ministr" of finance4 Government of the ?eo$e ; Re$u%ic of Bangadesh on %ehaf of the former Agrani Ban8 and the Board of #irectors of Agrani Ban8 Limited on Novem%er *)4 3(( 6ith retros$ective effect from (* @u"4 3((7 Agrani Ban8 Limited is governed %" a Board of #irectors consisting of *1-thirteen. mem%ers headed %" a chairman7 5he Ban8 is headed %" the /anaging #irector ; Assistant /anaging #irector and hief Executive Dfficer7 /anaging #irector is assisted %" #e$ut"in/anaging #irectors andoffices Genera 5he incuding %an8 has *( offices4 1( #ivisions head office4 )1 ona and/anagers7 H+H %ranches 3 irce cor$orate and ,( A#- authoried deaer. %ranches7
2 Bu,%'e,, Pe$-#$/*'ce 227 A,,e, Ju*3%5
For im$roving the >uait" of our assets4 the %an8 management has $rioritied financing in trade and commerce %" $roviding 6or8ing ca$ita7 9o6ever 4 some $ragmatic ste$s have %een ta8en to reduce non'$erforming oans7 22 I/=#$6E(=#$ Bu,%'e,,
5he %an8’s foreign trade reated activities are 6e run %" our s8ied man$o6er to earn confidence of im$orters4 ex$orters and others7 For smooth conduct of internationa trade4 Agrani Ban8 Limited has as man" as ,*+ foreign corres$ondents throughout the 6ord7 22; T$e*,u$5 O=e$*%#'
As in 3(** and 3(*34 the fund management division aso $erformed as a ma0or mar8et ma8er and mar8et eader in 3(*175he good ne6s for the "ear under revie6 6as that the division achieved a remar8a%e success in $roviding a ion share to the %an8’s tota income7 5hrough $rudent treasur" o$eration4 it %ecame the %an8’s to$ $rofit centre7
2; S4IFT
5he Societ" for ord6ide Inter%an8 Financia 5eecommunication -VSIF5V. o$erates a 6ord6ide financia messaging net6or8 6hich exchanges messages %et6een %an8s and other financia institutions7 Agrani Ban8 Limited is a mem%er of SIF57 SIF5 code is AGBKB##97 #ifferent 1) %ranches of the %an8 are connected 6ith SIF5 through SA? -SIF5 Access ?oint.7 SIF5 is o$erated via dia u$ connection and receives and sends messages from centra server7 ith a vie6 to ensuring %etter services to the customers es$ecia" to the im$orters4 ex$orters and remitters4 Agrani Ban8 Limited has4 in the meantime4 set u$ *, SIF5 stations in the near future7 ustomers 6i soon %e %rought onine to meet their %an8ing needs through use of their com$uters and $hones7
2@ F%'*'c%*3 Pe$-#$/*'ce * * G3*'ce
5a8a in crore P*$%cu3*$,
77
7
7;
7@
7<
*++3H 3*,(+ **,, *+1+ 223
3(+11 3+,H) *)3 3,(3 *1*+
3)33* 1,HH3 3)2, 11(* *H3
323,1 1H3 * 1(( 3+21
1,H+H ,,,*+ 1)+, ,**1 1(,2
)1 ,,+*
*+23 +,,1
3+H 21*(
*+2+1 HH1H
*)2, H,)
))H (2 H+H3 **+H* ,2 ), 2(* 22* -Source& Annua Re$ort of ABL'3(*,'3(*). 5a%e& Financia ?erformance at a Gance
*3+) 3(3
De=#,%, T#*3 A,,e, T#*3 Eu%5 T#*3 O=e$*%'& I'c#/e T#*3 O=e$*%'& E(=e'0%u$e I/=#$ E(=#$ Re/%*'ce P*%06 u= C*=%*3
@22 B#*$0 #- D%$ec#$, #- A&$*'% B*'. L02
Board of #irectors of Agrani Ban8 Ltd -ABL. is given %eo6'
*. 3. 1. ,. ). +. . H. 2.
#r7 Kondo8ar Bau 9a>ue hairman /r7 Ran0it Kumar ha8ra%ort" #irector /r7 She8har #utta #irector /r7Nagi%u Isam #i$u #irector /r7 A%du @ahir ho6dhur" #irector /r7 K7/7N7 /an0uru 9o>ue #irector /r7 A7K7 Guam Ki%ria #irector Luna Shamsuddoha #irector /r7 S"ed Bau Karim #irector
*(. /r7 S"ed A%du 9amid /anaging #irector ; Executive Dfficer -ED.7 @2; V%,%#' #- A&$*'% B*'. L02
B" assuring satisfaction to the customers4 through a $ro$er training of its most seected grou$ of em$o"ees4 it $ans to $ursue its mission7 Aso it $ans to accom$ish its mission through the constant innovation of its $roduct ine esta%ishing constant net6or8 6ith $ros$ective cor$orate cient7 @2@ M%,,%#' A&$*'% B*'. L02
?rovide exceent >uait" customer services ?rovide ex$ert 6or8ers and $rofessionaism /aintenance of %usiness ethics Become trusted& re$ositor" -$ace 6here things are stored. of customer’s mone"
and their financia advisor7 Sound ca$ita %ase
ABL mission is to $rovide Ban8ing services to their vaued cientee 6ith utmost $roficienc" and sincerit" reinforced %" an efficient 6or8force and the atest state of technoog"
@2< O$&*'%*%#'*3 S$ucu$e #- A&$*'% B*'. 8ACCORDING TO THE LIST OF HIERARCHY OF THE ORGANIATION9
X
B#*$0 #- D%$ec#$,
X
M*'*&%'& D%$ec#$ CEO
X
De=u5 M*'*&%'& D%$ec#$,
X
Ge'e$*3 M*'*&e$,
X
De=u5 Ge'e$*3 M*'*&e$,
X
A,,%,*' Ge'e$*3 M*'*&e$,
X
Se'%#$ P$%'c%=*3 O--%ce$,
X
P$%'c%=*3 O--%ce$,
X
Se'%#$ O--%ce$,
X
O--%ce$,
X
S*-- Me/be$,
5a%e& * 9ierarch" of Agrani Ban8 Limited
@2<2 Objec%+e #- A&$*'% B*'. L0:
5o faciitate and hande a 8inds of commercia %an8ing services to its customer
authoried %" Bangadesh Ban87 5o hande the ex$ort and im$ort trade of Bangadesh7 5o ta8e $art in internationa %an8ing etc7
5he Ban8 renders commercia %an8ing services to a t"$es of customers7 5he range of services offered %" the Ban8 incudes' acce$ting de$osit4 ma8ing oans and advances4 discounting %is4 conducting domestic and internationa mone" transfers4 carr"ing out foreign Exchange transactions in addition to internationa mone" transfers4 and offering other ustomer services such as safe 8ee$ing4 coections and issuing guarantees4 acce$tances and etters of credit7 ore %usiness of the Ban8 incudes' de$osit4 mo%iiation and ending activities com$rising short' term4 ong' term4 im$ort and ex$ort financing7 Financing activities are extended to different sectors of the econom" that coud %e grou$ed in to severa sectors incuding Rura ; agricuture4 Garments ; 5exties4 @ute4 ement ; Bric8s4 5anner"4 Stee ; Engineering4 Food ; Beverage4 hemica ; ?harmaceuticas4 ?rinting ; ?ac8ing4 Gass ;am$ eramics and /isceaneous7
@2> P$#0uc, *'0 Se$+%ce, #- A&$*'% B*'. L02 De=#,%,:
urrent de$osit
F#$e%&' cu$$e'c5 Acc#u': •
ii7 Saving de$osit
iii7 Fixed de$osit
•
i7 Foreign -F. A
urrenc"
L#*' *'0 A0+*'ce:
ashredit
F#$e%&' M*$.e:
E(c)*'&e
i7?re$aration Exchange Rate
of
ii7Non'Resident Foreign urrenc"#e$osit -NF#. A
i i7Secured Dverdraft
ii7S6a$
iii7
iii7InandBi?urchase
iii75erm ?acement
iv7Ex$ort ash redit
vi7Letter of credit
v7Industria redit-I.
v7Letter of redit'Sight
vi79ousing Loan onsumer redit
vi7Bac8 to Bac8 L
Resident
Foreign
urrenc"#e$osit -NF#. A iv7 S$ecia Notice 5ime #e$osit -SN5#.
•
iv7 Ex$orters Retention Yuota -ERY. A
v7 Non' Resident S$ecia 5a8a Account -NR5A
and
5a%e& 3 ?roducts and Services of Agrani Ban8 Limited -Source& Annua Re$ort of ABL'3(*,'3(*).
5he foo6ings are the detai ist of ?roducts and Services of Agrani Ban8 Ltd& @2>27 Acc#u', De=#,%,:
Savings #e$osits and Fixed #e$osits& Fixed #e$osit Recei$t -F#R.
Savings Ban8 Account& -SBA. ' Savings Ban8 Account can %e o$ened in an" %ranch of Agrani Ban8 Limited Ban8 %" an" Bangadeshi citien in the name of an individua or a grou$ of individuas 6hich can %e o$erated sing" or 0oint"& Fixed #e$osit Recei$t& -F#R. ' D$ening a Fixed #e$osit Account for different terms 6ith an" Branch of Agrani Ban8 is ver" sim$e7 An" individua or a grou$ of individuas can ste$ in to an" Branch of Agrani Ban84 fis Dut a $rescri%ed form4 hand out over the counter cash or easi" casha%e instrument of an" amount and eave the Branch 6ith a Fixed #e$osit Recei$t7
Agrani Ban8 ?ension Sancha" scheme7 Agrani Ban8 Bishesh Sancha" scheme7
@2>2 L#*' Sc)e/e 72 Te$/ L#*' 5he Ban8 ta8es coatera against giving an" 5erm Loan to a firm7 Ban8 $refer short' term oan -i8e' current assets4 accounts receiva%e and inventor". 6hich can %e transferred in to cash much sooner than fixes assets7 2 L#*' 8Ge'e$*39 Ban8 does not ta8e an" coatera7 For a s$ecific $ur$ose this short
$eriod oans are ta8en7 Dn" a note is used %" the Ban8 6hich is signed %" the %orro6er 6here states the conditions and ength of ta8ing this oan incuding interest rate7 ;2 Secu$e0 O+e$0$*- 8SOD9 In it4 Ban8 ta8es securit" of customer’s F#R or %aance in #?S S#?S /#S S#S E#S As are mar8ed as ien7 @2 T$*',=#$ L#*' 5o %u" an" t"$e of trans$ort4 the %orro6er a$$" for this oan7 9ere4 the coatera is on" that trans$ort 6hich the %orro6er 6i %u" %" this 5rans$ort Loan7
9ouse Buiding Loan For giving this house oan the Ban8s ta8es coatera of that house’s and and %uiding7 <2 P*5/e' *&*%', D#cu/e' 8PAD9 Su$$ose customer’s documents are aright %ut im$orter is 6iing to retire the documents' In this case4 Ban8 is o%igated to $a" $rice of ex$orted goods7 Since im$orter did not $a" for %i of exchange4 this $a"ment %" %an8 is one 8ind of credit to the im$orter and this credit in %an8ing is 8no6n as ?A#7 >2 L#*' *&*%', I/=#$e0 Me$c)*'0%,e 8LIM9' Ever"thing is D7K7 %ut im$orter fais to cear goods from the $ort and re>uest %an8 to cear7
In this case4 Ban8s cear the goods and ta8es deiver" i8e same4 %" $a"ing customs dut" and saes tax etc7 So4 this ex$enditure is de%ited to the im$orter’s account and in %an8ing it is caed LI/7
?2 L#*' *&*%', T$u, Rece%=, 8LTR9 Advance -Loan. against a 5rust Recei$t o%tained from the ustomers4 6hich are ao6ed on" to the first cass tested $arties4 6hen the documents are covering an im$ort shi$ment or other goods $edged to the Ban8 as securit" are given 6ithout $a"ment7 9o6ever4 for such advances $rior $ermissionsanction from 9ead Dffice must %e o%tained7 5he customer hods the goods or their sae'$roceeds in trust for the Ban84 ti such time4 the oan ao6ed against the 5rust Recei$ts is fu" $aid off7 2 C#',u/e$ F%'*'ce Sc)e/e 5here are %ranches and finance centers under this division 6hich have >uaitative 6or8force of em$o"ees7
Some of the services $rovided %" this division are unsecured $ersona oans4 credit cards4 and vehice reated ease etc7 2 H%$e6Pu$c)*,e Sc)e/e As Ban8 ma8e their o6n investment in Government securities -i8e' Government treasur" %is4 $rie %onds4 Bangadesh Ban8 %is4 s$ecia treasur" %onds; reverses re$o. and in other investment 6hich sometime %orro6er 6ants to hire as a oan from the Ban87 5hat is 6h" this oan is 8no6n as hire of Ban8’s $urchase scheme7 72 ATM B*'.%'& ' Agrani Ban8 Ltd7 has im$emented successfu" Automated 5eer /achine7 -A5/. #EBI5 card transaction from @une 3)4 3((H7 5hrough Automated 5eer /achine -A5/. #e%it card4 customer can avai the faciities i8e 6ithdra6a mone"4 %aance in>uir" and $urchase goods7 772 SMS B*'.%'& ' Agrani Ban8 Ltd7 has officia" aunched S/S %an8ing service from #ecem%er 3(**7 72 L#c.e$, ' For safe8ee$ing of customer’s vaua%es i8e im$ortant documents and goods i8e 0e6eries and god ornaments4 ABL Loc8er Service is avaia%e in most of the Branches in ur%an areas7 5heir nature of service is i8e custod" of oc8er safe and nature of charge is i8e rent7 7;2 E0uc*%#' Re/%*'ce Students 6ho are desirous -6ishing or 6anting. to stud" a%road for them this Ban8 is giving education remittance service7 In this service4 this Ban8 assures their remittance of funds in a%road for stud"7
@2? B*'. O=e$*%#'*3 A$e* #- ABL:
@2 Ac)%e+e/e', M%3e,#'e, #- ABL: •
5"$e& ?u%ic Limited om$an"
• • • • • • •
• •
Industr"& Ban8ing Financia services Founded& /arch 3+4 *23 9ead>uarters& #i8usha commercia area4 #ha8a4 Bangadesh Area served& Bangadesh Ke" $eo$e& #r7 Khondo8er Bau 9o>ue -hairman. ?roducts& Finance and Insurance4 onsumer Ban8ing4 or$orate Ban8ing4 Investment Ban8ing7 Net income& 5873+,7+ chore -!ST 1H71) miion. 3(** Em$o"ees& *,43+2 @227: C#//%/e', #- A&$*'% B*'. L0:
*. In arr"ing Durseves at or8& D%,c%=3%'e: 9onest" ; Integrit"4 Sincerit" C$e*%+%5: In Serving the Ban8& L#5*35: 5ota commitment ; dedication Exceence through team6or8 3. In Serving ustomers& ustomer first Yuait" focuses redi%iit" ; secrec"7etc7 • •
@22: C#$e V*3ue, #- A&$*'% B*'. L%/%e0 Integrit"
7pen communication
5eam6or8
C#$e V*3ue, 0erormance driven
Yuait" ontinuous sef Im$rovement
ABL’s core vaues consist of + eements7 5hese vaues %ind our $eo$e together 6ith an em$hasis that our $eo$e are essentia to ever"thing %eing done in the Ban87 • • •
ABL $rotects and safeguards a customer information7 ABL treats ever"one in an e>uita%e and consistent manner7 ABL creates an environment4 6hich earns and maintains customer trust7
D$en ommunication& • • •
ABL %uids customer reationshi$s %ased on integrit" and res$ect7 ABL offers a fu ine of $roducts and exceent service7 ABL is committed to the $ros$erit" of the customers and sharehoders7
?erformance #riven& •
In ABL4 customers and em$o"ees are 0udged in terms of their $erformance7
ontinuous Sef Im$rovement& •
ontinuous earning4 sef' chaenge and ma8e 6a"s for sef im$rovement of
•
6or8force at Agrani Ban8 Limited7 ABL offers hasse free %etter service time"7
• •
ABL %uids'u$ assets in the $ortfoio7 Interaction4 o$en communication4 and maintaining a $ositive attitude refect ABL’s commitment to a su$$ortive environment %ased on team6or87 @22;: O)e$ Fe*u$e, *'0 V*3ue,
72 C$e0% /*'*&e/e':
ABL has aread" ado$ted the redit ris8 management Guideines issued %" the Bangadesh Ban8 for im$roving the ris8 management cuture4 esta%ishing minimum
standards for segregation of duties and res$onsi%iities4 and $romoting the ongoing $rocess for im$rovement of the Ban8ing Sector in Bangadesh in the context of go%aiation7 5his $uts in $ace a ro%ust $rocess for $roactive management of oan $ortfoios in order to minimie Loss and enhance return to sharehoders7 5he Ban8 has introduced credit $oic" guideines for R/7 2 Hu/*' Re,#u$ce, D%+%,%#':
In ABL has a se$arate 9uman Resources #ivision -9R#. to manage the em$o"ee $oicies and $ractices7 In 3(** tota human resources strength of ABL 6as *,43(27 Ban8 foo6s a standardied human resources $oic"7 5he Ban8 has defined 9R $oicies incuding recruitment4 training ; deveo$ment4 $romotion4 eave4 transfer4 and disci$inar" action $oic"7 !sua" interna recruitment $rocedures are considered to fi u$ the mid and to$ management $ositions4 6hie entr"'eve $ositions are fied 6ith reguar" through com$etitive recruitment exams7 5he Ban8 esta%ished fu" e>ui$$ed training centre7 ;2 C#$=#$*e G#+e$'*'ce:
5o assess Ban8’s cor$orate governance $ractices RAB evauates the >uait" of financia re$orting and discosures4 strength of interna contro s"stem and interna audit function induction of $rofessiona" com$etent4 inde$endent non'executive directors on cor$orate Board4 formation of audit committee deegation of $o6er to executives and staff $rotection of sharehoder rights etc7 ABL has addressed most of the issues of cor$orate governance for strengthening organiationa strength7 But the Ban8 has not "et a$$ointed inde$endent director 6hich is re>uired %" SE7
@2 L%, #- B$*'c)e, #- A&$*'% B*'. L02
5here are tota 23* %ranches of Agrani Ban8 Limited situated in +, districts in Bangadesh7 :ou ma" %ro6se the %ranches %" districts or $ic8 "our near%" %ranch direct" from the ist %eo67 Foo6ing ta%e of a Agrani Ban8 %ranches 6i he$ "ou to have an" $articuar %ranch address 6ith ocation4 tee$hone num%er4 routing num%er4 SIF5 code and other reated information7 ic8ing an" district names 6i $rovide "ou another ist of %ranches in that $articuar district and so on an" %ranch names 6i sho6 "ou tota %ranch information direct"7 e have arranged the ist first" %" district names and second" %" %ranch names a$ha%etica"7 @27 C*=%*3 *'0 Re,e$+e, #- A&$*'% B*'. L02 @272< I'+e,/e'
5he %an8 has a6a"s given em$hasis on high "ieding investments and maintains Statutor" Li>uidit" Re>uirement -SLR. as fixed %" Bangadesh Ban87 5he investment ma" %e Govt7 securities or Non'govt7 securities7 5he investment $ortfoio of the %an8 at
the end of the "ear 3(*1 stood at 587 *,42237H+ crore as against 587 243,* 72H crore in the $revious "ear4 registering a gro6th of +3733 $ercent7 5he $ortfoio of investment of the %an8 as on 1* #ecem%er 3(*1 is sho6n %eo6& 5a%e& *1 5"$es of Investment T5=e,
7@
7<
G#+2 ,ecu$%%e,
*3H3)73,
**H7*
N#'6G#+2 ,ecu$%%e, T#*3
3*+7+3 *,2237H+
3*317H* 23,*72H
9ere %oth govt7 and non'govt7 securities 6ere increasing from one "ear to another "ear7 5he more investment can sho6 %etter contri%ution in SLR7 Ye*$
A/#u' #- I'+e,/e' 8%' c$#$e9
3(**
,(2)
3(*3
,3+,
3(*1
H1+
3(*,
23,3
3(*)
*,221 5a%e& *, Investments
'(--'--'*--'---+--(---)% --*--*-''
'))&
+&$(
)**
*(
*-'*
*-'&
*-'
*-'%
Gra$h& ,7*7) Investment
5he $revious five "ears of investment sho6 the u$6ard so$ing and this investment do %etter %usiness $erformance7 So the overa $ortfoio of investment can do the most $erformance7 @22 F%'*'c%*3 Pe$-#$/*'ce A'*35,%,
@227 O=e$*%'& I'c#/e
5he o$erating income of the %an8 stood to t87 ,**1 crore as on #ecem%er4 3(*)7 5he o$erating income of the %an8 is increasing from "ear to "ear com$ared to $revious five "ears7 In 3(*,4 tota o$erating income 6as 1(( crore7 Net o$erating income invoves in tota o$erating income7
5a8a in crore Ye*$
77
7
7;
7@
7<
O=e$*%'& I'c#/e
*+1+
3,(3
11(*
1((
,**1
5a%e& *) D$erating Income
))* &-)
'&'( *-'' *-'* '+*$ *()&
*-'& *-' *-'%
Gra$h& ,7 373 D$erating Ex$enditure From the a%ove gra$h4 6e can see that the tota o$erating ex$enditure is increasing in ever" "ear7 5his increasing situation continues in ine 6ith o$erating income7 So this resut 6oud assist to increase the o$erating $riofit of ABL7
@27 P$#-%*b%3%5 P#,%%#' #- A&$*'% B*'. -#$ 3*, < 5e*$, 4%) G$*=)%c*3 P$e,e'*%#' 877 7 7; 7@ 7<9
*7 a$ita Sur$us increased to 587 1 chore in 3(*( from deficit of 587 + chore in 3(**7 37 assified Loan reduced to 587 341, chore in 3(*( from 587 34),2 chore in 3(*37 17 ?aid'u$ ca$ita increased to 587 ,2 chore in 3(*( from 587 3,H chore in 3(*17 ,7 Net Interest /argin -NI/. im$roved %" (71*P in 3(*( to (71P in 3(*,7 )7 a$ita Ade>uac" Ratio increased from 27*+P in 3(*( to *(7H(P in 3(*)7 +7 Li>uidit" ratios increased significant"7 urrent ratio increased from (7)*P in 3(** to *71+P in 3(*)7
&--*%-*--'%-'--8eries '
%--
/olumn'
-
3(**
3(*3
3(*,
3(*)
-Figure *7* ?rofita%iit" ?osition of Agrani Ban8 imited at a gance since 3(*). -According 5o the Annua Re$ort of ABL 3(*,4 3(*).
9ere o$erating income is gro6ing ever" "ear7 A gra$h on o$erating income is $resented in
%eo6'
%--
''&
--&%-&--*%-*--'%-'--%--
'(&( *--)
*-* *-'-
&&-' *-''
&$-*-'*
*-'&
From the a%ove gra$h4 I can see tota o$erating income is increasing in ever" "ear7 5his increasing situation continues in ine 6ith o$erating $rofit7 So this resut 6oud assist to increase the net o$erating $rofit of ABL7
@22 O=e$*%'& E(=e'0%u$e
An ex$endi ture that a %usiness incur s as a resut of norma %usine ss o$erations a chaenge faced %" a com$an"Qs management is to determine ho6 much o$erating ex$enses can %e reduced 6ithout significant" affecting the firmQs a%iit" to com$ete 6ith its com$etitors7 5he o$erating ex$enditure of the %an8 stood at t87 1(,2 crore in 3(*1 as against t87 3+21 crore in 3(*37 It indicates an increase of *1733 P over the ast "ear7 5his ex$enditure can rise due to increasing staff $a"ment in ine 6ith the govt7 $oic" and ne6 recruitment of officers7 O=e$*%'& E(=e'0%u$e
3(** 3(*3 3(*1 3(*, 3(*)
@22; O=e$*%'& P$#-%
223 *1*+ *H3 3+21 1(2,
5he %an8’s tota o$erating $rofit %efore amortiation4 $rovision and tax stood at 587 *4(+1721 crore in 3(*175he o$erating $rofit 6as increasing from 3((2 to 3(**4 %ut it decreased more in 3(*3 and some6hat it rose in 3(*1 com$aring 6ith 3(*37 Ye*$ 3((2 3(*( 3(**
T#*3O=e$*%'&P$#-% 8%'c$#$e9 +,, *(H+ *,,
3(*3 3(*1
*(( *(+, 5a%e& * 5ota D$erating ?rofits
Operating Proft *--'%-'--%--
( *-''
'-+( *-'*
'$. *-'&
'--$ *-'
Gra$h& ,7371 D$erating ?rofit
@27; T#*3 A,,e, P#,%%#' #- A&$*'% B*'. -#$ )e 3*, < 5e*$, %) G$*=)%c*3 =$e,e'*%#' 877 7 7; 7@ 7<9
'*----
'-----
+----
(----
----
*----
*-''
*-'*
*-'&
*-'
*-'%
@2; I/=*c #' G3#b*3 Ec#'#/5 #- F#$e%&' E(c)*'&e Pe$-#$/*'ce
Econom" of Bangadesh is in the grou$ of 6ord’s most underdeveo$ed economi es7 Dne of the reasons ma" %e its underdeveo$ed %an8ing s"stem7 Government as 6e as different internationa organiations have aso identified that underdeveo$ed %an8ing s"stem causes some o%staces to the $rocess of economic deveo$ment7 Foreign exchange identifies the $rocess of converting domestic currenc" into internationa %an8notes at $articuar exchange rates7 5hese transactions $resent distinct ramifications for the go%a econom"7 Foreign exchange rates affect internationa trade4 ca$ita fo6s and $oitica sentiment7 5he ex$ort $osition of Bangadesh has reached in a ver" strong $osition during 3(*('*) 6here ex$ort gro6th increased %" ,*7, $ercent as com$ared to the $revious "ear7 5he ex$ort earnings of Bangadesh stood at !S# *24(, miion 6hich 6as *(73( $ercent higher than the ex$ort earnings in 3(*)7 Significant contri%utions of 8nit6ear and read"made garments 6ere sti continuing to increase the ex$ort earnings of Bangadesh7
Sector of ex$ort earnings in F: 3(*,'*)
?etroeumGoods
E(=#$ E*$'%'&, %'c$e*,e0 3,7*(P
5ea
Foot6ear
*27,(P
Froenfoods
Sec#$,
0ute Goods
*)7( P
eather
*)7((P
9andicraftGoods
*,7+(P
Read"made Garments
*17H( P
Engineering ?roducts
H72( P
8nit6ear
H7,(P
eramic ?roducts
+7H( P
E(=#$ E*$'%'&, Dec$e*,e0
Sec#$,
,37(P *+73(P
hemica goods Ra60utegoods
*,7+( P
*17,(P
Agricuture goods
**7*( P
5a%e& *H Sector earnings of ex$ort As $er countr" 6ise ex$ort o%servation4 !SA is the main ex$ort $roduct mar8et of Bangadesh and !SA sustained the to$ $osition among the im$orting goods of Bangadesh during the F:3(*3'*17 #uring this $eriod4 Bangadesh ex$orted !ST 142)37, miion in !SA4 6hich 6as 3(7(+ $ercent of tota ex$ort7 Aft er !SA4 Euro$ean !nion 8e$t the second $osition in ex$orting goods of Bangadesh4 the" are& German" -*,7) $ercent.4 !K -*(7,3 $ercent. and France -)71 $ercent.7
@2; I/=*c #' G3#b*3 Ec#'#/5 #- F#$e%&' E(c)*'&e Pe$-#$/*'ce
Econom" of Bangadesh is in the grou$ of 6ord’s most underdeveo$ed economi es7 Dne of the reasons ma" %e its underdeveo$ed %an8ing s"stem7 Government as 6e as different internationa organiations have aso identified that underdeveo$ed %an8ing s"stem causes some o%staces to the $rocess of economic deveo$ment7 Foreign exchange identifies the $rocess of converting domestic currenc" into internationa %an8notes at $articuar exchange rates7 5hese transactions $resent distinct ramifications for the go%a econom"7 Foreign exchange rates affect internationa trade4 ca$ita fo6s and $oitica sentiment7 5he ex$ort $osition of Bangadesh has reached in a ver" strong $osition during 3(*('** 6here ex$ort gro6th increased %" ,*7, $ercent as com$ared to the $revious "ear7 5he ex$ort earnings of Bangadesh stood at !S# *24(, miion 6hich 6as *(73( $ercent higher than the ex$ort earnings in 3(**7 Significant contri%utions of 8nit6ear and read"made garments 6ere sti continuing to increase the ex$ort earnings of Bangadesh7 Sector of ex$ort earnings in F: 3(*,'*)
?etroeumGoods
E(=#$ E*$'%'&, %'c$e*,e0 3,7*(P
5ea
Foot6ear
*27,(P
Froenfoods
Sec#$,
0ute Goods
*)7( P
eather
*)7((P
9andicraftGoods
*,7+(P
Read"made Garments
*17H( P
Engineering ?roducts
H72( P
8nit6ear
H7,(P
eramic ?roducts
+7H( P
E(=#$ E*$'%'&, Dec$e*,e0
Sec#$,
,37(P *+73(P
hemica goods Ra60utegoods Agricuture goods
*,7+( P
*17,(P **7*( P
5a%e& *H Sector earnings of ex$ort As $er countr" 6ise ex$ort o%servation4 !SA is the main ex$ort $roduct mar8et of Bangadesh and !SA sustained the to$ $osition among the im$orting goods of Bangadesh during the F:3(*3'*17 #uring this $eriod4 Bangadesh ex$orted !ST 142)37, miion in !SA4 6hich 6as 3(7(+ $ercent of tota ex$ort7 Aft er !SA4 Euro$ean !nion 8e$t the second $osition in ex$orting goods of Bangadesh4 the" are& German" -*,7) $ercent.4 !K -*(7,3 $ercent. and France -)71 $ercent.7
Export Earnings increased 0etroleumgoods
handicrat goods
2ootwear $6 $6
%6
''6 :eadymade garments '*6 '*6
/eramic products
9utegoods
leather
')6
'%6products 3ngineering '*6
knitwear
5he tota im$ort $a"ment stood at !ST 3+42,,7)( miion %" increasing **733 $ercent during F:3(**'*37 Im$ort gro6th so6ed do6n recent" as im$ort of unim$ortant goods 6as discouraged7 ountr" 6ise Im$ort Goods C#u'$%e, hina India /aa"sia
?ercentage Pe$ce'#u#-T#*3I/=#$e0G##0, *H72H P *17H) P +7*) P 5a%e& *2 5ota Im$orted Goods
ountr" 6ise im$ort goods ana"sis sho6s that4 hina stands at first $osition in terms of im$ort goods7 *H72H $ercent out of tota im$ort has %een im$orted from hina7 Second and third $ositions are India *17H) $ercent and /aa"sia +7*) $ercent res$ect ive"7 Ana"ing the categor" of im$orted goods4 it is o%served that4 im$ort $a"ment of ca$ita machiner"4 industria ra6 materias decreased %" 1H7) $ercent4 1)7)3 $ercent res$ective" and the ma0or im$ort $a"ment of consumer goods decreased %" 1+73 $ercent7 5he remittances $a"ed a vita roe in ex$editing economic deveo$ment of the countr" incuding reducing unem$o"ment $ro%em4 $overt" aeviation4 %oosting u$ the foreign currenc" reserve7 5he ion share of the foreign remittance comes from the countries of /idde East7 In this regard4 Saudi Ara%i a has %een in to$ $osition for the ast cou$e of "ears7 :et4 recent"4 the info6 of remittance has increased from /aa"sia4 Singa$ore4 !K4 and some other countries7 5o ex$ore ne6 man$o6er ex$ort mar8ets4 the government has underta8en severa ste$s through di$omatic initiatives aongside esta%ishing ne6 a%or 6ings in severa countries7 5here is aso an attem$t to im$art training on various trades to create s8ied a%or force to meet the demand of a%or mar8ets a%road7
5he amount of remittances %" the Bangadeshi ex$atriates in F: 3(*('** 6as *(7)) $ercent to the tota G#? and )(7+, $ercent of tota ex$ort earnings 6hich 6as increased %" **7** $ercent of tota G#? and )3723 $ercent of tota ex$ort earnings7 5he amount of remittances received %" Bangadesh in F:3(*3'*1 6as 27)( $ercent of tota G#?7
@27@ T#*3 L%*b%3%5 S)*$e)#30e$ eu%5 P#,%%#' #- A&$*'% B*'. L02-#$ 3*, < 5e*$, 4%) G$*=)%c*3 P$e,e'*%#' 877 7 7; 7@ 7<9
harges Advice charge ommission ?ostage charge
ontent Remittance
3(** 1,17H
587 )(( 5871('587*((( 587 3(
3(*3 *(713
3(*1 *,3H7,H
3(*, 3,)3711
3(*) 1(1+7,3
&%-&--*%-*--/olumn* '%-'--%-*-''
*-'*
*-'&
*-'
*-'%
@27 Bu,%'e,, Pe$-#$/*'ce A'*35,%, # -%'0 #u #*3 3%*b%3%5: 5his 6i he$ to find out the toata ia%iit" and sharehoder4s e>uit" $osition of the %an8
from the %eo6 ana"sis& @2727 De=#,%,
5ota de$osit of the %an8 as on 1* #ecem%er4 3(*1 is t871,H+7)3 ore 6hich sho6s an increase of t87 323,3723 core over that of the $revious "ear7 5he rate increase in de$osit 6as *273,P7 5ota de$osit com$rises demand de$osit t87 *32,7+ crore and time de$osit t873*H23723 core7 5he t"$es of de$osits are $resented in the foo6ing ta%e sho6n in the next $age&
Ye*$
7
77
7
7;
De=#,%,
*++3H
3(+11
3)33*
323,1
1,H+H
5a%e& 2 #e$osits
---&%--&---*%---
*-(&&
*---'%--'---%---
'((*+ *--)
*-'-
*%**' *-''
*)*& *-'*
&+(+ *-'&
Gra$h& ,7*7* #e$osits
9ere tota de$osits are increasing from "ear to "ear7 So I can sa" that overa function of de$osit coection is %etter7 In the $revaiing situation4 mo%iiation of de$osits %ecame high" com$etitive and hence cost of fund 6oud increase com$ared to the $revious "ear7
CHAPTER6< AN FOCUS ON DIFFERENT KINDS OF FOREIGN EXCHANGE OPERATIONS UNDERTAKEN BY AGRANI BANK LIMITED Le*$'%'&, )$#u&) *,.:
#uring m" three months $eriod of internee I have earnt a%out different foreign exchange o$erations 6hich are carried out %" ABL7A short focus area of m" earning is highighted %eo6& <27 De-%'%%#' #- F#$e%&' E(c)*'&e:
Foreign exchange is a $rocess 6hich converts one nationa currenc" into another and transfer mone" from one countr" to other countries7 According to /r7 97 E7 Evit4’’ Foreign exchange is that section of economic science 6hich deas 6ith the means and method %" 6hich right to 6eath in one countr"’s currenc" are converted into right to 6eath in term of another countr"’s currenc"7 It invoves the investigation of the method %" 6hich the currenc" of one countr" is exchanged for that of another4 the cause 6hich rented such exchange necessar"7
<2 C#'e', F#$e%&' E(c)*'&e Acc#u', #- ABL: <227 N#,$# Acc#u'
Nostro account means “our account 6ith "ou=7 A nostro account is a foreign currenc" account of Agrani Ban8 maintained %" its foreign corres$ondents a%road7 <22 V#,$# Acc#u'
Costro account means “"our account 6ith us=7 5he account maintained 6ith foreign corres$ondent in Agrani Ban8 of a $articuar countr" is 8no6n as vostro account7 <2;2; L#$# Acc#u' Loro account means “their account 6ith "ou=7 Account maintained %" third $art" is 8no6n as Loro account7 <2;2772 Se$+%ce P$#+%0e0 b5 A&$*'% B*'. *&*%', E(=#$ LC <2;2@ F#$e%&' E(c)*'&e Se$+%ce,
D# %u"ing rate -Sight #raft. !sage rate -For #A Bi. A$$ro$riate rate -For #? Bi.
I2FDBC: If the ex$ort document is not $urchase %" ABL4 it is caed foreign documentar" %i coection7 At the maturation data of ex$ort %i4 ABL coects the $a"ment for $art"7 5he coection $rocess is same as L#B7 Dn" the $ostage charge is high7 5he $ostage charge is 587 H(( 6ithin SAAR countries 6ithin Asia 587*)(( and outside Asia is 587 3(((7
II2 FDBP: If the ex$orter need mone" %efore that the maturation of ex$ort document7 9e She can sae it to ABL7 It is caed foreign documentar" %i $urchase7
A detai section of Foreign Exchange o$erations of agrani %an8 is $rovided in the ater $art of the re$ort7
<2; Objec%+e, #- F#$e%&' E(c)*'&e:
ABL is rendering various 8inds of services in internationa transaction of their cients7 Some are descri%ed %eo6& <2;2< L C O=e'%'&:
Bangadesh is main" an im$ort oriented countr"7 So4 L is a ver" im$ortant im$ort document 6hich is issued %" ABL7 In internationa mar8et4 t6o $arties are not 8no6n to each other7 5he im$orters of Bangadesh give an L to ex$orters of foreign countr" to give the assurance of $a"ment7 ABL is o$ening L in favor of their cients7 <2;2>2 E(=#$ P$#ce,,%'&:
hen ex$orters’ foreign document comes to ABL4 ABL coects $a"ment from foreign %an8 for its $art"7 ABL $urchase %i if their $art" 6i need ear" cash7 <2;2?2 A0+%,%'& #- E(=#$ LC:
5he advising %an8 getting the im$ort L sent %" the issuing %an8 ocated a%road 6i advise the L to the %eneficiar" 6ithout an" engagement or res$onsi%iit" on their $art7 It 6i see the foo6ing on"&
Issuing %an8 shoud %e a re$uted %an87 redit ine Arrangement 6ith the L issuing %an87 L cause is to %e acce$ta%e to confirming %an87 A$$rova from the com$etent authorit" for adding confirmation of ex$ort L onfirmation charges are to %e recovered as $er rues7
<2;2 Ne%*%'& #- E(=#$ LC:
#ocuments $a$ers to %e su%mitted %" ex$orter to %an8 for negotiation coection against ex$ort L7 5he ex$orters su%mit the documents to %an8 as $er re>uirement of %an87 Agrani Ban8 must scrutinie a the documents sti$uated in the credit 6ith
reasona%e care to ascertain 6hether the" confirm 6ith the terms of the credit4 the %an8 ma" negotiate and $a" the vaue of ex$ort %i to the ex$orter7
<2;2 L#*' -*c%3%%e,:
Loan faciit" is given to cients to he$ in foreign exchange7 #ifferent t"$es of oan faciities are ' -i. -ii. L5R -iii. LI/ -iv. Sanction of L7 <2;272 D#33*$ ,*3e *'0 =u$c)*,e:
ABL ses doar against $ass$ort7 5he rate of exchange is given %" Bangadesh Ban8 6hich is changed ever" da"7
2< P$#ce,, #- F#$e%&' E(c)*'&e O=e$*%#', #- A&$*'% B*'.:
Foreign exchange means foreign currenc" and incudes a de$osits7 Foreign trade can %e easi" defined as a %usiness activit"4 6hich transcends nationa %oundaries7 Foreign trade can usua" %e 0ustified on the $rinci$e of com$arative advantage7 It is economic
$rofita%e for a countr" to s$eciaied in the $roduction of that commodit" in 6hich the $roducers has the greater com$arative advantage and to ao6 the other countr" to $roduce that commodit" in 6hich it has the esser com$arative advantage7 In order to conduct foreign exchange o$eration s"stematica" and methodica" the Foreign Exchange Reguation -FER. Act4 *2, enacted on the **th march *2, for reguating recei$ts and $a"ments and deaings in the foreign exchange and securities7 Basic reguations for conducting foreign exchange o$eration are issued %" the Government as 6e as %" the Bangadesh Ban87
<2< O+e$*33 #- F#$e%&' E(c)*'&e O=e$*%#', u'0e$*.e' b5 A&$*'% B*'.:
<2> F#$e%&' E(c)*'&e O=e$*%#', #- A&$*'% B*'. -#$ )e 3*, < Ye*$, 87777;7@7<9
<2> T#*3 F#$e%&' E(c)*'&e ,c)e/e * *&3*'ce:
CHAPTER6> ANALYSIS AND FINDINGS >272 A'*35,%, $e3*e0 %) F#$e%&' E(c)*'&e O=e$*%#', #- A&$*'% B*'.:
>22 S4OT ANALYSIS FINDING: “S4OT” Ana"sis is the detaied strateg" of an organiation’s ex$osure and $otentia in $ers$ective of its strength4 6ea8ness4 o$$ortunit" and threat7 5his ana"sis used the organiation to ma8e their existing ine of $erformance aso foresee the future to im$rove their $erformance in com$arison to their com$etitors7
B" S4OT Ana"sis4 an organiation can aso o%serve their current $osition7 It can aso %e considered as an im$ortant too for ma8ing changes in the strategic management of the Drganiation7 5he acron"m S4OT stands for& o o o o
Strengths ea8nesses D$$ortunities and' 5hreats7
S4OT is an acron"m for the interna strength and 6ea8ness of a firm and the environmenta D$$ortunities the firm is facing7 So if 6e consider Agrani Ban8 as a %usiness firm and ana"e its strength4 6ea8ness4 o$$ortunit" and threat the scenario 6i
%e as foo6s& 72 S$e'&),: • • • • • •
Energetic as 6e as smart team 6or8 Good /anagement Lending rate is reative" com$etitive oo$eration 6ith each other /em%ershi$ 6ith SIF5 Good %an8er'customer reationshi$
• • • • • • •
Strong Financia ?osition Strong $osition in A/EL rating 9uge %usiness area Service charges are com$arative" reasona%e7 Strong cor$orate identit" :oung enthusiastic 6or8force Em$o6ered or8 force
2 4e*.'e,,e,: • • • • • • • • • • •
Lac8 of $ro$er motivation4 training and 0o% rotation7 Lac8 of ex$erienced em$o"ees in 0unior eve management7 Lac8 of o6n A5/ services7 5endenc" to eave the %an8 in >uest of fexi%e environment7 Lac8 of $roficient man$o6er in some de$artment7 Limited advertising and $u%icit" of %an8’s $roducts and activities7 A%sence of strong mar8eting activities7 #iversification77 Dutdated Soft6are and 9ard6are at ABL 9at8hoa Branch7 Dffice environment is not good as $rivate %an8 environment7 9igh charges of L7
;2 O==#$u'%%e,: • • • • • •
hange in $oitica environment7 Launching o6n A5/ card services7 Ex$ansion of %an8ing services into other different services7 Ex$ansion %ranches of onine7 Ex$erienced /anagers7 Gro6th of saes voume7
@2 T)$e*,: • • • • • • • • • • •
!$coming Ban8sBranches7 #ifferent services of FB’S -?hone Ban8ing9ome Ban8ing.7 Simiar $roducts are offered %" other %an8s7 #efaut Loans7 Financia risis7 Existing card services of Standard hartered Ban8 or other $rivate Ban87 #ai" %asis interest on de$osit offered %" 9SB7 Entrance of ne6 ?B’s7 Government has %een controing industria credit7 Recession of go%a econom"7 Intensification of com$etition in the industr"7
>227: BCG GRO4TH MATRIX
V5he conce$t of BGQs gro6th'share matrix4 centra no6 a da" to %usiness schoosQ curricuum on strateg" 777 $rovided com$anies 6ith a disci$ined and s"stematic too for $ortfoio management4V /artin tod Business Ne6s #ai"7 VRecent"4 9arvard Business Revie6 named BGQs matrix one of five Qframe6or8s that changed the 6ord7QV U'0e$,*'0%'& )e /*$%(:
In order to understand the financia $osition and 6hich $roduct is in 6hich $osition of Agrani Ban8 6e can cacuate and determine 6ith the he$ of this ?ortfoio 8no6n as BG Gro6th /atrix& 5o create a BG matrix4 %usinesses gather mar8et'share and gro6th'rate data on their %usiness units or $roducts7 Dne arge s>uare is dra6n and is divided into four e>ua >uadrants7 Aong the to$ of the %ox4 a mar8et share or cash generation is 6ritten4 and a gro6th rate or cash use is 6ritten do6n the eft side7 Dn the to$ eft is high mar8et share4 and o6 mar8et share is on the eft7 Dn the eft'hand side4 high cash use is at the to$ and o6 cash use or gro6th rate is at the %ottom7 ithin the diagram4 VstarsV go in the u$$er'eft >uadrant4 and V>uestion mar8sV are $ut in the u$$er'right s>uare7 At the %ottom4 Vcash co6sV go on the eft4 and VdogsV are $aced on the right7 5he diagram visua" sho6s that stars have high mar8et share and a high gro6th rate4 6hie >uestion mar8s have o6 mar8et share and a high gro6th rate7 Dn the %ottom4 cash co6s have a o6 gro6th rate %ut a high mar8et share4 and dogs have a o6 mar8et share and a o6 gro6th rate7
Gra$h& BG Gro6th /atrix
5he foo6ing ideas a$$" to each >uadrant of the matrix& S*$,: 5he %usiness units or $roducts that have the %est mar8et share and generate the most cash are considered stars7 /ono$oies and first'to'mar8et $roducts are fre>uent" termed stars7 9o6ever4 %ecause of their high gro6th rate4 stars aso consume arge amounts of cash7 5his genera" resuts in the same amount of mone" coming in that is going out7 Stars can eventua" %ecome cash co6s if the" sustain their success unti a time 6hen the mar8et gro6th rate decines7 om$anies are advised to invest in stars7 C*,) c#,: ash co6s are the eaders in the mar8et$ace and generate more cash than the" consume7 5hese are %usiness units or $roducts that have a high mar8et share4 %ut o6 gro6th $ros$ects7 According to Net /BA4 cash co6s $rovide the cash re>uired to turn >uestion mar8s into mar8et eaders4 to cover the administrative costs of the com$an"4 to fund research and deveo$ment4 to service the cor$orate de%t4 and to $a" dividends to sharehoders7 om$anies are advised to invest in cash co6s to maintain the current eve of $roductivit"4 or to Vmi8V the gains $assive"7 D#&,: Aso 8no6n as $ets4 dogs are units or $roducts that have %oth a o6 mar8et share and a o6 gro6th rate7 5he" fre>uent" %rea8 even4 neither earning nor consuming a great dea of cash7 #ogs are genera" considered cash tra$s %ecause %usinesses have mone" tied u$ in them4 even though the" are %ringing %ac8 %asica" nothing in return7 5hese %usiness units are $rime candidates for divestiture7 Jue,%#' /*$.,: 5hese $arts of a %usiness have high gro6th $ros$ects %ut a o6 mar8et share7 5he" are consuming a ot of cash %ut are %ringing itte in return7 In the end4 >uestion mar8s4 aso 8no6n as $ro%em chidren4 ose mone"7 9o6ever4 since these
%usiness units are gro6ing ra$id"4 the" do have the $otentia to turn into stars7 om$anies are advised to invest in >uestion mar8s if the $roduct has $otentia for gro6th4 or to se if it does not7 As BG founder Bruce 9enderson 6rote in *2+H4 Va $roducts eventua" %ecome either cash co6s or $ets Jdogs7 5he vaue of a $roduct is com$ete" de$endent u$on o%taining a eading share of its mar8et %efore the gro6th so6s7V Dnce a com$an" $ots out its matrix4 it can %egin to further ana"e its $roducts’ $otentia7 U'0e$,*'0%'& c*,) -3#:
5o understand the eements of the Agrani Ban8 Ltd74 com$anies shoud %e mindfu of the sources of cash fo67 9enderson 6rote that four rues are res$onsi%e for $roduct cash fo6& •
•
•
•
/argins and cash generated are a function of mar8et share7 9igh margins and high mar8et share go together7 Gro6th re>uires cash in$ut to finance added assets7 5he added cash re>uired to hod share is a function of gro6th rates7 9igh mar8et share must %e earned or %ought7 Bu"ing mar8et share re>uires an additiona increment or investment7 No $roduct mar8et can gro6 indefinite"7 5he $a"off from gro6th must come 6hen the gro6th so6s4 or it never 6i7 5he $a"off is cash that cannot %e reinvested in that $roduct7
>22: R*%# A'*35,%,
F%&u$e67 Cu$$e' R*%#: 5he current ratio is a i>uidit" ratio that measures a com$an"Qs a%iit" to $a" short'term and ong'term o%igations7 5o gauge this a%iit"4 the current ratio considers the current tota assets of a com$an" -%oth i>uid and ii>uid. reative to that com$an"’s current tota ia%iities7 5he formua for cacuating a com$an"’s current ratio4 then4 is& urrent Ratio U urrent Assets urrent Lia%iities 5he current ratio is caed “current= %ecause4 uni8e some other i>uidit" ratios4 it incor$orates a current assets and ia%iities7 5he current ratio is aso 8no6n as the 6or8ing ca$ita ratio7
Inter$retation& 9ere current ratio is (7***+1 in 3((24 (7*(31 in 3((H4 and (7(H2,3 in 3((7But the Industr" average is ,7* x s7 So it is the $oor $erformance of Agrani Ban87
F%&u$e6 F%(e0 A,,e Tu$'#+e$: 5he fixed'asset turnover ratio is4 in genera4 used %" ana"sts to measure o$erating $erformance7 It is a ratio of net saes to fixed assets7 5his ratio s$ecifica" measures ho6 a%e a com$an" is to generate net saes from fixed'asset investments4 name" $ro$ert"4 $ant and e>ui$ment -??;E.4 net of de$reciation7 In a genera sense4 a higher fixed'asset turnover ratio indicates that a com$an" has more effective" utiied investment in fixed assets to generate revenue7 5he fixed'asset turnover ratio is cacuated as&
Inter$retation& 9ere fixed asset turnover ratio is )71 in 3((24 )H7(3 in 3((H and ),7+H in 3((7 5he industr" average is ,7( xs so it is the high $erformance of agrani %an8
F%&u$e6; T#*3 A,,e Tu$'#+e$: 5ota Asset turnover ratio is the ratio of the vaue of a com$an"’s saes or revenues generated reative to the vaue of its assets7 5he Asset 5urnover ratio can often %e used as an indicator of the efficienc" 6ith 6hich a com$an" is de$o"ing its assets in generating revenue7 5his Ratio is cacuated %"' A,,e Tu$'#+e$ S*3e, #$ Re+e'ue, T#*3 A,,e,
Inter$retation& 9ere tota asset turnover is (7H in 3((24 (7H in 3((H4 and (73 in 3((7And the industr" average is 37* xs so the $erformance of this sector is o67
F%&u$e6@ A financia ratio that measures the extent of a com$an" or consumers everage7 5he de%t ratio is defined as the ratio of tota ong'term and short'term de%t to tota assets4 ex$ressed as a decima or $ercentage7 It can %e inter$reted as the $ro$ortion of a com$an"’s assets that are financed %" de%t7
Aso referred to as the de%t'to'asset ratio7
Inter$retation& 9ere #e%t Ratio is *7H in 3((24 *72 in 3((H4 and *7H( in 3((7 9ere de%t ratio is decrease in 3((27And it under controed7 Because the industr" average is ,7)( $ercent7
F%&u$e6< T%/e, %'e$e, E*$'e0 5imes interest earned -5IE. is a metric used to measure a com$an"Qs a%iit" to meet its de%t o%igations7 ta8ing $a"a%e a com$an"Qs earnings %efore interest and taxes -EBI5.5he and formua dividingisit cacuated %" the tota%"interest on %onds and other contractua de%t7 5IE indicates ho6 man" times a com$an" can cover its interest charges on a $retax earnings %asis7 BREAKING DO4N QT%/e, I'e$e, E*$'e0 6 TIEQ Faiing to meet these o%igations coud force a com$an" into %an8ru$tc"7 5IE is aso referred to as the interest coverage ratio7
-Amount in chore ta8a. Inter$retation& In times interest earned the" earned ,32171 in 3((24 ,33( in 3((H7 And 1)(+7+ in 3((75heir time interest earned increase ever" "ear7 So here there $erformance is >uite satisfied7
F%&u$e6> P$#-% M*$&%' R*%#: ?rofit margin is $art of a categor" of $rofita%iit" ratios cacuated as net income divided %" revenue4 or net $rofits divided %" saes7 Net income or net $rofit ma" %e determined %" su%tracting a of a com$an"’s ex$enses4 incuding o$erating costs4 materia costs -incuding ra6 materias. and tax costs4 from its tota revenue7 ?rofit margins are ex$ressed as a $ercentage and4 in effect4 measure ho6 much out of ever" doar of saes a com$an" actua" 8ee$s in earnings7 A 3(P $rofit margin4 then4 means the com$an" has a net income of T(73( for each doar of tota revenue earned7 hie there are a fe6 different 8inds of $rofit margins4 incuding “gross $rofit margin4= “o$erating margin4= -or Vo$erating $rofit marginV. “$retax $rofit margin= and “net margin= -or Vnet $rofit marginV. the term “$rofit margin= is aso often used sim$" to refer to net margin7 5he method of cacuating $rofit margin 6hen the term is used in this 6a" can %e re$resented 6ith the foo6ing formua&
?rofit /argin U Net Income Net Saes -revenue.
Inter$retation& In 3((2 there $rofit margin 6as 17) $ercent4 ,71*$ercent in 3((H4 and 17H+ $ercent in 3((7In three "ears their $rofit margin on de$osits 6as higher in 3((H %ut the industr" average is ,7 $ercent so here their $erformance is o67
F%&u$e6? Reu$' #' A,,e,: Return on assets -RDA. is an indicator of ho6 $rofita%e a com$an" is reative to its tota assets7 RDA gives an idea as to ho6 efficient management is at using its assets to generate earnings7 acuated %" dividing a com$an"Qs annua earnings %" its tota assets4 RDA is dis$a"ed as a $ercentage7 Sometimes this is referred to as Vreturn on investmentV7 5he formua for return on assets -RDA. is&
Inter$retation& 9ere Return on tota asset for Agrani Ban8 6as 17(, $ercent in 3((24 171 $ercent in3((H4 37H3 $ercent in3((7 So in 3((H there $erformance is high7 5he industr" average is *37+P7 5he $erformance is o87 If their return on tota asset is higher than *37+P so there $erformance is o67
F%&u$e6 MARKETBOOK: 5he %oo8'to'mar8et ratio is a ratio used to find the vaue of a com$an" %" com$aring the %oo8 vaue of a firm to its mar8et vaue7 Boo8 vaue is cacuated %" oo8ing at the firmQs historica cost4 or accounting vaue7 /ar8et vaue is determined in the stoc8 mar8et
through its mar8et ca$itaiation7 Formua&
Inter$retation& 9ere a sma dif ferent in 3((2 and 3((H7 3((H and 3(( 6as some rati o7 9ere the industr" average is 37(xs7 So in this section the $erforma nce of ABL 6as o67 5his ratio is smaer than the industr" average7
F%'*'c%*3 R*%#,: *7 L%u%0%5 $*%#,6 A i>uid asset is one that can %e easi" converted to cash 6ithout significant oss of its srcina vaue7 urrent Ratio' • 5he ratio is cacuated %" dividing current assets %" current ia%iities7 urrent ratioUcurrent assets current ia%iities
F%(e0 A,,e Tu$'#+e$ 37 A,,e M*'*&e/e'6 A set of ratios that measure ho6 effective" a firm is managing its assets7 Fixed asset turnover' 5he ratio of saes to net fixed assets7 •
5ota de$osits net fixed assets
•
5ota assets turnover ratio' 5he ratio cacuated %" dividing tota de$osits %" tota assets 5ota de$osits tota assets
17 Deb /*'*&e/e'6 #e%t ratio Uthe ratio of tota de%t divided %" tota assets7 •
#e%t ratio U tota de%t tota assets •
5imes interest earning ratioU Earnings %efore income tax divided %" interest charges7
,7 P$#-%*b%3%5 A grou$ of ratios sho6ing the effect of i>uidit"4 asset management and de%t management on o$erating resuts7 •
?rofit margin of saesU Net income divided %" tota de$osits
•
Return on the tota assetU net income divided %" the tota assets
)7 M*$.e V*3ue6A set of ratio that reates the earning and %oo8 vaue $er share7
firm’s stoc8 $rice to its
?riceEarningU /ar8et $rice $er share divided %" earning $er share /ar8etBoo8U /ar8et $rice $er share divided %" Boo8 vaue $er share7
•
•
De*%3, A'*35,%, -%'0%'&, Pe$#$/*'ce A'*35,%, #- A&$*'% B*'. L%/%e0
-Am ount in
%'*'c%*3 $*%#
crore ta8a. 3( (2
Industr" Average
omment
L%u% 0%5
*7urrent ratioUcurrent assetscurrent
3((H
(7**
,7*x
Lo6
(7*
Industr" average comme nt
,7*x
Lo6
3((
(7(H
Industr" Average com men t ,7*x
Lo6
ia%iities
A,,e M*'*&e/e'
*7fixed assets turnoverU5ota de$ositsNet fixed assets
)71
,7(x
9igh
)H7(3
,7(x
9igh
),7H(
,7(x
9igh
375ota assets turnoverUtota de$ositstota assets
(7H
37*x
Lo6
(7H
37*x
Lo6
(73
37*x
Lo6
Deb M*'*&e/e'
*7#e %t ratio
5otad e%ttot a assets
*7H
,7)(P
9igh o8
*72
,7)( P
9igh D8
*7H(
,7)( P
high o8
(7(1H
,7(P
Lo6
(7(,1
,7( P
Lo6
(7(1H
,7( P
Lo6
(7(1(
*37+(P
Lo6
(7(1
*37+ (P
Lo6
(7(3H
*37+ (P
Lo6
9igh
*,73+-
*17(
9igh
,*7H,-t
*17(
9igh
P$#-% /*$&%' #' 0e=#,%,
*7?rofita%iit" margin on de$ositsUNet incomede$osit s 37Return on tota assetUNet incometota asset
M*$ .e V*3u e
*7?riceEarnin
(7H,-ta
gsU/ar8et $rice $er shareearnings 37/ar8etBoo8 U/ar8et $rice $er shareBoo8 vaue
8a. *7(*3
*17(x
37(x
o8
ta8a.
x
o8
a8a.
x
o8
Lo6
*7(*1
37(x
Lo6
*7(*1
37(x
Lo6
-9ere x means time. -Industr" average rate is coected from Essentia of Financia /anagement %oo87.
>2;: F%'0%'&, *'0 D%,cu,,%#': Fund risis& ABL have not enough fund7 5he" have man" de$osits offers i8es AB#S de$osits4 a s$ecia de$osits is /IS7 ABL gives the /IS de$osits hoders *(P interest in ever" month7 As *(P of interest rate4 if an" account hoders de$osit *(4((((( 57K7 than ABL 6i give him *( thousand ta8a month"7 And the" have man" /IS hoders7 So the" thin8 that it is the main reason of crisis of fund4 and the" face shortage of fund7 5he share mar8et vaue is Biased decision regardingBan87 oans&Genera In oan $eo$e section face the" man" have not maintain the oan rues%ut andthe reguation of Bangadesh $ro%ems to get officias get the oan easi"7 Some officias do $oitics so their reatives get oan easi"7 So it creates man" $ro%ems for fund7 Cioations of reguations& 5he" do not foo6 the rues and reguations4 some officers are a%sence in t6o or three da"s in a 6ee87 It creates %ad effect to other em$o"ee7 ?oor management and 0o% cuture& ABL have a %ig $ro%em i8e recent" he" add onine s"stem %ut some %ranches have not this s"stem7 5he" have manua s"stem4 so man" $eo$e cannot i8e this %an8 %ecause in Bangadesh there are man" $rivate %an8 and the"
have onine s"stem7 It is the $oor management s"stem of ABL7 In I5 section the" have no I5 manager so I5 $erformance is ver" $oor4 man" em$o"ee have no s8i a%out I5 section7 So this is the reason that $eo$e cannot o$en account in ABL7
CHAPTER6?: Rec#//e'0*%#', *'0 C#'c3u,%#': ?27 Rec#//e'0*%#': B" identif"ing fe6 of the $revious" mentioned $ro%ems during m" internshi$4 from the SD5 ana"sis and Ratio ana"sis I 6oud i8e to recommend some 6a" to overcome those $ro%ems7 5hese are as foo6s& 7*7* Dn cearing ; ceaning u$ the oca remittance sections&
ABL shoud ma8e a data%ase to maintain their registr" records in to the om$uter7 So %" on" giving a Osearch’ command the" ma" find out their re>uired cearing information7
ABL shoud o$en their %ranches in the %usiness area i8e near E?Z4 $ort etc to
$rovide $rom$t services to im$orter and ex$orter7 Loca L is not introduced in our societ" ver" much7 ABL can give attention to
attract oca %usinessman for convincing them a%out oca L7 here com$uter eads ever" s$here of ives incuding %an8ing activities most of
the ABL’s em$o"ees are sti not ex$ert on com$uter iterac"7 So for it4 the management
shoud give com$uter training to their em$o"ees7
5he" ma" ma8e a data%ase or search for other soution to $re$are their de%it and credit voucher7 As %" ado$ting a %etter soution 6i ma8e their 6or8 easier7 ?rom$t attention shoud %e given to the F#R customers if the %an8 does not 6ant to ose ne6 customers7
7*73
Recommendations %" ana"ing different ratios& In ratio ana"sis the %an8 indicates some $oor and some good $erformance 7So ABL shoud im$rove some sectors to overcome some $oor situation7 5he" shoud im$rove their fund and >uait" management to get ride for some $oor $erformance situation7 5he" shoud im$rove their fund %" utiiing their mone"7 Li8e the" offer some scam and the" give oan in high interest rate -house oans.7 5he" shoud change some rues of scam i8e /IS7 5he" motivate $eo$e %" their ne6 scam7 5he" shoud maintain and foo6 some rues and reguation of oans of Bangadesh Ban875he" 5he"give givean" the8ind S/E theand $eo$e for6ho motivates $eo$e7 of tooan the"for ta8eo6 careinterest of the rate cient ta8es the oan7 5he" shoud im$rove their >uait" management i8e I5 s"stem7 5he" must train this $eo$e 6ho have no 8no6edge a%out I5 or onine s"stem the" change the manua s"stem and give onine s"stem in a %ranches7 5he" shoud recruit some $eo$e in I5 sectors7 5he" aso avoid $oitics7 5he" must foo6 the rues and reguations7 So the" overcome this situation7
7*71 Some recommendati ons on enhancing foreign exchange $erformance %" faciitating Im$ort Ex$ort sectors are mentioned in %eo6&
Since the im$ort'ex$ort %usiness have the highest contri%ution to the $rofita%iit" of the %an84 it shoud ta8e s$ecia attention7
S8ied man$o6er in the ine of im$ort'ex$ort %usiness must %e accom$ished through $ro$er training4 remuneration and 0o% satisfaction7
?erformance measurement $rograms can %e introduced to measure the $erformance of the officers invoved in foreign exchange $rocess7
Agrani Ban8 shoud a6a"s monitor the $erformance of its com$etitors in the fied of
foreign trade7 For customerQs convenience in Foreign Exchange #e$artment of Agrani Ban8 Ltd7
shoud $rovide more $ersonne to deiver faster services to their honora%e customer7 5o deiver >uait" service4 to$ management shoud tr" to mitigate the ga$ %et6een
customerQs ex$ectation and em$o"eeQs $erce$tion7 5he num%er of ex$orter and im$orter 6ho o$erate through this %an8 is not enough to achieve the goa7 So ABL shoud offer more faciities to attract them to %e their cient7
Foreign exchange de$artment shoud %e fu" com$uteried that the exchange $rocess 6oud %e convenient for %oth the %an8ers and the cients7 5he Ban8 shoud give more concentration of foreign remittance to increase $rofit from
the remittance7 5hough the remittance $erformance of ABL for the ast "ear -3(*3. 6as ver" %ad so the $erformance and $rofit shoud increase "ear %" "ear7 5hough the im$ort and ex$ort %usiness increased "ear %" "ear4 %ut the %an8’s income
gro6th rate ver" much fuctuated during the ast five "ears exce$t "ear of 3(*37 So the %an8 shoud tr" to sustain a constant gro6th rate7 5he ex$ort %usiness of the %an8 is on an increasing trend7 So the %an8 shoud tr" to
8ee$ the $ace of gro6th7 Ban8 shoud tr" to increase earning from ex$ort7 It shoud concentrate more effort to
im$rove ex$ort earnings and remittance earnings for our econom"7 5he im$ort $erformance is itte %it o6er in the "ear of 3(*3 com$ared to others "ears4
so the %an8 shoud tr" to $ut more concentration for the amount of im$ort7 5he ex$ort earnings gro6th rate and im$ort earning gro6th rate 6ere ver" much fuctuated during the ast five "ears7 So %an8 shoud tr" to 8ee$ a constant gro6th rate7 5he num%er of human resources in the remittance de$artment is rea" insufficient to give services to huge voume of 6or87 So4 num%er of staff shoud %e increased in this de$artment7
?2 C#'c3u,%#': Agrani Ban8 Limited is a eading ?u%ic %an8 in Bangadesh 6ith su$erior customer %ases that are o"a4 faithfu4 6orth" to6ards the %an87 5he service $rovided %" the "oung energetic officias of the Agrani Ban8 Limited is ver" satisfactor"7 Form the earning and ex$erience $oint of vie6 I can sa" that I rea" en0o"ed m" internshi$ $eriod in Agrani Ban8 Ltd7 at @ati"a @adughar Branch from the ver" first da"7 I am confident that this 1
-three. months internshi $ $rogram 6i definite" he$ me to reaie m" further carrier in the 0o% mar8et7 #uring the course of m" $ractica orientation4 I have tried to earn the $ractica %an8ing to reate it 6ith m" theoretica 8no6edge4 6hat I have gathered and going to ac>uire from various courses7 /an" ne6 commercia %an8s have %een esta%ished in the ast fe6 "ears and these %an8s have made the %an8ing sector ver" com$etitive7 So4 no6 the %an8s have to organie their o$eration and do their o$erations according to the need of the mar8et7 5he ma0or tas8 for %an8s4 to survive in this com$etitive environment is %" managing its assets and ia%iities in an efficient 6a"7 As an internee student of Agrani Ban8 Ltd at 9at8hoa Branch4 I have tru" en0o"ed m" internshi$ from the side of earning to the side of ex$eriences vie6$oint7 I am confident that three month internshi$ $rogram in Agrani Ban8 Limited 6i definite" he$ me to reaie career in the 0o% mar8et7 But during m" intern $eriod it 6as not much $ossi%e for me to go to the de$th of %ranches’ sections thorough" %ecause of the time imitations7 Agrani Ban8 Limited -ABL. is one of the 6ide" ex$anded Ban8s in Bangadesh7 #ue to the threat of de$osit shortage4 this Ban8 ma" minimie its different t"$es of unnecessar" ex$enditure and shoud maximie $rofit through aunching ne6 schemes and o%tain different $eo$e’s %eief7 I do aso %eieve that a of these 6i assist me further in m" career %uid'u$ in the future7 ABL is committed to $rovide high >uait" financia service to contri%ute to the gro6th of G7#7?7 of the countr" through simuation trade and commerce4 acceerating the $ace of industriaiation4 %oosting u$ ex$ort4 creating em$o"ment o$$ortunit" for the educated "outh4 $overt" aeviation4 raising standard of iving of imited income grou$ and overa sustaina%e socio'economic deveo$ment of the countr"7 I aso thin8 that there is %right future 6aiting for the Agrani Ban8 Ltd7 Near future ABL 6i %e a $osition to go as a cata"st for this deveo$ment in the %an8ing sector of Bangadesh7 Another thing I have to mention here that ABL is going through the $ath in 6hich the" need to go as i8e toda" and it 6i %ring more ne6 and 6efare oriented activities in the %an8ing sector in "ears to come7 ?erformance ana"sis of foreign exchange of a %an8 is not so sufficient to measure and ex$ress $erfect" 6ithin this short time of m" internshi$ $eriod7 But it is a great o$$ortunit" for me to get used to 6ith the o$erationa environment of foreign exchange %usiness of ABL7 I have tried %" sou to incor$orate the necessar" reevant information in m" re$ort7 At ast I 6oud i8e to concude that as a student of BBA I had to underta8e this training $rogram to fufi the $artia re>uirement of the BBA $rogram7 I have tried to the %est of m" ca$acit" to $re$are and su%mit this re$ort 6ithin a ver" short $eriod of time7 I am high" $eased %eing a%e to ma8e a re$ort on this 8ind of $rogram7 If there is an" 8ind of error 8ind consideration is re>uested7
B%b3%#&$*=)%e, *'0 Re-e$e'ce,:
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