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1.1 Background of the Study
Internship is an imperative part of BBA course. It is considered as an interface between academic knowledge and practical field. This report is prepared as a requirement for the completion of the BBA Program conducted by the Department of BBA, Major in Finance & Banking in International Islamic University Chittagong. I have completed my Internship Program for my academic curriculum purposes. The sole aim of the Internship Program is to blend our academic knowledge with that of practical ones and give us an insight into the management of organization in real life situations. As a part of practical orientation program, I was attached to Dutch-Bangla Bank, Agrabad Branch for three months.
Banking industry in Bangladesh Bangladesh
The report comprises of the organizational overview, operation of Banking in the different section as Foreign Trade/Exchange. In Foreign Exchange, Letter of Credit issuing decision is also related to allow credit facility to the client. And to regulate the bank, Bangladesh Bank provided sectional policy guideline for different department of the bank. As core are of concentration of this study was Foreign Exchange Division.
This internship experience also lends a hand me to guess industry, and economy at the time of investment and performance analysis. Surely beyond any doubt, it enriches my knowledge and promotes me experience.
1.2 Objective of the Study
Any work has one or more objectives. So the main objective of the study is to know,
Explicit Objective:
o To earn practical knowledge and experience on Foreign Exchange
Division of a commercial bank.
o To satisfy the partial requirement of the internship program as a
course of the B.B.A program.
Implicit Objective:
o To know about the functions of Foreign exchange department of
DBBL.
o To know about import and export procedures.
o To know about foreign remittance.
o To analyze performance of Import & Export of DBBL.
o To recognize barriers related with foreign exchange operations of
the banks.
o To give some suggestions to overcome the problems.
1.3 Methodology of the Study
The study contains a huge amount of data information. In preparing this report, I had to follow several methods to collect information. This report is carried out depending upon both primary and secondary data.
Data Collection:
A) Primary data- At first I have gathered primary data from the bankers’ statements, through personal interview, observation, banks preliminary affairs.
B) Secondary data- To collect secondary data I have used annual report, personal judgment, voucher, article, journal, website of DBBL, Flexcube and so on.
To make this report I have selected my architecture. According to architecture, I installed information in the following manner:
Architecture:
After generating data I designed the obtained information according to both descriptive and casual manner. To represent the DBBL based on obtained information, I have used required table, chart, picture, graph and so on. Last of all, it is designed in several sections of foreign exchange.
1.4 Scope of the Study
Banking is the ocean of activities. But in my little time, I have tried to work in the general banking in specific category, and in foreign exchange section. Because without concept of general banking other activities i.e. foreign trade and credit is difficult to understand. Dutch-Bangla Bank limited is the modern & advanced banker who provides online banking. They provide banking services through integrated banking software which support all types of banking activities. It encouraged me to understand the DBBL Information System.
The scope to obtain a clear idea about Foreign Exchange business of commercial banking operation, i.e. how the L/C is opened and how the import and export are done. Area and issued covered by this report include meaning of foreign exchange, functions of foreign exchange department of DBBL, document required in foreign exchange, types of letter of credit, import and export operation, types and function of foreign exchange remittance, and last of all performance of DBBL in foreign exchange.
1.5 Limitation of the Study
Every human being has some limitations. As a creature of Allah (swt), I have also some limitation of this study. I tried my level best to make it perfect. . Inspired of having the wholehearted effort, there exit some limitations, which acted as a barrier to conduct the program. The limitations were ---
- Some data could not been collected for confidentiality or secrecy of the management.
- The branch has no option to fix up the exchange rate of foreign currency against BDT, so the study is unable to cover the exchange rate fix up in import purpose.
- It is very much difficult to collect data from Bank because of strategic purpose.
- The branch too much dependable on head office for L/C opening approval.
- The branch is so busier to do their works especially Foreign Exchange Division; sometimes it might be time constraint.
- Only 12 weeks are not sufficient to visit all the desks in the branch. So some desks were remained unvisited. Time provided for conducting this study is another important constraint.
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2.1 DBBL Concern
“DUTCH-BANGLA BANK LIMITED”
“THE TRUSTED PARTNER OF THE CUSTOMERS”
The brand name ‘Your Trusted Partner’ associated with DBBL’s day-to-day operation. Dutch-Bangla Bank Limited establish this philosophy in their dealings with their customers, and offer them products and services that assure them to the essences of a relationship of partnership based on trust and confidences, and upholding and maintaining mutuality of interests. Leaving its competitors behind, DBBL has been able to make steady progress in terms of business growth, earning the confidence of its customers and above all creating a long listing image of your bank in all the spheres of the society. The bank is involved in all areas of commercial banking operations, comprising of trade finance, term finance, working capital finance and recently added lease and real estate finance in its operation. It also participates in syndicate finance to a number of large projects.
2.2 History of DBBL
Dutch-Bangla Bank started operation is Bangladesh June 03, 1996 .
From the onset, the focus of the bank has been financing high-growth manufacturing industries in Bangladesh Bangladesh Bangladesh
DBBL was the first bank in Bangladesh
Even with a history of hefty technological investments and an even larger donations, consumer and investor confidence has never waned. Dutch-Bangla Bank stock set the record for the highest share price in the Dhaka Stock Exchange in 2008.
Starting with one Branch in 1996, DBBL has expanded to seventy nine branches & about 700 ATM Booths .To provide client services all over Bangladesh it has established a wide correspondent banking relationship with a number of local banks. To facilitate international trade transactions, it has arranged correspondent relationship with large number of international banks that are active across the globe.
2.3 Vision Statement
Dutch-Bangla Bank dreams of better Bangladesh
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2.3 Mission Statement
Dutch-Bangla Bank engineers enterprise and creativity in business and industry with a commitment to social responsibility. “Profits alone” do not hold a central focus in the Bank’s operation; because “man does not live by bread and butter alone.
2.4 Core Objectives
Dutch-Bangla Bank believes in its uncompromising commitment to fulfill its customer needs and satisfaction and to become their first choice in banking. Taking cue from its pool esteemed clientele, Dutch-Bangla Bank intends to pave the way for a new era in banking that upholds and epitomizes its vaunted marques "YOUR TRUSTED PARTNER”
2.5 Board of Directors
1. Mr. Abedur Rashid Khan, Chairman
2. Mr. Zaheed Hossain Khan, Director
3. Mr. Bernhard Frey, Director
4. Mr. Sayem Ahmed, Director
5. Mr. Md.
6. Dr. Irshad Kamal Khan, Independent Director
7. Dr. Syed Fakhrul Ameen, Director from the Depositors
8. Mr. Chowdhury M. Ashraf Hossain, Director from the Depositors
9. Mr. Md.
2.6 Organizational Structure of DBBL
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2.7 Products of the DBBL
Banking Product
—Deposit-
Savings Deposit Account
Current Deposit Account
Short Term Deposit Account
Resident Foreign Currency Deposit
Foreign Currency Deposit
Convertible Taka Account
Non-Convertible Taka Account
Exporter's FC Deposit (FBPAR)
Current Deposit Account-Bank
Short Term Deposit Account-Bank
Short Term Deposit Account
Resident Foreign Currency Deposit
Foreign Currency Deposit
Convertible Taka Account
Non-Convertible Taka Account
Exporter's FC Deposit (FBPAR)
Current Deposit Account-Bank
Short Term Deposit Account-Bank
— Loan & Advances-
Life Line (a complete series of personnel credit facility)
Loan against Trust Receipt
Transport Loan
Real Estate Loan (Res. & Comm.)
Loan against Accepted Bill
Industrial Term Loan
Agricultural Term Loan
Lease Finance
FMO Local currency Loan for SME
FMO Foreign currency Loan
Cash Credit (Hypothecation) Small Shop Financing Scheme
Cash Credit (Hypothecation) Small Shop Financing Scheme
Overdraft
Retail Banking Products
(DBBL Future Line)
Card Products
DBBL ATM Service
DBBL-NEXUS Classic Card (debit)
DBBL-NEXUS Maestro card (debit)
DBBL-NEXUS VISA Electron card (debit)
DBBL-NEXUS Silver OD card (credit)
DBBL-NEXUS Gold OD card (credit)
IT Products
Account Summary
Account Details
Account Activity
Transfer Funds
Third Party Transfer
Pay Bills
Standing Instructions
Open/Modify Term Deposit
Loan Repayments
Statement Request
Cheque Book Request
Cheque Status Inquiry
Stop Payment Cheque
Interest Rate Inquiry
Foreign Exchange Rate Inquiry
Refill Pre-Paid Card
Change Password
Extra Features for Corporate Customer
Letter of Credit
Bank Guarantee
Limits Query
2.8 Economic contribution report
Savings, investments, employment generation, productions, distribution and consumptions are essential part of any economic system. The Bank being a financial intermediary plays a significant role in this process by mobilizing savings & other resources, allocating such resources to productive investments, local & international trades and consumptions. In the process the Bank is directly or indirectly accelerating economic activities & growth. By offering its unique products & services the Bank is engaged in maximizing savings, investments, productions, trading, employment, consumptions etc. to maximize economic growth and welfare of the society. Therefore, banking company is holding a key position in economic and social development of a country.
The Bank is a corporate citizen. It can not act on its own without its stakeholders. The stakeholders as a whole help, direct and monitor the Bank to perform its operations in an effective way to create and maximize value for the economy and society.
Shareholders provide the vital equity capital, depositors & lenders put their money in the Bank, borrowers take the credits for production, trading or consumptions, employees put their services to serve the customers, and government, Bangladesh Bank and Securities and Exchange Commission provide legal & regulatory framework, infrastructure, economic & business environment etc to ensure smooth operations of banking activities with transparency and accountability.
With the support & resources from various stakeholders, DBBL conducts its businesses to provide services to the customers and society at large and in the process creates and maximizes value for all its stakeholders in a fair, transparent and ethical way. Maximization of profit can not be the only objective of the Bank, rather maximizing benefits & value for all stakeholders in a fair and balanced way thereby maximizing welfare of the economy & society as a whole is the objective of DBBL.
However, profit is also important to give satisfactory returns to all the stakeholders and to ensure sustainable operations, growth and long term solvency of the Bank which in turns enable the Bank to contribute in a greater way to the economy & society.
As DBBL is dependent on its stakeholders to continue its operation and wealth creation activities, therefore, wealth created by the Bank is also distributed to its various stakeholders. Shareholders get dividends, depositors get interest, employees receive salaries and government gets tax, VAT etc.
2.9 Highlights
2.10 Five Years at a Glance
2.11 Financial Highlights
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3.1 Foreign Exchange
The term Foreign Exchange has different connotations in different contexts. Sometimes it is referred to as the process of conversion of one currency into another, sometimes as the process of transferring money from one country to another. In Bangladesh
No country is self sufficient in this world. Everyone is more or less dependent on another, for goods or services.
Foreign exchange is the process of conversion of one currency into another. The term ‘Foreign Exchange’ has three principal meanings:
- It is a term used referring to the currencies of other countries in terms of any single one currency. To a Bangladeshi Taka, Dollar, Pound Sterling etc. are foreign currencies and as such foreign exchange.
- The term also commonly refers to some instruments used in international trade, such as bill of exchange, drafts, travelers’ cheque and etc.
- The term foreign exchange is also quite often referred to the balance in foreign currencies held by a country.
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Sources: International Trade Finance - Journal, (Page - 30)
Bangladesh Institute of Bank Management
3.3 Function of Foreign Exchange Department
The performance of foreign exchange can be classified into three distinct factors. They are as follows:
Foreign Trade: It is an integral part of foreign exchange. It refers business performed by the buyer and seller participating from different country holds distinctive cultural values, normative beliefs and ideology. Some country has special advantage to produce certain items while other country possesses dearth of facility. Bangladesh Bangladesh Bangladesh
Foreign Trade includes:
PImport - To bring in, from abroad, something in kind of goods or services (to behave lawfully) is import.
PExport – Export means law fully carrying out of anything from one country to another country for sale.
Foreign Remittance: Foreign remittance refers that the exchange of money between two countries or among several countries.
3.4 Local regulation of Foreign Exchange
In Bangladesh
- Foreign exchange regulation (FER) Act, 1947 (Act No. VII of 1947) enacted on 11th March, 1947 in British India provides the legal basis for regulating certain payment, dealing in FE and securities and import and export of currency and bullion. This Act was first adapted in
- Bangladesh Bank issues Foreign exchange circular from time to time to control the export, import and remittance business.
- Ministry of commerce issues export and import policy giving basic formalities for import and export business.
- Sometime Chief Control of Import & Export (CCI&E) issues public notice for any kind of change in foreign exchange transaction.
- Bangladesh bank published two volumes in 1996. This is compilation of the instruction to be followed by the authorised dealers in transitions relation to foreign exchange.
- Bangladesh Bank has published a book “Guideline for Foreign Exchange Transaction (Volume-VI)” to regulate foreign exchange. It is amended after every five years. And the volumes include instructions as on the
- Statutory Revenue Order (SRO).
3.4 International Regulation of foreign exchange
There are some international organizations influencing our foreign exchange transactions. These are:
- The Uniform Customs and Practice for Document Credit, 2007 Revision. ICC
Publication No.600 (UCP) are rules that apply to documentary credit.
- Commercial letter of credit is the lifeblood of international trade. For more
than 70 years, the Uniform Customs and Practice for documentary credit – have
governed letter of credit transaction worldwide. The UCP has remained a vital
component of international trade. Bankers, traders, lawyers, transporters,
academics and all who deal with letter of credits transaction will refer to UCP
600 on a daily basis.
- The International Chamber of Commerce (ICC), the World Business Organization based in
- World Trade Organization (WTO) is another international trade organization established in 1995. General agreement on Tariff and Trade (GATT) was established in 1948, after completion of it's 8th round the origination has been abolished and replaced by WTO. This organization has role in international trade, through its 124 member countries.
3.5 Letter of Credit (L/C)
Letter of Credit (L/C) is a payment guarantee to the seller by the buyer’s bank. Letter of Credit can be defined as a Credit Contract whereby the buyer’s bank is committed (on behalf of the buyer) to place an agreed amount of money at the seller’s disposal claimed by the negotiating on a particular date under some agreed conditions. If the conditions of the credit do not require for presentation of specified documents, it is called Clean Credit. On the contrary, if the presentation of specified documents is obligatory, the credit is called a Documentary Credit. The Uniform Customs and Practice for Document Credit, 2007 Revision. ICC Publication No.600 (UCP) are rules that apply to documentary credit.
“Any arrangement, however named or described, that is irrevocable and thereby constitutes a definite undertaking of the issuing bank to honor a complying presentation.
Honor means:
— To pay at sight if the credit is available by sight payment.
— To incur a deferred payment undertaking and pay at maturity if the credit is available by deferred payment.
— To accept a bill of exchange (draft) drawn by the beneficiary and pay at maturity if the credit is available by acceptance.
Buyers and sellers enter into contracts for buying and selling goods/ services and the buyer instructs his bank to issue L/C in favors of the seller. Here bank assumes fiduciary function between the buyer and seller.
Letter of credit is an undertaking by the importer’s bank that if the exporter exports the goods and produces documents as stipulated in the letter, the bank would make payment to the exporter.
3.6 Operational Procedure of L/C in Import & Export Business
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| Exporter. Or supplier.  Beneficiary. |
| Importer. L/C opener. Or Applicant. |
Proforma invoice.
Contract.
Indentor’s indent.  | |||||||||
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 Shipment the goods. |
Issuing BankThis bank will deal with L/C for the buyer against supplier & through the L/C advising Bank. |
| Negotiating Bank This bank negotiates with issuing bank in favor of exporter for the bill and pays the amount to the exporter. |
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| Reimbursement Bank This bank deals with payment in favor of issuing bank |
| Advising Bank.  This bank will deal with the exporter & inform the supplier that a L/C came from the buyer. |
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3.7 Types of letter of Credit
Documentary of Credit may be either:
— Revocable
— Irrevocable
— Add confirmed credit
Also There are special types of Documentary of Credit :
— Revolving L/C
— Transferable L/C
— Back-to-back L/C
On the basis of payment Criteria:
— Sight L/C
— Deferred L/C
On the basis of Destination Criteria:
— Inland L/C
— Foreign L/C
Revocable Credit: This type of credit can be cancelled or amended at any time by the issuing bank without prior notice to the beneficiary. Now it is not used.
Irrevocable Credit: This type of credit can’t be cancelled or amended by the issuing bank without the agreement of parties concerned thereto. All the credits issued in our country are in irrevocable nature.
Add Confirmed Credit: When a third bank provides guarantee to the beneficiary to make payment in case of failure of making payment of issuing bank, the L/C is called confirmed L/C. In case of confirmed L/C, a third bank adds their confirmation to the beneficiary to make payment in addition to that of issuing bank. Confirmed L/C gives the beneficiary a double assurance of payment.
Revolving Credit: A revolving credit is one where, under the terms and conditions there of, the amount of credit is renewed or reinstated without specific amendment to the
credit being needed. Which provides for restoring the credit to the original amount after it
has been utilized.
Transferable Credit: If the word ‘Transferable’ incorporated in an L/C, then the L/C is transferable. The first beneficiary can transfer transferable L/C to second beneficiary. But second beneficiary cannot transfer it further to first beneficiary.
Back-to-Back Credit: One credit backs by another. It may so happen that the beneficiary/seller of an L/C is unable to supply the goods direct as specified in the credit as a result of which he needs to purchase the same goods and make payment to another supplier by opening a second letter of credit. In this case, the second credit called a “Back to Back L/C”. The back to back is a new credit opened on the basis of an original credit in favor of other beneficiary; under this concept the seller of the first credit offers it as security to the advising bank for the assurance of the second credit.
Sight Payment Credit: This type of L/C is based upon payment on presentation of documents. When the L/C bears a clause of payment at sight then the L/C is called sight payment L/C.
Deferred Payment Credit: When the payment of L/C is to be made after a specified period of time of shipment then the L/C is called deferred payment L/C.
Inland Credit: When the L/C applicant & beneficiary from same country and goods handled with in country then the L/C is called Inland L/C.
Foreign Credit: Parties of L/C specially applicant and beneficiary of two different countries deals each other through L/C, this types of L/C is called foreign L/C.
3.8 Parties to a letter of Credit
There are a number of parties involved in an L/C:
· Importer/ Buyer/ Applicant
· Issuing/ Opening Bank
· Exporter/ seller/ beneficiary
· Advising Bank / Notifying Bank
· Confirming Bank
· Negotiating Bank
· Reimbursing/ Paying Bank
· Transferring Bank
Importer/ Buyer/ Applicant: The person or body (customer of the bank) who requests the bank (opening bank) to issue letter of credit. The importer or buyer is the applicant of a letter of credit. Applicant must be the client of the issuing bank.
Issuing/ Opening Bank: This is the bank, which issues documentary credit on account of its client. The bank that opens/ issues letter of credit on behalf of the applicant/ importer.
Exporter/ seller/ beneficiary: Beneficiary of the L/C is the party in whose favor the letter of credit is issued or established.
Advising Bank/ Notifying Bank: The bank through which the L/C is advised to the beneficiary or exporter. It is a bank situated in the exporting country and it may be a branch of the opening bank or a correspondent bank.
Confirming Bank: The bank which adds its confirmation to the credit and it is done at the request of the issuing bank. The confirming bank may or may not be the advising bank.
Negotiating Bank: The bank that negotiates document and pays the amount to the beneficiary when presented complying credit terms. If the negotiation of the documents is
not restricted to a particular bank in the L/C, normally negotiating bank is the banker of the beneficiary. Usually this is exporter’s bank that purchases the export documents.
Reimbursing/ Paying Bank: This bank acts as an agent of the Issuing Bank, authorized to make payment or to honor reimbursing claim of the Negotiating Bank. The bank nominated in the credit by the issuing bank to make payment against stipulated documents, complying with the credit terms.
Transferring Bank: The bank which will transfer the L/C, being instructed by the original beneficiary.
3.9 Important Document Used in L/C
| Sl. No | Items |
| 01 | Forwarding |
| 02 | Commercial Invoice |
| 03 | Bill of Exchange |
| 04 | Packing List |
| 05 | Bill of Lading |
| 06 | Certificate of Origin |
| 07 | Inspection of certificate |
| 08 | Insurance document |
| 09 | Proforma Invoice |
| 10 | Inco-Terms |
| 11 | Nostro Account |
| 12 | Vostro Account |
| 13 | Loro Account |
Forwarding: Forwarding is the letter given by the advising bank to the issuing bank. Several copies are sent to the issuing bank. All copies including original should be kept in the bank.
Commercial Invoice: The invoice prepared relating to shipment of the goods is commonly identified as commercial invoice. Commercial invoice is an integral part of the shipping document prepared by the seller as per terms of the credit. Invoice is the price list along with quantities. Two copies should be given to the client and the other copies should be kept in the bank.
Bill of Exchange: A “bill of exchange” is an instrument in writing containing an unconditional order, signed by the maker, directing a certain person to pay on demand or a at fixed or determinable future time a certain sum of money only to, or to the order of a certain person, or to the bearer of the instrument. (Negotiable Instrument Act. 1881, Section-5). It may be either at sight or certain day sight. At sight means making payment whenever documents will reach in the issuing bank.
Packing List: Packing list is the letter describing the number of packets and there size. If there are several copies, then two copies should be given to the client and the remaining should be kept in the bank
Bill of Lading: Bill of Lading is the bill given by shipping company to the client. It is a transport document, the bill of lading gives proof of shipment of goods from port of lading/place of receipt to port of discharge/place of destination. Only one copy of Bill of Lading should be given to the client and the remaining copy should be kept in the bank.
Certificate of Origin: Certificate of origin is a document describing the producing country of the goods. An approved chamber of commerce of the exporter’s country generally issues the certificate or as has been stipulated in the credit terms.
Inspection of certificate: An inspection prior to shipment is conducted by an independent body which confirms by certifying that the quantity and price and other aspects of the goods as have been specified in the contract. The inspection agency is nominated by the buyer or L/C opening or as per rules of the importer’s country.
Insurance document: Insurance is a contract whereby the insurer is undertaking to indemnify the assured to the agreed manner and extent against fortuitous losses.
Proforma Invoice: Proforma Invoice is the sale contact between seller and buyer in export-import business. It is a form of quotation to a potential buyer, inviting him to buy the goods on stated terms.
Inco-Terms: Inco-Terms simply mean International Commercial Terms. These are also known as Contract Terms or Trade Terms or Delivery Terms or Sales Terms or Purchase Terms. These are used in the field of international trade or foreign trade.
Nostro Account: The foreign currency account maintained by the authorized dealers in foreign exchange with the foreign banks/ correspondents are called Nostro Accounts. All foreign exchange transactions are routed through nostro accounts. Nostro Account means 'our account with you’.
Vostro Account: Current Accounts of foreign banks with their correspondents in the latter’s currency is called Vostro Accounts. Vostro account means 'your account with us'.
Loro Account: Loro Accounts are current accounts which the banks maintain with banks abroad on behalf of their clients. Loro Accounts means 'their account with you’.
3.10 Operation of Documentary Credit
The following five major steps are involved in the operation of a documentary credit:
- Issuing
- Advising
- Amendment
- Presentation
- Settlement
Issuing a L/C: Before issuing an L/C, the buyer and seller concludes ‘sales contract’ providing for payment by documentary credit. As per requirement of the seller, the buyer then instructs the bank to issue a credit in favor of seller or beneficiary. Instruction for issuing a credit should be made by the buyer or importer in the issuing bank’s standard form.
Advising a L/C: Advising through a bank is a proof of apparent authenticity of the credit to the seller. The process of advising a credit consists of forwarding the original credit to the beneficiary to whom it is addressed. Before forwarding, the Advising Bank verify the signature (s) of the officer (s) of the Issuing Bank & ensure that the terms &
conditions of the credit are not in violation of existing exchange control regulation & the other regulation relating to export.
Amendment of L/C: Parties involved in an L/C, particularly the seller and buyer cannot always satisfy the terms and conditions in full as expected due to some reason. In such a situation, the credit should be amended.
In case of revocable credit, it can be amended or canceled by the issuing bank at any time and without prior notice to the beneficiary. But in case of irrevocable credit, it can neither be amended nor canceled without the agreement of the issuing bank, the confirming bank and the beneficiary.
Presentation of Documents: The seller being satisfied with the terms and conditions of the credit proceeds to dispatch the required goods to the buyer and after that, has to present the documents evidencing dispatching of goods to the negotiating bank on or before the stipulated expiry date of credit.
Settlement: Settlement means fulfilling the commitment of issuing bank in regard to effecting payment subject to satisfying the credit terms fully. This settlement may be done under three separate arrangements as stipulated in the credit. There are Settlement by payment, Settlement by acceptance, Settlement by negotiation.
3.11 Transmission of Letter of Credit
SWIFT is an abbreviation of ‘Society for Worldwide Inter bank Financial Telecommunications.’ It is a system of transmitting authenticated messages widely used by Banks & Financial Institutions. SWIFT is a co-operative organizations set up in Brussels
The SWIFT is a computerized message undertakes quick transfer of funds, transmission of Letter of Credits (L/C) and other remittances worldwide. It has become most dependable and speedy system for international financial transactions. The SWIFT network also handles foreign exchange confirmation and reconciliation. The major advantage of the SWIFT is that it has a format requirement for messages. This allows banks to interconnect it to other computer systems such as CHIP or US Fed wire and reduces settlement risks.
3.12 Account Services in Foreign Exchange
DBBL provides all the accounts services as prescribed by the guidelines of Central Bank i.e. Bangladesh Bank. They offer competitive interest rate and provide premium quality services for the accounts. Account services are:
1. Foreign Currency Account
2. Non-Resident Foreign Currency Deposit Account (NFCD)
3. Resident Foreign Currency Deposit Account (RFCD)
4. Convertible and Non-Convertible Taka Account
5. Non-Resident Blocked Taka Account
1. Foreign Currency Account
2. Non-Resident Foreign Currency Deposit Account (NFCD)
3. Resident Foreign Currency Deposit Account (RFCD)
4. Convertible and Non-Convertible Taka Account
5. Non-Resident Blocked Taka Account
Foreign Currency Accounts: Foreign currency account is that account, where person can keep money on the basis of who are Bangladeshi, but they stay in foreign country and get work permit and they get salary, only they can open FC Account under government regulation.
NFCD Accounts: Non-resident Foreign Currency Deposit (NFCD) accounts may now be maintained as long as the account holders desire. Amounts brought in by non-resident Bangladeshis can be deposited in foreign currency account any time after return to Bangladesh
RFCD Accounts: Persons ordinarily resident in Bangladesh Bangladesh
3.13Accounting Procedure in case of L/C Opening
When the officer thinks fit the application to open a L/C, giving the following entries- creates the following charges-
Showing accounting treatment at the time of L/C opening
| Particulars | Debit/ Credit | Charges in Taka |
| Customer’s A/C | Debit | 1000 |
| L/C Margin A/C | Credit | Commonly 10-30% |
| Commission A/C on L/C | Credit | 0.5% |
| VAT | Credit | 15% on commission |
| SWIFT Charge | Credit | 3500/= |
| Foreign Courier Charge (FCC) | Credit | 1000/= |
| Stamp | Credit | 150/= |
| Securities and Printing | Credit | 200/= |
3.14 Risks involved in Foreign Exchange Business
· Risk of non-payment
· Risk of non delivery of goods
· Risk of receiving sub standard goods
· Risk of frauds in goods
· Charter party frauds
· Container frauds
· Exchange risk
· Failure of Foreign banks
· Sudden changes in polices
· Country risk
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4.1Import
Import means to bring in goods from abroad that may be in the form of goods or service. Import of goods takes place in a country when the country is in a shortage of that product or of purchasing it from abroad is cheaper. Importers are those who are authorized by the import trade control authority. Under the import policy of Bangladesh
IRC is one type of certificate. In terms of importers, exporters and indenters (Registration) order, 1981 no person can import goods into Bangladesh
· Valid Trade License
· National Certificate
· Asset Certificate
· TIN Certificate
· Bank Solvency Certificate
· Registration partnership deed(if any)
· Memorandum And Articles of association
· Certificate of incorporation (In case of Company)
· Pass book import.
· VAT registration certificate.
4.2 Import Procedure
An importer is required to have the following formalities to import the goods through Dutch-Bangla Bank Ltd.
- An account with DBBL.
- Import Registration Certificate (IRC)
- Tax Paying Identification Number (TIN)
- Proforma Invoice/ Indent
- Membership Certificate
- Letter of Credit Application form duly attested
- One set of IMP Form
- Insurance Cover note with money receipt
- Others
4.3 Bank will supply the Documents/papers
· Letter of credit application form
· Letter of credit authorization form
· Import form
· Charge documents paper
With the above essentials bank will do the following:
· Landed cost analysis
· Present market position of the goods to be imported
· Credit information bureau report from Bangladesh Bank
4.4 The L/C Application for import
To open a L/C the application must submit an application to the bank's printed format called L/C application form. The application form must be completed and filled in and signed by the authorised person of the importer giving the following details:
· Full name and address of the importer and exporter
· L/C value for USD, which must not exceed the LCA value
· Brief description of the goods with its unit price, quantity, quality etc
· Origin of the goods, port of destination, port of loading etc
· Mode of advising L/C
· Opening of L/C under UCPDC published no 600 ICC revision 2007
· LCA number
· Mode of shipment
· Insurance cover note and name of the company
· Whether shipment/Transhipment allowed
· Last date of shipment and negotiation
· Special instruction if any
4.5 Import Finance
DBBL extends finance to the importers in the form of:
- Opening of Import L/C
- Loan against Trust Receipt for retirement of import bills.
- Short term & medium term loans for installation of imported machineries & production thereof.
- Payment against document
Payment against Document: PAD Loan is created upon lodgment of import documents. This Loan is created for 21 days - the time being the tolerance for taking documents for the importer. If after 21 days the documents are not taken by the importer, the Bank may sell the imported goods to recover the given amount.
Loan against Trust Receipt: Under this Loan is allowed only to first class importers. Here only on the basis of trust without paying the Bank anything or a partial amount, the importer takes the documents. Then importer is allowed 60-90 days time to make payment.
4.6 Lodgment & Retirement
Lodgment of Documents:
Lodgment means retirement of funds. Usually payment is made within maximum seven days; mainly five days after the documents have been received. If the payment is become deferred, the negotiating bank may claim interest for making delay. Lodgments constitute the followings:
1.Requisition for the foreign currency: For arranging necessary fund for
payment, a requisition is sent to the International Department.
2. Preparing sale memo: A sale memo is made at B.C rate to the customer. As the
T.T & O.D rate is paid to the ID, the difference between these two rates is exchange trading. Finally, an Inter Branch Exchange Trading Credit Advice is sent to ID.
3.Creation of PAD liability: DBBL lodges the converted the bill amount at BC (Bills Collection) rate prevailing on the date of lodgment to PAD A/C and an IBETCA Prepared at the converted bill amount at T.T clear rate is sent to ID. PAD A/C should be adjusted within 21 days.
Accounting Treatment:
PAD (Payment against documents) A/C--------------------------Dr.
(Converted the bill amount at B.C rate)
H.O. International Division A/C --------------------------------Cr.
(Converted bill amount at T.T clear rate)
Income A/C profit on exchange -----------------------------------Cr.
(Difference between B.C&T.T clear rate)
Reversal Entries:
Banker’s Liability ------------------------------------Dr.
Customer’s Liability ---------------------------------Cr.
(When lodgment is given)
4. Payment instruction: Payment instruction is given to the reimbursement bank to debit the issuing banks. Nostro A/C to make payment to the negotiating bank.
5. Payment Intimation to the Negotiating Bank: A Intimation is sent negotiating bank ensuring that payment has been made.
Accounting Treatment
Then the telex charge, service charge, and interest (if any) are debited to the PAD A/C.
PAD A/C--------------------------------------------Dr.
Income A/C-----------------------------------------Cr.
(Service charge & Telex charge)
Shipping documents is then stamped with PAD Number & entered in the PAD Register.
6. Intimation to the applicant: As soon as above formalities are completed the importers are served with PAD bill intimations for retirement of concerned import document.
A letter of intimation regarding receipt of the documents should be sent to the applicant with a request to take delivery of the documents on settlement of all dues against it.
Retirement of Documents:
On intimation the importer approaches with a letter for retirement of the document against full payment with up to date interest and charges payable. Bank prepares cost memo in printed form on account of the concerned party giving details head of charges payable.
Accounting Treatment:
Sundry Deposit L/C Margin A/C------------------------------------Dr.
PAD A/C----------------------------------------------------------------Cr.
(Margin amount transferred to PAD A/C)
Customer A/C----------------------------------------------------------Dr.
PAD A/C ---------------------------------------------------------------Cr.
Income A/C – interest on PAD--------------------------------------Cr.
(Customer’s account debited for the remaining amount)
As far the vouchers are passed and necessary entries are given in PAD Ledger endorsements are made under two authorized signature of the banks officers (P.A. Holder). Then the documents are delivered to the importer.
4.7 Flow chart of Import Procedure
4.8 Import performance
In Million Taka
 NameYear | D.B.B.L. | B. | ONE B. | M.T.B. | EXIM B. | J.B.L |
| 2005 | 26029.01 | 26352.30 | 17435 | 17660 | 4143.20 | 12151.90 |
| 2006 | 32067.74 | 31625.60 | 21601 | 26255.29 | 4959.67 | 15457.66 |
| 2007 | 35667.74 | 39218.70 | 25133 | 27866 | 6139.94 | 22191.84 |
| 2008 | 43999.44 | 50985.00 | 27844 | 28665 | 7854.46 | 30311.71 |
| 2009 | 53088.66 | 54621.50 | 32132 | 29562 | 9564.55 | 46684.73 |
The CHART presents growth rate and position of DBBL by comparing with the other private bank on the basis of Import.
The following GRAPH represents the increasing Import of DBBL:
On the above graph we see the comparative position of DBBL is satisfactory. Its import performance will increase year to year. The procedure of import of DBBL is quicker. So importer is more interested to import through DBBL.
4.9 Export
Export means law fully carrying out of anything from one country to another country for sale. In our country the import & export trades are regulated by the import & export control Act-1950. Export play great role in our economy. Bangladesh
Under the export policy of Bangladesh
For obtaining export registration certificate from CCI&E, the following documents are required:
· Application for ERC.
· Nationality & assets certificates.
- Trade license.
- Partnership deed (for partnership business).
- Bank certificate.
- Income Tax Certificate.
- Memorandum & article of association & certificate of incorporation (for Limited Company).
4.10 Export Mechanism
· Exporter will make the goods ready for shipment.
· The arrangements have to be taken for inspection of the goods by the competent authority as per credit terms.
· Exporter will declare export on EXP from against export L/C firm Contract/Advance payment.
· Exporters have to take approval from custom authority on EXP by submitting Export L/C and other necessary documents.
· After that, shipping company will receive the goods and will issue B/L.
· Exporter will collect certificate of origin for documentation.
· Then exporter will submit the full set of document to the negotiating Bank for negotiation.
· Negotiating Bank will dispatch the documents to the issuing Bank for Clearance of the goods from port of destination against payment as per credit terms.
4.11 Export Procedure
There are a number of formalities, which an exporter has to fulfill before and after shipment of goods. These formalities or procedures are enumerated as follows:
Obtaining Export Registration Certificate ERC: No exporter is allowed to export any commodity permissible for export from Bangladesh
Securing the order: After getting ERC, the exporter may proceed to secure the export order. He can do this by contracting the buyers directly through correspondence.
Signing of the contract: After communicating with buyer the exporter has to get contracted for exporting exportable items from Bangladesh
Receiving the Letter of Credit: After getting contract for sale, exporter should ask the buyer for Letter of Credit clearly stating terms and conditions of export and payment. After receiving L/C, the following points are to be looked for:
Ú The terms of the L/C are in conformity with those of the contract.
Ú The L/C is an irrevocable one, preferably confirmed by the advising bank.
Ú The L/C allows sufficient time for shipment and a reasonable time for
registration.
Ú If the exporter wants the L/C to be transferable, divisible and advisable, he
should ensure those stipulations are specially mentioned in the L/C.
Procuring the materials: After making the deal and on having the L/C opened in his favor, the next step for the exporter is to set about the task of procuring or manufacturing the contracted merchandise.
Endorsement on EXP: Before the export forms are lodged by the exporters with the customs/postal authorities, they should get all the copies endorsed by DBBL. Before shipment, exporter submits EXP. form with commercial invoice. Then DBBL officer checks it properly, if satisfied, certifies the EXP. Without it exporter he cannot make shipment. The customer must declare all exports goods on the EXP issued by the authorized dealers.
Shipment of goods: The exporter should take the preparation for delivery of goods as L/C & under other terms & conditions, prepare and submit shipping documents for payments/ acceptance/ negotiations in due time.
Presentation of export documents for negotiation: After shipment, exporter submits the following documents to DBBL for negotiation.
- EXP form
- Bill of Exchange
- Bill of Lading
- Invoice
- Insurance Document
- Certificate of origin
- Inspection Certificate
- Packing List
- Quality Control Certificate
- G.S.P. certificate
- Other documents
4.12 Examination of Export Document
Banks deal with documents only, not with commodity. As the negotiating bank is giving the value before repatriation of the export proceeds it is advisable to scrutinize and examine each and every document with great care whether any discrepancy(s) is observed in the documents. The bankers are to ascertain that the documents are strictly as per the terms of L/C Before negotiation of the export bill. Bank officers assigned for examining the export documents may use a checklist for their convenience.
4.13 Negotiation of Export Documents
Negotiation stands for payment of value to the exporter against the documents stipulated in the L\C. If documents are in order, DBBL purchases (negotiates) the same on the basis of banker-customer relationship. This is known as Foreign Documentary Bill Purchase (FDBP).
If the bank is not satisfied with the documents submitted to DBBL gives the exporter reasonable time to remove the discrepancies or sends the documents to L/C opening bank for collection. This is known as Foreign Documentary Bill for Collection (FDBC)
- Procedure for FDBP:
I) After purchasing the documents, DBBL gives the following entries:
FDBP A/C --------------------------------------------------Dr.
(At OD sight rate)
Customer A/C ----------------------------------------------Cr.
(Before realization of proceeds)
Bank would realize only postage charges from the exporter.
II) Subsequently, Bank will send the documents to the L/C opening Bank for payment with a forwarding letter detailing the enclosures. Upon realization of proceeds the Negotiating Bank would pass the following vouchers:
Head Office A/C-------------------------------------------Dr.
(At T.T Clean rate)
FDBP A/C--------------------------------------------------Cr.
Income A/C Profit on Exchange Trading--------------Cr.
(Adjustment after realization of proceeds)
III) A FDBP Register is maintained for recording all the particulars.
- Procedure for FDBC:
DBBL forwards the documents for collection due to the following reasons-
- If the documents have discrepancies.
- If the exporter is a new client.
- The banker is in doubt.
FDBC signifies that the exporter will receive payment only when the issuing bank gives payment. To make regular follow-up with the L/C opening Bank in case of any delay in getting payment.
The exporter submits duplicate EXP Form and Commercial Invoice. Subsequently, the value of the bill is calculated and the following accounting entries are given:
Head Office A/C--------------------------------------------Dr.
(T.T Clean)
Client’s A/C-------------------------------------------------Cr.
(OD sight)
Government Tax A/C--------------------------------------Cr.
(0.10 % of Invoice value)
Postage A/C-------------------------------------------------Cr.
Income A/C profit on Exchange--------------------------Cr.
After passing the above vouchers, an Inter Branch Exchange Trading Debit Advice is sent for debiting the Nostro account. An FDBC Register is maintained, where first entry is given when the documents are forwarded to the issuing bank for collection and the second one is done after realization of the proceeds.
4.14 Types of Payment of Export Bill
These are different types of payment used in international trade and letter of credit may include as follows:
- Sight payment
- Deferred payment
- By acceptance
- Negotiation
Sight Payment Credit: In a Sight Payment Credit, the bank pays the stipulated sum immediately against the exporter’s presentation of the documents.
Deferred payment Credit: In deferred payment, the bank agrees to pay on a specified future date or event, after presentation of the export documents. In DBBL, payment is given to the party at the rate of D.A 60-90-120-180 as the case may be. But the Head office is paid at T.T clean rate. The difference between the two rates us the exchange trading for the branch.
Acceptance credit: In acceptance credit, the exporter presents a bill of exchange payable to himself and drawn at the agreed tenor (that is, on a specified future date or event) on the bank that is to accept it. The bank signs its acceptance on the bill and returns it to the exporter. The exporter can then represent it for payment on maturity. Alternatively he can discount it in order to obtain immediate payment.
Negotiation Credit: In Negotiation credit, the exporter has to present a bill of exchange payable to himself in addition to other documents that the bank negotiates.
4.15 Export Finance
1. Pre-shipment Finance: Pre-shipment finance, allowed by a bank, to an exporter to meet the cost up to the shipment of the goods to overseas buyer. The purpose of such credit is to meet working capital needs starting form the point purchasing of raw material to final shipment of goods for export to foreign country. Pre-Shipment finance in the form of:
- Opening of Back to Back L/C
- Export cash credit
2. Post-shipment Finance: There is a time gap between export of the goods and realization of the proceeds. So exporter may require finance in that period to continue his business. The need for post-shipment finance arises because export that sell goods abroad have to wait for a long time before payment is received from overseas buyers. Banks are the main source for the exporters to seek the finance. So bank may finance against Export documents ensuring the following, Post-Shipment finance in the form of:
- Foreign/ Local Documentary Bills Purchase
- Export credit Guarantee
- Finance against cash incentive
Back-to-Back L/C: It may so happen that the beneficiary/seller of an L/C is unable to supply the goods direct as specified in the credit as a result of which he needs to purchase the same goods and make payment to another supplier by opening a second letter of credit. In this case, the second credit called a “Back to Back L/C”. A Back-to-Back mechanism involves two separate L/Cs. One is master Export L/C and another is Back-to-Back L/C. On the strength of Master Export L/C bank issues back to back L/C. Back-to-Back L/C is commonly known as Buying L/C. On the contrary, Master Export L/C is known as Selling L/C.
Scrutiny of Master L/C:
- Defective Points or Clauses appears in the Master L/C
- Issuing bank is not reputed
- Advising credit by the advising bank without authentication.
- Port of destination absent.
- Inspection clause.
- Nomination of specific shipping/Air line or nomination of specified vessel by subsequent amendment.
- B/L to blank endorses, to endorse to 3rd bank, to be endorsed to buyer or 3rd party.
- No specific reimbursing clause.
- Shipment/ presentation period is not sufficient.
- Original documents to be sent to buyer or nominated agent.
- FCR consigned to applicant or buyer.
- “Shippers’ load and count is not acceptable “clause.
- L/C shall expire in the country of the issuing bank.
- Negotiation is restricted.
Payment under back-to-back L/C:
- Payment at maturity out of exports proceeds.
- In case of export failure or non-realization/ short realization of export proceeds, forced loan i.e. OAP has to be created in order to settle the Back-to-Back L/C payment.
Export Cash Credit (ECC): Export Cash Credit is a pre-shipment finance like packing credit, but when the exporter are not eligible for packing credit then as per Head Office sanction bank can disburse such type of facilities in a higher rate to meet up exporters urgent financial crisis.
4.16 Flow chart of Export Procedure
4.17 Export performance
 NameYear | D.B.B.L. | B. | ONE B. | M.T.B. | EXIM B. | J.B.L |
| 2005 | 22144.17 | 13963.70 | 11961 | 8810 | 3128.50 | 6521.80 |
| 2006 | 33344.69 | 17480.10 | 16360 | 12943.29 | 4623.46 | 11583.64 |
| 2007 | 34060.27 | 20417.30 | 19413 | 18282 | 5579.04 | 13990.33 |
| 2008 | 40083.14 | 25155.30 | 25201 | 20555 | 5646.56 | 18617.43 |
| 2009 | 41162.51 | 32146.12 | 29100 | 22478 | 59452.20 | 21406.94 |
In Million Tk.
The CHART presents growth rate and position of DBBL by comparing with the other private bank on the basis of Export.
The following GRAPH represents the increasing Export of DBBL:
On the above graph we see the comparative position of DBBL is satisfactory. Its export performance will increase year to year. The procedure of export of DBBL is quicker. So exporter is more interested to export through DBBL.
4.18 Foreign Remittance
Remittance refers to the send or receipt of money from one place to another place. Foreign remittance refers that the exchange of money between two countries or among several countries. This is mainly occurred through Banking institution. Dutch-Bangla Bank Limited performs the remittance function. DBBL provides premium quality service for repatriation and collection of remittance with the help of its first class correspondents and trained personnel. By introducing on-line banking service and becoming a SWIFT Alliance Access Member, which enable its branches to send and receive payment instruction directly that helps provide premium services.
4.19 Types of Remittance
Remittance services provided by DBBL are:
· Foreign Inward Remittance: Draft, T.T
- Foreign Outward Remittance: FDD, TT, TC and Cash (FC)
Foreign Inward Remittance: Inward remittance refers to the extent where the bank makes payment to the client against foreign demand draft. Bank will make payment to the client by verifying the test number and signature of the authorized officer. Inward remittance covers purchase of foreign currency in the form of foreign T.T., D.D, and bills, T.C. etc. sent from abroad favoring a beneficiary in Bangladesh
Foreign Outward Remittance: Outward remittance covers sales of foreign currency through issuing foreign T.T. Drafts, Travelers Check etc. as well as sell of foreign exchange under L/C and against import bills retired. Sale
Foreign exchange means foreign currency and includes all deposits, credits and balances payable in foreign currency as well as foreign currency instruments such as Drafts, T.C.,
Bill of Exchange and Letters of Credit Payable in any Foreign Currency. All foreign Exchange transactions in Bangladesh
4.20 Activities of Foreign Remittance
Foreign Remittance done the following things:
— Overall supervision of Foreign Remittance Department.
· Correspondence to Nostro Account.
· Foreign TT payment & Purchase of F. Drafts, Chouse & preparations of Foreign.
· Bill Purchased (FBP).
· Checking of all Batches.
· Assist in preparation of IBCA/IBDA etc.
· Compliance of Audit & Inspection.
· Issuance of outward TT & FDD.
· Statement & all related works regarding deposit of Bangladesh Bank.
· Foreign Collection, Bangladesh Bank Clearing Check Collection.
· Withdrawal from F.C. A/C.
· Encashment of T.C. & Cash Dollar and Sterling Pound.
· Deduction of Tax and VAT.
· Preparation of related statements including convertible Taka Accounts.
· Preparation of IBCA & IBDA and Balancing of Collection and other special assignment as desired by Department in charge.
· Issuance of TC & Cash Dollar, Correspondence with different Bank/Institution related to TC/Dollar.
· Balancing of Account Statements.
4.21 Dealings of Foreign Remittance
Foreign Remittance deals with the following instruments:
(A) Travelers Cheque (TC)
(B) Foreign demand draft (FDD)
(C) Telegraphic Transfer (T.T.)
A. Travelers Cheque: Traveler’s cheque is a very popular method of foreign remittance. It is usually used by the travelers who are willing to remit fund to the place where they are going to visit and encash it from there. Traveler’s cheque is a substitute for cash and it is the safest method of transferring fund.
Steps involved in issue of Travelers cheque:
· After verifying all these documents the customer is asked to fill up prescribed application form.
· In the application the customer states the amount he is willing to endorse and it is be verified that his required amount is within the stipulated amount.
· Then the customer pays cash or by debiting his account the Travelers cheque is issued.
· Endorsement is given on the passport and on the ticket. Customer fills up the Travel & Miscellaneous form.
· Purchase Application Form is prepared and handed over to the purchaser along with the Travelers cheque.
· Entry given in three register, Foreign Currency issue register, Travelers cheque on hand register and Foreign Currency in hand register.
Payment of Travelers cheque:
When a customer wants to encash his Travelers cheque he has to show his passport and it is to be verified from the passport that he has traveled outside the country. Then the Travelers cheque will have to be scrutinized very strictly. If every thing in the Travelers cheque is in order then the customer will be asked to give his signature on the place of “Counter signature”.
If the signature agrees with the one in the place of “The signature of the holder” then the payment will be made through giving cash to the customer or crediting his account. Travelers cheque will be crossed and endorsement given on the back of the received travelers cheque.
B. Foreign Demand Draft: Foreign Demand Draft (FDD) is popularly used for educational purpose in our country. It is used for other commercial purposes also.
The procedure concerning issue of FDD is same as issue of Travelers cheque except that the customer is not required to submit his passport.
Payment of FDD:
After receiving the FDD for payment there are few steps, which are to be followed:
· At first the FDD is to be crossed.
· Serial number is given.
· Forwarding letter to the bank with which the bank has agreement.
· Party is given the cash or his account is credited.
Endorsement of Cash:
Cash foreign currency can also be remitted through endorsement in the passport. In case of endorsing cash on passport the requirements are same as in case of issue of Travelers cheque. But the only exception is that the passport holder is not required to be present by himself.
Travel quota for Bangladeshi nationals:
Principal branch releases foreign exchange to Bangladesh Bangladesh
5.1 SWOT Analysis of DBBL
It is very difficult to find out & analyze the overall banking performance of DBBL with in a very limited time. SWOT analysis is a simple framework for generating strategic alternatives from a situation analysis. It stands for Strength, Weakness, Opportunity and Threats of DBBL, Agrabad Branch.
| Strength
| Weaknesses
|
| Opportunities
| Threats
|
5.2 Findings
Dutch-Bangla Bank Limited is one of the leading private banks in the country. The findings of the report are-
v In Bangladesh
v DBBL considers clients as bank client not branch client.
v Foreign exchange division also expanding its service day by day.
v Foreign exchange division Contribute a large amount of income on the total income of the bank each year.
v Still there is lack of manpower in Foreign exchange division to provide quick service.
v Sound Import & Export operation.
v To strictly followed the rules and regulation of Bangladesh Bank and UCP 600 in foreign exchange division.
v The work is very sensitive in Foreign exchange division.
v The business in import sector as they don’t have any marketing department.
v DBBL cannot control properly the network of ATM booth.
v The branch is too much dependable on head office for L/C opening approval, sometimes it takes time and generates dissatisfactions of clients.
v Fixation of dollar rate is another problem of the bank.
v DBBL took part in foreign transaction as one of the most leading bank.
v The bank use online technology, as a result, the customer can get the fastest service from the bank.
v The bank offers minimum cost service of TT, OD, and FDD for the account holders.
v Finally Dutch-Bangla Bank Limited can be called one of the best banks for the time being.
5.3 Recommendations
Though Dutch-Bangla Bank Limited tries to give the best customer support. On the basis of preceding description and analysis the activities some recommendations are given below which may be effective for the organization:
v Foreign exchange division needs to shorten/easier its complex transaction procedure.
v In import section of DBBL should have marketing department of the bank to reach at the heart of the customer.
v The bank can adopt the decentralization of authority as make quick decisions in foreign trade.
v Should have more flexibility of dollar rate.
v DBBL can provide foreign market report which will enable the exporter to evaluate the demand for their products in foreign countries.
v To strictly followed the rules and regulation of Bangladesh Bank and UCP 600 in foreign exchange division, so the frauds cannot be arises.
v Dutch-Bangla Bank Limited should offer international credit card, because in modern world the use of increasing paper currencies is decreasing.
v DBBL should solve the network problem of ATM booth.
v The works are very sensitive in Foreign exchange division, so the division must careful to do the works.
v In foreign exchange more officers should be appointed for prompt service.
v Regular training program and workshop should be introduced to keep officers updated relating new issues for especially on the foreign exchange.
v Bank should increase their office space and take more care in interior decoration.
5.4 Conclusion
It was huge gratification for me to do my internship program in a venerated organization like DBBL. However my realistic experience in DBBL Agrabad branch for just three months, though my report is on Foreign exchange division, I tried hard to cover all about the related topics. I have tried to make the report as a best one.
For banking operation Foreign Exchange is one of the most important sector of a bank. Foreign exchange division of DBBL also contributes a lot towards the economic development through international transactions. Customers are satisfied with its service.
DBBL is the best bank, they shown good performance and holds the strongest position in the banking market. The bank must a positive attempt to be more outward looking in their goals and aware of what is happening. Their lending interest rate and customer dealing is really competitive and they can earned well reputation for their quality service, so it has a vivid future.
I hope, in spite of my all limitation. This experience of sharing works with such working environment with help me a lot in professional life.
Finally, I wish continuous success of this bank and healthy business portfolio of the bank.
“Dutch-Bangla Bank Limited –Your Trusted Partner” must be a true partner of the customers.
Reference & Bibliography
(1). Foreign Exchange Manual- Dutch-Bangla Bank Limited.
(2). Annual Reports DBBL-2006, 2007, 2008, 2009.
(3).Book on ’Guideline for Foreign Exchange Transaction’ issued by Bangladesh Bank (as on 31 May 2009 Edition Vol.-I )
(4). Book on ‘ICC Uniform Customs and Practice for Documentary Credits’ (UCP 600), 2007 Revision.
(5). Bank Management (Fifth Edition)
- Peter S. Rose
(6). Fundamental of Corporate Finance (8th Edition)
- Ross
- Westerfield
- Jordan
(7). Web site: http://www.dutchbanglabank.com
(8). Fundamentals of Banking-A. R. Khan
(9). Foreign Exchange: Book by-L.R. Chowdhury
(10). Everyday Working experience in Dutch-Bangla Bank Ltd. with the executives.
Appendix
(1) Copy of L/C Application Form.
(2) Copy of Others Documents.
