Exim bank ltd

At the very beginning I would like to express my deepest gratitude to almighty ALLAH for giving me the strength and the composure to finish the task within the scheduled time.

I am deeply indebted to my internal guide Mr. Shahriyar Anam Head of the Department, Business Administration; The University of Asia Pacific (UAP) for his whole-hearted supervision to me during the practical orientation period. His suggestions and comments to make the report a good one was really a great source of spirit for me.

I am profoundly grateful to Mr. Shah Md. Abdul Bari, (Senior Vice President Human Resources Division, Head Office, EXIM Bank Bangladesh Ltd.) for his kind assistance to provide me the opportunity of the practical orientation in this bank.

My sincere gratitude goes to Mr. Tariqul Islam Choudhury (Senior Assistant Vice Precedent and Manager), Mr. Md. Abu Sufian Mazumder (Executive officer) who gave special attention to me right from the very beginning of my stay at EXIM Bank Ltd. I am very grateful to the officials of Mirpur Branch of EXIM Bank Ltd. who extended their whole hearted cooperation from during my orientation period. I would also like to express my sincere gratitude to Mr. Mohammed Mohshin (junior officer), Finally, I would like to convey my best regards to all officials of the Mirpur Branch, EXIM Bank Ltd.

Lastly, I like to give many special thanks and inexpressible greets to my both senior and fellow UAP students, for giving me good advice, suggestion and for inspiring me in some cases. Thanks for all from the core of my heart.

In the name of Allah, the Beneficent, the Merciful Date: Shariyar Anam Head of the Department Department of Business Administration The Univerity of Asia Pacific Dhanmondi, Dhaka Subject: Submission of Internship Report on Practical Orientation in EXIM Bank of Bangladesh Ltd. Dear Sir: This is my pleasure to submit my internship report on “Practical Orientation in Export Import (EXIM) Bank of Bangladesh Limited� which I was assigned. It was a great opportunity for me to acquire knowledge and experience in respect of the functions, procedures and operational mechanism of a commercial bank based on Islami Shariah while working in Mirpur Branch of EXIM Bank Limited.

I believe that the knowledge and experience I have gathered during my internship period will immensely help me in my future professional life.

I have concentrated my best efforts to achieve the objectives of the internship study and hope that my endeavor will serve the purpose. However, I will always be ready to provide any further clarification that you may require.

Sincerely yours, ______________ Seemin Mehnoor Registration no. 03102071 The University of Asia Pacific

Banking system of Bangladesh has gone through three phases of developmentNationalization, Privatization, and Lastly Financial Sector Reform. Export Import (EXIM) Bank of Bangladesh Limited has started its journey as a private commercial bank from 1999.

In the period of practical orientation in XIM Bank Ltd. at Mirpur Branch, I was placed in three vital departments, these were: •

General banking,

•

Investment or credit, and

•

Foreign exchange.

But I was worked more in General banking and Foreign exchange departments.

General banking is the starting point of all the banking operations. It is the department, which provides day-to-day services to the customers. It opens new accounts, remit funds, issue bank drafts and pay orders etc. Provide customer through quick and sincere service is the goal of the general banking department.

Bank investment or credit is an important catalyst for bringing about economic development in a country. Without adequate finance, there can be no growth or maintenance of a stable economy. EXIM Bank, being one of the largest private commercial bank of the country, has some prejudice to finance directly on priority basis to industry and commerce sector for strengthening the economic base of the country. Hence, it is very clear that, EXIM Bank plays an important role to move the economic wheel of the country. Providing different sorts of credit and schemes like loan against imported merchandise (LIM), Trust Receipt, Bank Guarantee, Industrial Loan, IT loan, Consumer Credit scheme, Executives Car Loan, House Finance is the main spring of the credit department.

Foreign exchange department plays significant roles through providing different services for the customers. Letters of credit is the key player in the foreign exchange business. With the globalization of economies, international trade has become quite

competitive. Timely payment for exports and quicker delivery of goods is, therefore, a pre-requisite for successful international trade operations. To ensure this purpose EXIM Bank Ltd. transmit L/C through SWIFT (Society for Worldwide Inter-bank Financial Telecommunication) to the advising bank.

EXIM Bank Limited is providing different sorts LC services like L/C opening, lodgment, BLC (bills under letter of credit), Back to back LC etc. Foreign exchange department also provide foreign remittance lie traveler’s cheque, money Gram foreign demand draft, endorsement of US$ in passport.

On the other hand it was not possible for me to work in the Human Resource Department but like other all I was assigned in to the Mirpur branch and I was learned general banking, foreign exchange, and some of investment activities of the bank instead of Human Resource Management. Although I had tried to give an overview of EXIM Bank Ltd. HR department and it activities on the basis of Human Resource Management Components and Human Resource Management Wheel or Model.

Introduction: 1.1 BACKGROUND OF THE STUDY: It is very important to have a practical application of the knowledge acquired from any academic course of the study. Only a lot of theoretical knowledge will become fruitless if it is not applied in the practical life. So we need proper application of our knowledge to get some benefit from our theoretical knowledge to make it more fruitful. Such an application can be possible through internship.

The internship program exercise a significant importance as it enables a student to familiar with the practical business activities. The student work closing with the people of an organization and learn about the function of that organization. This program enables a student to develop his analytical skill and scholastic aptitude.

As part of the Internship Program of Bachelor of Business Administration course requirement, I was assigned for doing my internship in EXIM Bank Limited for the period of 90 days starting from May 06, 2008 to August 06. 2008. During my intern period in the EXIM Bank Limited, Mirpur Branch, I worked under different departments of the bank. I worked under the supervision of Senior Executive Officer (SEO), Sub-Manager, and under my immediate supervisor in the branch. Their assistance and guidance help me a lot to completing this report.

1.2 SCOPE OF THE STUDY: As I was sent to EXIM Bank Ltd., Mirpur Branch, the scope of the study is only limited to this branch. This report covers all areas of banking activities of EXIM Bank Limited. In the Mirpur Branch that include Customer Service, Remittance, Cash, Accounts, Investment and Foreign Exchange department. The report limits itself to understanding the activities of various departments rather than aiming for an extensive analysis of the entire banking activities handled by EXIM Bank Limited. It was beyond the scope of this report to study the entire process of each and every department because of feasibility and time considerations.

1.3 PROBLEM STATEMENT: Export Import Bank of Bangladesh Limited is an Islamic Bank having 35 branches and two new branches is going to open soon all over the country with different types of banking service and products. It is developing and expanding its branches in the country to gain greater acceptance as an effective and efficient means of intermediation and to contribute to the overall wealth creation. To gain greater acceptance, to contribute to the overall wealth creation and compete with commercial banks, the factors that earn extend foreign exchange business and earn more foreign currency.

1.4 OBJECTIVES OF THE STUDY: This study is aimed at providing me invaluable practical knowledge with the consideration of my theoretical knowledge I had gain from BBA program at the University of Asia Pacific. It will also help me to develop my concept of Islamic banking system and it operations. The objectives are:  To comply with the entire branch banking procedures.  To make a bridge between the theories and practical procedures in a real life situation.  To understand the terms that has been taught during my BBA period at the University in a real life situation.  To analyze the performance of the branch as well as EXIM Bank Limited as a whole.  To present my observation and suggestions to the bank and to increase knowledge.  To analyze and understand the Human Resource Management in a practical situation.

1.5 METHODOLOGY: This report has been prepared on the basis of experience gathered during the period of internship from May 06, 2008 to August 06, 2008. For preparing this report, I have undergone group discussion, collected data and face to face interviewed with the selected Officers. I also studied different circulars and files of the bank.

I hope these criteria will be enough to find out different picture of financial performance and Human Resource practice of the selected bank (EXIM Bank Ltd.).

During my study I followed some methodology to find out the fact and feature of the bank which are given as follows.

•

Sources of Data/Information

I have collected my information/data from the following sources, which helped me to make this report. The source has divided by two parts. Such as •

Primary Sources  Oral interview of the responsible officers.  Personal experience gained by visiting different desks during internship period.

•

Secondary Sources  Official Records of EXIM Bank ltd.  Annual Reports of EXIM Bank ltd  Relevant papers and different books.  Manual of different departments.  Periodical publications. EXIM Bank ltd.  Prior research reports.  Bangladesh Bank Report.

1.6 LIMITATIONS: Despite the diligent efforts given in preparing the report, it succeeded only to skim through the surface of the ocean on this subject. Therefore the views expressed in this report are likely to be restricted by limitations. After completing the institutional experience, practical performance in real life becomes difficult. So, my lack of experience greatly influenced in preparing this report. On the other hand it was not possible for me to work in the Human Resource Department, like other all I was assigned in to the Mirpur branch and I was learned general banking, foreign exchange, and some of investment activities of the bank instead of Human Resource Management. But I was tried to collect data on EXIM Bank Ltd. Human Resource Management from personal oral interview and observation.  Lack of knowledge about banking and financial related terminologies.  It is too much difficult to comment and suggest based on only the annual report and information supplied by the organization.  In many case the relevant authorities are not aware about internship.  Unwilling to provide data more because of confidentiality.  Lack of collecting essential data & information.  Information related to the Human Resource Management is top secrete.  Complete internship in a general branch instead of Human Resource Department.

Profile of Export Import Bank of Bangladesh Limited 2.1 Background: EXIM Bank Limited was established in 1999 under the leadership of Late Mr. Shahjahan Kabir, founder chairman who had a long dream of floating a commercial bank which would contribute to the socio-economic development of our country. He had a long experience as a good banker. A group of highly qualified and successful entrepreneurs joined their hands with the founder chairman to materialize his dream.

In deed, all of them proved themselves in their respective business as most successful star with their endeavor, intelligence, hard working and talent entrepreneurship.

Among them, Mr. Nazrul Islam Mazumder became the honorable chairman after the demise

of

the

honorable

founder

chairman.

This bank starts functioning from 3rd August, 1999 with Mr. Alamgir Kabir, FCA as the advisor and Mr. Mohammad Lakiotullah as the Managing Director. Both of them have long experience in the financial sector of our country. By their pragmatic decision and management directives in the operational activities, this bank has earned a secured and distinctive position in the banking industry in terms of performance, growth, and excellent management. The authorized capital and paid up capital of the bank

are

Tk.

1000.00

million

and

Tk

313.87

million

respectively.

The bank has migrated all of its conventional banking operation into Shariah based Islami banking since July/2004.

2.2 Vision & Mission: Our vision and mission are stated in the following bullets: • To be the finest bank in the banking arena of Bangladesh under the Shariah guidelines.

•

To maintain Corporate and business ethics.

•

To become a trusted repository of customers' money and their financial advisor.

•

To make our stock superior and rewarding to the customers/share holders.

•

To display team spirit and professionalism.

•

To have a Sound Capital Base.

•

To provide high quality financial services in export and import trade.

•

To provide excellent quality Customer service

2.3 Corporate Culture:

This bank is one of the most disciplined Banks with a distinctive corporate culture.

Here we believe in shared meaning, shared understanding and shared sense making.

Our people can see and understand events, activities, objects and situation in a distinctive way. They mould their manners and etiquette, character individually to suit the purpose of the Bank and the needs of the customers who are of paramount importance to us. The people in the Bank see themselves as a tight knit team/family that believes in working together for growth. The corporate culture we belong has not been imposed; it has rather been achieved through our corporate conduct.

2.4 Social Commitment:

The purpose of our banking business is, obviously, to earn profit, but the promoters and the equity holders are aware of their commitment to the society to which they belong. A chunk of the profit is kept aside and/or spent for socio-economic development through trustee and in patronization of art, culture and sports of the country. We want to make a substantive contribution to the society where we operate, to the extent of our separable resources.

2.5 Achievement: It is a great pleasure that by the grace of Almighty Allah, we have migrated at a time all the branches from its conventional banking operation into Shariah based Islami banking operation without any trouble. Lot of uncertainties and adversities were there into this migration process. The officers and executives of our bank motivated the valued customers by counseling and persuasion in light with the spirit of Islam especially for the non-Muslim customers. Our IT division has done the excellent job of converting and fitting the conventional business processes into the processes based

on Shariah. It has been made possible by following a systematic procedure of migration under the leadership of honorable Managing Director.

2.6 Management Profile:

Mr. Kazi Masihur Rahman Managing Director

Mr. Ekramul Hoque Additional Managing Director

Mr. Md. Sirajul Islam Bhuiyan

Mr. Mohammed Haider Ali Miah

Deputy Managing Director

Deputy Managing Director

Mr. Karimuzzaman

Executive Vice-President

Mr. Sirajul Miah Executive Vice-President

Haque

Mr.Md. Fazlur Rahaman

Executive Vice-President

Mr. Khondoker Rumy Ehsanul Haq

Mr. Fazal Akhter

Executive Vice-President

Executive Vice-President

Name Mr. Md. Akhtar Hossain Mr. Mohd. Alamgir Mr. Md. Zakaria Faruq Mr. Md. Golam Mahbub Mr. A.Y.M. Naimul Islam

Designation Place of Posting SVP RMG Division, Head Office SVP Regional Manager of Chittagong SVP Nawabpur Branch, Dhaka SVP Board Secretariat, Head Office SVP Narayanganj Branch, Narayanganj.

Financial Administration Division, SVP Head Office Human Resources Division, Head SVP Office

Mr. Md. Humayun Kabir Mr. Shah Md. Abdul Bari Mr.

Md.

Muhibbul

Choudhury Mr. Khondoker

Abrar

Nayeemul

SVP

SVP Kabir Mr. Md. Feroz Hossain SVP Mr. Shaikh Bashirul Islam SVP Mr. Sheik Moyeen Uddin SVP Mr. Md Shahidullah SVP Mr. Moniruzzaman Chowdhury SVP Mr. Shahidur Rahman SVP Mr. Md. Muniruzzaman SVP Mr. Md. Shahjahan SVP Mr. Md. Anisul Alam VP Mr. Khorshed Alam VP Chowdhury Mr. Md. Zoshim Uddin VP Bhuiyan Engr.

Shamsur Rahman VP Chowdhury, MBA Mr. Md. Mosharraf Hossain VP Mazumder Mr. Mohammad Hanif VP Mr. Md. Nasir Uddin Ahmad VP Mr. S.M. Abu Zaker VP

Khatungonj Branch, Chittagong Panthapath Branch, Dhaka Motijheel Branch, Dhaka International Division, Head Office Investment Division, Head Office Agrabad Branch, Chittagong EXIM Bank Training Institute Motijheel Branch, Dhaka General Service Division, Head Office Imamgonj Branch, Dhaka Uttara Branch, Dhaka New Eskaton Branch, Dhaka Rajuk Avenue Branch, Dhaka CBS Implementation Project, Head Office CBS Implementation Project, Head Office Jubilee Road Branch, Chittagong International Division, Head Office Agrabad Branch, Chittagong

Mr. Abu Hena Md. Mohsinn

SAVP

Mr. Md. Moidul Islam Mr. Abdul Jobbar Chowdhury Mr. M. Sakhawat Hossain Mr. Tariqul Islam Choudhury Mr. Md. Zakir Hossain Mr. F.M. Nawaz Ali Mr. Rafiqur Rahman Mr. Kazi Nesar Uddin Ahmad Mr. Md. Shah Alam Mr. Md. Abdur Rahman Mr. Mosleh Uddin Ahmed Mr. Md. Abdul Halim Mr. Md. Rashedul Hasan Ms. Maksuda Khanom Mr. Md. Zakir Anam Mr. Mefta Uddin Khan

SAVP SAVP SAVP SAVP SAVP SAVP SAVP SAVP AVP AVP AVP AVP AVP AVP AVP AVP

Mr. Khandker Md. Mostasir

AVP

Mr. Md. Mostafa

AVP

Mr. Md. Shah Azam

AVP

Mr. Md. Jashim Uddin Mr. Md. Solaiman Mridha Mr. Hasan Faruk

AVP AVP AVP

Mr. Md. Abdul Qaium Khan

AVP

Mr. Md. Mahbub Alam

AVP

Mr. Md. Nurul Absar Mr. Md. Shahjahan Patwary

AVP AVP

Mr. Md. Israil Khan

AVP

Mr. Mohammad Abul Hashem Mr. Md. Aminul Islam Mr. Md. Mumtaz Ahmed Mr. Md. Akhteruzzaman Mr. Md. Osman Ali Miah Mr.Emran Hossain

AVP AVP AVP AVP AVP AVP

Financial

Administration

Division,

Head Office Motijheel Branch , Dhaka Moulvibazar Branch, Moulvibazar Narayanganj Branch Rajuk Avenue Branch, Dhaka Uttara Branch, Dhaka Mirpur Branch, Dhaka Laksham Branch, Laksham ICCD, Head Office Ashugonj Branch Motijheel Branch Shimrail Branch Ashulia Branch GSD, Head Office Gulshan Branch Bashundhara Branch Satmasjid Road Branch CBS Implementation Project, Head Office Kawranbazar Branch CBS Implementation Project, Head Office, Dhaka Sylhet Branch Gazipur Chowrasta Branch, Gazipur Elephant Road Branch, Dhaka Information Technology Division, Head Office, Dhaka CBS Implementation Project, Head Office, Dhaka Jubilee Road Branch, Chittagong Agrabad Branch, Chittagong International Division, Head Office, Dhaka CDA Avenue Branch, Chittagong SAVAR Branch, Savar Bogra Branch, Bogra Khatungonj Branch, Chittagong Rangpur Branch, Rangpur Motijheel Branch, Dhaka

2.7 Shariah board: The Board of directors has formed a Sharia Supervisory Board for the Bank. Their duty is to monitor all the Bank’s transactional procedures, & assuring it’s Sharia compliancy. This Board consists of the following members headed by its Chairman.

The tasks of the Sharia supervisor in summary is replying to queries of the Bank’s administration, staff members, shareholders, depositors, & customers, follow up with the Sharia auditors and provide them with guidance, submitting reports & remarks to the Fatwa & Sharia Supervision Board and the administration, participating in the Bank’s training programs, participating in the supervision over the AlIqtisad AlIslami magazine, & handling the duty of being the General Secretary of the Board.

Members of Shariah Council: Professor Moulana Mohammad Salah Uddin

Mr.

Md.

Nazrul

Islam

Mazumder

Moulana Mohammad Sadequl Islam

Mr. A.K.M Nurul Fazal Bulbul

Professor H.M. Shahidul Islam Barakaty

Mr. Md. Abdul Mannan

Mr. A.S.M. Fakhrul Ahsan

Mr. Zubayer Kabir

Hafez Moulana Mufti Mohammad Khair Ullah

Mr. Abdullah Al-Zahir Sawpan

Hafez Quari Moulana Mufti Mohammad Nur Uddin

Mr. Kazi Masihur Rahman

Shariah Auditing: This is the civil supervisory aspect that shapes the Bank’s main feature. Its existence is part of the Sharia Supervision procedures. One of its main tasks is to check the Sharia compliancy in the Bank’s transactional procedures in accordance to the Fatwas issued

in

that

regard,

under

the

guidance

of

the

Sharia

Supervisor.

The Sharia auditor is assigned the task of revising the Bank’s transactional procedures throughout the year to check the extent to which the staff members and the different departments have abided by the regulations, advices, and Fatwas issued by the Fatwa & Sharia Supervision Board, forums, & banking conferences. As well as, assuring that all the contracts that states a right for the Bank or an obligation on the Bank is

certified

by

the

Fatwa

&

Sharia

Supervision

Board.

Moreover, the Sharia Auditing submits periodic reports to the Sharia Supervisor in order to be proposed to the Fatwa & Sharia Supervision Board to state what it finds appropriate in that regard.

Banking with shariah principles: Export Import Bank of Bangladesh Limited is the 1st bank in Bangladesh who has converted all of its operations of conventional banking into shariah-based banking since July/2004. We offer banking services for Muslims and non-Muslims alike allowing our customers choice and flexibility in their savings and investments. Our products are approved by our Shariah Board comprising of veteran Muslim scholars of our country who are expert in all matters of Islamic finance.

The process by which Noriba's investments are designed and executed allows the Bank to offer a combination of Sharia compliance and capital markets expertise that is unique

throughout

the

world.

Noriba is committed to the strict adherence to the requirements of the Sharia as a result of the Bank's sole focus on Sharia-compliant investments and the full supervision of its financial products and transactions by the Noriba Sharia Board.

Noriba experts specifically design each of the Bank's investment vehicles with the approval of the Noriba Sharia Board. Once the given product or transaction has been arranged, the Noriba Sharia Board carefully screens it for compliance before giving final approval for its implementation. This control mechanism guarantees that all aspects of Noriba's final products and banking transactions are in adherence with the guidelines of the Sharia.

2.8 Bank Operational Area: Export and Import Trade Handling and Financing:

As a commercial Bank, we do all traditional Banking business including the wide range of savings and credit scheme products, retail banking and ancillary services

with the support of modern technology and professional Excellency. But our main focus is, for obvious reason, on export and import trade handling and the development of entrepreneurship and patronization of private sectors.

2.9 Branch Information: (EXIM Bank Ltd. have 35 Branches in Bangladesh and two more are in-process to opening)

2.10 Financial Statement: Export Import Bank of Bangladesh Limited Financial Administration Division Head office Dhaka.

Year wise Dividend position of the Bank Year

% Cash dividend

% Stock dividend

Total

1999

-Nil-

-Nil-

-Nil-

2000

14.00%

-Nil-

14.00%

2001

25.00%

12.50%

37.50%

2002

8.00%

24%

32.00%

2003

40.00%

-Nil-

40.00%

2004

-Nil-

40%

40.00%

2005

-Nil-

30%

30.00%

2006

-Nil-

25%

25.00%

2007

7%

25%

32.00%

EXPORT IMPORT BANK OF BANGLADESH LIMITED Highlights on the overall activities As at 31 December 2007 Ser. No.

Particulars

2007 (Taka)

2006 (Taka)

1

Paid up capital

2,142,196,800

1 ,713,757,500

2

Total capital

4,569,562,645

3 ,467,368,068

3

Surplus/(shortage) of capital

498,916,145

5 51,245,578

4

Total assets

51,503,027,985

4 1,793,540,962

5

Total deposits

41,546,568,592

3 5,032,024,625

6

Total investment

40,195,239,222

3 2,641,270,316

7

Total contingent liabilities and 22,632,654,873 commitments

1 8,994,087,363

8

Ratio on investments and deposits

93.18%

9

Ratio on classified investments 1.58% and total investments

1.80%

10

Profit after tax and provisions

930,843,607

6 50,292,342

11

Classified investments

635,106,791

5 88,173,168

12

Provision held against classified 270,763,271 investments

1 83,888,706

13

Surplus/(shortage) of provision

- 6 ,950,000

-

14

Cost of fund

9.07%

9.17%

15

Profit earning assets

42,357,645,536

3 5,161,475,381

16

Non-profit bearing assets

9,145,382,449

6 ,632,065,581

17

Return on investment (shares and 8.77% bonds)

6.55%

18

Return on assets (after tax)

1.73%

19

Income on investment (shares and 205,594,883 bonds)

1 21,460,342

20

Earnings per share

43.45

4 3.48

21

Net income per share

43.45

3 7.95

22

Price earning ratio (times)

9.02

7.74

96.75%

2.00%

2.11 Share Information of EXIM Bank: Export Import Bank of Bangladesh Limited Name of the Company

Export Import Bank of Bangladesh Limited

Instrument Code

EXIMBANK

Number of shares issued in IPO

31,38,750

Total Number of shares including Sponsors

62,77,500

Face Value

Tk.100.00 per share

Premium

Tk.30.00 per share

Market lot

50

Date of publication of Prospectus

June 28, 2004 in “The Daily Janakantha”

Opening Date for Subscription of Shares

July 24, 2004

Closing Date for Subscription of Shares

July 28, 2004

Date and Place of Lottery for Allotment of August 19, 2004; Bangladesh China Friendship Conference Shares

Center

Number of Allotment Letter Issued

56755

Date of Issuance of Allotment Letter(s)

August 21, 2004

Date of listing with DSE

September 26, 2004

Date of listing with CSE

September 04, 2004

Date of 1st Trading

October 16, 2004

Opening price on 1st Trading Date

517.00

Highest price (2004-2005)

805.00

Lowest Price (2004-2005)

450.00

2.12 Product & Services:

Super Savings Scheme

Monthly Savings Scheme Monthly Income Scheme

Multiplus Savings

Hajj Deposit

2.12.1 Investment / Finance: • Corporate Finance •

Industrial Finance

•

Project Finance

•

Syndicate Investment

•

Mode of Investment: Murabaha Bai Muazzal Izara Bil Baia Wazirat Bil Wakala

2.12.2 Deposit:

Quard Local Documentary Bill Purchased Foreign Documentary Bill Purchased

•

Al-Wadia Current Deposit

•

Mudaraba Savings Deposit

•

Mudaraba Short Term Deposit

•

Mudaraba Term Deposit:

•

One Month Three Months Six Months Foreign Currency Deposit

•

Mudaraba Savings Scheme:

Twelve Months Twenty Four Months Thirty Six Months

Monthly Savings Scheme(Money Grower) More than triple the Deposit in 10 years Monthly Income Scheme(Steady Money)

(Multiplus Savings) Mudaraba Hajj Deposit

More than Double the deposit in 6 years (Super Savings) We emphasize on non-fund business and fee based income. Bid bond/ bid security can be issued at customer’s request.

Our Bank is posed to extend L/C facilities to its importers / exporters through establishment of correspondent relations and Nostro Accounts with leading banks all over the world.

Moreover, Consumers can deposit their Telephone bill of Grameen Phone in all the branches except Motijheel and the consumers of Palli Buddut somity of Gazipur can deposit their electricity bill to Gazipur branch.

2.13 E-cash/ ATM Service: The bank is currently providing Credit Card Service (MasterCard) to the privileged customers of the bank in collaboration of Prime Bank. Floating VISA card for both Debit and Credit card service is under process.

2.14 Society for Worldwide Inter-bank Financial Telecommunication (SWIFT): Bank Identified Code (BIC): EXBKBDDH List of branches having Bank Identifier Code (BIC) Sl. No

Branch Name

BIC

1

MOTIJHEEL BRANCH

EXBKBDDH001

2

PANTHAPATH BRANCH

EXBKBDDH002

3

AGRABAD BRANCH

EXBKBDDH003

4

KHATUNGANJ BRANCH

EXBKBDDH004

5

IMAMGANJ BRANCH

EXBKBDDH006

6

GULSHAN BRANCH

EXBKBDDH007

7

NAWABPUR BRANCH

EXBKBDDH010

8

NARAYANGONG BRANCH

EXBKBDDH011

9

RAJUK AVENUE BRANCH

EXBKBDDH013

10

UTTARA BRANCH

EXBKBDDH015

11

JUIBLEE ROAD BRANCH

EXBKBDDH018

12

MIRPUR BRANCH

EXBKBDDH017

13

KARWAN BAZAR BRANCH

EXBKBDDH035

14

BOGRA BRANCH

EXBKBDDH021

INTERNATIONAL OPERATION List of Nostro A/c CIS of January-2002 > Sl. No

Name of Country

Name of the Bank

Currency

Bank Identifier Code

A/C No.

1

U.S.A.

American Express Bank Ltd. , New York

USD

AEIBUS33

739755

2

U.S.A.

Standard Chartered Bank , New York

USD

SCBLUS33

3582-048957-001

3

U.S.A.

Mashreqbank psc , New York

USD

MSHQUS33

70119908

4

U.S.A.

Citibank N. A. , New York

USD

CITIUS33

3615-1783

5

U.S.A.

Wachovia Bank N.A. , New York

USD

PNBPUS3NNYC

2000193008917

6

U.S.A

HSBC Bank N.A. , New York

USD

MRMDUS33

000148849

7

Hong Kong

Union De Banques Arabes Et Francaises (UBAF) Hong Kong Limited, Hong Kong

USD

UBAFHKHX

60-044200-00103-0-53

8

Hong Kong

Union De Banques Arabes Et Francaises (UBAF) Hong Kong Limited, Hong Kong

HKD

UBAFHKHX

60-044200-00126-0-53

9

Germany

Commerzbank AG, Frankfurt

EUR

COBADEFF

400 8701526 00 EUR

10

Germany

HypoVereinsbank , Munchen

EUR

HYVEDEMM

69105530

11

Germany

American Express Bank GMBH, Frankfurt

EUR

AEIBDEFX

018124200

12

U.K.

Standard Chartered Bank, London

GBP

SCBLGB2L

01-7083394-01

13

U.K.

HSBC BANK PLC, London

GBP

MIDLGB22

59180818

14

Japan

American Express Bank Ltd., Tokyo

JPY

AEIBJPJX

313000832

15

Japan

Union De Banques Arabes Et Francaises (U.B.A.F.), Tokyo

JPY

UBAFJPJX

1028157000 1000

16

Japan

Sumitomo Mitsui Banking Corporation, Tokyo

JPY

SMBCJPJT

4324

17

Switzerland

Habib Bank AG Zurich, Zurich

CHF

HBZUCHZZ

1-1-1-20110-1124701

18

Switzerland

Union Bank of Switzerland AG, Zurich

CHF

UBSWCHZH80A

230-75605.05A

19

Canada

The Bank of Nova Scotia, Toronto

CAD

NOSCCATT

527120027413

20

India

American Express Bank Ltd., Kolkata

ACU

AEIBINDXCAL

412800726

21

India

Citibank N.A., Mumbai

ACU

CITIINBX

0011440002

22

India

Standard Chartered Bank, Kolkata

ACU

SCBLINBB

322-0-513033-3

23

India

Arab Bangladesh Bank Ltd., Mumbai

ACU

ABBLINBB

300119

24

India

The Hong Kong Shanghai Banking Corporation Limited., Mumbai

ACU

HSBCINBB

019-134980-650

25

India

ICICI Bank Limited, Mumbai

ACU

ICICINBB

000406000235

26

Pakistan

NDLC-IFIC Bank Limited, Karachi

ACU

NIBPPKKA

0060-00344793701

27

Pakistan

The Hongkong and Shanghai Banking Corporation Limited, Karachi

ACU

HSBCPKKX

001-032101-190

28

Pakistan

Askari Commercial Bank Limited, Karachi

ACU

ASCMPKKA

020500092-2

29

Sri Lanka

Union Bank of Pakistan, Colombo

ACU

UNBLLKLC

3600-001780-051

30

Nepal

Nepal Bangladesh Bank Ltd. ( Kathmandu)

ACU

NPBBNPKA

011121 D

31

Bhutan

Bank of Bhutan Limited, Phuentsholing

ACU

BHUBBTBT

34016

National Commercial Bank, Jeddah

SAR

NCBKSAJE

88321015000105

32 Saudi Arabia

2.15 EXIM Bank at a Glance: Figure in crore Sl. No.

Particulars

2004

2005

2006

2007

01.

Authorized Capital

100.00

100.00

350.00

350.00

02.

Paid-up Capital

62.78

87.90

171.38

214.22

03.

Reserve Fund

35.73

57.00

81.09

113.46

04.

Deposits

1907.82

2831.90

3503.20

4154.66

05.

Investment(General)

1933.20

2604.60

3264.13

4019.52

06.

Investment(Shares & Bonds)

154.30

163.30

223.33

245.77

07.

Foreign Exchange Business 4931.24

7294.00

9617.51

11790.01

a) Import Business

2678.10

4143.20

4949.67

6139.94

b) Export Business

2241.84

3128.50

4623.46

5579.04

c) Remittance

11.31

22.30

34.38

71.03

08.

Operating Profit

83.58

117.58

137.87

190.82

09.

Loan as a % of total Deposit

101.97%

91.97%

93.18%

96.75%

10.

No. of Foreign Correspondent

200

222

246

246

11.

Number of Employees

768

934

1020

1104

12.

Number of Branches

28

28

30

35

13.

Return on Assets

3.44%

1.65%

1.73%

2.00%

2.16 Photo Gallery:

Signing Ceremony of Core Banking Exim Bank Donates Taka 20 Lac’s to Software of EXIM Bank

Ahsaniya Mishon Cancer Hospital

48th Board Meeting of EXIM Bank

Review

meeting

of

EXIM

Bank

regarding the attainment of goal fixed for the year 2006

23 rd Meeting of Shariah Council

Managers’ Conference, 2006

Get-Together of Officers’ & Executives of Exim Bank

Activities of General Banking and My Understanding 3.1 INTRODUCTION: General banking department is the heart of all banking activities. This is the busiest and important department of a branch, because funds are mobilized, cash transactions are made; clearing, remittance and accounting activities are done here.

3.2 ACTIVITIES OF GENERAL BANKING DEPARTMENT: Since bank is confined to provide the services everyday, general banking is also known as ‘retail banking’. In EXIM Bank LTD Principal Branch, the following departments are under general banking section: •

Account opening section

•

Deposit section

•

Cash

•

Remittance section

•

Clearing section

•

Accounts section

section

ACCOUNT OPENING SECTION: Account opening is the gateway for clients to enter into business with bank. It is the foundation of banker customer relationship. This is one of the most important sections of a branch, because by opening accounts bank mobilizes funds for investment.

Various rules and regulations are maintained and various documents are taken while opening an account. A customer can open different types of accounts through this department. Such as: I. Al –Wadia (Current) account.

II. Mudaraba Savings (SB) account.

III. Mudaraba Short Term Deposit (MSTD)

TYPES OF ACCOUNTS WITH TERMS AND CONDITIONS: I. Al- Wadia (Current) Account: Current account is purely a demand deposit account. There is no restriction on withdrawing money from the account. It is basically justified when funds are to be collected and money is to be paid at frequent interval.

Some Important Points are as follows Minimum opening deposit of TK.1000/- is required;  There is no withdrawal limit.  No interest is given upon the deposited money;  Minimum Tk.1000/= balance must always maintain all the time.

II. Mudaraba Savings (SB) Account: This deposit is primarily for small-scale savers. Hence, there is a restriction on withdrawals in a month. Heavy withdrawals are permitted only against prior notice.

Some Important Points are as follows Minimum opening deposit of Tk.5000/= is required;  Minimum Tk. 1000/= balance must always maintain all the time;  Withdrawal amount should not be more than 1/4 th of the total balance at a time and limit twice in a month.  If withdrawal amount exceed 1/4th of the total balance at a time no interest is given upon the deposited money for that month.

III. Mudaraba Short Term Deposit (MSTD) Account: Normally various big companies, organizations, Government Departments keep money in MSTD account. Frequent withdrawal is discouraged and requires prior notice. The deposit should be kept for at least seven days to get interest. The interest offered for MSTD is less than that of savings deposit. Interest is calculated based on daily minimum product and paid two times in a year. Interest rate is 4.50%.

ACCOUNTS OPENING PROCEDURE:

The account should be properly introduced by Any one of the following: Step 1

Step 2



An existing Current Account holder of the Bank.



Officials of the Bank not below the rank of an Assistant officer.



A respectable person of the locality well known to the

Manager/Sub-Manager of the Branch concerned.

Receiving filled up application in bank’s prescribed form mentioning what type of account is desired to be opened  The form is filled up by the applicant himself / herself 

Two copies of passport size photographs from individual are taken, in case of firms photographs of all partners are taken

Step 3

Step 4 Step 5 Step 6



Applicants must submit required documents



Application must sign specimen signature sheet and give mandate



Introducer’s signature and accounts number – verified by legal

officer Authorized Officer accepts the application Minimum balance is deposited – only cash is accepted Account is opened and a Cheque book and pay-in-slip book is given

DOCUMENTS REQUIRED FOR OPENING ACCOUNT: □ Individual / Joint Account: 1. Introduction of the account.

2. Two photographs of the signatories duly attested by the introducer.

3. Identity (copy of passport).

4. Joint Declaration Form (For joint a/c only).

5. Employee’s Certificate (in case of service holder). □ Partnership account: 1. Introduction of the account.

2. Two

photographs of the signatories duly attested by the introducer.

3. Partnership letter duly signed by all partners (Sign should be similar as stated in Partnership Deed).

4. Partnership Deed duly certified by Notary public.

5. Registration (If any).

6. Updated Trade license. □ Proprietorship account: 1. Introduction of the account.

2. Two

photographs of the signatories duly attested by the introducer.

3. Valid copy of Trade License.

4. Rubber stamp.

5. TIN number certificate.

6. Identity (Copy of passport).

7. Permission letter from DC/ Magistrate (in case of newspaper) □ Limited company 1. Introduction of the account.

2. Two photographs of the signatories duly attested by the Introducer.

3. Valid copy of Trade License.

4.

Board

resolution

Chairman/Managing

of

opening

A/C

duly

certified

by

the

director.

5. Certificate of Incorporation.

6. Certificate of Commencement (In case of Public limited company).

7. Certified (joint stock) true copy of the Memorandum and Article of Association of the Company duly attested by Chairman or Managing director.

8. List of directors along with designation & specimen signature.

9. Latest certified copy of Form – xii (to be certified by register of joint stock companies) (In case of Directorship change).

10. Rubber Stamp (Seal with designation of each person) 11. Certificate of registration (In case of Insurance Company – Obtained from department of Insurance from the Peoples Republic of BD). □

Club / societies account: 1. Introduction of the account.

2. Two photographs of the Signatories duly attested by the introducer.

3. Board Resolution for Opening A/C duly certified by President/ Secretary.

4. List of Existing Managing Committee.

5. Registration (if any).

6. Rubber Stamp.

7. Permission letter from Bureau of N.G.O. (In case of N.G.O. A/C).

3.3 Deposit Section: Deposit is the lifeblood of a bank. From the history and origin of the banking system We know that deposit collection is the main function of a bank.  Accepting deposits: The deposits that are accepted by EXIM Bank like other banks may be classified in to, a) Demand Deposits b) Time Deposits  Demand deposits: These deposits are withdrawn able without notice, e.g. current deposits. EXIM Bank accepts demand deposits through the opening of:a) current account b) Savings account c) Call deposits from the fellow bankers  Time deposits: A deposit which is payable at a fixed date or after a period of notice is a time deposit.

EXIM Bank accepts time deposits through Fixed Deposit Receipt (FDR), Short Term Deposit (STD) and Bearer Certificate Deposit (BCD) etc.

While accepting these deposits, a contract is done between the bank and the customer.

When the banker opens an account in the name of a customer, there arises a contract between the two. This contract will be valid one only when both the parties are competent to enter into contracts. As account opening initiates the fundamental relationship & since the banker has to deal with different kinds of persons with

different legal status, EXIM Bank

officials remain very much careful about the

competency of the customers. ď ś Fixed Deposit: The Local Remittance section of EXIM Bank also issues FDR. They are also known as time deposit or time liabilities. These are deposits, which are made with the bank for a fixed period, specified in advance. The bank need not maintain cash reserves against these deposits and therefore, the bank offers higher of interest on such deposits.

Opening of fixed Deposit Account: The depositor has to fill an account form where in the mentions the amount of deposit, the period for which deposit is to be made and name/names is which the fixed deposit receipt is to be issued. In case of a Joint name EXIM Bank also takes the instructions regarding payment of money on maturity of the deposit. The banker also takes specimen signatures of the depositors. A fixed deposit account is then issued to the depositor acknowledging receipt of the sum of money mentioned there. It also contains the rate of interest and the date on which the deposit will fall due for payment.

Term Deposits: These rates are not negotiable. In this table we can find out the percentage that is given by the bank for specific period of time to the customer.

Fixed deposit: 3 (three) month

SL no.

01

Range of amount TK 10000.00-Above

Rate of Interest 12.50%

Fixed deposit: 6 (six) month SL no.

01

Range of amount TK 10000.00-Above

Rate of Interest 12.75%

Fixed deposit: 12 (twelve) month

SL no.

01

Range of amount TK 10000.00-Above

Rate of Interest 13%

Payment of interest: It is usually paid on maturity of the fixed deposit. EXIM Bank calculates interest at each maturity date and provision is made on that “miscellaneous creditor expenditure payable accounts� is debited for the accrued interest.

Encashment of FDR: In case of premature FDR< EXIM Bank is not bound to accept surrender of the deposit before its maturity date. In order to deter such a tendency the interest on such a fixed deposit is made cut a certain percentage less the agreed rate. Normally savings bank deposit is allowed.

Loss of FDR: In case of lost of FDR the customer is asked to record a GD (general diary) in the nearest police station. After that the customer has to furnish an Indemnity Bond to EXIM Bank a duplicate FDR is then issued to the customer by the bank.

Renewal of FDR: In EXIM Bank, the instrument is automatically renewed within seven days after the date of its maturity if the customer does not come to encash the FDR. The period for renewal is determined as the previous one

3.4 Cash Section: Banks, as a financial institution, accept surplus money from the people as deposit and give them opportunity to withdraw the same by cheque, etc. But among the banking activities, cash department play an important role. It does the main function of a commercial bank i.e. receiving the deposit and paying the cash on demand. As this department deals directly with the customers, the reputation of the bank depends much on it. The functions of a cash department are described bellow: FUNCTIONS OF CASH DEPARTMENT: Cash Payment 1. Cash payment is made only against cheque 2. This is the unique function of the banking system which

is known as “payment on demand” 3. It makes payment only against its printed valid Cheque 1. It receives deposits from the depositors in form of cash Cash Receipt

2. So it is the “mobilization unit” of the banking system 3. It collects money only its receipts forms

□ Cash packing: After the banking hour cash is packed according to the denomination. Notes are counted and packed in bundles and stamped with initial. □ Allocation of currency: Before starting the banking hour all tellers give “Teller cash proof sheet”. The

head teller writes

requisition of money through the number of

denomination wise in “Reserve sheet” at the end of the

the

packet

day, all the notes

remained are recorded in the sheet.

3.5 REMITTANCE SECTION Carrying cash money is troublesome and risky. That’s why money can be transferred from one place to another through banking channel. This is called remittance.

Remittances of funds are one of the most important aspects of the Commercial Banks in rendering services to its customers.  Types of remittance:  Between banks and non banks customer  Between banks in the same country  Between banks in the different centers.  Between banks and central bank in the same country  Between central bank of different customers.

The main instruments used by the EXIM Bank of remittance of funds are  Payment order ( PO)  Demand Draft ( DD)  Telegraphic Transfer (TT)

So the basic three types of local remittances are discussed below Points

Explanation

Payment from

Pay Order

Demand Draft

TT

Pay Order gives the payee the right to claim payment from the issuing bank

Demand Draft is an order of issuing bank on another branch of the same bank to pay specified sum of money to payee on demand.

Issuing branch requests another branch to pay specified money to the specific payee on demand by Telegraph /Telephone

Payment from Payment from ordered Payment from ordered issuing branch branch branch only

Within the Generally clearinghouse used to area of issuing Remit fund branch.

Outside the Anywhere clearinghouse area of country issuing branch. Payee can also be the purchaser.

Payment is 1. Confirm that the DD made through is not forged one. clearing Payment 2.Confirm with sent Process of advice the paying 3.Check the ‘Test bank Code’ 4.Make payment Only commission

Charge

1.Confirm branch

in

the

issuing

2.Confirm Payee A/C 3.Confirm amount 4.Make payment 5.Receive advice

Commission + telex Commission charge Telephone

+

3.6 CLEARING SECTION: Cheques, Pay Order (P.O), Demand Draft (D.D.) Collection of amount of other banks on behalf of its customer are a basic function of a Clearing Department. 

Clearing:

Clearing is a system by which a bank can collect customers fund from one bank to another through clearing house. 

Clearing House:

Clearing House is a place where the representatives of different banks get together to receive and deliver cheque with another banks.

Normally, Bangladesh Bank performs the Clearing House in Dhaka, Chittagong, Rajshahi, and Khulna & Bogra. Where there is no branch of Bangladesh Bank, Sonali bank arranges this function. 

Member Of Clearing House:

EXIM Bank LTD. is a scheduled Bank. According to the Article 37(2) of Bangladesh Bank Order, 1972, the banks, which are the member of the clearinghouse, are called as Scheduled Banks. The scheduled banks clear the cheque drawn upon one another through the clearinghouse.

 Types of Clearing: A. Outward Clearing: When the Branches of a Bank receive cheque from its customers drawn on the other Banks within the local clearing zone for collection through Clearing House, it is Outward Clearing.

B. Inward Clearing : When the Banks receive cheque drawn on them from other Banks in the Clearing House, it is Inward Clearing. 

Types of clearing house: There are two type of clearing house: Those are 1) Normal clearing house 2) Same day clearing house

1. Normal clearing house: 1) 1st house: 1st house normally stands at 10 a.m. to 11a.m 2) 2nd house: 2nd house normally stands after 3 p.m. and it is known as return house.

2. Same day clearing house: 1) 1st house: 1st house normally stands at 11 a.m. to 12 p.m.

2) 2nd house: 2nd house normally stands after 2 p.m. and it is known as return house.

Who will deposit cheque for Clearing: Only the regular customers i.e. who have Savings, Current, STD & Loan Account in the bank can deposit cheque for collection of fund through clearing house.

Precaution at the time of cheque receiving for Clearing, Collection of LBC, OBC & Transfer: 1) Name of the account holder same in the cheque & deposit slip.

2) Amount in The cheque & deposit slip must be same in words & in figure 3) Date in the cheque may be on or before (but not more than six months back) clearing

house date.

4) Bank & Branch name of the cheque, its number & date in the Deposit slip.

5) Cheque must be signed.

6) Signature for confirmation of date, amount in words / in figure Cutting & Mutilation of cheque.

7) Cheque should be crossed (not for bearer cheque).

8) Account number in the deposit slip must be clear.

9) Depositorâ&#x20AC;&#x2122;s signature in the deposit slip.

Return house: Return House means 2nd house where the representatives of the Bank meet after 3 p.m. to receive and deliver dishonored cheque, which placed in the 1 st Clearing House.

Cheque may be dishonored for any one of the following reasons:

1) Insufficient fund.

2) Amount in figure and word differs.

3) Cheque out of date/ post- dated.

4) Payment stopped by the drawer.

5) Payee’s endorsement irregular / illegible / required.

6) Drawer’s signature differs / required.

7) Crossed cheque to be presented through a bank.

8) Other specific reasons not mentioned above.

The dishonor cheque entry in the Return Register & the party is informed about it.

Party‘s signature required in the return register to deliver the dishonor cheque. After duration, the return cheque is sent to the party’s mailing address with Return Memo.

If the cheque is dishonored due to insufficiency of funds than EXIM Bank charges.

25/=as penalty.

Responsibility of the concerned officer for the Clearing Cheque: 1) Crossing of the cheque.

2) (Computer) posting of the cheque.

3) Clearing seal & proper endorsement of the cheque.

4) Separation of cheque from deposit slip.

5) Sorting of cheque 1st bank wise and then on branch wise.

6) Computer print 1st branch wise & then bank wise.

7) Preparation of 1st Clearing House computer validation sheet.

8) Examine computer validation sheet with the deposit slip to justify the computer posting 9) Copy of computer posting in the floppy disk.

3.7 Bills Collection: In modern banking the mechanism has become complex as far as smooth transaction and safety is concerned. Customer does pay and receive bill from their counterpart as a result of transaction. Commercial bank’s duty is to collect bills on behalf of their customer.

Types of Bills for Collection

i. Outward Bills for Collection (OBC). ii. Inward Bills for Collection (IBC).

Outward Bills for Collection (OBC) OBC means Outward Bills for Collection .OBC exists with different branches of different banks outside the local clearing house. Normally two types of OBC: 1) OBC with different branches of other banks 2) OBC with different branches of the same bank

Procedure of OBC: 1) Entry in the OBC register.

2) Put OBC number in the cheque.

3) “Crossing seal” on the left corner of the cheque & “ payees account will be credited on realization “ seal on the back of the cheque with signature of the concerned officer.

4) Dispatch the OBC cheque with forwarding.

5) Reserve the photocopy of the cheque, carbon copy of the forwarding and deposit slip of the cheque in the OBC file.

Commission for collection: Up to 1 lac ---------------------------------------------- 0.15% Above 1 lac---------------------------------------------- 0.10% Above 5lac ---------------------------------------------- 0.05%

Inward bills for collection (IBC) When the banks collect bills as an agent of the collecting branch, the system is known as IBC. In this case the bank will work as an agent of the collection bank. The branch receives a forwarding letter and the bill.

Procedure of IBC: 1. IBC against OBC: To receive the OBC cheque first we have to give entry in the IBC Register .The IBC number should put on the forwarding of the OBC with date.

2. Deposit of OBC amount: OBC cheque amount is put into the “sundry depositsundry Creditors account”, prepare debit & credit voucher of it . If the OBC cheque is honored, send credit advice (IBCA) with signature & advice number of the concern branch for the OBC amount.

3. Again place in the clearing house or send the OBC cheque with Return Memo to the issuing branch according to their information.

3.8 ACCOUNTS SECTION: Accounts Department is called as the nerve Centre of the bank. In banking business, transactions are done every day and these transactions are to be recorded properly and systematically as the banks deal with the depositors’ money. . Improper recording of transactions will lead to the mismatch in the debit side and in the credit side. To avoid these mishaps, the bank provides a separate department; whose function is to check the mistakes in passing vouchers or wrong entries or fraud or forgery. This department is called as Accounts Department. If any discrepancy arises regarding any transaction this department report to the concerned department.

Besides these, the branch has to prepare some internal statements as well as some statutory statements, which are to be submitted to the Central Bank and the Head Office. This department prepares all these statements.

Workings of this department:  Recording the transactions in the cashbook.  Recording the transactions in general and subsidiary ledger.  Preparing the daily position of the branch comprising of deposit and cash.  Preparing the daily Statement of Affairs showing all the assets and liability of the branch as per General Ledger and Subsidiary Ledger separately.

 Recording inters branch fund transfer and providing accounting treatment in this regard.  Preparing the monthly salary statements for the employees.  Preparing the weekly position for the branch which is sent to the Head Office to maintain Cash Reserve Requirement (C.R.R)  Preparing the monthly position for the branch which is sent to the Head Office to maintain Statutory Liquidity Requirement (S.L.R)  Preparing the budget for the branch by fixing the target regarding profit and deposit so as to take necessary steps to generate and mobilize deposit.  Recording of the vouchers in the Voucher Register.  Packing of the correct vouchers according to the debit voucher and the credit voucher

Activities of Foreign Exchange Department And My Understanding

4.1 INTRODUCTION H.E. Evitt defined “Foreign Exchange” as the means and methods by which rights to wealth expressed in terms of the currency of one country are converted into rights to wealth in terms of the currency of another country.

Foreign Exchange Department is international department of the bank. It deals with globally and facilitates international trade through its various modes of services. It bridges between importers and exporters. Bangladesh Bank issues license to scheduled banks to deal with foreign exchange. These banks are known as Authorized Dealers. If the branch is authorized dealer in foreign exchange market, it can remit foreign exchange from local country to foreign country. This department mainly deals with foreign currency. This is why this department is called foreign exchange department.

Foreign exchange is the means and methods by which rights to wealth in a country’s currency are converted into rights to wealth in another country’s currency. In banks when we talk of foreign exchange, we refer to the general mechanism by which a bank converts currency of one country into that of another. Foreign Exchange Department (FED) is the international department Bangladesh Bank issues license to scheduled banks to deal with foreign exchange. These banks are known as Authorized Dealers. If the branch is authorized dealer in foreign exchange market, it can remit foreign exchange from local country to foreign countries. So EXIM Bank, Principal branch is an authorized dealer.

There are three kinds of foreign exchange transaction: 1. Import 2. Export 3. Remittance.

4.2 IMPORT BUSINESS To import, a person should be competent to be and importer’. According to Import and Export Control Act, 1950, the Office Of Chief Controller Of Import and Export provides the registration (IRC) to the importer. In an international business environment, buyers and sellers are generally unknown to each other. So seller of goods always seeks security for the payment of his exported goods. Bank gives export guarantee that it will pay for the goods on behalf of the buyer if the buyer does not pay. This guarantee is called Letter of Credit. Thus the contract between importer and exporter is given a legal shape by the banker by ‘Letter of Credit’.

 LETTER OF CREDIT Definition A letter of credit is a letter issued by a bank (know as the opening or the issuing bank) at the instance of its customer (known as the opener) addressed to a person (beneficiary) undertaking that the bills drawn by the beneficiary will be duly honored by it (opening bank) provided certain conditions mentioned in the letter gave been complied with.

•

Parties to the L/C

Importer

Who applies for L/C

Issuing Bank

It is the bank which opens/issues a L/C on behalf of the importer.

Confirming

It is the bank, which adds its confirmation to the credit and it,

Bank

is done at the request of issuing bank. Confirming bank may or may not be advising bank.

Advising

or It is the bank through which the L/C is advised to the

Notifying Bank

exporters. This bank is actually situated in exporter’s country.

It may also assume the role of confirming and / or negotiating bank depending upon the condition of the credit.

Negotiating

It is the bank, which negotiates the bill and pays the amount

Bank

of the beneficiary. The advising bank and the negotiating

bank may or may not be the same. Sometimes it can also be confirming bank.

Accepting Bank

It is the bank on which the bill will be drawn (as per condition of the credit). Usually it is the issuing bank.

Reimbursing

It is the bank, which would reimburse the negotiating bank

Bank

after getting payment â&#x20AC;&#x201C; instructions from issuing bank.

4.3 STEPS FOR IMPORT L/C OPERATION â&#x20AC;&#x201C; 8 STEPS OPERATION Step 1 - Registration with CCI&E: o For engaging in international trade, every trader must be first registered with the Chief Controller of Import and Export(CCI & E) .By paying specified registration fees to the CCI & E. the trader will get IRC/ERC (Import/Export Registration Certificate), to open L/C with bank, this IRC is must

Step 2 - Determination terms of credit: The terms of the letter of credit are depending upon the contract between the importer and exporter. The terms of the credit specify the amount of credit, name and address of the beneficiary and opener, tenor of the bill of exchange, period and mode of shipment and of destination, nature of credit, expiry date, name and number of sets of shipping documents etc.

Step 3 -Proposal for Opening of L/C: To have an import L/C limit an importer submits an application to department to EXIM Bank. The proposal contains the following particulars: o Full particulars of the bank account o Nature of business o Required amount of limit o Payment terms and conditions o Goods to be imported o Offered security

o Repayment schedule Step 4 - Application by importer to the banker to open letter of credit: For opening L/C, the importer is required to fill up a prescribed application form provided by the banker along with the following documents:

1. L/C Application form

7. Authority to debit account

2. Filled up LCA form

8. Filled up amendment request Form

3. Demand Promissory Note

9. IMP form

4. pro-forma invoice

10. Insurance cover note and money receipt.

5. Tax Identification number

11. Membership certificate

6.Import registration certificate

12. Rate fluctuation undertaking

Step 5 - Opening of L/C by the bank for the opener: o Taking filled up application form the importer. o Collects credit report of exporter from exporterâ&#x20AC;&#x2122;s country through his foreign correspondence there. o Opening bank then issues credit by air mail/TELEX/SWIFT followed by L/C advice as asked by the opener through his foreign correspondent or branch as the case may be, at the place of beneficiary. The advising bank advises the L/C to the beneficiary on his own form where it is addressed to him or merely hand over the original L/C to the beneficiary if it is so addressed.

Step 6 â&#x20AC;&#x201C; Shipment of goods and lodgment of documents by exporter: o Then exporter ships the goods to the destination of the importer country o Sends the documents to the L/C opening bank through his negotiating bank.

Generally the following documents are sent to the Opening Banker with L/C:

1. Bill of Exchange

6. Packing List

2. Bill of Lading

7. Advice Details of Shipment

3. Commercial Invoice

8. Pre-shipment Inspection Certificate

4. Certification of Origin

9. Vessel Particular

5. A certificate stating that each packet 10.Shipment Certificate contains the description of goods over the packet.

Step 7 - Lodgment of Documents by the opening Bank from the negotiating bank: After receiving the documents, the opening banker scrutinizes the documents. If any discrepancy found, it informs the importer. If importer accepts the fault, then opening bankers call importer retiring the document. At this time many thing can happen.

These are indicated in the following: o Discrepancy found but the importer accepts - no problem occurs in lodgment. o Discrepancy found and importer not agreed to accept - In this case, importer protest and send back all the documents to the exporter and request his to make in the specified manner. Here banker is not bound to pay because the documents send by exporter is not in accordance with the terms of L/C. o Documents are OK but importer is willing to retire the documents - In this case bank is obligated to pay the price of exported goods. Since importer did not pay for bill of exchange, this payment by bank is one kind of credit to the importer and this credit in banking is known as PAD. o Everything is O.K. but importer fails to clear goods from the port and request bank to clear - In this case banks clear the goods and takes delivery of the same by paying customs duty and sales tax etc. So, this expenditure is debited to the importerâ&#x20AC;&#x2122;s account and in banking it is called LIM.

Step 8 - Retirement:

The importer receives the intimation and gives necessary instruction to the bank for retirement of the import bills or for the disposal of the shipping document to clear the imported goods from the customs authority. The importer may instruct the bank to retire the documents by debiting his account with the bank or may ask for LTR (Loan against Trust Receipt).

4.4 ACCOUNTING PROCEDURE IN CASE OF L/C OPENING: When the officer thinks fit the application to open a L/C, giving the following entriescreates the following charges-

Particulars Customer’s A/C L/C Margin A/C Commission A/C on L/C VAT SWIFT Charge Data max Stamp Postage DHL/Courier

Debit/ Credit Debit Credit Credit Credit Credit Credit Credit Credit Credit

Charges in Taka

50% 15% on commission 3000/= 1000/= 350-470/= 300/= 1500

 Amendment of L/C: After opening of L/C some time’s alteration to the original terms and conditions become necessary. These amendments involve changes in a. Unit price b. Extension of validity o the L/C c. Documentary requirements etc.

Such amendments can be affected only if all the concerned parties agree i.e. the beneficiary, the importer, the issuing bank and the advising bank.

For any amendment the importer must request the issuing bank in writing duly supported by revised indent/ Proforma invoice. The issuing bank then advises the required amendment to the advising bank. L/C amendment commission including postage is charged to the clients A/C.

 Loan against Trust Receipts (LTR): o Advance against a Trust Receipt obtained from the Customers are allowed to only first

class tested parties when the documents covering an import

shipment or other goods pledged to the Bank as security are given without payment. However, for such advances prior permission/sanction from Head Office must be obtained. o The customer holds the goods or their sale-proceeds in trust for the Bank, till such time, the loan allowed against the Trust Receipts is fully paid off. o The Trust Receipt is a document that creates the Banker’s lien on the goods and practically amounts to hypothecation of the proceeds of sale in discharge of the lien.  Loan Against Imported Merchandise (LIM): Advance (Loan) against the security of merchandise imported through the Bank may be allowed either on pledge or hypothecation of goods, retaining margin prescribed on their Landed Cost, depending on their categories and Credit Restriction imposed by the Bangladesh Bank. Bank shall also obtain a letter of undertaking and indemnity from the parties, before getting the goods cleared through LIM Account.  Payment Procedure of Import Documents: This is the most sensitive task of the Import Department. The officials have to be very much careful while making payment. This task constitutes the following Date of Payment: Usually payment is made within seven days after the documents have been received.

If the payment is become deferred, the negotiating bank may claim interest for making delay.

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.

Requisition for the Foreign Currency: For arranging necessary fund for payment, a requisition is sent to the International Department.

Transmission of Message: Message is transmitted to the correspondent bank ensuring that payment is being made.

4.5 EXPORT BUSINESS The goods and services sold by Bangladesh to foreign households, businessmen and Government are called export. The export trade of the country is regulated by the Imports and Exports (control) Act, 1950. There are a number of formalities, which an exporter has to fulfill before and after shipment of goods. The exports from Bangladesh are subject to export trade control exercised by the Ministry Of Commerce through Chief Controller of Imports and Exports (CCI & E). No exporter is allowed to export any commodity permissible for export from Bangladesh unless he is registered with CCI & E and holds valid Export Registration Certificate (ERC). The ERC is required to be renewed every year. The ERC number is to be incorporated on EXP forms and other documents connected with exports. The formalities and procedure are enumerated as follows: 1. Obtaining exports LC: To get export LC form exporter issued by the importer.

2. Submission of export documents: Exporter has to submit all necessary documents to the collecting bank after shipping of goods 3. Checking of export documents: After getting the documents banker used to check the documents as per LC terms.

4. Negotiation of export documents: If the bank accepts the document and pays the value draft to the exporter and forward the document to issuing bank that is called a negotiating bank. If the bank does buy the LC then the bank normally act as collecting bank.

5. Realization of proceeds: This is the period when the issuing bank has realized the payment.

6. Reporting to the Bangladesh bank: As per instruction by Bangladesh bank the bank has to report to respective department of Bangladesh bank by mentioning latest payment.

7. Issue to proceeds realization certificate (PRC): bank has to issue proceed realization certificate of export LC to the supplier / exporter for getting cash assistance

EXPORT OPERATION Bangladesh exports a large quantity of goods and services to foreign households.

Readymade textile garments (both knitted and woven), Jute, Jute-made products, frozen shrimps, tea are the main goods that Bangladeshi exporters exports to foreign countries. Garments sector is the largest sector that exports the lion share of the country's export. Bangladesh exports most of its readymade garments products to U.S.A and European Community (EC) countries. Bangladesh exports about 40% of its readymade garments products to U.S.A. Most of the exporters who export through EXIM BANK are readymade garment exporters. They open export L/Cs here to export their goods, which they open against the import L/Cs opened by their foreign importers.

Export L/C operation is just reverse of the import L/C operation. For exporting goods by the local exporter, bank may act as advising banks and collecting bank (negotiable bank) for the exporter.

As an advising bank: It receives documents from the foreign importer and hands it over to the exporter. Sometimes it adds confirmation on the L/C on request from the Opening Bank. By adding confirmation, it assumes the responsibility to make payment to the exporter.

As Negotiating Bank: It negotiates the bills and other shipping documents in favor of the exporter. That is, it collects the proceeds of the export-bill from the drawee and credits the exporterâ&#x20AC;&#x2122;s account for the same. Collection proceed from the export bill is

deposited in the bank’s NOSTRO account in the importer’s country. Sometimes the bank purchases the bills at discount and waits till maturity of the bill. When the bill matures, bank presents it to the drawee to encash it.

In our country, Export and Import operation of bank is very much related with one another because of use of Back to Back and maturity of payment for Back-to-Back L/C is set in such that it can be paid out of export proceeds. .

BACK-TO-BACK L/C It is simply issued to the clients against an import L/C. 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 bank to Back L/C. Back-toBack L/C is commonly known as Buying L/C. On the contrary, Master Export L/C is known as Selling L/C. Features of Back-to-Back L/C: •

An Import L/C to procure goods /raw materials for further processing.

•

It is opened based on Export L/C.

•

It is a kind of Export Finance.

•

Export L/C is at Sight but back to Back L/C is at Usance.

•

No margin is required to open Back to back L/C

•

Application is registered with CCI&E

•

Applicant has bonded warehouse license.

•

L/C value shall not exceed the admissible percentage of net FOB value of relative Master L/C.

•

Usance period will be up to 180 days.

•

The import L/C is opened for 75% of the value of Export L/C.

•

Here L/C issued against the lien of export L/C.

•

Arrangements are such that export L/C matures first then out of this export profit, import L/C is paid out.

Documents Required for Opening a Back-to-back L/C: In EXIM Bank Principal Branch, following papers/ documents are required for opening a back-to-back L/C1. Master L/C 2. Valid Import Registration Certificate (IRC) and Export Registration Certificate (ERC) 3. L/C Application and LCAF duly filled in and signed 4. Performa Invoice or Indent 5. Insurance Cover Note with money receipt 6. IMP Form duly signed In addition to the above documents, the followings are also required to export oriented garment industries while requesting for opening a back-to-back L/C – 1. Textile Permission 2. Valid Bonded Warehouse License 3. Quota Allocation Letter issued by the Export Promotion Bureau (EPB) in favor of the applicant for quota items.

Checklist of exports L/C: Following defective points are usually found in the Master L/C. So, the bank officials so much carefully check these points. These are: 1. Name of the Advising Bank.

2. Name of Transferring Bank 3. Form of Doc. credit: • Name of Issuing Bank • Documentary Credit No. and issuing date • Date of shipment • Expiry date and place 4. Applicant/ for order of/ On Account.

5. Beneficiary/ Favoring 6. Amount 7. Availability of Credit 8. Partial shipment/ Transshipment

9. Payment condition /Draft Sight 10. Category.

11. Description of goods: • Item • Total Qty • Unit price 12. B/L Clause 13. Reimbursement clause.

14. UCPDC Clause 15. Net FOB value.

Payment of back-to-back L/C: In case back to back as 60-90-120-180 days of maturity period, deferred payment is made. Payment is given after realizing export proceeds from the L/C issuing bank.

L/C under EDF: •

Exporter development Fund is created by Bangladesh Bank to give encourages to the exporter in Bangladesh.

•

Generally Back-to-Back L/C is a L/C that is here bill of exchange is payable after some maturity date say 90 or 120 days after the date of acceptance/negotiation. But some foreign seller may require sight payment.

Here import L/C matures first. In that case Bangladesh Bank gives the fund to the bank to pay the price of imported goods in favor of the local purchaser of raw materials. When export proceeds come, first Bangladesh Bank loan to the importer is adjusted and remaining part goes to the importer of raw materials.

Negotiation of exports documents: The most common method of financing exporters is negotiation of documents under L/C. It is a post-shipment credit. Here the bank acts as a negotiating bank. After the

shipment of the goods, the exporter submits the relative documents to the branch for negotiation. The documents are to submit within the period mentioned in the L/C. after approval of negotiation of the bill the full particulars of the documents are entered into the Foreign bill Purchased (F.B.P) register. The documents are sent to the L/C opening branch with a forwarding letter. The branch claim reimbursement from the issuing bank or from the reimbursing bank, giving clear instructions to credit the proceeds of the bill to the EXIM Bank head office NOSTRO A/C maintained with the named correspondent bank abroad under telex intimation to the Principal branch and Head Office (International Division).

Negotiation stands for payment of value to the exporter against the documents stipulated in the L\C. If documents are in order, EXIM Bank 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 EXIM Bank 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) Presentation of export documents for negotiation/Purchase: After shipment, exporter submits the following documents to EXIM Bank for negotiation.

•

Bill of exchange

•

Bill of Lading

•

Invoice

•

Insurance Policy/Certificate

•

Certificate of Origin

•

Inspection Certificate

•

Consular Invoice

•

Packing List

•

Quality Control Certificate

•

G.S.P. certificate.

Foreign documentary bills for collection (FDBC): EXIM Bank forwards the documents for collection due to the following reasons, •

If the documents have discrepancies.

•

If the exporter is a new client.

FDBC signifies that the exporter will receive payment only when the issuing bank gives payment. EXIM Bank make regular follow-up with the L/C opening Bank in case of any delay in getting payment.

Settlement of Local Bills: 1. The settlement of local bills is done in the following ways, 2. The customer submits the L/C to EXIM Bank along with the documents to negotiate 3. EXIM Bank official scrutinizes the documents to ensure the conformity with the terms and conditions.

4. The documents are then forwarded to the L/C opening bank.

5. The L/C issuing bank gives the acceptance and forwards an acceptance letter.

6. Payment is given to the customer on either by collection basis or by purchasing the document.

Mode of payment of export bill under L/C: As per UCPDC 500, 1993 revision there are four types of credit. These are as follows: 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. No bill of exchange is involved. 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 him in addition to other documents that the bank negotiates.

4.6 FOREIGN REMITTANCE This bank is authorized dealer to deal in foreign exchange business. As an authorized dealer, a bank must provide some services to the clients regarding foreign exchange and this department provides these services.

The basic function of this department are outward and inward remittance of foreign exchange from one country to another country. In the process of providing this remittance service, it sells and buys foreign currency. The conversion of one currency into another takes place at an agreed rate of exchange, which the banker quotes, one for buying and another for selling. In such transactions the foreign currencies are like any other commodities offered for sales and purchase, the cost (convention value) being paid by the buyer in home currency, the legal tender.

Remittance procedures of foreign currency: There are two types of remittance: I. Inward remittance II. Outward remittance.

I. Inward Foreign Remittance: 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.

Purchase of foreign exchange is to be reported to Exchange control Department of Bangladesh bank on Form-C. II. Outward Foreign 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.

4.7 Activities of this department: 1. Issuance of TC, Cash Dollar /Pound 2. Issuance of FDD, FTT & purchasing, Payment of the same.

3. Passport endorsement.

4. Encashment certificate.

5. F/C Account opening &filing.

6. Opening of Export FC retention Quota A/C& maintain.

7. Maintenance of ledger of Cash Dollar, FC Deposit A/C & TC. 8. Maintain FBC register &follow up FBC. 9. Opening of Student file &Maintain.

10. Preparation of all related statement, Voucher & posting.

11. Preparation of Weekly, Monthly, Yearly Statement for Bangladesh Bank returns timely.

12. Attending all related correspondence to other Bank or Institutions.

Modes: The remittance process involves the following four modes Cash Remittance

Sell

Bank sell Dollar / Pound for using in abroad by the purchaser. The maximum amount of such sell is mentioned in the Bangladesh Bank publication of ‘Convertibility of Taka for Currency Transactions in Bangladesh’.

Purchase

Bank can purchase dollar from resident and non – resident Bangladeshi and Foreigner. Most dollars purchased comes from realization of Export Bill of Exchange.

Dollar/ Pound

Traveler’s Cheque (TC)

Issue of TC TC is useful to traveler abroad. Customers can encash the TC in abroad from the drawee bank. TC is alternative to holding cash and it provides better security than holding cash in hand.

Buying Of TC

Telex Transfer

Outward TT

If any unused leaf of TC is surrendered bank buys it from the customer. All payments are made in local currency. Banks generally buy only those TC. It remits fund by tested TT via its foreign correspondence bank in which it is maintaining its NOSTRO Account.

Incoming TT Foreign Demand Draft

It also makes payment according to telegraphic message of its foreign correspondence bank from the corresponding VOSTRO Account.

Bank issue Demand Draft in favor of purchaser or any other according to instruction of purchaser. The payee can collect it for the drawee bank in which the Issuing bank of Demand Draft holds its NOSTRO Account. Bank also makes payment on DD drawn on this bank by its foreign correspondence bank through the VOSTRO Account.

In these processes of remittance, bank must have to make profit as a business institution. Profit is made in two ways: A. Commission charged B. Difference in the buying and selling rate.

Miscellaneous Services by This Department: Student File: Students who are desirous to study abroad can open file in the Bank. By opening this file, bank assures the remittance of funds in abroad for study.

F.C Accounts: Foreign Currency Accounts opened in the names of Bangladeshi nationals or persons of Bangladeshi origin working or self â&#x20AC;&#x201C; employed abroad can now are maintained as long as the account holders desires RFCD: Stands for Resident Foreign Currency Accounts. Persons ordinary resident in Bangladesh may maintain foreign currency accounts with foreign exchange brought in at abroad. Balance of such accounts is freely remittable abroad.

Formalities for opening foreign currency (FC) Account: The AD may without prior approval of the Bangladesh Bank open Foreign Currency (FC) account in the name of: 1. Bangladesh national residing abroad.

2. Foreign nationals residing abroad/ in Bangladesh and also foreign firms 3. Registered abroad and operating in Bangladesh and abstract foreign missions and their expatriate employees.

4. Resident of Bangladesh nationals working with the foreign / international organization operating in Bangladesh provided their salary in paid in foreign currency.

Foreign exchange earned through business done or service rendered in Bangladesh cannot be put into these accounts.

No payment in foreign currency (FC) may be made to any resident in Bangladesh out of the foreign currency (FC) account.

All citizens of Bangladesh and other persons are residing to Bangladesh who became the owner of any foreign currency (FC).

Papers required: •

Application duly billed in and signed.

•

Photograph (two copies).

•

Passport photocopy.

•

Work permit from board investment. ( in case of foreign nationals).

Rate of exchange: It means the price of one currency expressed in terms of another currency. Rate of exchange is the rate by which the relation among different foreign currencies is established in terms of local currency of that country. Value at which one country currency can be converts into another’s country.

In exercise of the power conferred by section three of exchange regulation ACT 1947, Bangladesh has issued license to certain bank to deal in foreign exchange is called authorized dealer.

The Human Resource Management (HRM) and The Human Resource Department of EXIM Bank: Though I was assigned in a general branch at Mirpur I was unable to figure out the whole HR Management of EXIM Bank Ltd. But I was able to asses their some policy and procedures of Human Resource management (HRM) by observation and personal interview. These policies and procedures are familiar to me because I had already learned from my university courses. I will describe some important points of HRM related to by observation and describe the situation in EXIM Bank Ltd. Those policies and procedures are mentioned briefly bellow according to HRM components and HRM Model: Human resource management (HRM) is concerned with â&#x20AC;&#x2DC;peopleâ&#x20AC;&#x2122; dimension in management. Since every organization is made up of people, acquiring their services, developing their skills, motivating them to high levels of performance, and ensuring that they continue to maintain their commitment to the organization are essential to achieving organizational objectives.

Those organizations that are able to acquire, develop, stimulate, and keep outstanding workers will be both effective and efficient. Those organizations that are ineffective or inefficient risk the hazard of stagnating or going out of business. Survival of an organization requires competent managers and workers coordinating their efforts toward an ultimate goal. While successful coordination cannot guarantee success, organizations that are unsuccessful in getting such coordination from managers and workers will ultimately fail!

To look HRM more specifically, that it is a process consisting of four functionsacquisition, development, motivation, and maintenance-of Human Resource (HR). In less-academic terms, we might describe these four functions as getting people, preparing them, activating them, and keeping them.

Acquisition Human Resource Planning Recruiting -Internal -External Employee Socialization

Maintenance Safety and Health Employee/Labor relations

External Influences

Development Employee Training Management Development Career Development

Motivation Job Design Performance Evaluations Rewards Job Evaluation Compensation/Benefits Discipline

Figure: Human Resource Management (HRM) Components.

External influences: Important environmental influences HRM practices-government regulations, labor unions, management practices, an Equal Employment Opportunity (EEO). It has been argued that these forces have a major impact on HRM by constraining the decision-making discretion of mangers. Who can be hired and fired, how personnel information is disseminated, what equipment can and cannot be used, what methods can be used for evaluating jobs and employee performance, and how wage rates are determined are just a few of the issues that have constrained many, if not most, organizations.

Acquisition of Human Resources: It is here that management ensure that is has the right number and kind of people, at the right places, at the right times, capable of

effectively and efficiently completing the work required so that the organization can achieve its overall objectives.

If human resource planning uncovers the need to hire additional employees, one must discover potential applicants. These potential applicants must be screened to identify job applicants who are likely to be successful if hired.

The acquisition function is completed when the selected applicants cants have been placed in the organization’s culture and their work environment. The organization’s culture conveys how things are done and what matters. When employees have adapted to the organization’s culture, they have “learned the rope” or “Socializing the New Employee.”

Development of Human Resources: Competent employees will not remain competent forever. Some are minimally qualified upon entering the organization but require additional training or education. Others enter the organization capable of performing at an optimal level, but their skills become obsolete over time. And, of course, organizations change over time, and management must ensure that there is an appropriate match of individual abilities with organizational needs fro future. Each of these is considered in the development function.

Employee training gives individuals specific skills that they will use on the job; management development looks at practice for ensuring a continual flow of managers.

When human resources have been developed effectively, one can expect to have competent employees with up-to-date skills ad knowledge.

Motivation of Human Resources: High performance depends on both ability and motivation. Many employees with extraordinary talent do not perform satisfactorily because they will not exert the necessary effort. Therefore, we desire to have capable employees who are highly motivated.

If a person performs effectively, extrinsic factors such as job design, working conditions, job security, and supervision must be seen as satisfactory. But that alone is not enough. Many people also look for intrinsic factors such as achievement,

recognition, and responsibility from their work. For individuals who place high value on intrinsic factors, the absence of these factors can reduce oneâ&#x20AC;&#x2122;s willingness to exert high degrees of effort.

But other forces can influence motivation. The performance appraisal process and its outcome will affect an employeeâ&#x20AC;&#x2122;s motivation. People expect there work to be objectively evaluated. If they think their efforts will be unfairly judge, motivation will decrease. Furthermore, there rewards or punishments that follow the appraisal will influence motivation.

At this juncture, if we have effectively motivated the individual who has up-to-date skills and knowledge we can expect to have a competent employee who desire to exert a high level of effort.

Maintenance of Human Resources: The objective of the last major function is to retain people who are performing at high levels. This requires that the organization provide safe and healthful working conditions and satisfactory labor relations. If these activities are performed effectively, we can expect to have competent employees who are committed to the organization and satisfied with there job.

Research and the Future: The effective management of human resources depends on refining HRM practices to changing conditions. Research allows the manager to keep abreast of the latest findings in HRM and provides a framework by which solution to unique HRM problems can be found. This is true we cannot bound Human Resource Management in any boundary because it deals with human beings most unpredictable create in the world. But we can manage human Resources by continuous change and bringing dynamism in our HR policies. The successful manager will be at the forefront of these changes with new and relevant HRM practices.

On the basis of above discussion we can now understand the basic importance of HRM in an organization. We can understand how should it maintain and what are basic process should be followed to keep HRM up-to-date, etc. From this discussion I want to conclude this chapter with comparison of EXIM Bank HR department with my theoretical knowledge.

Using these Human Resource Management (HRM) Components we can say that EXIM Bank Ltd. has a very good culture for employee socialization. EXIM Bank Ltd. Has a proper HR planning for the organization. EXIM Bank Ltd. HR department is well concern about there management, employees training and development. They are also has a well defined career path in the organization. EXIM Bank Ltd. Provide a handsome package of compensation varied according to position fro there management team and employees. They frequently evaluate employeeâ&#x20AC;&#x2122;s performance through branch managerâ&#x20AC;&#x2122;s information. EXIM bank is followed national various rules and regulations for a healthy and safe work environment for their employees.

Now we will see from the HRM Wheel or Model point of view the status of EXIM Bank Ltd. Next:

Training & Development Union/Labor Relation

Employee Assistance Focus: providing personal problem solving, counseling to individual employee.

Focus: identifying, assessing and – through Focus: assuring health planned learning – helping develop the key union/organization competencies which relationship. enable individuals to perform current or future jobs.

Organization development

Human Resource Areas Outputs: Quality work life Productivity Readiness for change

Compensation/Benefits Focus: assuring compensation and benefits fairness and consistency.

Personnl Research & Information Systems

Focus: assuring a personnel information base.

Selection & staffing

Focus: assuring healthy inter and intra-unit relationships and helping groups initiate and manage change.

Organization/Job Design Focus: defining how tasks, authority and systems will be organized and integrated across organization units and in individual jobs.

Human Resource Planning

Focus: determining the organization’s major Focus: matching people Human Resource needs, and their career needs strategies and and capabilities with philosophies. jobs and career path.

Figure: Human Resource Management Model or Wheel

First of all let see according to the HRM Wheel or Model what the status of EXIM Bank Ltd. HR department is: Point of consideration

Proper use

Moderate

No use

use Training and Development Organization and Development Organization/Job Design Human Resource Planning Selection and Staffing Personnel Research and Information System Compensation/Benefits Employee Assistance Union/Labor Relations

        N/A

N/A

N/A

From the above table we can understand that EXIM Bank Ltd. is following Training and Development, Organization/Job Design, and Human Resource Planning properly.

On the other hand Organization and Development, Selection and Staffing, and Personnel Research and Information System are followed moderately in the organization. Selection and Staffing are partly biased by directing body and other related stake holders. Personnel Research and Information system is created and updated based on branch information. Compensation and Benefits are paid well compare to other peer groups but some times it given based on HR manager, branch manager’s willingness. Employees are suffering if they had done any fault or there have an influence of branch manger on compensation and benefits. That is why I consider these factors as moderately followed by the bank.

At last only Employee Assistance from the all components of a sound HRM model is ignored by the EXIM Bank Ltd. In the EXIM Bank Ltd. There have no such system to give assistance to any employee for his or her personal problems. That is why this factor considered as a no use factor.

In banking sector, especially in private banking sector of country there is nothing like such typical trade union or labor union that is why it is not applicable in this case.

From the above discussion we can easily conclude that EXIM Bank Ltd. has a well organized HR department, but it has some short comings. If they can over come from these short comings there HR department can support the whole organization very promptly towards there goal.

Findings of The Study EXIM Bank’s General Banking & Foreign Exchange Department mission is to actively participate in the growth and expansion of our national economy by providing credit & foreign exchange facility to viable borrowers, efficiently delivered and competitively priced. The following general policy guidelines govern the implementation of the business strategy of EXIM Bank with respect to credit & foreign exchange risk.

 EXIM Bank Ltd. Has a well established HR department, consisting lots of talented personnel.  HR department of EXIM Bank Ltd. Provides a better planning and compensation package to their employees which well enough compare to its peer group.  Personnel Research and Information system is created and updated based on branch information.  How tasks, authority and systems will be organized and integrated across organization units and in individual jobs. All of these are well designed in this organization.  This Bank helps that customer who is engage in export & import business.  Foreign Exchange operations of EXIM Bank are more dynamic and less time consuming than other banks.  It is does not extend any credit facility against cheque or pledge of goods.  General banking side provides different types of deposit & credit department extended loan facilities to the general customer.

 It is follows the Islamic rules in every part of general banking.  Most of the Loan products of EXIM Bank of similar types. This Bank makes loan only to reputable clients who are involved in legitimate business activities and whose income and wealth are derived from legitimate sources.  This Bank does not extend credit where it does not have the industry knowledge or highly specialized skills needed to properly evaluate the proposal.  Bank requires that borrowers have a source of repayment established at the inception of the credit, and that any exception must be specifically addressed in the approval of credit.  It is engages primarily in the extension of credit in Bangladesh Taka or in the same currency as the collateral.  This Bank unsecured lending practices favor extensions of credit for short term, self-liquidating transactions.  This Bank extends venture capital to start up business or to businesses, which are entirely dependent on new technologies, but is considered with extreme caution and also secured by first class or other acceptable collateral.

Recommendations: It has been only eight years that EXIM bank in service. That is why one cannot expect that the bank would perform like any other banks that are in service decades or so.

EXIM Bank Limited is undoubtedly a successful bank. By this study I have gathered some practical knowledge about banking activities of EXIM Bank, in Bangladesh and other relevant matter. Policy guidelines have been established and will continue to be developed from time to time taking into consideration economic makeup and market requirement. If the limitations can be removed it will become more successful than at present. So I would like to recommend on the basis of my understanding removing its limitations as follows:

Human Resource Department: o HR department should develop such a system through which they can assess employees without any influence. Or they can develop self assistance system where employees will provide information to the HR department individually monthly. o EXIM Bank Ltd. Running a well designed recruiting process but they should follow an influence free and fair judgmental decision to recruit any new employee. o HR department should develop a system for personal problem solving, counseling to individual employee it will help to get and retain maximum motivated employees then ever. After it employees will feel that they are a significant part of the organization rather then just an ordinary employee. o HR department should organize regular training facilities based on employees need or demand.

General Banking Department o If the entire general Banking system is fully computerized then they satisfied the customer by provide fast service.

o If they establish networking system with their branches then it can easily transfer data within short time. o If they cancel the introducer system then they can collect more deposit through new account and it also satisfied the customers. o It can also take policy of advertising to communicate with the target audience.

Foreign Exchange Department o To attract more clients EXIM Bank has to create a new marketing strategy, which will increase the total export and import business. o Effective and efficient initiatives are necessary to recover the default loans. o Attractive incentive package for the exporter will help to increase the export and accordingly it will diminish the balance of payment gap of EXIM Bank. o Long-term training very much required for the foreign exchange officials. o Bank can provide foreign markets reports, which will enable the exporter to evaluate the demand for their products in foreign countries. o This department shall only remain engaged with the documentary aspects of international Trade like opening L/C for all types of import and negotiation of export bills. o The request of credit facilities in the form of L/Cs, PADs & PCC shall be assessed by a separate department (Credit department) for approval of the credit lines in the account shall convey to the foreign trade department the operational condition of the facilities to them for execution.

o The primary documentation and completion of other securities shall also be done by a section of credit department before conveying the credit to trade department.

Other o EXIM Bank should give more attention to advertisement to create more attraction among their customer, which is collect, more deposit and increase investment scope.

Conclusion: Lot of new commercial bank has established in last few years and the bank has made this banking sector very competitive. So, banks have to organize their operations and do their operations according to their need of market. Banking sector is no more depends on traditional system o banking.

We moved a long way from the time when the banks were deposit taking and money lending institution. The old concepts, attitude and methods in banking have undergone a marked change all over the world. Modern banking is an outcome development driven by changing financial activities and lifestyle. Bangladesh has not lagged behind. Banks are required to participate in the nation building activities and act as agent for bringing about socioeconomic changes.

As an internee of EXIM Bank Bangladesh, Mirpur branch I have truly enjoyed my internship from the viewpoint of learning and experience. I am confident that three months internship program in

EXIM Bank Bangladesh will definitely help me to

realize career in the job market.

During the course of my practical orientation I have try to learn the practical banking to realize my theoretical knowledge what I have gathered and going to acquired from my various courses. It is great pleasure for me to have practical exposure it couldnâ&#x20AC;&#x2122;t be possible for to compare the theory with practice.

Through the department s and sections are covered in the internship program , it is not possible to go to the depth of each activities of branch because of time limitation. So objective of the internship program have not been fulfilled with complete satisfaction.

However, highest effort has been given to achieve the objectives f the internship program.

So in conclusion it can be said that every organization has its positive as well as negatives and EXIM Bank Bangladesh limited existence of the later one is les then the earlier one and as the management is determined to reach the pick of success it seems that in near future the negatives will be eliminated. Eight is a short span of time and the organization, which can be established itself as one of the most reputed private commercial bank in the country within a short period deserves special credits and

with their able leaders EXIM Bank will the highest level of success very shortly. I wish the banks all success prosperity in their field.

At last it can be said that, EXIM Bank Bangladesh limited is the first growing bank and its contribution in our economy is also considerable. We hope that EXIM Bank will expand its services by expanding its branch all over the country.

So in conclusion it can be said that every organization has its positive as well as negatives and EXIM Bank Bangladesh limited existence of the later one is les then the earlier one and as the management is determined to reach the pick of success it seems that in near future the negatives will be eliminated. Eight is a short span of time and the organization, which can be established itself as one of the most reputed private commercial bank in the country within a short period deserves special credits and with their able leaders EXIM Bank will the highest level of success very shortly. I wish the banks all success prosperity in their field.

At last it can be said that, EXIM Bank Bangladesh limited is the first growing bank an its contribution in our economy is also considerable. We hope that EXIM Bank will expand its services by expanding its branch all over the country.

BIBLIOGRAPHY

Mulla, Md. Abul Hasanat; The Bank Companies Act 1991, Helena Prokashani, Dhaka, 1997

Chowdhury, L.R., A Textbook On Foreign Exchange, Fair Corporation, Dhaka, 2000.

Farooqi, Q.G.M., Charging of Securities, Talk Synopsis.

Gordon, E. & Natarajan, K., Banking: Theory, Law & Practice, Himalaya Publishing House, Mumbai, 1996.

Choudhury, T.A., Modes of Payment in International Trade, Reading Materials on International Trade & Finance (E-102), Bangladesh Institute of Bank Management (BIBM), 2000.

(Choudhury, T.A., An Overview of Banks and Their Services, Reading Materials on Theory & Practice of Banking (B-101), Bangladesh Institute of Bank Management (BIBM), 2000.

Pavel, Asaduzzaman; Practical Orientation Report On United Commercial Bank Limited; December 24,1997; 1st batch, MBM program, BIBM

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• .

•

Booklets published by EXIM Bank

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EXIM Bank web site (www.eximbankbd.com)

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Export policy order: 2003-2006.

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Guidelines for Foreign Exchange Transaction of Bangladesh bank – 1996

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Import policy order: 2003-2006.

•

Prospectus of EXIM Bank Bangladesh limited.

EXIM Bank Bangladesh limited annuls Report 2005 EXIM Bank Bangladesh limited annuls Report 2006.

EXPORT IMPORT BANK OF BANGLADESH LIMITED

Balance Sheet as at 31 December 2007 PROPERTY & ASSETS Notes 2007 Cash 3 In hand (including foreign currencies) With Bangladesh Bank and Sonali Bank (including foreign currencies)

4 17,038,832 4 ,198,001,365 4 ,615,040,197

2 36,122,796 3 ,082,999,752 3 ,319,122,548

77,934,754 9 9 15,100,915 1 ,293,035,669

45,738,588 4 73,605,876 1 ,419,344,464

2 ,250,000,000 2 07,716,314 2 2 ,457,716,314 233,254,288

2 ,000,081,900 33,172,388 2,

Balance with other banks and financial institutions 4 In Bangladesh3 Outside Bangladesh Money at call and short notice - Investments (shares and bonds) 5 Government securities Others Investments 6 General investments 0,567,133,959 Bills discounted and purchased

3 8,214,429,999 1 ,980,809,223 4 0,195,239,222 2,641,270,316 7 2 00,702,928 8 2 ,741,293,655

Fixed assets Other assets Non-banking assets - Total assets 1,793,540,962 TAKA

2006

5 1,503,027,985

3 2 ,074,136,357 3 1 78,431,761 2 ,002,117,585 4

EXPORT IMPORT BANK OF BANGLADESH LIMITED Balance Sheet as at 31 December 2007 LIABILITIES & CAPITAL Notes Liabilities Borrowing from other banks, financial institutions and agents Deposits and other accounts10 Al wadeah current deposits and other accounts Bills payable Mudaraba savings bank deposits Mudaraba term deposits 9,479,565,759 Call deposits - Foreign currency deposits Other liabilities Total liabilities 8,681,855,883 Capital/shareholders' equity Paid up capital Proposed cash dividend Proposed issue of bonus shares 13 Share premium 14 Dividend equalisation account 15 Statutory reserve 16 Retained earnings 17 Total shareholders' equity Total liabilities and shareholders' equity 1,793,540,962 Off balance sheet items Contingent liabilities: Acceptance and endorsements - 18 Letters of guarantee 18.1

2007

2006

9 5 00,000,000 4 ,778,629,437 7 43,645,368 2 ,209,666,103 3 3,682,916,577

3 ,463,314,632 3 16,705,918 1 ,684,526,998 2

1 31,711,107 8 7,911,318 4 1,546,568,592 3 5,032,024,625 11 5 ,413,930,707 3 ,649,831,258 4 7,460,499,299 3 12 2 ,142,196,800 3 42,751,500 8 5,687,800 9 4,162,500 6 2,775,000 1 ,134,639,838 6 08,754,548 4 ,042,528,686 5 1,503,027,985

1 ,713,757,500

1 ,866,915,726

1 ,574,148,312

9 4,162,500 6 2,775,000 8 10,880,421 1 ,670,358 3 ,111,685,079 4

Irrevocable letters of credit 18.2 Bills for collection 18.3 Other contingent liabilities 18.4 Total contingent liabilities 8,994,087,363 Other commitments - Total off balance sheet items 8,994,087,363 Taka

9 ,260,231,000 1 ,412,114,208 1 0,093,393,939 2 2,632,654,873

7 ,452,716,000 1 ,308,859,198 8 ,658,363,853 1

22,632,654,873

1

The annexed notes 1 to 38 form an integral part of these financial statements.

Managing Director As per our annexed report of same date Date:...........................

Pinaki & Company Chartered Accountants

EXPORT IMPORT BANK OF BANGLADESH LIMITED Profit and Loss Account for the year ended 31 December 2007 Particulars Notes Investment income 3,808,085,566 Profit paid on deposits, borrowings, etc.

(2,953,607,619) Net investment income 854,477,947 Income from investment in shares/securities 120,461,375 Commission, exchange and brokerage 882,976,105 Gain on sale of investment in shares 998,967 Other operating income 155,041,956 Total operating income 2,013,956,350 Salaries and allowances 330,992,966 Rent, taxes, insurance, lighting, etc.

72,158,724 Legal expenses 3,090,674 Postage, stamp, telegram and telephone 39,201,661 Audit fees 382,875 Stationery, printing, advertisement, etc.

28,883,882 Managing Director's remuneration 3,919,032 Managing Director's fees 196,500 Directors' fees 1,578,096 Depreciation on and repairs to Bank's property 44,748,138 Other expenses 110,130,729 Total operating expense 635,283,277 Profit before provisions 1,378,673,073 Provision for investment 179,182,138 Provision for off balance sheet exposure

2007 20 4,943,468,082 21 (3,587,536,228) 1,355,931,854 22 124,378,550 23 1,042,456,394 81,216,333 24 216,439,446 2,820,422,577 25 515,785,817 26 83,969,332 27 1,819,276 28 42,088,151 235,125 29 32,647,994 4,887,000 144,000 30 2,177,217 31 57,349,344 32 171,115,272 912,218,528 1,908,204,049 33 176,243,963 113,163,000 -

2006

Profit before tax 1,199,490,935 Provision for tax 539,032,593 Deferred tax Profit after tax 650,292,342 Retained earnings brought forward 42,989,805 Transfer from provision for diminution in value of share Adjustment for (under)/over provision for tax made in earlier years Profit available for appropriation 671,000,470 Appropriations: Statutory reserve 240,890,812 Issue of bonus shares 323,759,417 669,330,112 Retained earnings carried forward 1,670,358 Earnings per ordinary share 43.48 Taka The annexed notes 1 to 38 form an integral part of these financial statements.

Managing Director Director Director Director As per our annexed report of same date Date:........................... Pinaki & Company Chartered Accountants

1,618,797,086 687,953,479 10,166,000 930,843,607 1,670,358 4,963,123 (27,244,800) 1,670,358 20,708,128 932,513,965 323,759,417 428,439,300 608,754,548 34 43.45

EXPORT IMPORT BANK OF BANGLADESH LIMITED Highlights on the overall activities as at 31 December 2007 Particulars 2007 2006 1 Paid up capital 2,142,196,800 1, 713,757,500 2 Total capital 4,569,562,645 3, 467,368,068 3 Surplus/(shortage) of capital 498,916,145 5 51,245,578 4 Total assets 51,503,027,985 4 1,793,540,962 5 Total deposits 41,546,568,592 3 5,032,024,625 6 Total investment 40,195,239,222 3 2,641,270,316 7 Total contingent liabilities and commitments 22,632,654,873 1 8,994,087,363 8 Ratio on investments and deposits 96.75% 93.18% 9 Ratio on classified investments and total investments 1.58% 1.80% 10 Profit after tax and provisions 930,843,607 6 50,292,342 11 Classified investments 635,106,791 5 88,173,168 12 Provision held against classified investments 270,763,271 1 83,888,706 13 Surplus/(shortage) of provision 6 ,950,000 14 Cost of fund 9.07% 9.17% 15 Profit earning assets 42,357,645,536 3 5,161,475,381 16 Non-profit bearing assets 9,145,382,449 6, 632,065,581 17 Return on investment (shares and bonds) 8.77% 6.55% 18 Return on assets (after tax) 2.00% 1.73% 19 Income on investment (shares and bonds) 205,594,883 1 21,460,342 20 Earnings per share 43.45 4 3.48 21 Net income per share 43.45 3 7.95 22 Price earning ratio (times) 9.02 7.74 Taka