FORIGN EXCHANGE Southeast Bank Limited Chapter 1 Introduction ORIGIN OF THE REPORT: The research paper has been prepared for Md. Queamrul Islam , Faculty of the Graduate Program, School of Business at Southeast University as a partial requirement of the BBA Program. OBJECT OF THE REPORT: The objective of the report consists of two sections. One is to understand and analyze the whole organization. Its strengths, weakness, potentials and threats as well as another objective is to analysis the assets and liability management of the city bank limited. SCOPE Of The Study: While preparing this report, I had a great opportunity to have an in depth knowledge of all the divisional work practiced by City Bank Limited. It also helps me to acquire a first hand perspective of a leading private bank in Bangladesh. Nevertheless, this is not the end of it- the asset & liability management system, though can be summarized in a few sentences, but nevertheless, it is abroad topic and organizations are trying its best to reach better quality and minimize discrepancies. Therefore, certain areas of this topic were uncovered while preparing this report. METHODOLOGY of THE REPORT: The report has been written on the basis of information collected from primary as well as secondary sources. I mainly gather data through first hand experience i.e. by actively getting involved in the activities of all departments. I have used personal interview method with the management of the company to get in-depth information. Also, I took help from the existing journals, manuals, information files and some information from the peoples who were involved in all departments. LIMITATION:
I was very fortunate that I was given a lot of liberty to carry out of most of the chores that was not expected of an internee. This was done partly at the cost that certain information will not be delivered outside the bank because of the bank’s security. Due to secrecy point of view, it was not possible to collect all the core information/ data from the office. Though it is a competitive market, the company was quite liberal in disclosing the confidential information to me for my report but it was expected of me to keep the confidential things at my discretion and at the same time, render as much information in the report as required. SOURCES OF THE REPORT: Information and Data have been collected from the following sources: •
Annual Report of (City Bank Limited) in 2004.
•
Web of the City Bank
•
Different Circulation of the Bank
•
Own notes and observation.
•
Newsletter and documents of the Bank
GLOSSARY A/C
Account
AD
Authorized Dealer
BB
Bangladesh Bank
BC
Bills for Collection
B/L
Bill of Lading
BE
bill of exchange
BR
Bank Rate
CCI & E
Chief Controller of Import & Export
C&F
Clearing & Forwarding
CFR
Cost & Freight
CIB
Credit Information Bureau
CRF
Clean Report of Finding
DA
Document against Acceptance
DC
Documentary Credit
DP
Document Against Payment
ECGS
Export Credit Guarantee Scheme
E0DF
Export Development Fund
EPB
Export Promotion Bureau
ERC
Export Registration Certificate
EXP
Export Forms
EPZ
Export Processing Zone
FBN
Foreign Bill Negotiation
FBP
Foreign Bill Purchase
FCC
Foreign Correspondence Charge
FDBC
foreign Documentary Bills for Collection.
FE
Foreign Exchange Circular
FOB
Free on Board
GSP
Generalized System of Preference
IBCA
Inter Branch Credit Advice
IBDA
Inter Branch Debit Advice
IBC
Inward Bills for Collection
IBP
Inward Bills for Purchase
ICC
International Chamber of Commerce
IMP
Import Forms
LCAF
Letter of Credit Authorization Form
L/CL
Letter of Credit
LIBOR
London Inter Bank Offered Rate
NBR
National Board of Revenue
NFCD
Nor-Resident Foreign Deposit A/C
NOC
No Objection Certificate
OFBC
Outward Foreign Bills for Collection
OFBL
Outward Foreign Bills for Lodgment
PAD
Payment Against Documents
PC
Packing Credit
SDR
Special Drawing Right
SEM
Secondary Exchange Market
SRO
Supplementary Revenue Order
SWIFT
Society
for
World
Wide
Inter
Bank
Financial
Telecommunication UCPDC
Uniform customs & Practices for Documentary Credit
URC
Uniform Rules for Collection
URR
Uniform Rules for bank to Bank Reimbursement
Summary of Assignment: On the basis of my knowledge, books, reading materials lecture synopsis from my course and guidance of my course coordinators. In this assignment I have tried to my best to vive latest Principles, procedures and methods of foreign Exchange operation followed by Southeast Bank for making this Assignment advantageous. This assignment comes in six chapters. The first chapter is Introduction chapter, in the second chapter is the over view of THE CITY BANK LIMITED, the third chapter is the operation of import, the forth chapter is the operation of export, the fifth chapter is remittance, and the six chapter is conclusion and others. During the assignment period the Bank officers has helped me. I have felt very comfortable to work with them. Time to tome the officer’s coordinators has guided me and provided necessary instruction for preparation for this Assignment.
Over view of The City Bank: Board of the Director---------------Excite of the Bank Hierarchy of the position Performance of the bank Authorized Capital & Paid up Capital Reserved fund & Others Reserve Deposit of the bank Credit of the Bank Recovery of non-Performing loans Investment of the bank Foreign exchange of Business Treasury Capital market Operation Operational result Human resources Development Automation & It ATM ‘Service & Credit Card Corporate culture Board of Director
Mr.
Deen
Mohammad
Chairman
Aziz
Al-Kaiser
Vice Chairman
Mr.
Rubel
Aziz
Director
Mr.
Mr.
Mrs.
Evana
Fahmida
Samdani
Director
Hossain
Khaled
Saifullah
Mr.
Director
Director
Mr. Rajibul Huq Chowdhury Director
Mr.
Mohammad
Ahmed
Rajeeb
Shoeb
Samdani
Director
Mr.
Hossain
Mehmood
Director
Mr. Director
Mrs.
Tabassum
Kaiser
Meherun
Haque
Director
Rafiqul
Islam
Khan
Mrs. Director
Executives of the Banks: Managing
Director
Mr.
Abbas
Senior
Executive
Mr.
Md.
Uddin
Ahmed
Vice
president
Nurul
Akbar
Khan
Mr. A T M Najmul Husain Senior
Vice
Mr.
Md.
Mr.
A
Kamrul Mohd.
Mr.
A.K.
Mr.
Sheikh M.
Hafizur
H
A.B.M.
Mr.
Sk.
Mr.
Tahirul
Islam
Shariftil
Alam Zahurul
Chowdhury
Shafiq
Uddin
Md.
Engr.
Khaleque
Shaerul
Haque
Joarder
President Qazi
Monzurul
Mr.
Md.
Anisur
Md.
Nazmul
Mr. Md. Mostaque Md.
Mr.
Sheikh
Mr.
Khan
Badruzzaman
Bhuiyan
Uddin
Ahmed Rahman
Shawkat Sharafat Mohfiz
Md.
Rahman Ahmed
Mustaqur
Mr.
Islam Arif
Furkanurrin
Mr.
Mr.
Rahman
Mahmudul
Mr.
Mr.
Mostafa
Mizanur
Vice
Mr.
Siddiqui
Golam
Md.
Islam Khan
Ahmed
Mr.
Mr.
Ahmed
Yeahia
Imam
Mr.
Rahman
M
Md.
Mr.
Khan
Shamsuddin
A
Mr.
Mr.
Ahsan
Y
Mr.
Mr.
president
Ali Ali Zalal
Khalilur
Rahman
Mr.
Kazi
Mr. Mr.
Kamal
Uddin
Fazles Shah
Sobhan
Chowdhury
Md.
Mr.
Ahmed
Aminul
Iqbalur
Ahsan Rahman
Mr.
Md.
Shahidul
Islam
Mr.
Md.
Abdul
Mazid
Mr.
Nasir
Uddin
Sikder
Moyeedul
Hossain
Mr. Mr.
Syed Md.
Mahbubul
Mr.
Haque
Md.
Mr.
Md.
Mr.
A
Fazlul Abdus
Karim Salarn
B
Mr.
Chowdhury
M
Shahjahan
Abdul
Mr.
Md.
Patwary Momin
Abdul
Quddus
Mr.
Md.
Muklesur
Rahman
Mr.
Md.
Mahfuzur
Rahman
Mr.
Manzur
Quader
Mr.
Chitta
Ranjan
Baral
Mr.
Md.
Zahirul
Alam
Mr.
Mesbah
Uddin
Ahmed
Mr.
Abul
Bashar
Mr. Ahsanul Bari Senior
Assistant
Vice
President
Mr.
Md.
Mr.
Shaifur
Rahman
Khan
Mr.
Ahmed
Mostafa
Hasan
Mr.
Sk.
Mr.
Md. Nazmul
Mr.
Sheikh
Mr.
Hefazat
Hossain
Samadur Nawab
Mr.
Mr.
lqbal
Meah Karim
Ferdous
Rahman Sikder Siddique
Monirul
Islam
Ullah
Kamal Ahmed
Mr.
Md.
Zaidul
Mr. Mr.
Md. A
Tahir-Uz-Zamil
N
Mr.
M
Azizul
Mohammad
Mr.
Aminul
Md.
Islam
Mojibur
Mr.
Rahman
Sowgat A
H
Mr.
Mahmood M
Fakhrul
Mohammad
Mr.
Md.
Mr.
Rahul
Mr. Abu
Mr.
A
Sayed
Mr.
Faruque
Kanti
Barua
Motaher
Hossain
Md.
K
M
Md.
Islam Elahi
Omar
Kazi
Mr.
Kabir Tahiruzzaman
Syed
Mr. Mr.
Haq
Abdul
Hakim
Zahirul
Huq
Abdul
Hoque
Mr.
Muhammad
Mr.
Gobinda
Chandra
Biswas
Mr.
Ashim
Kumar
Gupta
Mr.
Md.
Enam
Mr.
Md.
Mr.
Mobarak
Mr. Mr. Mr.
Md.
Mr.
Saha Talukder Chowdhury
Mohammad
Azad
Md.
Zahangir
Alam
Md.
Akbar
Mr.
Abdur
Hossain Roof
Bamesh
Mr. Mr.
Hossain Khalequzzaman
Mr.
Siddiqui Chowdhury
Chandra
Md.
Ullah
Hossain
Ahmed Delwar
Sabir
Mr.
Hossain Yeakub
Nripendra
Mr.
Mr.
Salim
Ranjan Md.
Md. Syed
Bhattachajee Bodiuzzaman
Akhtaruzzaman Enayetul
Talukder Mowla
Mr.
Md.
Mr.
A.
K.
Mr.
S.
M.
Mr.
Badsha
M.
Hasanuzzaman
Reazur
Md.
Rahman
Abdul
Mr. Mr.
Sultan
Halim
Alauddin A
Mr.
H
Ahmed M
Shah
Rezaul
Haque
Zahirul
Islam
Mr. Md. Habibullah Performance of The City Bank Limited: The The City Bank Limited Is The First Private Sector Bank In Bangladesh. It Came To Being In 1983 With Authorized Capital Of Tk. 400/-Million Under The Entrepreneur Of 12 Nos. Prominent & Leading Businessman Of The Country. The Noble Intention Behind Staring Of This Bank Was To Bring About A Qualitative Change In The Sphere Of Banking And Financial Management. To Day The Bank Serves It’s Customers At Home & Abroad With 77 Branches Spread Over The Country &
About
300
Overseas
Connections.
The Services Encompass Wide Diversified Areas Of Trade, Commerce & Industry Tailored To The Specific Needs Of The Customers And Is Distinguished By An Exceptional Level Of Prompt And Personal Attention. Over The Years The Bank Has Expanded The Spectrums Of Its Services. The Extensive And Ever Growing Domestic Network Provides And Carries Various Products And Services
To
The
Doorsteps
Of
Millions.
The City Bank Limited Has Already Introduced Some New Banking Products Like Credit Card, ATM, And SWIFT Etc, Which Created Attraction Among The Clients. The Bank Is Going To Introduce Real Time On-Line Integrated Banking System, With All Modern Delivery Channels Etc. The Bank’s Services Have Always Received Appreciation For The Warmth And Hospitality Typifying The Rich Cultural Heritage Of Bangladesh And Have A Set Of Landmark Of Achievement At
Home
&
Abroad.
For Significant Performance, The Bank Has Earned National & International Recognition. The City Bank Limited Was One Of The 12 Banks Of Bangladesh Among The 500 Banks In Asia For It’s Asset, Deposit & Profit As Evaluated By ASIA WEEK In The Year 2000. Besides Bank Received
“Top Ten Company” Award From The Prime Minister Of The People’s Republic Of Bangladesh In The Year 1992-93 Which Was Declared By Securities & Exchange Commission. We Have A Powerful Board Of Directors Consists Of 17 Members. MR. Deen Mohammad A Top Leading Businessman, Industrialist And Pioneer Personality & Entrepreneur Of Private Sector Banks In Bangladesh, Is The Chairman Of Our Bank. Mr. Abbas Uddin Ahmed A Dynamic, Nationally & Internationally Reputed Banker Is The Managing Director Of The Bank. After Taking His Charge As Chief Executive In The Year 2000, Entire Activities Of The Bank Has Got Momentum. The Overall Scenario Of The Bank Has Since Been Changed. Deposit of the Bank: Fixed Deposit Receipt Period
of
Scheme:
Can be opened for a term of 1 month, 3 months, 6 months or 12 months. Installment
size
Any
handsome
Interest
amount.
rate:
Period
:
>=1
month
Rate
and
3
:
Period
:
Rate Eligibility
:
6.50
>=
3
:
month
and
7.50 up
months<
to
Tk.
6
– 50.00
months
8.00
lacs
7.50
%
p.a
Remarks : if deposits are collected form Government, above Tk.50.00 lacs to Tk. 3.00 crore 7.75 % p.a Semi-Government & Autonomous Bodies, above Tk. 3.00 crore 8.00 % p.a Sector Corporation, Educational Institute, NGO and Social welfare organization Marriage Saving Scheme Period The
of term
of
Scheme:
savings
shall
Installment
be
for
12
years.
size:
Monthly installment Size is Tk. 250, Tk. 500, Tk. 1000, Tk. 1500, Tk. 2000 and Tk. 2500 Maturity: Depositor Monthly
draw
the
following
Deposit
|
maturity
amount
Maturity
at
a Amount
time
250.00
|
65,000.00
500.00
|
1,30,000.00
1000.00
|
2,60,000.00
1500.00
|
3,90,000.00
2000.00
|
5,20,000.00
2500.00
|
6,50,000.00
Loan
Facility:
Loan may be allowed upto 80% of the deposited amount against lien on the same after at least 2 (Two) years of regular payment of installments Excise duty and source tax etc. are deducible from the depositor profit. Three Stage Savings Scheme Open a Three Stage Savings Scheme with BDT 500 or it's multiple up to BDT 5000 and receives high return on maturity. Product
Name
The name of the scheme is " Three Stage Savings Scheme" What
is
TSSS
Scheme?
The Scheme is designed to help the fixed income group to save money and build up a sizable funds with which they can go for some income generating venture to improve the quality of their life and/or meet any future financial obligations. Who
can
open/
apply?
Any citizen of Bangladesh can open this scheme. The scheme can be opened in the name of an individual only. TSSS is perfect for those 18 years of age or elder. How
it
works?
(Monthly
Deposit
Amount)
To open the scheme requires monthly installment of BDT 500 or its multiple up to BDT 5000 till maturity. This is a fixed term deposit savings scheme. Tenure The scheme is for 2, 4 & 6 years (every 2nd year is known as a stage)
Rate of Interest: 8% -13% Monthly Benefit Scheme Open a Monthly Benefit Scheme with BDT 1,00,000/= or its multiples, but maximum BDT1, 00,00,000/- shall be acceptable under the Scheme and receive high return on monthly basis. Product
Name
The name of the scheme is " Monthly Benefit Scheme" What
is
Monthly
Benefit
Scheme?
The Monthly Benefit Scheme is a Deposit Scheme where the depositor gets monthly benefit out of his deposit. The scheme is designed for the benefit of the persons who intend to meet the monthly budget of their families from the income out of their deposit. Who
can
open/
apply?
Any citizen of Bangladesh can open this scheme. The scheme can be opened in the name of an individual only. MBS is perfect for those 18 years of age or elder. How
it
works?
(Monthly
Deposit
Amount)
To open the scheme requires deposit BDT 1,00,000/= or its multiples but maximum BDT 1,00,00,000/=. The deposit for a period for 2/3/5 years and the principal amount is refundable on maturity. Tenure The scheme is for 2/3/5 YEARS Junior Savers Scheme Open a Junior Savings Scheme with BDT 5000/=, receive high return on monthly deposit and secure your children's future educational needs and it's a children financial education program. Product The name of the scheme is " Junior Savers Scheme"
Name
Junior
Savers
Scheme
The Junior Savers Scheme is a perfect way to encourage saving for your children's future educational needs. This is a scheme that will grow with your child. City Bank Junior Savers Scheme is a unique savings scheme designed to help you save for your children and it's a children financial education program. Who
can
open/
apply?
Junior Savers is perfect for those 18 years of age or younger, who will be beneficiary/ nominee. Account must be opened in the name of parent/ natural/legal guardian. How
it
works?
/
(Monthly
Deposit
Amount)
To open the scheme requires an initial deposit of BDT 5000/=, which will be followed by monthly installment of BDT 1000 till maturity. The applicant will have the option of depositing any amount in multiples of the above. This is a fixed term deposit savings scheme. Customer can buy any number of JSS. Tenure The scheme is for TEN YEARS (120 equal monthly deposits). Insurance The scheme is 100% insurance coverage. In case of death of the account holder during the period of scheme, nominee/ beneficiary will get only the amount covered by insurance i.e.; maximum limit payable upon maturity or upon death of the account holder shall not exceed the limit covered by the scheme. (Death due to any cause, detail workings attached) Lakhpati Savings Scheme Open a Lakhpati Savings Scheme with BDT 3000/=, receive high return on monthly deposit and become a Lakhpati just after Six years. Product The name of the scheme is " Lakhpati Savings Scheme"
Name
What
is
Lakhpati
Savings
Scheme?
The Lakhpati Savings Scheme, person gets the opportunity to build up savings by contributing monthly installments and become a Lakhpati just after Six years. The Scheme is designed to help the fixed income group to save money and build up a sizable funds with which they can go for some income generating venture to improve the quality of their life and/or meet any future financial obligations. Who
can
open/
apply?
Any citizen of Bangladesh can open this scheme. The scheme can be opened in the name of an individual only. LSS is perfect for those 18 years of age or older. How
it
works?
(Monthly
Deposit
Amount)
To open the scheme requires an initial deposit of BDT 3000/=, which will be followed by monthly installment of BDT 1075 till maturity. The applicant will have the option of depositing any amount in multiples of the above. This is a fixed term deposit savings scheme. Customer can buy any number of LSS. Tenure The scheme is for SIX YEARS (you need to open a LSS for six years/ 72 equal monthly deposits). Insurance The scheme is 100% insurance coverage. In case of death of the account holder during the period of scheme, nominee/ beneficiary will get only the amount covered by insurance i.e.; maximum limit payable upon maturity or upon death of the account holder shall not exceed the limit covered by the scheme. (Death due to any cause, detail workings attached) ATM & City Card With The CITY CARD You Will Be Able To Access Banking Service And Account Information At All Time From Any Of Over 50 Atms And Around The City, Revolutionizing Your Everyday Banking Transactions. Features: The The City Bank Limited Launched Their Smart Card-ATM Card, Credit Card, Debit Card &
Utility Bills Payment Card All In A Single Card In The Name & Style Of "City Card" The
Features
Of
The
"City
Card"
Are
As
Under:-
The City Card Provides Round The Clock Banking Through Atms From Which Customers Can Avail: POS Terminals At The Merchant End Will Operate/Provide Service Throughout The Day & Beyond Banking Hours To Offer:• Debit Transaction • Credit Transaction • Account Information • City Card Loading • Online Or Offline The "City Card" Network Can Operate Both Online In Case Line Failure. Since Your City Card Can Store Account Information Within & Record Transaction Offline ATM & POS Services Can Be Accessed Without The Need For Online Authorization From Your Bank. City Card Help You For Self Service Banking Any Time Any Where Though Atms & POS Terminals. Cash Withdrawals Balance Inquiry Mini Statement Cheque Book Request PIN Charge Utility Bills Payment Facilities Commission based Services and products •
Foreign Bill Collection
•
Foreign Bill Purchase
•
Traveler’s Cheques
•
Pay Order
•
Demand Draft
•
Telegraphic Transfer
•
Foreign Exchange Transaction
Locker Service Only our Saving / Current account holder can apply for a locker.
Minimum
balance
:
saving / current account balance Taka 5,000.00 Features: *
Rented
*
for
Access
a
period
at
of
one
anytime
year
during
and
will
the
automatically
bank’s
be
business
renewed hours
* All rentals are payable annually in advance 1.11 Utility Service •
The The City Bank Limited offers multiple special services with its network of branches throughout the country in addition to its normal banking operations. Operation
•
Collection
•
Electricity bills
•
Telephone/Mobile bills
•
Water/Sewerage bills
•
Customs
&
Sale
excise
&
Encashment/Purchase
Prize
Bonds
Lottery tickets of different Semi-Govt. and Autonomous Bodies. Non-Funded Products and Services
•
Bank Guarantee
•
Bank Acceptances
Funded Product and Services •
Over Draft
•
Time Loan
•
Term Loan
•
Real Estate Loan
•
Export Credit
duties
•
Consumer Credit Scheme
•
Bills under Letter of Credit
•
Loan against Trust Receipt
•
Loan against Imported Merchandise
Chapter-2 Different Types of Loan:
TYPES OF LOAN Term Loan/Project Loan Short Term Industrial Loan Mid Term Industrial Loan
Bank, as financial institution is a service-oriented organization. It provides financial services to the economy by mobilizing fund from surplus unit to deficit unit. Bank mobilizes funds by introducing various financial products. Efficient & effective fund mobilization depends on individual bank’s capability of designing financial products. The City Bank Limited is also trying to design the financial product efficiently. Nevertheless. Vision may differ from the reality. The City Bank Limited has a vision and mission to improve the financial sector of Bangladesh i.e. economic condition of Bangladesh by providing effective and innovative banking and financial product in financial market. However, in every economy of the world financial sector is highly regulated sector. Therefore, financial products of every bank are almost same as same law & regulations regulate them. However. As the City Bank has a vision and mission to do something
different, therefore, we The City Bank people are trying to be different from other banks and that can be proved by the quality & efficient management of the financial product of The City Bank Limited. Term Loan/Project Loan i.e. acquire land, buildings, plant and equipment etc, collectively known as fixed assets; and / or balancing, "M" modernization, "R" for replacement and "E" expansion; and / or inventories comprising of raw materials, stock in process and finished goods. Short Term Industrial Loan Bank, as financial institution is a service-oriented organization. It provides financial services to the economy by mobilizing fund from surplus unit to deficit unit. Bank mobilizes funds by introducing various financial products. Efficient & effective fund mobilization depends on individual bankâ&#x20AC;&#x2122;s capability of designing financial products These are:-
Cash Credit (Hypothecation) Cash Credit (Pledge) Overdraft Facilities Secured Overdraft Facilities. Secured Overdraft (Work Order) Bank Guarantee. Letter of Credit (L/C) Back to Back Letter of Credit (BTB) Loan against Trust Receipt (L.T.R.) Loan against Imported Merchandise (L.I.M) Packing Cash Credit (P.C.C.) Loan General and others
Short Term Industrial Loan Bank, as financial institution is a service-oriented organization. It provides financial services to the economy by mobilizing fund from surplus unit to deficit unit. Bank mobilizes funds by introducing various financial products. Efficient & effective fund mobilization depends on individual bankâ&#x20AC;&#x2122;s capability of designing financial products
These are:-
Cash Credit (Hypothecation) Cash Credit (Pledge) Overdraft Facilities Secured Overdraft Facilities. Secured Overdraft (Work Order) Bank Guarantee. Letter of Credit (L/C) Back to Back Letter of Credit (BTB) Loan against Trust Receipt (L.T.R.) Loan against Imported Merchandise (L.I.M) Packing Cash Credit (P.C.C.) Loan General and others
Mid Term Industrial Loan The City Bank Limited has a vision and mission to improve the financial sector of Bangladesh i.e. economic condition of Bangladesh by providing effective and innovative banking and financial product in financial market. However, in every economy of the world financial sector is highly regulated sector. - project loan to any industry under the rules & regulations of Bangladesh Bank/G.O.B. - Term Loan to any Industry for import of Capital Machinery under the rules & regulations of Bangladesh Bank/G.O.B. - Equity Participation to any Financial Institutions/Companies under the rules & regulations of Bangladesh Bank/G.O.B. - Term Loan under Syndication/Consortium arrangement under the rules & regulations of Bangladesh Bank/G.O.B. - Equity Entrepreneurship Fund (EEF) to any company under the rules & regulations of Bangladesh Bank/G.O.B. - Commercial House Building Loan in urban area to any developer/individual/company under the rules & regulations of Bangladesh Bank/G.O.B. - Transport Loan to any company/individual under the rules & regulations of Bangladesh Bank/G.O.B. - Credit Line Facilities as Term Loan to any Leasing Companies under the rules & regulations of Bangladesh Bank/G.O.B. Finance Of Leasing
*
Capital
*
Heavy
construction
*
Lifts/
*
Air
*
Machinery.
Vehicles
like
Luxury
bus,
*
equipments. Elevators. Conditioners.
Mini-bus,
Taxi-cab,
Car,
Pick-up,
Medical
*
Trucks,
etc.
equipments.
Generators,
Computers,
*
etc. Apartment/Building.
* Other costly consumer's durable. The City Bank Limited offers lease financing facilities on theâ&#x20AC;&#x2122; above items under pleasing atmosphere. The Basic Terms Selection
Autonomy:
The lessee bears all the liberty to decide and select the brand, specifications, price, supplier/seller and purchase terms & conditions of the leased items. Lease
term:
i) Capital Machinery, Equipment and Medical Instrument - Maximum 5 (five) years. ii)
Vehicles
&
other
Consumer
durable
-
Maximum,4(four)
years.
iii) Apartment/Building Case to Case basis. Payment
Mode:
Entire financed amount along with interest and charges would be recovered by equal monthly installments. Lease
Deposit
:
A minimum deposit equivalent to 3 (three) months lease rentals is required which shall be refunded/adjusted on expiry of the lease term. Security a)
: Leased
item
itself
b)
Bank/Insurance
guarantee
c) Encashable securities like FDR, BSP, Share Certificates of listed companies, ICB unit Certificate etc. d) Immovable properties alongwith cash security if the value of tangible security falls short of the
value
of
leased
assets
and
e) Personal guarantee of a gentleman acceptable to the Bank. Insurance
:
You have to take insurance coverage on bank stipulated insured value for the entire lease term at your own cost (Year to year basis). Maintenance: You have to maintain the leased items in usable condition throughout the whole lease period at your cost; and shall be solely responsible for any damage or loss although insurance will cover most of the abnormal risks. Options
on
expiry
of
the
lease
term.
a) You may acquire ownership of the Leased item(s) on payment of nominal value or an agreed price
with
you.
b) Return the Leased item(s), to the Bank. If option 'a' is adopted, transfer fee shall be borne by you, Your
Benefits
Budgeting
within
Budget:
The City Bank Ltd. can make the acquisition of the required assets for you when your budget does not allow you to buy it. Full
Funding:
Under the method we provide 100% funding while only 50%-60% of financing is made under traditional system. Financial
need
meet
up
without
out-flowing
own
fund:
You can acquire the articles keeping your capital intact. Thus leasing helps to build up your fund raising capacity.
Financial
Flexibility:
Through leasing capital will not be tied up with the acquisition of assets. You can invest your costly capital elsewhere for more profitable venture. Prompt
Service:
Process of appraisal and documentation is simple and faster as compared to those of other financial institutions, which ensure quicker disbursement. Off-Balance
Sheet
Facility:
You can acquire the asset for use without recording the lease obligations as liability in your books of accounts since the CBL owns the asset. This will improve your financial performance as will be revealed from financial ratio analysis. Tax
Benefit:
Your organization will enjoy more tax benefits, as payments of lease rentals by you are entirely revenue expenditure and thus deductible for tax purposes. Some Branches & Address : Name of Branch
Location
Principle B.B Avenue BRANCH
10, Dilkusha Commercial Area, Dhaka-1000 B.B Avenue, Dhaka-1000
DHANMONDI BRANCH KAWRAN BAZAR BRANCH
2/1, Cosmos Tower,28(Old),15(New) Dhaka1205 8,Kawran Bazar C/A, Dhaka
AGRABAD BRANCH
39, Agrabad C/A, Chittagong
JOYPARA BRANCH
Samabay Super Market, Joypara Bazar Dohar, SDhaka
BANANI BRANCH
Awal Centre,34,Banani C/A, Dhaka
RAJSHAHI BRANCH
Shaheb Bazar, Rajshahi
NAOGAON BRANCH
Chakdev, Naogaon.
SYLHET BRANCH
Laldighirpar, Sylhet.
Dhanmondi
BOARD BAZAR BRANCH
Imamgong Branch
Plot No. 651/652, Board bazaar, Joydebpur, Gazipur. 25/1, Zindabahar 1st Lane, Nayabazar Dhaka. 599, Ramjoy Mahajon Lane, Khatunganj, Chittagong. Red Cresent Concord Tower 17, Mohakhali Dhaka-1212. Raziha Mansion 184, Senpara Parbata, Rokeya Sarani Mirpur-10, Dhaka-1212. 44-45/2 Imamgong, Dhaka-1100
Islamalpur Road Branch
108 Islampur Road, Dhaka-1100
Johnson Road Branch
Aziz Centre 1st Floor 31 Johanson Road, Dhaka-1100
New market Branch
28 Mirpur Road, Dhaka-1205
Gulshan Branch
49 Gulshan South,Dhaka-1212
Bangshal Branch
45, Bangshal Road, Dhaka-1100
Shaymoli Branch
23/6 Khligi Road
Posta Branch
35, Shaista Khan, Road, Dhaka
Islami Banking Branch
Islami mantion, 9/H, Motijeel
Zinzira Branch
Tinpatty
Nawabjong Branch
Post office
Bowbazar Branch
Deotala, Golla, Nawabjong
Kaligong Branch
Shubhadda, Keranaigong
Mouchak Branch
80/A Siddeswari, Circular, Road Malibagh
Foreign Exchange Branch
27, Dilcusha C/A
Mirpur Branch
1, Dar-Us â&#x20AC;&#x201C;Salam road, Sec-1
Nawabplur Branch
219-220
Urdu road Branch
10, Lalabag
Sadarghat Branch
78 Loyal Street Patuali
NAYABAZAR BRANCH KHATUNGANJ BRANCH MOHAKHALI BRANCH MIRPUR BRANCH
Sales
Aid
Device:
If you are a Manufacturer/ Dealer, you may utilize leasing as a sales promotion tool for achieving sales target. Correspondents Network: Asia LEBANON
JORDAN
KUWAIT
Beirut PAKISTAN
Amman BAHRAIN
Safat UAE
Islamabad
Manama
Abu
Karachi
Ajman
Lahore
Al-Ain
Peshwar
Deira-Dubai
Rawalpindi
Dubai
Faisalabad
SAUDI
Dhabi
Ras ARABIASRILANKA
At
Sharjah OMAN
Riyadh MALDIVES
Colombo NEPAL
Muscat TAIWAN
Malce MALAYSIA
Kathmandu SINGAPORE
Taipei INDONESIA
Kualalampur Thailand
Singapore PHILLIPINES
Jakarta MACAU
Bangkok JAPAN
Manila SOUTH
Tokyo
Seoul
Hanoi
Nagoya
Busan
Ho Chi Minh City
Osaka
Daegu
Macau KOREAVIETNAM
Khaimah
CHINA
INDIA
HONGKONG
Changjiang
Mumbai
Hongkong
Changzhou
Kolkata
Kowloon
Dalian Hangzhou Beijing Guangzhou Shanghai
Guwahati New Ahmedabad Hyderabad
Shenzhen
Chennai
Tianjie
Coimbatore
Fujan
Shillong
Fuzhou
Karunganj
Guangdong
Thimphu
Guangxi Guizhou Hainan Hebei Henan Hunan Jiangsu Nanjing Jiangxi JilinLiaoning Qinghai Shandong SichuanTianjin Zbangzhou Zhejiang Zhuhai Yunan Financial Performance - Balance Sheet
Delhi
PROPERTY & ASSETS CASH Cash in hand (Including Foreign Currencies Balance with Bangladesh Bank & Sonali Bank
2004 TAKA 1,477,386,687 475,002,705 1,002,383,982
2003 TAKA 1,431,723,120 409,420,610 1,022,302,510
(including foreign currency) BALANCE WITH OTHER BANKS & FINANCIAL
214,861,460
425,857,255
INSTITUTIONS: In Bangladesh Outsite Bangladesh MONEY AT CALL & SHORT NOTICE: INVESTMENTS: Government
164,611,490 50,249,970 2,725,225,000 3,161,375,458 2,941,146,530
300,963,787 124,893,468 2,195,000,000 3,379,258,554 3,148,305,783
Others LOANS & ADVANCES: Loans, Cash Credit & Overdrafts etc.
220,228,928 17,027,836,839 15,214,378,550
230,952,774 14,778,548,110 13,606,256,099
Bills Purchased & discounted
1,813,458,289
1,172,292,011
Fixed Assets
682,367,906
686,694,568
OTHER ASSETS
1,086,502,239
801,475,687
NON-BANKING ASSETS
-
-
TOTAL ASSETS
26,375,555,589
23,698,557,294
LIABILITES & CAPITAL
-
-
LIABILITES:
-
-
Borrowings from other bank, financial institutions
40,000,000
-
and Agents DEPOSITS & OTHER ACCOUNTS:
22,236,956,587
20,046,311,058
Current Deposits and other accounts
2,710,976,718
2,303,026,299
bills payable
341,640,899
235,560,348
savings Bank Deposits
5,371,144,695
4,598,541,303
Bearer Certificate of Deposits
-
3,900,000
Term Deposits
12,531,197,484
11,734,802,154
Other Deposits
1,281,996,971
1,170,480,954
OTHER LIABILITIES
2,681,126,266
2,855,036,022
TOTAL LIABILITIES
24,958,082,853
22,901,347,080
CAPITAL/SHAREHOLDER'S EQUITY:
-
-
Paid-up Capital
480,000,000
240,000,000
Statutory Reserve
378,420,483
213,809,643
Other Reserve
240,619,365
240,619,365
Retained Earnings
78,432,888
102,781,206
Proposed Bonus Share
240,000,000
-
TOTAL SHAREHOLDER'S EQUITY:
1,417,472,736
797,210,214
TOTAL LIABILITIES & SHAREHOLDER'S EQUITY
26,375,555,589
23,698,557,294
Chapter-3 Foreign Exchange Portfolio of the City Bank Limited Foreign Exchange means exchange of currency of one country with that of another. The term “Foreign Exchange” is often used inters changeably, but some authors have ascribed different meanings. Dr. Paul ensign defines Foreign Exchange as the system or process of converting one national currency into another and transferring foreign money one counter to another. Foreign trade means export & import between two countries. According to Mr. Evit “It is the means & 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.” So the department witch deal with the currency of foreign country is called Foreign Exchange Department. PROCEDURE FOR OPENING L/C A Customer before approaching Bank for opening L/C must be a recognized importer a customer are required to submit the following documents to the licensing authority for obtaining import incense (Permit). Documentary Requirements for Opening L/C Importer shall submit following documents for opening L/C a) Valid Import Registration Certificate (commercial industrial) b) Tax Identification Number Certificate c) VAT Registration Certificate d) Membership Certificate of a recognized Trade Association as per IPO e) A declaration, in triplicate, that the importer has paid income tax or submitted income tax return for the preceding year f)
Pro forma Invoice or Indent duly accepted by the importer
g) Insurance Cover Note with Money Paid Receipt covering value of goods to be imported plus 10 (Ten) percent above. h) L/C application Form (MF-fx13) duly signed by the importer
i)
Letter o Credit Authorization Form (LCAF0, commercial industrial as the case may be, duly signed by the importer and incorporating New ITC number of at least 6(six) digits under the Harmonized System as given in the Import Trade Control Schedule 1988.
j)
IMP Form duly signed by the importer
Precautionary steps The branch must ensure that they deal only with known customers having a place of business in Bangladesh and can be traced easily, should any occasion arise for this purpose. The branch shall assess the financial standings & credibility of the customers with a view to ensure sates factory arrangement for this purpose. The Branch shall asses the financial standings & credibility of the customs with a view to ensure satisfactory arrangement for retirement of the documents. The Branch should also obtain confidential report on the exporter in all cases where the amount of the L/C exceeds Tk. 2,00,000.00 against P/Invoice and Tk.5,00,000.00 against indents. The Branch shall verify prices so as to ascertain competitiveness of the commodities to be imported. The Branch shall also see the marketability of the commodities to be imported. The Branch shall verify signature of the Importer on L/C Application Forms, LCAF & IMP Form. The Branch will not open L/Cs for import of goods through the customs stations/routes like Soamajid, Hili, Burimary, Birol, et. Unless the importers pay 100% margin or prior Head Office approval is obtained. An importer desirous to have an import L/C limit must have apply to the designated Bank with import registration certificate (IEC) pass Book so obtained from licensing authority along with following particulars. •
The full particulars of Bank account
•
These of business (Proprietorship, partnership, Limited (.O) Incase of Ltd. Co. balance sheet to last 3 years and the Hames of Directors.
•
Historical background
•
Amount of limit required
•
Terms of payment: Whether the import documents would be retired against payment or receipt or against acceptance or whether post import finance is required in the form of LIM/TTR etc.
•
Goods to be imported.
•
Security to be offered
•
Re-payment schedule and source of fund
•
Other liabilities of he customer with the bank
•
Statements of Assets and liabilities
•
Account position (Balance)
•
Trade License and import registration, Number with renewal date.
On receipt of above particulars the import section of the Bank will prepare credit report of the concerned importer. The report should be collect form the previous banker of the party also. DIFFERENT ASPECTS OF FOREIGN EXCHANGE & FOEIGN TRADE IN THE CITY BANK LIMITED: Foreign exchange & foreign trade are being routed in the city bank limited : Through the following: 1) Import 2) Export 3) Remittance 1. Import: Import of merchandise essentially involves two things, bring of goods physically into the country & remittance of foreign exchange toward the cost of the merchandise and services connected with dispatch of the merchandise. The physical import is regulated by the ministry of commerce through the chef controller of imports & export while Bangladesh Bank regulates the payments of these imports through its exchange control department. 2. Export: Export is vis-a-visa of import. The import and export normally made against latter of credit through dependent upon the buyer & seller relationship. Detail procedure of import & export to be discussed in ahead. 3. Remittance:
Remittance means transfer of fund. Latin the word “Remittance” we understand transfer of fund from one place to another place with may be within the country or between two countries. Remittance and which in effected between two countries is called foreign remittance. Introduction The foreign exchange means the mechanism of purchase and sale of Foreign Currency against Home currency and vice verse through the use of monetary instruments (i.e. B/E, currency Notes/ Cheques etc.) for clearing the load of international indebtedness involving the international community of bankers as media or mechanism. Foreign exchange business of The City Bank Limited The foreign trade handled by the Bank may be classified as under: 1. Import business 2. Export Business 3. Foreign Exchange Remittance 4. Banking Service. The achievement of Southeast Bank in the area of foreign exchange business has been quite phenomenal. The Bank has been providing service to import and export trade and for repatriation of hard-carned foreign exchange of Bangladeshi living and working abroad and has, by now, consolidated its position in these areas. Balance of trade (BOT) The balance of trade of a nation is a systematic financial record, usually of a year, of its imports exports of visible commodities from and to the rest of he world. For many years until now, he value of Bangladesh’s imports of commodities from the other countries exceeded the value of its exports, showing consistent deficit in balance of trade.
Balance of payment. The balance of payments, on the other hand, is a systematic financial statement of a nation’s total international transactions, visible and invisible generally conversing a one-year period. One basic purpose of the balance of payments accounts is to summarize how the nation’s goods and services tread is financial position in an accounting year. It indicated net inflow and outflow of the nations international craning and payments. Accounts are maintained on the principle of double entry book keeping system.
Definition of some important terms used in the Import Policy: a) ‘Basis of Licensing’ means percentage, rate or formula adopted for determining the share of an importer. b) ‘Category’ means half-yearly import entitlement of a registered commercial importer. c) ‘Commercial Importer’ means importers who import goods for sale in the same form. a) ‘Entitlement’ means half-yearly requirements of raw materials or spares of an industrial unit assessed or recommended by the sponsoring authority. b)
‘Industrial Consumer’ means a firm or a unit requiring materials for manufacture of its products.
c) ‘Licensing Authority’ means the authority appointed to issue licenses, permits and registration certificates and include Chief Controller, Controller, Deputy Controller and Assistant Controller of Imports & Exports. d) ‘Permit’ means authorization without involving foreign exchange and include import permit or clearance permit or export permit as the case may be; e) ‘Repeat License’ means a license issued after utilization of earlier license. Before entering into an import transaction country’s legal and economic framework are to be considered. These include: •
Restrictive governmental policies
•
Exchange regulations
•
Tariffs and taxation
•
Reporting to the controlling authorities
It is important to have a general understanding of some of the basic legal and economic terminology used internationally. Following ICC Publications provide such terminology & rules governing international trade: •
UCDC, JCCPUB-500
•
URR, ICCUB-525
•
URC, JCCPUB-522
•
Incoterms 2000 ICCPUB-460 (Revised)
Import procedure:
Registration: Procedure for obtaining imports Registration certificate for commercial importer and industrial consumers. The registration of importer is made y the Chief controller CCI & E or Area Officers of CCI & E has its area officers in most of the District (Old) H.Q. A Bangladesh bank registration unit is also tagged with such unit officers of CCI & E. Types of importers: There are mainly three types of importer viz. Commercial importers, industrial consumer and importers under wage earners scheme. i.
Commercial importers
ii. Industrial consumers Importers under wage Earners scheme Documentary Letter Of Credit A Letter of Credit, simply defined, is a written instrument issued by a bank at the request of its customer, the Importer (Applicant), whereby the bank promises to pay the Exporter (Beneficiary) for goods or services, provided that the Exporter presents all documents called for, exactly as stipulated in the Letter of Credit, and meets all other terms and conditions set out in the Letter of Credit. A Letter of Credit is also commonly referred to as a Documentary Credit. Parties
to
a
Letter
of
Credit
Accepting Bank: The bank named in a term Letter of Credit on which drafts are drawn that has agreed to accept the draft. By accepting the draft, the Drawee Bank signifies its commitment to pay the face amount at maturity to anyone who presents it at maturity. After accepting the draft,
the
Drawee
Bank
becomes
the
Accepting
Bank.
Advising Bank: The bank to which the Issuing Bank sends the Letter of Credit, with instructions to
notify
the
"Available
Exporter
(Beneficiary).
with"
Bank:
The Bank authorized in the Letter of Credit to effect payment under, accept or negotiate the Letter Confirming
of
Credit. Bank:
The bank which, at the request of the Issuing Bank, adds its confirmation to the Letter of Credit. In doing so, the Confirming Bank undertakes to make payment to the Exporter under the Letter of Credit assuming all terms and conditions of the Letter of Credit have been met. Drawee
Bank:
The bank named in the Letter of Credit on which the drafts are to be drawn. Exporter/ The
Beneficiary/ party
that
has
Importer/ The
Seller: contracted
to
Applicant/ party
that
has
Issuing
sell
goods.
Buyer: contracted
to
buy
goods.
Bank:
The bank issuing the Letter of Credit at the request of its customer the Importer (Applicant) in favour
of
the
Exporter
Reimbursing
(Beneficiary).
Bank:
The bank designated in the Letter of Credit to reimburse the "available with" bank which submits payment claims under the Letter of Credit. Loan Against Trust Receipt •
Depending on the relationship with the client, he may ask for LTR facilities instead of LIM.
•
Party has to submit proper securities
•
Documents are given to the party to retire goods from the port on good faith.
•
After selling the goods to the market the party adjust the LTR along with the interest
Loan Against Imported Merchandise: •
There may be an existence agreement or the party may propose to the bank for having LIM facilities after arriving the goods in the port
•
If the party doesn't have any godown facilities or he has the shortage of money to clear the goods from the port, then he wants bank loan
•
The branch sends a message to clearing cell for clearing the goods from the port. There are
four
*
clearing Principle
cell
Office
*
Agrabad
*
Khulna
* Benapole •
Clearing cell sends duty requisition to the branch
•
The branch informs the party to deposit margin against LIM
•
Having the margin, the Clearing cell is asked for make the duty payment and to clear the goods from the port.
â&#x20AC;˘
The party takes out the goods from the godown by Delivery Order (DO). For this reason per unit price of the goods is needed
Packing Cash Credit Pre-shipment finance allowed under the name of "Packing Cash Credit", is essentially a short term advance granted by the bank to an exporter to enable him to procure, process, manufacture, pack and ship the goods to the buyers abroad in conformity with the terms of Export
Letter
of
Credit.
Allowable limit: Packing Cash Credit may be allowed to the garments/export oriented industries to meet their funded requirements for the performance of the export. Generally it does not exceed 90% of the FOB value of the Master LC. Export Development Fund L/C will be opened under normal terms and procedures approved by proper authority. And accordingly after receiving documents, the same will be lodged under PAD as per normal practice. PAD liabilities against the said L/Cs will be adjusted accordingly. For adjustment of Upon realization of export proceeds EDF Loan A/C will be adjusted. Bank Guarantee A bank guarantee enables the customer to acquire goods, buy equipment, or draw down loans, and thereby expand business activity. Swift Banking The City Bank Limited is one of the first few Bangladeshi Banks who have become member of SWIFT (Society for Worldwide Inter-bank Financial Telecommunication) in 1983. SWIFT is members owned co-operative, which provides a fast and accurate communication network for financial transactions such as Letters of Credit, Fund transfer etc. By becoming a member of SWIFT, the bank has opened up possibilities for uninterrupted connectivity with over 5,700 user institutions in 150 countries around the world Lone: Export Any goods or service sold to a Foreign Country. That dispatch of home products to the foreign buyers complying certain rules /regarding of the Govt. of the country. The export is called the lifeblood of country if used.
Documentation is the most vital part of any trade especially for the export trade. Fulfillment of trade contract depends largely on the preparation and submission of documents in the correct manner. On the hand wrong handing of the same may put the export into difficulties/troubles including on Non-Receipt of payment in time. Generally, the following documents/papers are required to be submitted along with the export Bills for negotiation by the exporters bank in terms of related export L/C. Draft / Bill of Exchange, (ii) Commercial Invoice,(iii) Bill of Lading/AWB. (iv) Certificate of Origin (v) Quality Certificate (vi) Inspection Certificate from buyerâ&#x20AC;&#x2122;s nominated agent (vii) Certificate weighment and measurement from LMD. (vii) Packing list (ix) Phytosanitery Certificate (x) Radio activity Certificate (xi) Letter of Credit (original) (xii) Letter of Contract from buyer (original) (xiii) EXP Forms (Exports Forms) etc. Legal Requirements of Export Although payment aspect of exports in Bangladesh Bankâ&#x20AC;&#x2122;s physical aspect is controlled by the Export policy Order announced by the Ministry of Commerce. Bangladesh Bank has set out elaborate procedure and laid down detailed rules and regulation concerning exports and export payments. All exports, to which the requirement of declaration applies, must be declared on the Exp Form. The branch should before certifying any export form, consider and take notice of the following: i)
The intended exports shall have valid Export Registration Certificate
ii)
Payment for goods exported from Bangladesh should be received through the branch in freely convertible foreign currency or in Taka from a non resident Taka account of a bank branch or a correspondent abroad.
iii)
Commission, brokerage and other trade charges are admissible only up to a maximum of 5% of the value of goods. The charges beyond 5% may be admissible subject to prior approval of Bangladesh Bank.
iv)
In order to avoid any loss of foreign exchange to the country, the branch should see that
a) Arrangements have been made for realization of export proceeds within prescribed period of 4(four) months. b) Arrangement has been made for receipt of title to goods like Bill of Lading, Airway Bill, etc. by the branch on shipment of goods. c) The Exp Form is signed either by the exporter or one holding valid legal power of attorney from exporter and the terms of the power of attorney are such that both the exporter and the attorney may be held responsible jointly and severally for realization of export proceeds. d) Bonafides of the buyers/consignees abroad and their credentials v)
The branch and its officials certifying the export forms as well as the exporter render themselves liable to punitive action under the FER act for delay in repatriation or non realization of export proceeds.
vi)
In respect of export of goods by land route or by sea, the Bill of Landing , railway Receipt and other documents of title to cargo should be drawn only to the order of Southeast Bank Limited.
vii)
In respect of export of goods by air, the Airway Bill and any other documents of title to cargo should be drawn to the order of a bank in the country of import nominated by the branch.
Foreign Remittance: Remittance: Remittance means transfer of fund. Latin the word â&#x20AC;&#x153;Remittanceâ&#x20AC;?. We understand transfer of fund from one place to another place with may be within the country or between two countries. Remittance, which is effected within the country, is called local remittance and which is affected between two countries is called foreign remittance. Remittance mainly two typesi)
Out ward Remittance.
ii)
Inward Remittance.
The Remittance in which are effected from our country to abroad is called outward remittance. The remittance, which comes from abroad, is called in ward remittance. Both types of remittance are being routed through following means: i)
Telegraphic transfer T.T.
ii)
Mail Transfer M.T.
iii)
Foreign demand draft F.D.D.
iv)
Travelers cheque T.C
v)
International Money Order I.M.O.
It is noted that the payment of import and export bills also to be settled through the above means. Procedure Of Payment Of Inward Remittance Procedure of payment of inward remittance Foreign TT & M.T: On receipt or TT on MT message first its authentication should be verified. The effort to be given for confirmation of credit with the receptive. NOSTRO A/C from Head office international division. If satisfied the TT or MT procedures are to be credited to beneficiaryâ&#x20AC;&#x2122;s A/C. If beneficiary maintain FC C/A the vouchers will be. If the beneficiaries maintain Taka A/C the vouchers will be: Foreign DD, Cheques, Bills T.C etc. If instruments are deposited by our A/C holder in there A/C these may either be purchased or may be sent for collection. Meanwhile instrument should be sent for creating to our NOSTRO A/C after credit confirmation from IBW. If instruments are send for collection. Procedure of payment of outward remittance: Outward remittance covers sales of Foreign Currency through issuing Foreign T.T/M.T/Drafts TCâ&#x20AC;&#x2122; s etc as will as sales of Foreign Exchange (outward remittances) submit appropriate return to Bangladesh Bank duty supported by schedules. Normally all outward Foreign remittance to be made through issue of T.T./FDD. If a remittance is made through FDD it should be crossed A/C payee only. Bangladesh Bank through its guideline for Foreign Exchange Transaction allowed different particular amount of F.C. to be remitted abroad for specific reason. For example Travel Quota, Medical Treatment, Education, Seminars and Workshop etc. Issuance of Instruments:
Application to be received from the remitter on T.M. from declaring the purpose of remittance. If seems permissible, TT or DD to be issued as usual drawn on our Foreign NOSTRO A/C. The vouchers will be: REMITTANCE FORMALITIES THROUGH DIAGRAM
Remitter
Remitting Bank
Payee Bank
Payee Personal Information
Banking Information
Remittance Instruments, cash TC, FDD, TT, MT, PO, IMO, cheque etc. collection and realization WES remittance express remittance facility, customers service cell. Procedure of T.C Issues: a)
Ensure that the intending traveler is a client of the AD Bank or is sufficiently well known
to the AD bank. b)
The indenting travelers must come to the bank with the following documents to have
the T.C.
c)
i.
Valid passport
ii.
Confirmed valid Air Ticket.(If travel by Air)
Verification of the passport & Air Ticket regarding validity. Eligibility, status etc of the
same. d)
Filling up the / M from by the purchaser and signing on the T/M (F-68)-
e)
Realization of required fund: Bank has to realize equivalent local / Foreign currencies of
T.C plus bank commission. F.C A/C holder may give debt authority for the same or may be managed from other F.C / A/C or nominee of F.C A/C holder. f)
Fill up the purchase Agreement form (P.a.F) regarding name, address etc and give of the
purchaser, T.C series No date of issue, amount etc. and give endorsement on passport.
g)
Give copy marked ‘Purchasers Copy’ to purchaser, Highlight importance of carrying this
copy to facilitate refunds for the cheque lost carrying this copy to facilitate refunds for the cheque lost, stolen, mutilated or destroyed. h)
Be sure that purchaser signed all cheques in the upper left side of the cheque, only one
person may sign any cheque. i.)
Use original P.A.F for settlement and retain duplicate for records.
Two sets of photocopies of passport and Air ticket to be obtained. Procedure of Encashment: a.
Compare the counter signature with the original signature cheque will not be honored if
signatures differ. b.
Additional signature may be obtained if the signature differs
c.
Blank cheque should not be encashed.
d.
Previously counter signed cheques not to be encashed.
e.
Be aware of large encashment & taka caution against hurry.
f.
Check the passport endorsement, purchase contract of the purchaser if available.
If is dealing officer is satisfied regarding the genuineness of the purchaser And the T.C then he can pay equivalent local currency to the customers. And Record the T.C in inward remittance register (F.C.D.O register). AFC Accounts Convertibility of Taka in current account transaction symbolized a turning point in the country’s exchange management and exchange rate system. Now the operations of foreign currency accounts have been more liberalized. Funds from these A/c’s are freely remittable to my country according to the needs of A/c holders. Types of Account FC Accounts Resident Foreign Currency Deposit Account Non-resident Foreign Currency Deposit Account What is FC Account? A account opened and maintained by Authorized Dealer in currencies other Than Bangladeshi Taka. In which currencies the Account may be opened? Without prior approval from Bangladesh Bank. FC Account may be opened is US Dollar:
Great Britain Pound from Bangladesh Bank. Authorized Dealer may open FC Account. 1.
a) In the name of Bangladesh Nationals/residing abroad, Bangladeshi Nationals working earning abroad including self-employed. b) Foreign National residing abroad or in Bangladesh and also Foreign Firms registered abroad and operating in Bangladesh or in abroad. c) Foreign Mission and their expatriate and employee. d) Diplomatic bonded warehouse.
2.
Foreign currency A/C may be opened locally in joint venture contracting firm employed
to execute project by foreign donors / International donor agencies as performs of the approve contract. In the name of resident Bangladeshi national working with Foreign / International organization operating in Bangladesh provided their Salary is paid in foreign currency. Resident & Non-Resident: Resident: A Resident is a person, Bank or firm who / which resides in Bangladesh. A Person is presumed to be ordinary resident if he maintains a home in Bangladesh or resides in the country for a sustain (Six months or more) part of each year or pay income Tax as a resident of Bangladesh. Foreign National who resides in Bangladesh continuously for six months or more. Non-Resident Bangladeshi National including those having duel Nationality and ordinarily residing abroad. Foreign National and companies / firm registered / incorporated abroad Foreign Banks / other financial institute and institutional invites. A type Industrial unit in EPZ. Bangladesh Nationals serving with embassies/ High commission of Bangladesh in Foreign countries. Officer / Staff of the Govt. / semi Govt. / Nationalized Banks and employee of body corporate posted abroad or deputed with International & Regional Agencies like IMF, World Bank / IDB, ADB etc during their assignment abroad. Who can Open FC Accounts
The Branch with Authorized Dealership License may. Without prior approval of Bangladesh Bank, open foreign currency A/câ&#x20AC;&#x2122;s in their books in the name of: Bangladeshi nationals residing abroad Foreign nationals residing abroad or in Bangladesh Foreign firms and companies registered abroad and operating in Bangladesh of abroad Foreign missions/Embassies/UN organizations and their expatriate employees Diplomatic bonded warehouses (duty free shops) Local and joint venture contracting firms employed to execute projects financed by foreign donors/international donor agencies. Bangladeshi nationals working as employees/consultants in international bodies in Bangladesh and drawing pay and allowances/consultancy fees/honorarium in foreign currency. Merchandise and service exporters Bangladeshi Nationals who are ordinarily resident in Bangladesh may open foreign currency accounts with foreign exchange brought in at the time of their return to Bangladesh from visits abroad. Industrial enterprises in EPZ. Currency in which FC/AC can be opened: FC Accounts can be opened either in Pound Sterling US Dollar Euro Japanese Yen Papers/Documents required for Opening FC/AC (a) For Bangladeshi Wage Earners Photocopy of first 7 (seven) pages of valid passport and visa page/arrival page Photocopy of employment contract/appointment letter/work permit Two copies of passport size photograph of each account holder and nominee duly attested. (b) For Foreign National/Company/Firm Two copies of photograph of account holder for individual and operators of other account holder Copies of relevant pages of passport for individual and operators of other account holder Copy of service contract/appointment letter/work permit, if any for individual
Copies of registration in Bangladesh with Board of Investment/Bangladesh Bank for Foreign/Joint Venture Firm Copies of Memorandum and Articles of Association/Laws/Bye Laws, etc. or Joint Venture Agreement for Joint Venture Company Who are eligible to open NFCD Account? a.
All Non resident Bangladesh Nationals and personals of Bangladesh origin including
those having duel / Nationality / and ordinarily residing abroad. b.
Bangladeshi Nationals serving with Embassies / High Commission of Bangladesh in
foreign countries and also the officer / staff of the Government / semi Government / Nationalized Banks and employee of body corporate posted abroad re deputed to International or regional Agencies like IMF, World Bank / IDB, ADB etc. during their assignment abroad. c.
Foreign National & companies firms registered and / or incorporated abroad, bank,
other financial institutes including institutional investors and 100% foreign owned (A type) industrial units in the Export processing Zone in Bangladesh. d.
Shore staff of Bangladesh shipping companies, but crewmembers of Bangladesh flag
vessel sealer not allowed. What is Nature Of NFCH Account? WFCD Account is in the nature of interest bearing terms deposits maturing after one month, three month, Six month and one year. Maintenance Of Account with foreign correspondent Foreign currency A/ Cs under WES, which plays a vital role on our overall Foreign exchange are opened by Bangladeshi nationals serving and carning Abroad having income from sources other than Bangladesh (ECAD / Ecap). Loro A / Cs- These are Accounts either in a Foreign or in the home currency and mean Third - party Accounts. When referring to the account of a Third party it is a usually described as a ‘Loro or ‘Their ‘Account. Resident - A resident is a person, Bank or Firm who / which resides in Bangladesh. There is no definite rule whether a person is ordinarily resident if he maintains a home in Bangladesh or resides in the country for a substantial part of each year or pays income Tax as a resident of Bangladesh. Temporary visitors may not be regarded as a resident. As a resident he can maintain locally as.
Private Non- Resident Taka A / Cs: The A/Cs of individuals, firms or companies resident in countries outside Bangladesh are designated as NonResident A/Cs regarded for Exchange control purpose as A/Cs. All such A/Cs are regarded foreign Exchange control purposes as A/Cs of countries in which the A/C holder is permanently residing. NOSTRO A/C: Meaning “Our account with you or them” presently we are maintaining 26 accounts abroad in 6 (six) agencies with bank of 9 (nine) countries. VOSTRA A/C: Meaning “Their or your accounts with us” at present with 10 (ten) banks / exchange house (NRD & NRT A/C). LORO A/Cs Meaning “Third party A/C i.e. their A/C. OTHER ACCOUNTINGS: FCAD, FCAD, FC, PFC, NFCD A/C What is nature of NFCD Account? NFCD accounts are in the nature interest bearing term deposits maturing after one month, three month, six month and one year THE CITY BANK LIMITED, has recently introduced MFCD account instead of NFCD. Maintenance of A/C’s with Foreign Correspondents: A / D may maintain Account in freely convertible currencies in which they are authorized to deal with their correspondents / branches abroad subject to intimation to the Bangladesh Bank. Intimation to reach the G.M.F.C.D Bangladesh Bank, H.O Dhaka within 15 days from the date of opening of the new A/c with the following particulars. Name of currency in which the A/C is opened. Name and address of the Foreign Branch or correspondent with whom the A/C is opened. The date of opening the A/C opened. The purpose for which A/c is opened. WES and General / Regular A/Cs opened for settlement of transaction inward & outward remittances, ACU Transactions & various others. Mode of Operation: Foreign currency accounts opened i9n the name of Bangladesh nationals working abroad or self employed abroad cam now be maintained as long as the account holders desires.
Such accounts may also be opened by the eligible persons within six months of their return to Bangladesh. Deposits Credit to a foreign currency account may be made against inward remittance of foreign exchange in any form or transfer from another FC account or Non-Resident Taka Accounts of banker’s abroad. Ads may also raise credits to such accounts with the proceeds of convertible foreign exchange viz. Currency notes, travelers’ cheques, drafts, etc. brought into Bangladesh by the account holders while on temporary visit to Bangladesh, provided such foreign exchange in excess of US$ 5000 of its equivalent has been duly declared by them to the customs on Form ‘FMJ’ at the time of their arrival. Portion of repatriated export proceeds of Merchandize/service exporters are allowed to credit to the exporters retention quota account. Foreign exchange earned through business done or services rendered in Bangladesh can not be put into F.C. accounts Withdrawals Payments may be made freely abroad from these FC accounts to the extent of balance lying therein. Local disbursements may also make freely in Taka from such foreign currency accounts. Funds lying in FC Accounts can be utilized for import of goods and commodities as per instructions issued my the CCI&E and Bangladesh Bank. No payment in foreign exchange may be made to or on behalf of any resident in Bangladesh out of the FC accounts except foreign diplomats or privileged persons who have specific authority from Bangladesh Bank to accept such payment. Ads may pay interest at prevailing Euro Currency Deposit rate, if balance in the account is not less than US$ 1000 or Pound Sterling 500 and are maintained for a minimum period of one month/ Foreign nationals/companies/firms registered and/or incorporated abroad and A-type industries of EPZ may also open FC account in the form of Term Deposit (NFCD). Convertible & Non-convertible Taka A/c The branch with Authorized Dealership License may open convertible Taka Accounts in the names of foreign organizations/foreign nationals viz. Diplomatic missions, UN organizations, Non-profit International Bodies, Foreign Contractors & Consultants engaged for specific projects
under the Government, Semi-Government, Agencies & the expatriate employees of such missions/organizations who are resident in Bangladesh. These accounts may be credited with foreign currencies brought on or remitted from abroad or transferred from a foreign currency A/c of another convertible Taka account. For transfer from another convertible Taka account, the Taka amount from the transferor’s account would be converted into foreign currency for transfer & credit to the recipient account by re-conversion into Taka. No money emanating from a business originating in Bangladesh and otherwise reportable to Bangladesh can be carried to these accounts. A convertible Taka account may be debited for payment in foreign currency abroad, for local expenses, for transfers to foreign currency accounts or other convertible Taka accounts or for credits to a non-convertible Taka account. The branch may open Taka STD (7-30 days special notice) accounts in the names of foreign diplomatic missions and their expatriate personnel, foreign airlines & shipping lines operating in Bangladesh, international non-profit organizations including charitable organizations, UN organizations and their respective expatriate personnel & pay interest thereon provided that the amount of interest accrued on balance of these accounts will be disbursed locally in nonconvertible Taka and that no part of the earned interest will be remittable abroad at any stage. Foreign organizations/their expatriate personnel mentioned above may maintain nonconvertible Taka accounts with the branches without prior Bangladesh Bank approval. These accounts may be credited with funds from convertible Taka accounts, with remittance from abroad and with Taka received from authorized sources including interest from STD accounts, these accounts may freely be debited for local expenses. No remittance abroad or transfer to an FC account/convertible Taka account may be made by debit to a non-convertible Taka account. Outward Remittance: The teem “Outward Remittance” include not only remittance i.e. sale of foreign currency by TT, MT, Drafts, Travelers cheque but also payment against imports into Bangladesh & Local currency credited to Non-Resident Taka Accounts of Foreign banks or convertible Taka account. Two forms are used for Outward Remittance of Foreign Currency, such as IMP Form:
All Outward Remittances on account of imports ate done by form IMP.
T.M. Form:
For all other Outward Remittances form TM is used.
Private Remittance
Family remittance facility Foreign Nationals working in Bangladesh with the approval of the Government may remit through an Authorized Dealer 50% of Salary and 100% of leave salary as also actual savings and admissible pension benefits. No prior approval of Bangladesh Bank is necessary for such remittance. Remittance of moderate amounts of foreign exchange for maintenance of family members abroad (spouse, children, parents) of Bangladesh Nationals are allowed by Bangladesh Bank, on written request supported by certificate from the Bangladesh Mission in the concerned country. Remittance of Membership Fees/Registration Fees etc. Authorized Dealer may remit, without prior approval of Bangladesh Bank, membership fees of foreign professional and scientific institutions and fees for application registration, admission, examination (TOEFL, SAT, etc.) in connection with admission into foreign educational institutions on the basis of written application supported by demand notice/letter of the concerned institution. Education Prior permission of Bangladesh Bank is not required for releasing foreign exchange in favor/on behalf of Bangladeshi students studying abroad or willing to proceed abroad for studies. Ads shall allow exchange facilities for this purpose according to the following drill: Application duly filled in by the student as per prescribed format of Bangladesh Bank. Original and photocopy of admission letter issued by the concerned institution in favor of the student. Original and photocopy of estimate relating to annual tuition fee , boarding and lodging, incidental expenses, etc. issued by the concerned institutions. Attested copies of educational certificates of the applicant and Valid passport. Remittance of Consular Fees Consular fees collected by foreign embassies in BD Taka and deposited in a Taka Account maintained with an AD solely for this purpose may be remitted abroad without prior approval of Bangladesh Bank. Remittance of Evaluation Fees
Authorised Dealers, without prior approval of Bangladesh Bank, may remit evaluation fee on behalf of Bangladesh is desiring immigration to foreign countries for getting educational certificates of the person concerned evaluated buy a foreign institution. A demand note of the foreign immigration authority is required for this purpose. Travel Endorsement on Passport & Ticket Private travel quota entitlement of Bangladeshi nationals is set at US$3000.00 per year for visit to countries other than SAARC member countries and Myanmar. Quota for SAARC member countries and Myanmar is US$1000.00 for travel by air and US$500.00 for travel by land route. However, the travelers have to produce VISA for release of foreign currency exceeding US$500.00 ADs may release this travel quota in the form of foreign currency exceeding US$600.00 or equivalent and balance exchange in the form of TCs or total quota in the form of TCs The annual quotas mentioned above are for adult passengers. For minors (below 12 years in age) the applicable quota will be half the amount allowable to adults. ADs may release above travel quota without prior approval of Bangladesh Bank subject to observation and satisfaction of following points â&#x20AC;&#x201C; The intending traveler is a customer of the AD Bank or is sufficiently well known to the Ad Bank or the intending traveler has paid relevant Travel Tax. The intending traveler has a valid passport. The AD should verify and satisfy itself that any foreign exchange released for an earlier travel was utilized with the journey being actually undertaken or was duly encased unutilized. The intending traveler is in possession of a confirmed air ticket for journey to be undertaken and that the intended journey to be undertaken not later than two weeks after the date on which exchange is issued. The amount released is endorsed on the passport and air ticket of the traveler with indelible ink, with the signature and the name of the AD branch embossed in the passport and ticket. However, while issuing foreign exchange to the Diplomats/Privileged persons/UN personnel, Govt. Officials traveling on official duties, such endorsement in the passports need not be made.
In each case of release of foreign exchange for travel abroad, photocopies of first six pages of the passport. Page on which visa is stamped and the page recording endorsement of foreign exchange and photocopies of the pages of ticket showing name of the passenger, route and date of journey and endorsement of foreign exchange along with the relative TM from should be sent to Bangladesh /bank along with monthly returns. Health & Medical Authorized Dealers, without prior approval of Bangladesh Bank, may release foreign exchange up to US$10,000.00 for medical treatment abroad on the basis of the recommendation of the Medical Board set up by the Health Directorate and the cost estimate of the foreign medical institution. Applications for release of exchange exceeding US$10,000.00 should be forwarded along with supporting documents to Bangladesh Bank for prior approval. Seminars and workshops Without prior approval of Bangladesh 窶話ank Ad may release US$200.00 per Diem and US$250.00 per diem to the private sector participants for attending seminars. Conferences and workshops organized by recognized international bodies in SAARC member countries or Myanmar and in other countries respectively for the actual period of the seminar/workshop/conference to be held on the basis of invitation letters received in the names of the applicants or their employer institutions. Foreign Nationals The ADs any issue foreign currency TCs to foreign nationals without any limit and foreign currency notes up to US$3000.00 or equivalent per person against surrender of equivalent amounts in foreign currencies. The TCs and foreign currency notes should, however, be delivered only on production of a ticket for a destination outside Bangladesh and the amount issued should be endorsed on the relative passports. Ads may allow re0-conversion of unspent Taka funds of foreign tourists into foreign exchange on production of the encashment certificate of foreign currency. Re-conversion shall be allowed by the same AD with which the foreign currency was enchased earlier. AD should retain the original encashment certificate and relative FMJ Form where re-conversion exceeds US$500.00 Remittance for Hajj
ADs may release foreign exchange to the intending pilgrims for performing Hajj as per instructions/circulars to be issued by the Bangladesh Bank each year. Other Private Remittances Applications for remittances by private individuals for purposes other than those mentioned above should be forwarded to Bangladesh Bank for consideration & approval, after assessing the bonafides of the purpose of remittance on the basis of documentary evidence submitted by the applicant. Official & Business Travel Official Visit For official or semi-official visits abroad by the officials of Govt./Semi-Govt./Autonomous/Semiautonomous institutions, etc., ADs may release foreign exchange as per entitlements fixed by the Ministry of Finance from time to time. In such cases, the applicant for foreign exchange shall be
required
to
submit
the
sanction
letter
and
the
Competent
Authorityâ&#x20AC;&#x2122;s
Order/Notification/Circular authorizing the travel. Business Travel quota for New Exporters Up to US$6,000.00 or equivalent may be issued by an AD without prior approval of Bangladesh Bank to a new exporter for business travel abroad, against recommendation letter from Export Promotion Bureau. Bonafide requirement beyond US$6,000.00 is accommodated by Bangladesh Bank upon written request though an AD with supporting documents. Business Travel Quota for Importers and Non-exporting producers Subject to annual upper limit of US$5000.00, importers are entitled to a business travel quota @ 1% of their imports settled during the previous financial year. Subject to annual upper limit of US$5,000.00 non-exporting producers for the local markets are entitled to a business travel quota @ 1% of their turnover of the proceeding financial year as declared in their tax returns. The same business organizations engaged in imports as well as products shall, however, draw business travel quota entitlement only on one count. Exportersâ&#x20AC;&#x2122; Retention Quota Merchandise exporters may retain up to 40% of realized FOB value of their exports in foreign currency accounts. However, for exports of goods having high import content (such as
readymade garments, POL products including Naptha, furnace oil, bitumen, electronic goods, etc.) the retention quota is 7.5% of the repatriated FOB value. Funds from these accounts can be used to meet bonafide business expenditure, such as business visits abroad, participation in export fairs and seminars, establishment and maintenance of office abroad, import of raw materials, machinery and spares, etc. without prior approval of Bangladesh Bank. Exporters may, at their option, retain the foreign currency in interest bearing renewable term deposit accounts with ADs in US Dollar, Pound Sterling, DM/EURO or Japanese Yen with a minimum amount of US$2000.00 or $1500.00. Service exporters (excluding indenting commission or agency commission of indenting house or buying house respectively) may retain 5% of their repatriated income in foreign currency Accounts or as renewable time deposits with ADs. Funds from these accounts can be used to meet expenses for bonafide business travel abroad. Commercial Remittances Opening of branches or subsidiary companies abroad Remittance of up to US$30,000.00 of equivalent per annum may be released by the ADs without prior approval of Bangladesh Bank to meet current expenses of offices/branches opened abroad by resident in Bangladesh or a Commercial/Industrial concern incorporated in Bangladesh. Such remittance may only be made in the names of concerned offices/subsidiary companies abroad subject to examination of following papers: A) Approval letter of the competent authority of the country concerned for opening the office in that country. B) Copy of report submitted to Bangladesh Bank, as per prescribed Format, within one month of opening of foreign branches/subsidiaries. Before effecting remittances for subsequent years, the ADs shall verify the renewed lease agreement (if applicable) and shall satisfy itself about the actual necessity of remitting funds by
examining the actual and/or estimated income and expenses of the offices/subsidiaries abroad as revealed from its audited accounts and other papers/vouchers. Remittance by shipping companies Airlines & Courier Service Foreign shipping companies, airlines and courier service companies may send, through an AD, funds collected in Bangladesh towards freight and passage after adjustment of local cost & taxes, if any, without prior approval of Bangladesh Bank. Remittance of Royalty and Technical Fees No prior permission of Bangladesh Bank or BOI is required buy the enterprises for entering into agreement involving remittance of royalty, technical know-how or technical assistance fees, operational service fees, marketing commission, etc., if the total fees and other expenses connected with technology transfer do not exceed6% of the cost imported machinery in case of new projects. 6% of the previous yearâ&#x20AC;&#x2122;s sales as declared in the income tax returns of the ongoing concerns. The ADs may remit such royalty and other fees without prior approval of Bangladesh Bank. Royalty and other fees beyond the rate mentioned above may be remitted by the ADs without prior approval of Bangladesh Bank, provided specific approval of BOI has been obtained by the applicant company. Remittance on account of Training & Consultancy Industrial enterprises producing for local market may remit through ADs up to 1% of their annual sales as declared in their previous yearsâ&#x20AC;&#x2122; tax return for the purpose of training and consultancy services as per relevant contract with the foreign trainer/consultant, without prior approval of Bangladesh Bank. Remittance of Profits of Foreign Firms/Branches ADs may without prior Bangladesh Bank approval, remit abroad the post tax profits of branches of foreign firms and companies including foreign banks & other financial institutions subject to submission of relevant documents/information along with the application. Remittance of Dividend Prior permission of Bangladesh Bank is not required for :Remittance of dividend income to non-resident shareholders on receipt of application in the prescribed form from the companies concerned.
Remittance of dividend declared out of previous years’ accumulated reserves. Subscriptions to Foreign Media Services On application from the local newspapers, ADs may remit foreign exchange towards cost of subscription of news items, features, articles of foreign news agencies subject to submission of (i) contracts entered into between the applicant and the foreign news agency and (ii) NOC of the Ministry of Information. Costs/Fees for Reuters Monitors ADs may remit abroad cost on account of their own subscription to foreign media services such as Reuters monitor service, without prior approval of Bangladesh Bank. Advertisement of Bangladesh Products in mass media abroad Prior permission of Bangladesh Bank is not required by the ADs for remittance of charges for advertisement of Bangladeshi commodities in mass media abroad, subject to submission of invoice from the concerned foreign mass media along with the applications of the remitter. The applicant will have to submit copy of the advertisement to the ADs within one month of its issuance. Accounting Mechanism Encashment of Travelers’ Cheque For Payment in Taka Counter value Foreign Exchange Dealing: SPOT Foreign Exchange Transaction: Dealing in Foreign Exchange involves the exchange of one currency into another on spot or forward basis. Banks usually undertakes such exchange transactions mainly because of the following reasons: To replenish its Nostro Accounts with Overseas Correspondents; To unload the excess position i.e. position beyond the open position limit; To switch currencies for profit talking or avoid loss; To cover or hedge the risks associated with Sale & Purchase of Currencies. A few numbers of steps are involved in carrying out a transaction. One is ‘Where’ and another is ‘When’ to deliver the funds. The rate shall also have to be fixed before a deal is made. The following sections deal with the activities relating to Sale & Purchase of Foreign Currencies: Settlement Country:
When a deal is made, the parties concerned shall have to execute the deal, which is called Settlement. Foreign exchange deal normality involves two currencies. So settlement will have to be made in two countries, which are called Settlement Countries. The place at which the deal is made is called dealing center. Spot Settlement: Unlike other merchandise, foreign currencies excepting bank notes & TCs cannot be delivered off the shelf. This is because of the simple reason that Nosto Accounts which are maintained with International banks at important trade centers are required to be debited and credited to effect settlement of a deal. It requires time to send tested messages to these banks. Moreover, there are different time zones and weekly & other holidays differ from country to country. So as a matter of practice foreign exchange deals, spot or ready, are allowed to be settled in two working days. Thus a deal on Monday would actually be settled on Wednesday. A working day is one on which both the involved banks are open in the two settlement Centers. This is to ensure that both banks received their respective currencies on the same date. Value Date: The principle and practice of delivery of both the currencies on the same date is known as Value Date and the transactions are known as value dated ones. Under this system neither party would lose interest for delayed receipt of funds. In real life delivery time of currencies bought and sold cannot be completely synchronized. Due to time zone differences, delivery would take palace earlier in the Far East, later in Europe and later still in USA. Value dating poses a problem for dealing with Middle Eastern Currencies because Friday is a holiday in those Countries. To cope with this problem, bankers have found a compromise formula under which a person buying, say, Kuwaiti Diner, makes payment in Dollar in USA on Friday but Diner is delivered in Kuwait on Saturday. PERFORMANCE OF THE CITY BANK LIMITED Correspondents: Countries Banks Branches
……………………………… ………………………….. …………………………
Nostro A/cs ……………………………… Credit Line ………………………………
Vostro A/c ………………………………. b) Taka Drawing Arrangement: Banks Exchange house / company Under process. Publication of ICC ICC (International Chamber of Commerce) is the international organization to communicate the foreign trade to minimize the problem of Terminology, ICC have set some uniforms rules regarding Foreign trade. That are: 1.
UCPDC
2.
INCO Terms
3.
URR
4. URC
ICC publication no 500 ICC publication no 500 ICC publication no 500
UCPDC The Uniforms customers and practice or Documentary credit were first published by the ICC in 1933. Revised versions were issued in 1951, 1962, 1974 and 1983. This Revision was adopted by the ICC Executive Board in April, 1993 and first published as ICC publication No. 500 in May, 1993 by ICC publishing S.A (Paris) and ICC publishing INC (New York); 1993 Revision in force as of January, 1994. Secretary General of the ICC is Jean-Charles Rouhe R. Chairman ICC Commission on Banking Technique and Practice is Charles Del Busto. Total number of Articles 49 in the ICC 5000. INCO Terms International commercial terms i.e. INCO Terms refer to the standard contract terms prepared by the ICC. The purpose of INCO terms is to provided a set of International rules for the interpretation of the important terms used in foreign Trade contracts i.e. import & Export. The first INCO terms were published by the ICC in 1936. These terms are accepted and used through out the world as simple and reliable terminology for avoiding misunderstanding between & seller.
There are 13 Standardized INCO Terms No
Category
Group Terms
1.
Departure
E
2.
Main Carriage unpaid
F
EXW EX Works FCA Free on alongside ship FAS Free on alongside ship FOB Free on Board
3.
Main Carriage Paid
C
CER Cost & Freight
D
DAF Delivered AT Frontier
CIF Cost insurance & Freight CPT Carriage Paid to CIP Carriage Insurance Paid to 4.
Arrival
DES Delivered Ex ship DEO Delivered Ex Quay DDU Delivered Duty unpaid DDP Delivered Duty Paid URC: 522 & URR-525 URC means uniforms rules for Collection. International chamber commerce (ICC) publications No 522. The ICC uniform rules for collections were first published by the ICC in 1956, 1995 revision in force as on January 1996. There are 26 articles in URC. URR means Uniform Rules for reimbursement the ICC uniform rules for bank reimbursements under documentary credits in force as on July 20, 1999. There are in URR-525. Chapter-4 SWOT ANALYSIS OF THE CITY BANK LIMITED Swot analysis is an import analytical tool for every organization. The synonyms swot stands for Strength, weakness, opportunities & Threats. Through this SWOT analysis we can get information about the strength, weak ness, opportunities as well as threats of an organization. After getting the information from the SWOT analysis we can take the right measurement for that organization. Now I would like to discuss about the strength, weaknesses, opportunities & threats of the Southeast Bank limited. Strengths of the Southeast Bank limited : â&#x20AC;˘
Management :
Southeast Bank is processing the managerial skill in every part of internal division, such as Credit and Advance division, Human Resource division. The span between management is remark ably shorter.
•
Customer Services:
Bank of your choice” the bank believes in – Any suggestions from them are heartily acceptable. The employees of the bank are very helpful to given information and suggestions to their customers as will as reliable for customers Service. Strengths in managerial skills, cohesion and avoiding bureaucracy help the bank in creating valuable services to their customers. The bank launched several deposit Schemes, which have been appreciated by the customers resulting growth of deposit of the bank. The bank has e4arned customers loyalty as organizational THE CITY BANK LIMITED is only the agent of Money Gram in Bangladesh. Which is opereating more than 115 countries. The bank has joined the shared ATM Network Bangladesh whit a pool of ten Banks. WEAKNESSES OF THE CITY BANK LIMITED •
Competitiveness: The bank is bit of back ward in sense of marketing. Other banks are issuing Credit Card, Electronic Cash, Networking system in whole Bangladesh controlled by the Head office and expansion of Marketing Research and Development.
•
Promotional Activities: The bank cannot avoid the importance of marketing operations. But it needs a fullequipped marketing department. Advertising and Promotional Activities are very simple in the department of the bank.
•
Lack of effective It technology
•
Lacking of skilled manpower.
•
Poor quality of the computer system.
•
Availability of mismanagement practice.
•
Absence of attractive remuneration package and motivation for the employee.
•
Absence of on lime Banking System
OPPORTUNITIES OF THE CITY BANK LIMITED •
The banking sector of Bangladesh is increasing more rapidly and the future prospected of this banking sector is good.
•
THE CITY BANK LIMITED is giving general loan for the public that’s why the banks are achieving reputations as well as decent profit.
•
The bank also giving loan, which enters doing the small business. The bank provide loan from one lac to five lacs.
•
The bank can increasing their profit by introducing their profit by introducing new sectors like leasing, one point service, Tele-Banking, credit card AWIFT etc.
THREATS OF THE CITY BANK LIMITED: •
Most of the bank in Bangladesh is introducing on-line Banking system, because of this reason they are giving better service to the client. That’s why the clients are really satisfied with them.
•
The competitors may come with innovative ideas, which is difficult to adapt.
•
The size of the market and the present state of economic activity did not provide adequate scope for business for a large number of banks with poor management and outdated operating systems.
•
One of the most important things is that most of the employees of the bank always try to motivate the clients through their behavior, attitude and other strategies. Because of this reason the clients are really pleased and the fell enjoy dealing with that bank and they also bring more other clients for that bank, they may be their relatives, friends or any party. One of the important threats of THE CITY BANK LIMITED (New Elephant Road Branch) is that some times the employees this bank treats so badly with the clients, because of this reason they move to another banks.
•
Opening of the recently permitted new banks, without implementation of the need reforms, could lead to unethical competition and horse-trading in the country’s troubled banking sector.
•
Adding the lack of skilled and at the top and mid-level management of banks could also result in ‘’horse-trading’.
•
Foreign banks were all prepared to snatch the country’s limited market with potentials of new business opportunities. Government step at this time should have been to strengthen local banks through undertaking needs reforms. Instead of doing that new banks were permitted further squeezing the business opportunities.
REMARKS Comparative Analysis of City Bank with Other Banks Comparison regarding number of customers
Number of customer is an important factor for a Bank's good performance . The more the customer the more is the success. Customer hunting is a very important task of each Bank. It is an important indicator of the marketability of the Bank. The follwind table shows the number of the leading Bank in CCSBanks Primer Bank Limited Islami Bank Bangladesh Limited Pubali Bank Limited Uttara Bank Limited The City Bank Limited
Number of Customer 17668 85031 32000 14020 1490
Source: Data collected form different Banks
Islami Bank possesses the largest number of clients in CCS . Here also the reason- period in serving and number of branches is satisfactory. Islami Bank has 112 braches all over Bangladesh to serve CCS. And it is serving for about 8 years. So it can be said that the number of customer of The City Bank is satisfactory. Pubali Bank has the highest number of branches but the number of customer is less than Islami Bank. This is the maximum amount that is offered by Banks to their buying essential goods. There are two category of loanâ&#x20AC;˘
Vehicles and
â&#x20AC;˘
Other goods.
For vehicle loan the following table shows the maximum amount that is offered by different Banks. Anew comer in Bangladesh in this scheme is HSBC (Hong Kong And Shanghai Banking
Corporation Ltd) . It has come with this product with the simplest procedure. The following table shows the maximum offer for car loan by different BanksBanks Primer Bank Limited Islami Bank Bangladesh Limited Pubali Bank Limited Uttara Bank Limited The City Bank Limited
Maximum offered amount 10,00,000 3,50,000 3,00,000 15,00,000 5,00,000
Source: Data collected from different Banks
In the category of other goods such as domestic appliances, entertainment, intangibles etc the maximum mount is 1.0 lac in almost all Banks. But Uttara Bank offers three lacs for any type of goods. The following table shows the maximum offer for other type of goodsBanks
Type of goods
Maximum offered amount
Primer Bank Limited
All types of goods
1,00,000
Islami Bank Bangladesh All types of goods Limited
75,000
Pubali Bank Limited
With down payment
1,00,000
Uttara Bank Limited
All types of goods
3,00,000
.HSBC
All types of goods
7,50,000
Mercantile Bank Ltd
House hold goods
1,00,000
Treatment and Traveling
50,000
Domestic appliance
1,00,000
Office equipments
2,00,000
One Bank Ltd
Entertainment
1,00,000
Intangibles
Varies time to time
National Bank LTD
All types of goods
4,00,000
The City Bank Ltd
All types of goods
1,00,000
Source: Data collected from different Banks Table-7.6b When a customer is willing to take a loan under CCS he buys the application from The City Bank . Then he fills up that and submits it to the Bank, The application form is checked by the officer. From that time loan processing starts. Generally prime Bank requires 7 days for disbursing a loan. I myself observe it. In other leading Banks every Bank says that they disburse the loan within 2 or 3 days . It is possible if the officer does not physically inspects each and every information provided by the customer . That's why their time requirement for disbursing a loan is high, But this 7 days should be reduced to 3 to 4 days because of the competitive Banking system, some customers even don't ask for the interest rate but ask for the requirement. In some Banks such as Pubali Bank Ltd, has engaged commission agent. The job of the commission agent duty is to collect, inspect, disburse , recover and monitor the Bank process. So they can take care of disbursing loan as soon as possible so Pubali Bank lit, can disburse the loan within 2 or 3 days and they have a fixed amount for commission agent. The City Bank & Prime Bank ltd, unlike any other Bank charges very high stamp charge, which should be reduced. Looking at all the expenses it is seen that the credit offered by Uttara Bank Ltd, is really cheaper than that of others. Bank
Prime Bank ltd. Islami Bank Ltd.
Pubali Bank Ltd.
From price Stamp Interest (in TFQ charge (in rate Tk.) 10 470 16% 20 294 14%
25
340
13% car)
Risk Fund (in Tk) Service Charge (in Tk.)
2% 1% (for lyear)
1% 2% (for lyer)
2% (for 2 yrer)
4% ( for 2 year)
(for 1% (for car)
12% (for 2% (for other ) other)
3% (it is Service Charge)
Agent Commissi
Uttara Bank Ltd.
10
13% (for 2% (but not less Tk 200 (Up to loan amount 5000 car) than TK 200) 12% (for other) Tk 500 ( above loan amount 50000)
Mercantile Bank ltd.
15%
2% (for car) l%(for other)
1%
The City Bank 470 Limited Source; data collected from different Banks Table -7.8a
13%
1%
1%
Down payment is the client's equity. When a customer wants to buy a goods he is required to bring a quotation to the Bank. Then a percentage of the quoted price is required by the to contribute. Different Banks require different percentage of down payment. The following table show the down payment requirement of different Banks for different itemsBank Prime Bank limited Islami Bank limited Uttara Bank limited Pubali Bank limited
Item Cra other All goods new Reconditioned car Motor Cycle Baby Taxi other car
Other The City Bank Limited Any types Source: Data collected from different Banks.
down Payment (in %) 40 20 25 35 40 35 40 20 40 20 25%
Table -7.9a Comparison on the Basis nature of security For any type of loan security is a vital thing. CCS also requires security from their customer . As this in of small loan it does no require mortgage or cash security . All Banks prefer personal guarantee for securing CCS loan. But in choosing guarantor, and determining number of guarantor different Banks there is a difference in preferenceBank PBL IBBL
Type of customer Service holder, Businessman Service holder, Businessman
Number of Guarantor 2 2
HSBC
This Bank has come with this product, which does not require
any personal guarantee , or any other kind of security. The City Bank Limited Service holder, Businessman 2 Source : Data collected from different Banks. table-7.11 Consumer credit is a financial baby product in the market; It *s gross life almost 1 to 5 years. So before going a bit more it would be hardly rational to say that consumer credit will not be induced to default culture in the term lending market. It's present recovery position is 95.49% which has not been affected by the so called default culture. The reason behind this in that either the customers have not found out any practical way of misusing this product or the is so adjusted that they are not able to do so probably the last one and solid supervision is the reason of the appreciating development. The recovery rate of four leading Banks up to 2001 areBank Prime Bank limited Islami Bank Bangladesh limited Uttara Bank limited T'ubali Bank limited The City Bank limited Source: Data collected from different Banks.
Recovery rate 95.49% 96.00% 98.00% 90.00% 97.00%
Table7.12a Recovery rate of different Banks upto 2001
Figure:.12a From the above table it is found that almost all Bank's recovery rate is higjv Uttara Bank processes the highest recovery rate. Recovery rate of prime Bank is also in considerable position . From the above table it is found that almost all Bank's recovery rate is high. Uttara Bank processes the highest recovery rate. Recovery rate of The City Bank is also in considerable position . Year 1995 1996 1997
Recovery rate 93.00% 98.65% 96.26%
1998 1999 2000 2001 Source: Prime Bank ltd.
95.48% 96.08% 95.45% 95.49%
Figure: 7.12.1a In the second year was of high rate but then it decreased to 96.26% . Last three years the rate was sticky at 96% . And in 2000 & 2001 it was decreased by 1% approximate. But it is said that this is a good recovery percentage. Year wise recovery of loan by Islami Bank (BD)Ltd. Year 1993 1994 1995 1996 1997 1998 1999 Source: Islami Bank Bangladesh Ltd. Table-7.12.2a
Recovery rate (In%) 97.58 94.77 94.18 90.00 94.00 95.00 95.5
Recovery rate of Islami Bank Bangladesh Ltd, is also very good. There considerable difference between prime Bank ltd , and Bank Bangladesh on the basis of recovery rate. Year wise recovery of loan by Pubali Bank ltd. Year 1995 1996 1997 1998 1999 Source: Puabli Bank Ltd.
Recovery rate In % 100.00% 89.24% 89.11% 88.17% 89.25% Table 12
At the very beginning Recover)7 of Pubali Bank Ltd , was 100% . But they could not maintain it's trend. It has gradually decreased to 88,27%. But last year they have increased the rate by 1%. So they have to try to recover highly otherwise this scheme will be stopped. Year wise recovery of loan by The City Bank ltd. Year 1996 1997 1998 1999 2000 2001 2002 Source : The City Bank Ltd.
Recovery rate In % 96% 95% 93% 94% 93% 92% 96%
Recovery rate of The City Bank Bangladesh Ltd, is also very good. There considerable difference between prime Bank ltd , and Bank Bangladesh on the basis of recovery rate.