Foreign Exchange Procedures of AL-Arafah Islami Bank Ltd

www.AssignmentPoint.com Letter of transmittal Date Mr. Anisuzzaman Lecturer, School of Business ……… University Subject: Submission of Internship Report. Dear Sir, !oul" li#e to than# you for your coo$eration in $re$arin% this re$ort. t has been a %reat o$$ortunity for me to e&$lore an" learn the activities of forei%n e&chan%e $roce"ures of AL' Arafah slami Ban# Lt" (A BL). *he re$ort contains the activities of forei%n e&chan%e "e$artment of A BL. +ith out your hel$ it !oul" have been "ifficult to com$lete this re$ort. +ith "ee$ %ratitu"e, su$ervision "urin% my internshi$. !oul" really a$$reciate if you enli%hten me !ith your thou%hts an" vie!s re%ar"in% this re$ort. f you have any en-uiry about this re$ort, !oul" be %la"e to ans!er you. .ours sincerely …………………….. also ac#no!le"%e the coo$eration $rovi"e" by Mr. ,afi#'ul' slam ( n char%e) forei%n e&chan%e, for his utmost www.AssignmentPoint.com Acknowledgement All $raises to Almi%hty Allah for enablin% me to com$lete the internshi$ re$ort on /0orei%n 1&chan%e $roce"ures of Al'Arafah slami ban#2 successfully !ith a soun" health con"ition. !oul" li#e to e&$ress my "ee$est %ratitu"e to!ar" my internshi$ su$ervisor Mr. ,afi-'Ul' Alam, nchar%e, (0orei%n e&chan%e) for %ivin% me necessary su%%estions an" hel$in% me to $re$are this internshi$ re$ort. !ant to e&ten" my s$ecial %ratitu"e an" than#s to Mr. Arif, senior e&ecutive officer, 0orei%n e&chan%e "e$artment, A BL !ith out the s$ecial %ui"ance of !hom it !oul" be im$ossible for me to com$lete this re$ort successfully. am also %rateful to Mr. Asa"uzzaman , 3ea", 0orei%n e&chan%e for his e&cellent coo$eration, su$$ort an" contribution to ma#e it !orthy. *here is no "oubt that because of their hel$, as an ine&$erience" $erson !as able to accom$lish the re$ort. 0inally, trie" my best to com$lete this re$ort. must say that as a freshman in ban#in% sector these fe! "ays are not enou%h to cover every as$ects of ban#in% an" com$lete such a re$ort. *here mi%ht be some mista#e "ue to my limite" a$titu"e. n this re%ar", "o believe to %et a #in" consi"eration from every one. www.AssignmentPoint.com Preface *heoretical #no!le"%e becomes an effective tool !hen it is accom$anie" by $ractice. A $erfect co'or"ination bet!een theory an" $ractice is of $aramount im$ortance in the conte&t of the mo"ern business an" economic !orl". n or"er to resolve the "ichotomy bet!een these t!o areas school of business has intro"uce" internshi$ $ro%ram. t brin%s the stu"ent closer to the $ractical !orl" an" there by hel$ us to substantiate our $ractical #no!le"%e. *o $re$are an internshi$ re$ort for BBA 7844. choose Al' Arafah slami Ban# Lt" to "o my !or#e" in 0orei%n 1&chan%e "e$artment. internshi$ re$ort for the $erio" of three months startin% from 45th 6anuary 7844 to 49th a$ril !as $lace" at A BL uttara branch !here trie" my level best to focus on my s$ecific "e$artment an" learn forei%n e&chan%e $roce"ures. My or%anization su$ervisor !as Mr. ,afi#'Ul'Alam ( nchar%e) forei%n e&chan%e. $re$are" / A ,e$ort on 0orei%n 1&chan%e :roce"ures of A BL2. !or#e" un"er my aca"emic su$ervisor Mr. Anisuzzaman Lecturer, School of business. Uttara University also a$$rove" an" %ui"e" me to have $re$are this !or#in% re$ort. As it is a !or#in% re$ort, most of this information is base" on the e&$eriences that %athere" !hile !or#in% as an intern. *his re$ort "escribes about !hat the !or#in% $roce"ures of my "e$artment !as, ho! my su$ervisor hel$e" me on my !or#s an" finally !hat have learne" from this internshi$ $ro%ram. *o "ra! a conclusion, $ur$ose effectively. feel that have trie" my best to cover all si%nificant "imension of the to$ic. My all efforts !oul" be meanin%ful an" !oul" feel $leasure if the internshi$ serves the www.AssignmentPoint.com Table of Contents :a%e ;o 4.8 3istory of A BL 7.8 <or$orate :rofile =.8 Structure of A BL (or%anization chart) >.8 <or$orate mission an" vision 5.8 Business @bjective 9.8 0inancial :osition at a %lance ?.8 <a$ital Structure (sector !ise investment) A.8 :ro%ressive Analysis B.8 :ro"uctC Service information B.4 Deneral Ban#in% (De$osit Scheme) B.7 0inanceC nvestment B.= 0orei%n 1&chan%e 48.4 ntro"uction of forei%n e&chan%e "e$artment 44.8 0unction of forei%n e&chan%e "e$artment 44.4 Letter of cre"it 44.7 1&$ort business 44.7.4 :re'shi$ment finance 44.7.4.4 Bac# to bac# cre"it 44.7.4.7 :ac#in% cre"it 44.7.7 :ost'shi$ment finance 44.= m$ort business 44.=.4 :roce"ure for sanction of $ost'shi$ment cre"it 44.> 1&$ort an" im$ort $erformance of A BL 47.8 ,emittance 47.4 n!ar" remittance 47.7 @ut!ar" remittance 47.= :erformance of A BL in remittance 4=.8 ,elationshi$ !ith imme"iate su$ervisor www.AssignmentPoint.com 5 5 9 ? ? A B B 48 48 48 44 44 44 47 4= 4= 4> 4> 45 45 45 49 4? 4A 4A 4A 4B 4>.8 *he level of res$onsibility 45.8 :roblems encountere" in han"lin% tas#s assi%ne" 49.8 <om$etences an" s#ills ac-uire" in han"lin% the job 4?.8 1valuate the $erformance of the tas#s assi%ne" 4A.8 Major fin"in%s 4B.8 ,ecommen"ation 78.8 <onclusion Appendix A$$en"i& 4 : 0orm of 1&$ort (1E: 0orm). A$$en"i& 7 : Bill of La"in%. Biblio%ra$hy List of Figures 84. Structure of A BL (@r%anization chart) 87. <a$ital structure 8=. 1&$ort an" m$ort $erformance List of Tables 84. 0inancial :osition <hart 87. 1&$ort an" m$ort $erformance 8=. :erformance of 0orei%n ,emittance 4B 78 78 74 74 77 7> 75 79 7? 89 8B 49 8A 49 4A www.AssignmentPoint.com Executive Summary Al'Arafah slami Ban# Lt" (A BL) is one of the lar%est Ban#s in Ban%la"esh. Day by "ay A BL has become a %iant in the ban#in% sector. t has t!o main "ivisions of o$eration'<or$orate an" DeneralC<onsumer Ban#in%. Deneral ban#in% "eals !ith retail ban#in% services to customers. Ban#s $erform this function in t!o !ays'4 .ta#in% "e$osits from various areas in "ifferent forms.7 4en"in% that accumulate" amount of money to the $otential investors in other "ifferent forms. Deneral Ban#in% is the startin% $oint of the entire ban# o$eratin%. Deneral Ban#in% "e$artment ai"s in ta#in% "e$osits an" simultaneously $rovi"es some ancillaries services. t $rovi"es those customers !ho come fre-uently an" those customers !ho come one time in ban#in% for enjoyin% ancillary services. n some %eneral ban#in% activities, there is no relation bet!een ban#er an" customers !ho !ill ta#e only one service form ban#. @n the other han", there are some customers !ith !hom ban# are "oin% its business fre-uently. t is the "e$artment, !hich $rovi"es "ay'to'"ay services to the customers. 1very"ay it receives "e$osits from the customers an" meets their "eman" for cash by honorin% che-ues. t o$ens ne! accounts, "emit fun"s, issue ban# "rafts an" $ay or"ers etc. since ban# in confine" to $rovi"e the service every"ay %eneral ban#in% is also #no!n as retail ban#in%. Un"er Deneral Ban#in% Division, !as !or#in% as an intern in the front "es#. *his "e$artment mainly $rovi"es service by o$enin% various "e$osit accounts, savin% scheme to customers for a !i"e variety of $ur$oses. *hey are al!ays on the run to search for ne! customers. *his re$ort is base" on fin"in% out their !ay to satisfy the consumer as !ell as ho! A BL is financially $erformin%. My overall objective of A BL financial statement analysis is the e&amination of financial $osition an" returns in relation to ris#. *his must be "one !ith a vie! to forecastin% the firmFs future $ros$ective. At the en" $art of the re$ort have state" some recommen"ations, !hich ho$e !ill be hel$ful for ban to recover all the !ea#nesses. www.AssignmentPoint.com 1.0 Histor of Al!Arafa" #slami $an% Limited &A#$L'( slamic i"eolo%y encoura%es us to succee" in life here G hereafter. *o achieve this success !e must follo! the !ay "ictate" by the 3@L. HU,A; an" the $ath sho!n by ,asul (SM). +ith this %oal in vie! Al' Arafah' slami Ban# Lt" !as establishe" (re%istere") as a $ublic limite" com$any on 4A 6une 4BB5. *he inau%ural ceremony too# $lace on 7? Se$tember 4BB5. *he authorize" ca$ital of the Ban# is *I.5888.88 million of !hich the $ai" u$ ca$ital is *I. 4,?BA.88 million. Some very reno!ne" slamic $ersonalities an" $ious businessmen of the country are the s$onsors of the ban#. *he total $ai" u$ ca$ital !as investe" locally. *he Ban# is committe" to contribute si%nificantly in the national economy. t has ma"e a $ositive contribution to!ar"s the socio economic "evelo$ment of the country by o$enin% 98 branches of !hich 4? authorize" "ealer (AD) throu%hout the country. *he e-uity of the ban# stoo" at *I.=,59> million as on =4 December 7848, the man$o!er !as 4,7B9 an" number of sharehol"ers !as 44,=A7. *he Ban# con"ucts its business on the $rinci$les of Musara#a, Bai' muazzal, an" hire $urchase transactions a$$rove" by Ban%la"esh Ban#. ).0 Corporate Profile of &A#$L'( +ith the objective of achievin% success here G hereafter by $ursuin% the !ay "irecte" by Allah an" the $ath sho!n by 3is ,asul (SM), Al Arafah slami Ban# Lt" !as establishe" (re%istere") as a $rivate limite" com$any on 4A 6une 4BB5. *he inau%ural ceremony too# $lace on 7? Se$tember 4BB5. *he authorize" ca$ital of the Ban# !as *#.5,888.88 million an" the $ai" u$ ca$ital !as *#. 4,?BA million as on =4.47.7848. ,eno!ne" slamic Scholars an" $ious businessmen of the country are the s$onsors of the Ban#. 488J of $ai" u$ ca$ital is bein% o!ne" by in"i%enous sharehol"ers. *he e-uity of the ban# stoo" at *#. =,59> million as on =4 December 7848, the number of em$loyee !as 4,7B9 an" the number of sharehol"ers !as 44,=A7. t has achieve" a continuous $rofit an" "eclare" a %oo" "ivi"en" over the years. 3i%h -uality customer service throu%h the inte%ration of mo"ern technolo%y an" ne! $ro"ucts is the tool of the ban# to achieve success. *he ban# has a "iverse array of carefully tailore" $ro"ucts an" services to satisfy customer nee"s. www.AssignmentPoint.com *he Ban# is committe" to contribute si%nificantly to the national economy. t has ma"e a $ositive contribution to!ar"s the socio economic "evelo$ment of the country !ith 98 branches as on =4.47.7848 of !hich 4? is AD (Authorize" Dealer) throu%hout the country. *.0 +tructure of A#$L ( &,rgani-ational C"art' C"airman 1ice!C"airman .anaging Director Deput .anaging Director /xecuti0e 1ice President Deput .anaging Director /xecuti0e 1ice President +enior 1ice President 1ice President Assistant 1ice President +enior Principal ,fficer Principal ,fficer +enior ,fficer ,fficer 2unior ,fficer Assistant ,fficer 3uard4Peon 0i%ure 4: @r%anizational 0lo! chart of A BL. www.AssignmentPoint.com 5.0 .ission 6 1ision of &A#$L'( 1ision( *o be a $ioneer in slamic Ban#in% in Ban%la"esh an" contribute si%nificantly to the %ro!th of the national economy. .ission(  Huality financial services by a"o$tin% the latest technolo%y.  0ast an" efficient customer service.  Stea"y G com$etitive return on sharehol"ersF e-uity.  nnovative ban#in% at a com$etitive $rice  Attract an" retain -uality human resources.  nvolvin% more in Micro an" SM1 financin% 7.0 $usiness ob8ecti0es(  Achieve soun" an" stea"y %ro!th in both mobilizin% "e$osits an" ma#in% -uality investment to #ee$ the $osition as a lea"in% slami ban#.  *o "eliver financial services !ith to retail, small an" me"ium scale enter$rises, as !ell as cor$orate clients throu%h sufficient branches across the country.  Desi%n business initiatives to match the chan%in% tra"e an" in"ustrial nee" of the clients. www.AssignmentPoint.com 9.8 0inancial :osition of A BL (At a %lance): &#n million ta%a' Particulars Authorize" <a$ital :ai" u$ <a$ital ,eserve 0un" Sharehol"ers 1-uity De$osit nvestment m$ort 1&$ort *otal ncome *otal 1&$en"iture :rofit before *a& :rofit after *a& ncome *a& *otal Assets 0i&e" Assets 1arnin% $er share (*a#a) :rice e-uity ratio (*imes) Divi"en" $er share $onus ;o. of Sharehol"ers ;umber of 1m$loyees ;umber of Branches Man$o!er $er Branch 5>87 ??4 >5 4B >>A? B47 >9 78 4784= 48== >9 7= 4899> 48A8 58 =5 =B 47A?9 447> 9> )009 4888.8 9??.B> 5>7.77 4778.49 449>=.99 44>?>.>4 479=4.98 >B=7.B8 4>57.9A B8>.>A 5>A.78 797.B8 745.48 45==9.AB 78A.88 =A?.A8 ?. B4 79J AB =5J )00: 7588.88 A5>.78 A=5.BA 49B8.4A 49??5.=> 4?>7=.4B 4AA7.4> B4>.7? 74?7.>A 4787.?4 A55.>? >?8.87 =A5.>5 74=9A.4? 745.44 558.7> >. )00; 7588.88 445=.48 48B4.B5 78=?. 58 7=88B.4= 77B89.=? 7?8>7.?7 47?4>.B4 7B55.94 74BB.>= ?59.4A =>?.=4 7=5.5= =84A7.=7 ==>.>A =8.47 4>.97 78J = =8J )00< 7588.88 4=A=.A4 B85.== 7?85.?> 7B9B8.47 7B?7=.?B =79A5.4= 784?9.9> >=A?.79 7A5B.49 457=.8B 99A.7> 5B8.99 =B45A.>> =B9.?9 >A.7B B.5 )010 5888.88 4?BA.B5 477=.4A =59>.?= =A=55.58 =94=>.8A =>8?>.A8 7=5>9.48 59>=.A9 =4>9.4? 4?7B.A= A5A.BB 5B8.99 >A545.?B >99.=8 5?.>5 44.7= =AJ *able 4 : 0inancial :erformance of A BL. www.AssignmentPoint.com > ?.8 <a$ital Structure in 7848: (Sector !ise nvestment) +ectors &a' Agriculture 6 Forestr &b' #ndustr &c' Construction &d' >ater 6 +anitar +er0ice &e' Transport 6 Communication &f' +torage &g' Trade Finance &"' .iscellaneous T,TAL ;.0 Progressi0e Anal sis( Ta%a in million 79; 10=):: 1=;1) <.): 1=)*7 1*.<< )*=;;5 955 *;=*<*.): 0i%ure 7 : Sector !ise investment. At the en" of financial year 7848, the number of "e$ositors stoo" at =,>=,7?= an" the amount of "e$osit has accumulate" to BD* =A,=55.58 million. *he total amount investment e&ten"e" to a sum of BD* =9,4=>.8A million. *he investment income !as BD* >,88>.5> million "urin% the year 7848 !hich re%istere" a %ro!th of 45.A9J over the $revious year. nvestment income is ?5.>AJ of the total income of BD* 5,=85.9= million. *he ban# has the "e$ositors BD* 7,99?.=> million !hich is 99.94J of the investment income an" ?>.5BJ of the total e&$en"iture for the year 7848. t in"icates 78.4=J %ro!th over the year 788B. *he scenario coul" be better un"erstoo" by the follo!in% com$arison: A#$L in ?ear )000 'Lac# of revenue momentum '@ver layere" or%anization '+ea# ris# control environment 'Basic $ro"uct offerin% '3i%h cost structure 'Manual Ban#in% ' nefficient an" Ma"rasha 1"ucate" man$o!er A#$L in ?ear )010 ',evenue "riven tar%et or %oal. ',evenue "iversification G sustainability 'Stron% ris# mana%ement culture in $lace '3i%her value'a""e" , customize" $ro"uct '<ost efficiency '<om$uterize" Ban#in% (:artly) '1fficient man$o!er. an" University e"ucate" www.AssignmentPoint.com <.0 Product4+er0ice #nformation( slamic ban#s ren"er almost similar services to their customers that conventional ban#s "o. 3o!ever, "ifferences e&ist in a"ministerin% incentives for "e$ositors an" char%in% for ca$ital investments, in so far as techni-ues of calculatin% the incentive or the cost of the ca$ital are concerne". Li#e a conventional ban#, A BL also acce$ts "e$osits from customers an" a"vances loans. *he ban# invests its fun"s for short as !ell as lon% term "e$osits. A BL $erform mainly three "ifferent ty$es of functions. :ro"uctC service nformation Deneral Ban#in% nvestment 0orei%n 1&chan%e <.1 3eneral $an%ing &Deposit +c"eme'(  n"ivi"uals Account  6oint Accounts  :artnershi$ Accounts  :ublicC:rivate Limite" <om$any Accounts.  Different ty$es of De$osit. <.) Finance4#n0estment(  <ash <re"it  Secure" @ver"raft  Ban# Duarantee  Lon% *erm an" Short *erm 0inancin%  3ouse Buil"in% Loan <.* Foreign /xc"ange( www.AssignmentPoint.com  ;on ,esi"ent 0orei%n <urrency Account (;0<D)  ;on ,esi"ent BD* De$osit Account (;,*A)  ,esi"ent 0orei%n <urrency De$osit Account (,0<D)  0orei%n <urrency De$osit Account 10.0 #ntroduction of Foreign /xc"ange Department ( 0orei%n e&chan%e is the means an" metho"s by !hich ri%hts to !ealth in a countryFs currency are converte" into ri%hts to !ealth in another countryFs currency. 0orei%n 1&chan%e De$artment is the international "e$artment Ban%la"esh Ban# issues license to sche"ule" ban#s to "eal !ith forei%n e&chan%e. *hese ban#s are #no!n as Authorize" Dealers. f the branch is authorize" "ealer in forei%n e&chan%e mar#et, it can remit forei%n e&chan%e from local country to forei%n countries. So Al'Arafah slami Ban# (A BL), :rinci$al branch is an authorize" "ealer. *here are three #in"s of forei%n e&chan%e transactions: 0orei%n *ra"e 1&$ort Business m$ort Business ,emittance 11.0 Functions of Foreign /xc"ange Department( *he main functions of 0orei%n 1&chan%e "e$artment are:    ssuin% Letter of <re"it ssuin% Letter of Duarantee ssuin% Bac# to Bac# LC<  :urchasin% nlan" an" forei%n bills  *ra"in% forei%n <urrencies. www.AssignmentPoint.com 11.1 Letter of Credit( A letter of cre"it is a letter issue" by a ban# (#no!n as the o$enin% or the issuin% ban#) at the instance of its customer (#no!n as the o$ener) a""resse" to a $erson (beneficiary) un"erta#in% that the bills "ra!n by the beneficiary !ill be "uly honore" by it (o$enin% ban#) $rovi"e" certain con"itions mentione" in the letter have been com$lie" !ith. Ste$s for o$enin% letter of cre"it are: (a) <ustomer a$$lication for o$enin% LC< !ith in"ent or $roforma invoice. (b) :ro$osal $re$aration as $er circular security of $a$ers submitte" by the im$orter (list of $a$ers). (c) Sanction of $ro$osal' *erms an" con"itions. (") 0ill u$ the forms submitte" by A BL (e) Security of L<A0, L<A, M:, LC< a"vice co$y. (f) ,ealization of mar%in, commission, $osta%e char%es, re%ister entry numberin%, $assin% of voucher. (%) :assin% of LC< by airmail, cable tale transmission, S+ 0*. (h) @$enin% of LC< file (mar#in%C $reservin%) (i) Amen"ment of LC< (if re-uire") (j) 1&tra :recaution (inclu"in% fun" for im$ort) :arties to the LC<: m$orter ssuin% Ban# <onfirmin% Ban# +ho a$$lies for LC< t is the ban# !hich o$ensCissues a LC< on behalf of the im$orter. t is the ban#, !hich a""s its confirmation to the cre"it an" it is "one at the re-uest of issuin% ban#. <onfirmin% ban# may or A"visin% or ;otifyin% Ban# may not be a"visin% ban# t is the ban# throu%h !hich the LC< is a"vise" to the e&$orters. *his ban# is actually situate" in e&$orterKs country. t may also assume the role of confirmin% or ne%otiatin% ban# "e$en"in% ;e%otiatin% Ban# u$on the con"ition of the cre"it. t is the ban#, !hich ne%otiates the bill an" $ays the amount of the beneficiary' *he a"visin% ban# an" the ne%otiatin% ban# www.AssignmentPoint.com may or may not be the same. Sometimes it can also be Acce$tin% Ban# ,eimbursin% Ban# confirmin% ban#. t is the ban# on !hich the bill !ill be "ra!n (as $er con"ition of the cre"it). Usually it is the issuin% ban# t is the ban#, !hich !oul" reimburse the ne%otiatin% ban# after %ettin% $ayment ' instructions from issuin% ban#. 11.) /xport $usiness( *he %oo"s an" services sol" by Ban%la"esh to forei%n househol"s, businessmen an" Dovernment are calle" e&$ort. *he e&$ort tra"e of the country is re%ulate" by the m$orts an" 1&$orts (control) Act, 4B58. *here are a number of formalities, !hich an e&$orter has to fulfill before an" after shi$ment of %oo"s. As a ne%otiatin% ban#, it ne%otiates the bills an" other shi$$in% "ocuments in favor of the e&$orter. *hat is it collects $rocee"s of the e&$ort bills from the "ra!er an" cre"it the e&$orters account for the same amount. Sometimes ban# $urchase the bills at "iscount from the local e&$orters an" !aits till maturity of the bill. n times of maturity, ban# $resents it to the "ra!er to Ancash. 1&$orters nee" finance in the follo!in% !ays: • • :re'shi$ment finance. :ost'shi$ment finance. 11.).1Pre!s"ipment Finance( *he e&$orters may obtain facilities "urin% $re'shi$ment sta%e in the follo!in% !ays: • • Bac# to Bac# cre"it. :ac#in% cre"it. 11.).1.1 $ac% to $ac% credit( www.AssignmentPoint.com Un"er this arran%ement A BL an e&$ort by o$enin% a letter of cre"it on be half of the e&$orter !ho has receive" a letter of cre"it from the overseas buyer but is not the actual manufacturer or $ro"ucer of the e&$ortable %oo"s. *he letter of cre"it is o$ene" in favor of the actual $ro"ucer !ith in or outsi"e the country. Since the secon" letter of cre"it is o$ene" on the stren%th of, an" bac#e" by another letter of cre"it it is calle" bac# to bac# cre"it. *he nee" for bac# to bac# cre"it arises because the beneficiary may have to $rocure the %oo"s from the actual $ro"ucer !ho may not su$$ly the %oo"s unless its $ayment is %uarantee" by A BL in the form of letter of cre"it. Documents ,e-uire" for @$enin% a Bac#'to'bac# LC<: n A BL :rinci$al Branch, follo!in% $a$ers or "ocuments are re-uire" for o$enin% a bac#'to' bac# LC<: 4. Master LC<. 7. Lali" m$ort ,e%istration <ertificate ( ,<) an" 1&$ort ,e%istration <ertificate (1,<). =. LC< A$$lication an" L<A0 "uly fille" in an" si%ne". >. :roforma nvoice or n"ent. 5. nsurance <over ;ote !ith money recei$t. 9. M: 0orm "uly si%ne". :ayment of bac# to bac# LC<: n case of maturity of bac# to bac# L< of 98'B8'478'4A8 "ays, "eferre" $ayment is ma"e. :ayment is %iven after realizin% e&$ort $rocee"s from the LC< issuin% ban#. 11.).1.) Pac%ing credit( :ac#in% cre"it covers the cre"it e&ten"e" by A BL to the e&$orters $rior to the shi$ment of the %oo"s. Such cre"it is %uarantee" to the e&$orters for the $rocurement an" $rocessin% of ra! materials, manufacturin% of finishe" $ro"ucts, $ac#in% or trans$ortin% %oo"s meant for e&$ort to forei%n country. Such facility is allo!e" to an e&$orter just at the time !hen he has forei%n buyers or"er by the !ay of confirme" e&$ort letter of cre"it. +hen the or"er is e&ecute", the $ac#in% cre"it %ets $ai" out of the $rocee"s of the bill "ra!n on the forei%n buyer. 11.).) Post!s"ipment Finance( www.AssignmentPoint.com :ost'shi$ment cre"it is %iven to the e&$orters by A BL after the actual shi$ment of %oo"s. *he necessity for $ost shi$ment finance arises because the e&$orters !ho have shi$$e" %oo"s have to !ait for a lon% time for receivin% $ayment from the overseas buyers, the $erio" of !aitin% "e$en"s on the terms of $ayment. *he e&$orters nee" fun" to carry on normal e&$ort activities. 0inance is re-uire" for these activities. A BL %enerally finance e&$orters at $ost shi$ment sta%e on verification of the cre"it !orthiness an" financial soun"ness of both buyer an" the seller. 11.* #mport $usiness( • nternational tra"e ta#es $lace bet!een seller an" buyer locate" in "ifferent countries. *he $arties to a tra"e transaction are not al!ays #no!n to each other. 1ven if they are #no!n to each other the seller may not have the full confi"ence in the cre"it !orthiness of the buyer or the buyer may not li#e to $ay before he actually receives the %oo"s. Un"er a ban#erKs letter of cre"it the issuin% ban# (A BL) %ives !ritten un"erta#in% on be half of the buyer that the ban# !ill honor the obli%ation of $ayment or acce$tance on the $resentation of sti$ulate" "ocuments. m$orter ban# issue the letter of cre"it at a mar%in $rescribe" by the Dovernment. *his mar%in varies from commo"ity to commo"ity. Accor"in% to %overnment instruction the ban# "oes not %enerally issue letter of cre"it less than at 58J mar%in. 10.*.1 Procedure for sanction of post!s"ipment credit under document negotiation( *he usual metho" of $rovi"in% finance at the $ost' shi$ment sta%e is ne%otiation un"er letter if cre"it. n this re%ar" A BL carefully verify follo!in% $oints for ne%otiation "ocuments: • • • *he "ocument shoul" be $resente" for ne%otiation before e&$iry of the cre"it. *he amount of bill shoul" not e&cee" the amount authorize" in the LC<. All the "ocuments as#e" for in the LC< have been submitte". @$eration activities for im$ort section: @fficers in LC< o$enin% "es# $rocess LC< a$$lication. • nternal A$$roval' t is ma"e for those im$orters !ho are enjoyin% LC< limit facility for a $erio" of 47 months a$$roval by hea" office. www.AssignmentPoint.com • 3ea" @ffice A$$roval' :ro$osal ma"e on case to case basis in a "etail format for those im$orters "urin% their initial = to 9 months $erio". Satisfactory $erformance in the account !oul" enable them to avail full fle"%e cre"it line on 47 month basis. ;e&t ste$ is to o$en letter of cre"it: • • • • An LC< number is $rovi"e". @$enin% char%es or commission recovere". <har%es an" liability vouchers are $asse". :re$aration an" chec#in% of LC< bo"y in accor"ance !ith $ro'forma (: ) invoice or in"ent. 11.5 /xport and #mport performance of &A#$L' .ear 7848 788B 788A 788? 7889 7885 788> 788= 7887 *otal 1&$ort( n Million *#) 7=5>9.48 784?9.98 47?4>.B8 B4>7.?8 >B=7.B8 =9=B.=> =8?5.57 4AB>.?? 757>.9= *otal m$ort ( n Million *#) =>8?>.A8 =79A5.48 7?8>7.?8 4AA74.>8 479=4.98 B==?.>B ?9BA.7B 5497.54 555B.7? *able 7 : 1&$ort m$ort :erformance *otal 1&$ort an" m$ort: ( n million *a#a) At the en" of 7848, the total amount of www.AssignmentPoint.com forei%n tra"e !as 98,>5=.4A million *# sho!in% a %ro!th of A.A5J. *he total e&$ort of the ban# !as 78,4?9.9> m *# in 788A, !hich has increase" by 49.?8J to 7=,5>9 m *# in 788B. Similarly the amount of im$ort has increase" from =7,9A5.4= m *# of 788A to =>,8?>.A8 m *# in 788B. 1&$eriencin% a a %ro!th 8f >.75J. 0i%ure = : 1&$ort G m$ort :erformance. 1).0 F,@/#3A @/.#TTAAC/( *his ban# is authorize" "ealer to "eal in forei%n e&chan%e business. As an authorize" "ealer, a ban# must $rovi"e some services to the clients re%ar"in% forei%n e&chan%e an" this "e$artment $rovi"es these services. *he basic function of this "e$artment are out!ar" an" in!ar" remittance of forei%n e&chan%e from one country to another country. n the $rocess of $rovi"in% this remittance service, it sells an" buys forei%n currency. ,emittance $roce"ures of forei%n currency: *here are t!o ty$es of remittance: 4. n!ar" remittance 7. @ut!ar" remittance. 1).1 #nward Foreign @emittance( n!ar" remittance covers $urchase of forei%n currency in the form of forei%n *.*., D.D, an" bills, *.<. etc. sent from abroa" favorin% a beneficiary in Ban%la"esh. :urchase of forei%n e&chan%e is to be re$orte" to 1&chan%e control De$artment of Ban%la"esh ban# on 0orm'<. www.AssignmentPoint.com 1).) ,utward Foreign @emittance( @ut!ar" remittance covers sales of forei%n currency throu%h issuin% forei%n *.*. Drafts, *ravelers <hec# etc an" as !ell as sell of forei%n e&chan%e un"er LC< an" a%ainst im$ort bills retire". 1).* Performance of Foreign @emittance( &)005!)00;' :erformance in forei%n remittance (in million) .ear ;ational 7885 7889 788? 788A 788B B>,>A> 445,?A5 449,A>> 49>,B4= 4B9,5=9 ,emittance A BL ?,9>> B,A?B 4>,9?8 4>,99A 7=,99B J of A BL ?.?9 A.5= A.B A.84 47.8> *able = : :erformance of 0orei%n ,emittance *he $erformance of forei%n remittance sho!s an increasin% tren" from 7885 to 788B. t can be seen from the chat that there is a shar$ im$rovement in the $erformance from 7885 to 788A. www.AssignmentPoint.com 1*.0 @elations"ip wit" immediate super0isor( *he relationshi$ !ith imme"iate su$ervisor !as very frien"ly. Al!ays he use" to ta#e care about all of the official !or#s. 3e also trie" to train me by $rovi"in% u$"ate" information to ensure a better $erformance. +hen ever !as busy in $rovi"in% information to e&istin% clients an" at the same time ne! account hol"ers !ho !ere intereste" to o$en an L<, he use" to ma#e my job easier. +hile $uttin% entries manually in "ifferent re%ister boo#s, su$ervisor use" to cross chec# if any mista#e has been ma"e. f any mista#e !as foun", then he (su$ervisor) hel$e" to catch u$ the mista#e an" ma"e it ri%ht. 3is $oliteness an" coo$eration hel$e" me to continue my !or# smoothly !ith satisfaction. 15.0 T"e le0el of @esponsibilit ( *he level of res$onsibility !as very crucial in ma#in% manual entries in the re%ister boo#.. Un"er forei%n e&chan%e "e$artment ha" to maintain four to si& re%ister boo#s every "ay. @n each re%ister boo# ha" to in$ut transaction amount !ith transaction "etail of an LC<, !hich is more then on an avera%e BD* 7,888,888. So, any minor mista#e mi%ht lea" to a bi% loss for A BL. Due to a !ron% entry A BL mi%ht lose its $otential clients, because this is a sensitive issue to "irectly affect customer loyalty. *he $rinci$le officer use" to rechec# these entries to fin" out !hether there are any "iscre$ancies. f any mismatch !ith manual entries an" soft!are recor"s !ere foun", su$ervisor use" to sen" it bac# to me for a rechec#. *hese manual entries an" e&amination of $ro$er "ocumentation !ere -uite sensitive tas# to han"le. 17.0 Problems encountered in "andling tas%s assigned( www.AssignmentPoint.com *here are a number of tas#s that ha" to $erform un"er forei%n e&chan%e "e$artment of A BL. 0in"in% out files of a s$ecific $arty !as a "ifficult tas# to mana%e. Documents an" files of "ifferent clients !ere not se-uentially arran%e" accor"in% to the maturity "ate. *here fore lots of time is bein% s$ent in arran%in% an" fin"in% out thousan"s of files. More over "ifferent business clients use" to come at a time to ta#e their $ayments. As recor"s of all $arties !ere maintaine" in one recor" boo#, so it !as time consumin% to fin" out the maturity "ate of each $arty. @n the other han" maintainin% a sin%le re%ister boo# for all $arties enable one $arty to !ait for the other. 3ence, convincin% client !as a critical job. After arran%ement of every thin% $ayment to client is to be ma"e. *his $ayment ma#in% is another com$le& tas#. Before ma#in% $ayment ha" chec# the balance of forei%n currency account. Base" on the sufficiency of ha" to ma#e $ayments. *hese $ayment !ere "one by 0DD forei%n "eman" "raft. Any minor mista#e in 0DD bloc# !oul" lea" to a severe loss to A BL. *here the tas# re-uire" full attention an" accuracy. 19.0 Competencies and s%ills acBuired in "andling t"e 8ob( +or#in% un"er forei%n e&chan%e "e$artment of A BL enable" me to %ather some valuable e&$eriences. @ne of the major s#ills that have ac-uire" is ho! to !or# un"er a team of e&$erience" em$loyees. +ith in the team of fifteen members each $erson ha" "ifferent mentality. ha" to be very "ynamic an" com$romisin% in or"er to co$e u$ !ith the team. More over in han"lin% clients have ac-uire" fluency in s$ea#in% an" convincin% $o!er. <ontinuous "ealin%s !ith clientKs $roblems an" en-uiries %ave me an i"ea of !hich techni-ue to a$$ly to satisfy clients. 0inally, !or#in% environment. coul" learn the im$ortance "ocument arran%ement to buil" a smooth www.AssignmentPoint.com 1:.0 /0aluate t"e performance of t"e assigned tas%s( *as#s that han"le !ere -uite im$ortant an" sensitive. As choose to !or# in forei%n e&chan%e "e$artment, ha" to maintain all im$ortant "ocuments inclu"in% LC< o$enin%, 0B:, 0B< re%ister boo#s. *hese tas#s ultimately reflecte" the ban#Ks accuracy an" affectivity. A minor mista#e mi%ht lea" to severe losses. *hou%h all recor"s !ere maintaine" by A BLKs o!n "ifferent soft !ares, but these manual entries hel$e" them to cross chec# the accuracy of the "ata at the en" of the "ay. More over another im$ortant to $lay in this "e$artment !as the e&amination of LC< form. An LC< form chec#e" by me ensure" its accuracy. @nly chec#in% LC< form !as not sufficient, at the same time ha" to motivate an" %ui"e a client to thin# about !hy A BL is "ifferent from other commercial ban#s. <onsumer loyalty $artly "e$en"e" u$ on my behavior an" the -uality of information $rovi"e". *his ensures !hether the client !oul" return to avail the service an" ma#e ne&t transaction. 3ence, han"lin% this job !as -uite sensitive. 1;.0 ma8or findings( forei%n e&chan%e "ivision are not $ro$erly arran%e" therefore it becomes "ifficult for the clients to share their information. *herefore, tas#s become len%thy an" time consumin%. (b) *he or%anizational hierarchy is tall therefore "ecision ma#in% $rocess is very slo!. f there is any re-uirement for re$air an" re$lacement then the branch mana%er has to !ait for a lon% time to %et the su$$ort. More over sometimes clients also have to suffer for this len%thy "ecision ma#in% $rocess. (c) *he recor" #ee$in% system is manual an" bac#"ate". *herefore time is !aste" in recor"in% several LC< "ocuments in re%ister boo#. Moreover li#e other ban#s there is no se$arate recor"in% boo# for each $arty. All are recor"e" in a sin%le re%ister boo# soM one business client has to !ait for the other. (") *he ban#in% system of A BL is not mo"ernize" in com$are to other rivals in the com$etitive mar#et. *he ban# "ose not has A*M facilities therefore clients "onKt have the o$tion of !ith"ra!in% money any time from any !here. *herefore, a lar%e $ortion of customer is out of reach. (e) t ta#es more time to o$en u$ LC< "ue to the shorta%e of authorize" "ealer (AD) branches. www.AssignmentPoint.com (a) *he !or#in% environment is not !ell or%anize". 0urniture an" other necessary tools of (f) Lac# of "ele%ation. Branch mana%er fails to ta#e imme"iate action in or"er to accelerate ban#in% activities "ue to lac# of sufficient $o!er. (%) *he or%anization "oes not $rovi"e any e&tra incentive for sho!in% e&tra or"inary $erformance. *herefore, the ten"ency of sho!in% better s#ills "oes not e&ist. (h) *he recruitment an" selection $rocess is mostly fair but too much time consumin% an" len%thy. t ta#e t!o to three months for a recruitment. (i) *here is no $olicy to ensure better relationshi$ an" coor"ination amon% em$loyees. More over one !ay communication "onKt allo! em$loyees to share their o$inion an" fee"bac#s !ith the to$ mana%ement. (j) A BL as an or%anization in slamic ban#in% it is committe" to avoi" interest. *herefore, even thou%h there are many $rofitable $rojects available but it cannot invest the $ermissible $art of its statutory li-ui"ity reserves an" short term li-ui"ity sur$lus in these sectors. 1<.0 @ecommendation( n or"er to ensure better $ro%ress of A BL in future, some necessary ste$s are recommen"e" bello! on the basis of collecte" "ata, observation, clientKs o$inion, an" my $ersonal ju"%ment. (a) A BL of Uttara shoul" %o for internal rea"justments. *he mana%ement shoul" enhance their service of forei%n e&chan%e "e$artment by ensurin% a $ro$er rearran%ement of furniture an" other lo%istical su$$orts. *his rea"justment !oul" ensure fast an" better service to the clients. (b) Automate" *eller Machine (A*M) shoul" be intro"uce" as soon as $ossible. *his is because !ith out this facility a lar%e $ortion of client is out of reach. ;o! a "ays e"ucate" clients are loo#in% for mo"ern automate" ban#in% service. (c) *he ban# shoul" %o for a%%ressive a"vertisement an" un"erta#e several $romotional activities to %et hol" over lar%e $ortion of the mar#et. t !oul" hel$ to collect more "e$osits an" investment sco$e. (") *he entire "e$artment shoul" be informe" re%ar"in% their %oals an" objectives. t is essential to turn com$any objective in to in"ivi"ual tar%et. A $hiloso$hy of !or#in% for the customer instea" of !or#in% for boss must be intro"uce". www.AssignmentPoint.com (e) t is observe" that officers have to s$en" more time in $re$arin% vouchers. *his must be avoi"e" throu%h automation. n forei%n e&chan%e section in"ivi"ual recor" boo# nee" to be maintaine" for each $arty, so one $arty "onKt have to !ait for the other. (f) Branches of A BL are not sufficient as $er "eman" of the $eo$le, so the mana%ement shoul" concentrate on settin% u$ more branches. (%) *he ban# has the $rovision of internshi$ but is no or%anizational $ro%ram to train interns. *he mana%ement can come u$ !ith such $ro%rams to hel$ an intern in %atherin% valuable e&$erience. (h) 6ob "escri$tion shoul" be clarifie" an" $ro$er trainin% facilities shoul" be insure" to im$rove the $erformance of the bottom line mana%ement. (i) (j) *he mana%ement shoul" al!ays monitor the $erformance of its rival in the fiel" of forei%n tra"e. *his !oul" enable them to remain u$"ate". An official trainin% re%ar"in% S+ 0* must be insure". (#) *he mana%ement can follo! flat or%anizational hierarchy in stea" of tall. *his !oul" enhance "ecision ma#in% $rocess. Moreover "ele%ation shoul" be "ecentralize" so that branch mana%ers can ta#e "ecisions at a short notice. www.AssignmentPoint.com )0.0 Conclusion( Ban%la"esh is a "evelo$in% country an" its economy has chan%e" enormously in the last "eca"e. *his chan%e has raise" the nee" for better ban#in% facilities. *o meet this increasin% nee" a number of $rivate commercial ban#s, nationalize" commercial ban#s an" forei%n ban#s o$eratin% their activities in Ban%la"esh. Al'Arafah slami Ban# is one of them. t is a %reat $leasure to have $ractical e&$osure to A BL uttara branch. t hel$e" me a lot to be a $rofessional ban#er in near future. 0orei%n e&chan%e is the $ivotal "e$artment to any mo"ern ban#in%. 0orei%n e&chan%e "e$artment acts as a me"ia bet!een e&$orters an" im$orters. :ayments of forei%n bills, 0DD, 0** an" all transactions relatin% to forei%n e&chan%e of the ban# can be !ell e&$laine" as forei%n tra"e. A BL is servin% a lar%e number of clients in Uttara branch. ts forei%n e&chan%e "e$artment is -uite busy. *ura% %arments, EL'com$osite, @ne !ay, ,obin %arments, S#am$ %arments are some of the $otential clients of A BL forei%n e&chan%e. *otal e&$ort an" im$ort $erformance of Uttara branch is increasin% in last five years tremen"ously. *he number of o$enin% e&$ort an" im$ort L< has also increase". 0orei%n e&chan%e $roce"ures are more or less !ell or%anize" an" mana%ement is tryin% their best to satisfy their clients. Ban# al!ays contribute to!ar"s the economic "evelo$ment of a country. n com$are to other ban#s, A BL is contributin% a si%nificant $ortion by investin% more of its fun" in fruitful $rojects lea"in% to an increase in $ro"uction of the country. t is obvious that ri%ht channel of ban#in% establish a successful net!or# over the country an" increase resources. A BL is $layin% its lea"in% role in socio'economic "evelo$ment of the country. Since ince$tion, A BL has been ren"erin% its ban#in% service !ith the nee"s of the nation to co$e !ith the "eman" of the $eo$le in the country. www.AssignmentPoint.com $#$L#,3@APH? Al'Arafah slami Ban# Limite" annual re$ort (7848). Al'Arafah slami Ban# Limite" annual re$ort (788B). Monthly ,e$ort on 0orei%n 1&chan%e A BL. Documentary collections of A BL. A te&tboo# on forei%n e&chan%e, L.,. <ho!"hury. >ebsite( !!!.al'arafahban#.com www.AssignmentPoint.com