FAYSAL Report

_____________________________________________A Report on Pubali bank Ltd ___________________Impact of Foreign Remittance on Foreign Exchange Business

of 101


1.1 Introduction Banks play an important role in the business sector and industrialization of a

country. Basically, bank collects deposit from the surplus units and lend it to the

deficit units against interest for a certain period. Under this sphere, the bank

offers different interest notes and other options to there customers to remit and

deposit there money. Most of the common between the banks, only the customer

service and other facilities vary. A Significant growth in the GDP with lower

inflation level was attained during the past few years despite a host of adverse

external sector developments like South-East Asian crisis and recent global

recession and various domestic adversities including devastating floods. In the

background of liberalization of the economic policies in Bangladesh, there are

many government banks, semi-government banks, private and foreign banks.

Pubali Bank Ltd is one of the largest and leading private commercial sector

banks in Bangladesh. The bank was incorporate at 1959 in the name of Eastern

Mercantile bank Ltd. under the 1994 Commercial Act in 1971. After the

liberation of Bangladesh the government of Bangladesh nationalized the bank

and the Bangladesh Bank Nationalize Order 1972 and charged the name Pubali

Bank. In 1983 the Pubali Bank was decentralized and focused as private named

Pubali Bank Ltd.

of 101


1.2 Derivation of the report

The internship program is a connected part of the BBA program that all the

students have to submit you to University of Bangladesh. The students are sent

to various organizations where they are assigned to one or more projects. At the

end of the program, the internees are required to place the accomplishments and

findings of the project through the writing of the internship report covering the

relevant topics. During this program, supervisor guides each student – one from

the university and the other from the organization. This report is the outcome of

a 3 months September 01, 2009 to November 30, 2009 internship program in

Pubali Bank Limited, Foreign Exchange Branch Dhaka.

1.3 Intents of the study

This study is intended for providing me invaluable practical knowledge about

banking operation system in Bangladesh. The prime objective of the study is to

examine the performance of Pubali Bank Ltd.

However, the specific objectives are the followings:

To accomplish the partial requisite of BBA Program and to achieve of good

judgment with theoretical base.

To have a revelation on the banking environment of Bangladesh.

To review the impact of Foreign Remittance on Foreign Exchange Business

and consumer banking services and operating system of Pubali Bank Ltd.

To evaluate the factors affecting performance of the bank.

To suggest the better ways of enhancing the performance of the bank.

To know how the Bank fixes profit rate and distribute/allocate the profit.

To make myself more confident and active in future to finger my job.

of 101


1.4 Rationale of the report

Knowledge and learning become perfect when it is associated with theory and

practice. Theoretical knowledge gets its perfection with practical application. As

our educational system predominantly text based, inclusion practical orientation

program, as an academic component is as exception to the norm. As the parties,

educational institution and the organization substantially benefit from such a

program, it seems a “win-win situation”. It establishes contracts and networking

contracts. Contracts may help to get a job. That is, students can train and prepare

themselves for the job market. A poor country like Bangladesh has an

overwhelming number of unemployed educated graduates. As they have no

internship experience they have not been able to gain normal professional

experience of establish networking system, which is important in getting a job.

That’s why practical orientation is a positive development in professional area.

Recognizing the importance of practical experience, Department of Finance

Studies, stream- FIN has introduced a three months practical exposure as a part

of the curriculum of Bachelor of Science Business Administration program. In

such state of affairs the present aiming at analyzing the experience of practical

orientation related to an appraisal of Pubali Bank Limited, Foreign Exchange

Branch Dhaka.

1.5 Methodology

For teaming up the data & information collected through primary & secondary

sources I have used both qualitative & quantitative method. During my study I

followed some methodology to find out the fact & feature of the Bank which are

given as follows:

(A) Area of study: My project is the operational mechanism in Foreign

Exchange Business through Foreign Remittance of Pubali Bank Limited.

(B) Sources of data/information: I have collected my information/data from

the following sources, which helped me to make this report. The source has

divided by two parts.

of 101


Such as,

01. Primary source &

02. Secondary source

I used both the above sources.

Primary sources: It includes interviews & conversation with officers &

executives of the Bank of different divisions/department and branches.

Secondary sources: It includes annual report, general report, investment

manual, general banking manual, selected books, journals & other publication

etc.

1.6 Scope and Limitations of the Report

(a) Scopes

The report is based on the operational functions of Pubali Bank Ltd, Head

Office, International Division, and how they works to regenerate the Foreign

Currency and Foreign Revenue from other countries and help to establish

corporate level of industry and also the managerial techniques to solve the

sensitive operation of the banks performance. I had the privilege to learn on

Foreign Exchange Business and Foreign Remittance by serving here since

September 1, 2009.

I have joined in the service of the Bank in September 1, 2009. I have got

huge training on General Banking and Foreign Exchange by the bank

management through Pubali Bank Training Institute and Bangladesh Institute

Bank Management. Therefore, I had a chance to prepare the report on the

basis of my professional training and experiences over four years.

(b) Limitations

The total report like “Impact of Foreign Remittance on Foreign Exchange

Business of Pubali Bank Ltd.” is vast and not possible to make it over a

night. So it is the hard task to prove all the information on that necessary

segment which might make report more resourceful and out standing. I

of 101


couldn’t prepare the report as the best of my wish because much information

could not gathered for the recourses of confidentially. During the banking

hour there were many customers who has to be served time offered per

customer was not adequate to ask about their satisfactory and dissatisfactory

level in connection with foreign remittance and foreign exchange business

which might have helped to focus in more detail.

Another limitation of this report is Bank’s policy of not disclosing some data

and information for obvious reason, which could be very much useful.

The Bank authority was very busy, so they could not give me enough time

for discussion about various problems.

In case of performance analysis secondary data are used.

This study completely depended on official records and annual reports.

To prepare an analytical report need financial assistance. The financial

assistance provided by the department is insufficient. In perspective of lack

sufficient money, various types of analysis did not become possible.

The bank is my employer and I had to perform my official duties at Foreign

Exchange Office during my internship program so that I had no enough time

to go here and there to collect more data and interview of the different

officials/executives of the Bank.

I have joined in the service of the Bank in September 1, 2009. The report is

prepared on the basis of my professional experiences over four years.

of 101


1.7 Structure of the study

The Report is divided into seven chapters. The report is organized in such a way,

which will enable the reader to grasp the subject matter of the study from top to

bottom. It will allow an assessment of subject.

First chapter provides the background of the study. It describes the

objective, methodology and the scope & limitations of the report

Second chapter describes the Banking Sector of Bangladesh.

Third chapter describes about the history of bank and its banking

activities.

Fourth Chapter describes about General Banking.

Fifth Chapter describes about the Foreign Exchange. It includes the

description about the Import, Export and Remittance.

Sixth chapter describes about the market analysis of inter bank

Dollar, Euro, Pound, Yen rate.

Seventh chapter describes about reason to chose, compare the

SOWT of the bank.

Eighth Chapter also describes about the conclusion and the

recommendation about the bank Performance.

Ninth chapter describes about Abbreviation use in Foreign Exchange

Section.

of 101


.

of 101


2.1. Banking Sector in Bangladesh

In 1971, Bangladesh, was East Pakistan, emerged as an independent country. In

immediately nationalized the entire banks expanding 3 Foreign Banks. Six

nationalize Banks were thus formed. In 1983 a new policy was implemented

allowing private sector participation in the industrialization. As a part of this

process, two national commercial banks were against denationalization and a

number of private commercial banks were allowed to operate. Among these

Pubali Bank and Uttara bank were the first to be decentralized.

Particulars Number of Banks

Nationalized commercial Bank 04

Privatized commercial Bank 30

Specialize Bank 04

Foreign Bank 12

Co- Operative Bank 01

Grameen Bank 01

Total = 52

Table # Schedule Banks in Bangladesh.

of 101


Banks play a very important role in international trade. Now-a-days, no country

can thrive without international trade. Moreover, banks provide some other non-

trading service, like factory, issuing guaranty etc. when are very much

supportive to modern business.

s

of 101


of 101


3.1. An over View of Pubali Bank

3.1.1 Historical Background

The bank was incorporated in the year 1959, under the name and style of eastern

Mercantile Bank Limited under company act 1913. After liberation of the

country in 1971, the bank was nationalized as per policy of the government of

the People’s Republic of Bangladesh under the Bangladesh Bank order 1972,

(Po no: 26 of 1972) and rename as Pubali Bank. Subsequently, the bank was

decentralized in 1983 and was again incorporate under the name of Pubali Bank

Ltd. in that year. The government of the People’s Republic of Bangladesh

transferred the entire undertaking of Pubali Bank to Pubali Bank Ltd. while took

over the same as a going concern.

3.1.2 Economical Backgrounds

In 1983 PBL started their new journey with the deposit of 645.14 crore taka and

they sold 16 lac share in the market.

3.1.3 Vision

To stand out as a pioneer banking institution in Bangladesh and contribute

significantly to the national economy. By assuring customer satisfaction for its

customers and through proper training of its most selected group of employees

its mission. Also through constant innovation of its product line and establishing

constant networking with prospective corporate clients it plans to accomplish its

mission.

3.1.4 Bank’s Mission

High quality financial services with the help of latest technology.

Fast & accurate customer service.

Balanced growth strategy.

High standard business ethics.

Steady return on shareholders' equity.

of 101


Innovative banking at a competitive price.

Deep commitment to the society and the growth of national economy.

Attract and retain quality human resource

3.1.5 Principal objectives

Pubali Bank Ltd. main objective is to maximize profit through customer

satisfaction. Pubali Bank Limited has been ensuring maximum profit by

providing best and improved customer service along with other corporate

objectives mentioned below.

o Profit maximization

o To provide standard financial services.

o To provide excellent customer services to its clients.

o Ensuring high return on investment and services with different service

product.mainly done for the use of promote, disciplinary action and to

control human resources. Performance feedback is almost absent in PBL.

No systematic culture has yet been developed for performance feedback.

Bank’s Name Region/Zone Number of Branches

Pubali Bank Ltd.

Bangladesh.

Dhaka 71

Narayangonj 17

Chittagong 54

Sylhet 42

Moulvibazar 29

Comilla 24

Noakhali 16

Mymensingh 24

Rajshahi 23

Rangpur 17

Barisal 25

Khulna 22

Total Branches 364

of 101


3.1.6 Branch Network

PBL is the largest private sector’s commercial bank in Bangladesh. The bank

within stipulation lay down by the Bank Company Act 1991 and directives as

received from Bangladesh bank from time to time provide all types of

commercial banking services. It has 351 branches All over the country and also

enlisted the Dhaka and Chittagong stock exchange as publicly quoted company

for its general class of share.

3.1.7- Pubali Bank at a GlanceAs at 31st December (in million Taka)

of 101

Particulars

Year

2006 2007 2008

Authorized Capital 5000.00 5000.00 5000.00

Paid-up Capital 1200.00 2100.00 2940.00

Reserve funds and other reserves 3327.50 3832.09 4606.82

Deposits 48675.93 57996.82 73016.51

Advance 40386.65 50549.17 61788.15

Investment 4982.10 5556.58 8375.59

Import Business 37316.50 48345.41 58009.10

Export Business 17701.80 19907.50 24795.66

Bridge Finance 7.14 6.89 6.89

Total Income 5494.49 7087.65 9009.25

Total Expenditure 3684.43 4145.66 5563.39

Pre-tax Profit 1810.06 2941.97 3445.86

Net Profit 845.53 1353.51 1515.23

Total Assets 58401.14 71560.66 89884.70

Fixed Assets 1369.07 1367.23 1383.36

Number of Employees 5141 5270 5321

Number of Shareholder 11697 19009 24153

Number of Branches 356 361 371

Earnings per ordinary share 94.92 64.45 51.54


Source of Data # (Annual report 2006 to 2008 )

Central Account Department

3.1.8 Share Capital

The authorized capital and paid up capital of the bank stood at tk. 5000 million

and tk. 1200 million respectively in 2008. Out of 24153 shareholders,

Bangladesh Government held 72 Shares of tk 7,200.00 while the remaining

shares of TK. 2939.99 million were held by various institutions and individuals.

3.1.9 Statutory reserve Fund and other Reserve

At the close of 2008, the statutory Reserve and other reserves of the Bank stood

at taka 4606.82 million, out of which Statutory Reserve was taka 2418.83

million, other reserve was tk. 2187.99 million. Total reserve stood tk. 4606.82

million at the end of 2008

3.1.10Deposits of Bank

The Deposit trend was positive in 2008. At the end of 2007, Total Deposit was

Taka 57996.82 million that came to Taka 73016.51 million at the end of 2008

showing 25.90% increase. Out of the Total Deposit, Time Deposit and Demand

Deposit were Taka 22635.92 million and Taka 50380.59 million i.e 31.00% and

respectively.

(a) Foreign Exchange Business

3.1.12 Inward Foreign Remittance

Non resident Bangladeshis sent foreign exchange equivalent to Taka 28196.00

million through the Bank during 2008 whereas the Taka 240990.00 million in

2007. The increase shows a growth of 17.04% which is a proof of confidence on

the Bank from the NRBs. of

101


3.1.13 Import Business

During the year the Bank handled import business worth of Taka 58009.10

million. During the previous year, the amount was Taka 48345.41 million. The

amount of import business handled by the Bank increased by Taka 9663.69

million during the year, which was 20.00% higher than the previous year.

3.1.14 Export business.

The Bank handled export business worth Taka 24795.65 million during the year

as against Taka 19907.50 million in the previous year registering an increase of

Taka 4888.15 million @ 24.55% over the previous year.

3.1.15 Investment

Total investment of the Bank was Taka 8375.59 million during 2008.In a

comparison to previous year total investment was increase by Taka 2819.01

million @ 50.73% growth. The Bank mainly invested in Government Bonds,

Treasury Bills, Approve Debentures, Shares and Debentures of private

institutions.

3.1.16 Advance and Loan

The total advances of the Bank during 2008 at taka 61788.15 million showing an

increase of taka 11238.98 million @ 22.23% growth. In the line with national

economic development, the Bank made advances mainly as commercial loan,

import and Export business, Term Loan to large and medium scale industries,

of 101

33%


House Building Loan, Working Capital Loan Consumers Credit and Syndication

Loan etc

3.1.17 Profit Position of Bank

Total Operating income & total Operating expenditure of the Bank during 2008

were Taka 6189.08 million before making provision for bad and doubtful debts

and income tax. During the year the Bank made a provision of Tk 305.00 million

against loans and advances, diminution in value of investments, exposure of off

Balance Sheet items of taka 1625.63 million against Corporate Income Tax and

deferred Tax. As such, net profit of the Bank stood Taka 1551.23 million which

the Board of Directors proposes to appropriate in the following manner.

Net Profit Tk 1551.23 million

Transferred to Statutory Reserve Tk 628.17 million

Transferred to General Reserve Tk 887.06 million

3.1.18 Bank expansion and mobilization

The Bank expanded its operation through further opening of 10 new branches at

the following places during the 2008.

1. Kuril Bishwa Road Branch, Dhaka

2. Ati Bazar Branch, Dhaka

3. Halishahar Branch, Chittagong

4. Chakaria Branch, Cox’ Bazar

5. Gachhbari Bazar Branch, Sylhet

6. Tengra Bazar Branch, Moulavibazar

7. Daudkandi Branch, Comilla

8. Chauddagram Branch, Comilla

9. Dagon Bhuiyan Branch, Feni

10. Raipur Branch, Laxmipur

As such the total number of branches of the Bank stood 371 all over the country.

Moreover 18 branches were shifted to the new premise in more suitable places

and large number of branches were refurnished and modernized. of

101


3.1.19 Manpower and training

The Human Resources Division is very much concerned about the training of its

members of management. Every year it provides a schedule for development and

training purposes. The division the personnel function of PBL from recruitment

to selection and also from employees’ welfare to individual’s relations, hence the

department has to play a very important role.

3.1.20 Training and Development

PBL attach importance to provide institutional training to their human resources.

It has its own training institution. At the top there is a national level training

institute and PBL also provide training at Bangladesh Institute of Bank

Management (BIBM) to cater to the training needs of the higher level bank

personnel.

3.1.21 Performance Appraisal and Feedback

The PBL follows closed appraisal system and appraisal in mainly done for the

use of promote, disciplinary action and to control human resources. Performance

feedback is almost absent in PBL. No systematic culture has yet been developed

for performance feedback.

of 101


of 101


4.1 General Banking

It is most important side of the bank. Bank is nothing but a middleman between

lenders (surplus unit) and borrowers (deficit unit). To provide loan, a bank needs

a huge amount of money from the depositors. General banking is the side where

banks offer different alternatives to the clients to deposit and remit their money.

To encourage the clients, bank offers different options in front of their clients.

Most of these options are very much similar between the banks, but the customer

services and facilities may not be the same. Every Branch of Every Bank has to

maintain the General Banking department. It takes care of lot of important

banking activities mainly collecting the deposit from customers. General

banking department is mostly expected to maximize the number of customers. It

is the introductory department of the Bank to its customers. Pubali Bank Limited

has all the required sections of General Banking.

I worked here from December 20, 2005 to March 20, 2006. I performed as an

Senior Officer of the department as an internee. But, I have been serving in

Pubali Bank Ltd, since November 2001 so that I had the chance to learn about all

the banking activities like General Banking including Loans & Advances,

Foreign Exchange Business including Foreign Remittance etc.

At the beginning of my service in Pubali Bank Ltd, I was posted at Foreign

Exchange Branch, Dhaka where I worked 1½ years. The branch is equipped with

the following sections of general banking:

Account opening

Clearing

Remittance

Others

of 101


Figure: sections of General Banking Operation

4.2 Account Opening Section

The relationship between the banker and the customer begins with the opening

of an account by the customer. Initially all the accounts are opened with a

deposit money by the customer and hence these accounts are called deposit

account. Usually a person needs to open an account ton take services form it.

Without an opening an account, one can get only a few services from the bank.

So the banking begins actually by opening an account with a bank.

4.3 Formalities maintained for opening an account

4.3.1 Application on the Prescribed Form

The person willing to open a current account with the bank has to make

application in the prescribed form. This form must be properly filled up and

signed by the applicants.

4.3.2 Introduction to the Applicant

The applicant also required to furnish in the application form the names of the

referees from whom the banker may make inquires regarding the character,

integrity and respectability of the applicants. In most cases the introduction is

done by the customer of the bank or some other person knows to the bank by

signing on the application form with his/her account number (if any).

4.3.3 Specimen signature

Every customer is required to supply to his banker with one or more specimens

of his/her signature. These signatures are taken on cards, which are preserved by

of 101

General banking

Account opening

Clearing House

Remittance Others


the banker, and his signature of the account holder on the cheques is compared

with the Specimen signatures.

4.3.4 Opening and operating the account

After the above formalities are over, the banker opens an account in the name of

applicant. Generally the minimum amount to be deposited initially is Tk. 1000/-

for opening a current account. Then the bank provides the customer with:

4.3.5 A pay in slip/deposit book

With a view of facilitate the receipt of credit items paid in by a customer, the

bank will provide him/her pay in slip either loose or in a book forms. The

customer has to fill up the pay in slip at the time of depositing the money with

the bank. The cashier with his/her initials and stamps will return the counter foil

to the customer on the receipt of the money.

4.3.6 Cheque Book

To facilitate withdrawals and payments to third parties by the customer, the bank

will also provide a cheque book to the customer. But it is noted that to get a

cheque book, the customer has to dully fill up the cheque requisition slip to the

banker.

Images: Cheque book

of 101


4.3.6-Formalities maintained for closing an accounts

The customer may inform the bank in writing of his/her intention to close the

account.

The customer has to apply to the branch in charge for closing the account.

Then the in charge will remark on the account closing application for closing

the account.

By drawing a cheque of the whole amount and a nil balance confirmation to

be taken from the account holder.

Recover the unused cheque leaves and enter into the “Broken cheque book

register

Remove the account opening form, specimen signature card and all other

papers relating to the closed account.

Remarks of account closing at the ledger folio should be authenticated by the

manager or supervising officials

The banker may ask the customer to close the account when the banker finds

that the account is not been operated for a long lime.

If the account is not operated upon for 6 months then the banker will try to do

the bilateral communication with the account holder. But if the banker does

not get any response from the account holder then the account becomes

“Dormant” account.

If the is not the operated upon for 2 years then the account becomes

“inoperative” account.

A new register for unclaimed deposit account will be maintained called

“unclaimed deposit account.

For withdrawal at any amount from tat account, permission from head office

or controlling office wins is required.

of 101


Generally, there are three types of accounts in our country’s banking system.

1. Current Account or Demand Deposit (CD Account)

2. Savings Bank Account (SB Account)

3. Fixed (or Time) Deposit Receipt (FDR)

4. Other Types of Deposit

4.3.7 Current Account

Current account is purely demand deposit account because the bank is bound to

pay the amount to the account holder on demand at any time. It is running and

active account, which may be operated upon any number of times during a

working day. There is no restriction on the number and the amount of

withdrawals from a current account. The special characteristics of a current

account are as follows:

The primary objective of current is to serve big customers such as

businessmen, joint stock companies, private limited companies, public

limited companies etc. from the risk of handling cash by themselves.

The cost of providing current account facilities is considerable to the bank

since they undertake to make payments and collects the bills, drafts, cheques

for any number of times in a particular day. The bank therefore does not pay

any interest on current deposit while on the other hand some banks charge for

incidental charges on such account.

For opening of a current account minimum deposit of taka 1000/= is

required. Introductory reference is also required for opening of such account.

4.3.8 Documentations

1.Proprietorship

Up-to-date copy of trade license

Introducer of a CD account holder

Two copies of passport size photographs of account holder

Seal

TIN

of 101


VAT certificate

2. Partnership

up to date copy of trade License


Two copies of passport size photographs of account holder.

Photocopy of partnership Deed, notarized by Notary Public

Account agreement (MF-06) and letter of partnership (MF-07)

Seal

TIN & VAT certificate

3. Private Limited Company



Certified copy of Memorandum and Articles of Association, signed and

sealed by the managing Director

Photocopy of the certified of Incorporation

List of directors as per return of joint stock company with signature

Seal of each operating persons

Particulars of Directors

Resolution for opening account with the bank

4. Public Limited Company



Certified copy of Memorandum and Articles of Association, signed and

sealed by the managing Director

Photocopy of the certified of Incorporation


Particulars of Directors


Certificate of commencement of business

of 101


List of directors as per return of joint stock company with signature

5. Societies, Clubs, Associations etc


Registration from the concerned authority

By laws/ rules and regulations/ constitutions duly signed and sealed by

chairman




of 101


Images: Current Account Form

6. Fixed Deposit Receipts (FDR)

These are the deposits, which are made with the bank for fixed period specified

in advance. It is purely a time deposit account. The bank doesn’t maintain cash

reserves against these deposits and therefore the bank offers higher rates of

of 101


interest on such deposits. At present the rate of interest for fixed deposit Receipt

(FDR) in the First Security Bank Limited are as follows:

Rate of interest for fixed deposit Receipt (FDR)

Time period Interest rate(less than 1

core)

Interest rate (more than 1

core)

For 1(one month) 7% 7.25%

For 3(three month) 8.25% 8.5%

For 6(six month) 8.5% 8.75%

For 1(one year) 9% 9.25%

For 2(two year) 9.5% 9.75%

Source: Bank Circular

7. Savings Bank Account

A savings account is meant for the people of the lower and middle classes who

wish to save a part of their incomes to meet their future need and intend to earn

an income from their savings. it aims to encouraging savings of non trading

persons, institutions, society and clubs etc. by depositing small amount of money

in the bank. Both the elements of time and demand deposit are present in this

account.

8. Documentation

Two copies of passport size photographs of account holder.

Photograph of the nominee

Introducers reference

Employer certificate

of 101


Images: Savings Account Form

of 101


9. Other Types of Deposit Accounts

There are some other types of deposit account maintained by the bank. Such as:

9.1 Short term deposit

It is also a time deposit account. The formalities for opening of this account are

to those required for current account. The only difference is that 7 days notice is

inquired for withdrawal of any sum and interest is paid.

9.2 Savings schemes

To attract depositors and encourage saving First Security Bank Limited

introduced various schemes.

9.3 Monthly Savings Scheme

(a) Objectives

Building the habit of savings

Attract small savers

Saving for rainy days

Ensure regular income flow

(b) Mode

Monthly installments of various sizes for a fixed deposit.

(c) Benefits

Lump sum returns after various terms of period

of 101


9.4 Monthly Benefit Scheme

(a) Objectives

Help the retired persons for investing their retirement benefits

Create investment opportunities for non resident Bangladeshi

Explore investment opportunities for school, college, university etc

(b) Mode

Deposit a fixed amount of money, say Tk. 50000 or it’s multiply for five years.

(c) Benefits

A fixed amount of money in every month for five years

9.5 Double deposit scheme

(a) Objectives

Gives maximum profit

Help in meeting specific needs like education, marriage etc

(b) Mode

Deposit a fixed amount of money, say tk. 50000 or it’s multiply for 7 years.

(c) Benefits

After seven years deposited amount will be doubled

9.6 Clearing House

Clearing house is an assembly of the locally operating scheduled banks for

exchange of cheques, drafts, pay orders and other demand instruments drawn on

each other and received from their respective customers for collection. The

of 101


house meets at the appointed hour on all working days under the supervision of

two central bank officers or its agent as the case may be, and works within the

regulations framed therefore on the basis of prevailing banking practices. in

Bangladesh, clearing house sites at Bangladesh bank where there is no office of

the Bangladesh bank, Sonali bank acts as agent of Bangladesh bank.

There are mainly two types of banking systems Bangladesh, such as:

internal clearing or inter branch clearing or inward clearing

external clearing or inter banks clearing or outward clearing

(a) How it works?

The entire number banks representative daily conducts two meetings at a fixed

time. In their first meeting they handover cheque, drafts etc. passed, which has

drawn upon them. In case there are certain cheque, which could not be honored

are returned to the presenting banks with the reasons of non-payments in the

second meeting at the clearing-house.

(b) Operation Procedure

Clearing operations are completed in three stages:

operation at branch level

operation at internal clearing house

operation at the clearing house in Bangladesh Bank

Bangladesh Bank clearing their house sites twice in a day. In its first meeting

Bangladesh Bank clearing-house received instruments and distributes the same

among the representatives of different banks drawn on their bank. In second

meeting different bank representatives comes with returned instruments and

distributing among the representatives.

(c) Software

Software called NIKASH supplied by Bangladesh Bank is used in clearing of the

cheques and other instruments. The in-charge of clearing section make clearing

of 101


slip for each cheque through computer using NIKASH and finally this cheques

are send to the Bangladesh Bank Clearing –House sorting bank wise.

(d) Remittance

Sending money from one place to other places for the customer’s is another

important service of banks and this service is an important part of countries

payment system. For this service, people specially businessmen transfer funds

from one place to another very quickly. There are various types of remitting

money, such as:

(e) Pay Order (PO)

The pay order is used for making a remittance to the local creditor. Pay Order

gives the payee the right to claim payment from the issuing bank. it can be en-

cashed from issuing bank only. Unlike cheque, there is no possibility of

dishonoring pay order because before issuing pay order bank takes out the

money of the pay –order in advance. Pay Order cannot be endorsed or crossed

and so it is not negotiable instrument.

(f) Demand Draft (DD)

Demand Draft is an order of issuing bank on another branch of the same bank to

pay specified sum of money to the payee on demand that is the named person or

order of the demand. It is generally issued when customer wants to remit money

in any place, which is out side of the clearing-house area of issuing branch.

Payee can be purchaser himself or another mentioned in the DD. it is a

negotiable instrument and it can be crossed or not.

(g) Telegraphic or Telephonic Transfer (TT)

This Method transfers money to one place to another place by telegraphic

message. The sender branch will request another branch to pay required money

to the required payee on demand. Generally for such kind of transfer payee

should have account with the paying bank. Otherwise it is very difficult for the

paying bank to recognize the exact payee.

of 101


When sending money is urgent then the bank uses telephone for remittance. This

service is only provided for valued customers, who is very reliable and with

which banks have long standing relationship.

(h) Mail Transfer Advice (MTA)

Where the remitter desires the banker to remit the funds to the payee instead of

purchasing a draft himself the banker does it through a mail transfer advice. The

payee must have an account with the paying office as the amount remitted in

such a manner is meant for credit to the payee’s account and not for cash

payment. It is the least used technique for transferring fund. Where there is no

telex machine or telephone line then this method is used.

9.7 Other Parts of General Banking

(a) Crossing

Crossing cheque is written across the face of the cheque within two parallel

lines. This practice becomes common even outside of clearing house, as an

element of safety.

Normally two types of cheque used in the bank. Such as:

Open cheque: A cheque, which capable of being paid over the counter in

cash is known as open cheque.

Crossed cheque: A cheque, which can only be paid to the banker for

crediting the proceeds to the amount of its payee.

(b) Purpose of crossing

To avoid possible loss that may occur by open cheques getting into the hands

of wrong parties

Crossing is a direction to the paying bank to pay the money generally to a

bank or a particular bank, so that.

of 101


It can be easily traced out for whose use the money was received.

(c) Forms of crossing

General crossing

not negotiable

and company and co

not transferable

Special crossing

(d) Endorsement

An endorsement is the mode of negotiating, a negotiable instrument. According

to the section 15 of the Negotiation Instruments Act, 1881, an endorsement is

“when the maker or holder of a negotiable instrument sign the same, otherwise

then as such maker, for the purpose of negotiation, on the back of face thereof or

on a slip of paper annexed thereto he is said to endorse the same and is called the

endorser”

(e) Dispatch

Dispatch includes all correspondence, letter, statements and returns and

telegrams. This dispatch is also known as Mail. Dispatch is primarily divided

into two categories:

Inward: It means what are receives from the outside.

Outward: It means what are sent to the outside.

This dispatch also divided into (a) ordinary. (b) Registered and (c) Local.

Every correspondence should have an office copy and one additional copy is

also retained in the Master file of the office.

of 101


9.8 Loans & Advances

In any international trade the buyers and sellers are of different countries. None

of them know each other nor about their business integrity and creditworthiness.

Various regulations prevailing in their respective countries about foreign trade

are also unknown to them. Thus, the buyer wants to be assured of goods and the

seller to be assured of payment. In such a situation commercial Banks assure

these things simultaneously by opening letter of credit guaranteeing payment to

seller and goods to buyers. By opening letter of credit on behalf of a buyer and

in favour of a seller, commercial banks undertake to made payment to a seller

subject to submission of documents drawn in strict compliance with the terms of

the letter of credit giving title to goods to the buyer.

The bank’s Loans & Advances portfolio also indicates an impressive growth.

The growth rate of PBL, June 2005 is 101.95%. PBLs advance portfolio is well

diversified and covers a wide range of business and industries. The sectors

financed include Textile and Ready-made Garments, Edible Oil, and Information

Technology, Pharmaceuticals, Construction and consumer credit amongst others.

The Bank has formulated its policy to give priority to SME (Small and Medium

Enterprise) and at the same time PBL is financing large-scale enterprises through

consortium of banks.

I worked my first banking service at Pubali Bank Ltd, Technical Road Branch,

Sylhet from February 2002 to May 2003 wherefrom I learnt the activities of

credit department and performed daily affairs of Loans & Advances. These are

the following:

(a) Mainly two types of Loans

1. Funded (Demand or consumer loan)

2. Non-Funded (L/C, Bank Guarantee, Tender etc.)

A lot of types of Funded Loans and Advances are available in The Branch of the Pubali

Bank. The types are following-

of 101


1. Cash credit hypothecation

2. Over draft

3. Term loan

a) More than five years.

b) Less than five years

c) Within one year

4. Demand loan

a) Loan against DPS.

b) Loan against other security.

c) Loan against consumer credit.

d) Staff loan (PO)

5. Bank guarantee

6. Flood loan

7. PC (Packing) credit)

8. Export development fund (EDF)

9. Letter of credit( import)

10. Payments against documents (import &ex[ort

11. LATR ( loan against trust received)

12. House building

a) commercial

b)general

c) staff

13. Lease finance

9.9 Loan sanction for the client

(a) Process is following

Application for by Client in rough format than built-in format

Received

Verification (Normal than physical)

For heavy loan, Branch has to submit CIB and Proposal to Head office and

of 101


Bangladesh Bank for permission

Approved the loan application/Reject the proposal

Collect security

Give new account and permission to withdraw the loan money.

Loans & Advances is permitted on the Basis of

● Lien ● Mortgage

1. LIEN

Lien is permitted against the Following

DPS= Deposit Pension Scheme

FDR= Fixed Deposit Receipt

PSP= Protirakha Sanchoy Patra

Lien (VALUE) must be the higher than the Value of Loans. 80% of Lien

Documents (Value) is permitted for the Loans & Advances. The position of Lien

Documents must be under the hand of Bank.

Here, Interest Rate of Loans: - 14%

2.MORTGAGE

● Land ● Building ● Shop

Mortgage (VALUE) must be the higher than the Value of Loans. 50% of

Mortgage Documents (Value) is permitted for the Loans & Advances. The

position of Mortgage Documents need not to be under the hand of Bank only

legal papers are necessary to be under the hand of Bank.

Here, Interest Rate of Loans: - 13%

To get Loans & Advance for the Individual client against DPS(Deposit Pension

Scheme), FDR( Fixed Deposit Receipt), MBDR(Monthly Benefit Deposit

Receipt), DBDR (Double Benefit Deposit Receipt), PSP (Protirakha Sanchoy

Patra) etc in favor 3rd party the papers following are needed-

of 101


Letter of Arrangement

Letter of Authority

Demand Promissory Note

Balance confirmation Slip

Letter of Lien and authority for advances of third party’s against Fixed

Deposits/ Call Deposits/ Special Deposits or Margin Deposits

Letter of Continuity

Memorandum of Deposit of Securities

of 101


.

of 101


A: (5.1. Import)

Letter of credit may be defined as an arrangement guarantee issued by a bank at

the request & on the instructions of a customer to make payment to or to the

order of the beneficiary.

Or,

Authorized another bank to effect such payment or to pay accept or negotiate

such bill of exchange against stipulated documents, provided that terms &

condition of the L/C are complied for documentary credit 1983 revision. From

the very beginning PBL has embarked on extensive foreign exchange business

with a view to facilitating international trade transactions of the country. The

bank has established credit amounting to Tk 26033.80 as of December 31, 2005

items of import financed by the bank included electronic equipment’s, sports

goods, rice, wheat, seeds, soybean, polyolefin, dyes, chemicals, accessories etc.

The issue of import for re-export, known as ‘enrapt’, is likely to have sufficient

focus in the new five-year import policy for 2002-07 to be announced this year.

5.1.01. Import Policy

a) Sources of finance and items permissible for import against

Cash Foreign Exchange;

Foreign Aid/Credits/ Grants/ barter and others.

b) The procedure for imports by industrial consumers, commercial imports

and actual users, including formation of groups by smaller importers.

c) Basis of licensing for the category holders of various permissible items

including repeat licensing procedure.

d) The date of opening of L/C and shipment and procedure for submission of

Letter of Credit Authorization (LCA) form covering various items of

import.

e) Conditions for entry of new comers into Import Trade.

f) Conditions for import by established importers and industrial consumers.

g) Procedure for imports under O.G.L. if any.

h) Import by TCB and other Govt. Agencies. of

101


i) Validity of licenses with regard to L.C opening and shipment thereof.

j) Rules relating to revalidation of license (LCA form) and extension of

L/C.

k) Change of items by the Commercial Importers.

5.1.02. Definition of some important terms used in the

Import Policy

o ‘Basis of Licensing’ means percentage, rate or formula adopted for

determining the share of an importer.

o ‘Category’ means half-yearly import entitlement of a registered

commercial importer.

o ‘Commercial Importer’ means an importer who imports goods for sale in

the same form.

o ‘Entitlement’ means half-yearly requirements of raw materials or spares

of an industrial unit assessed or recommended by the sponsoring

authority.

o ‘Industrial Consumer’ means a firm or a unit requiring materials for

manufacture of is products.

o ‘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.

o ‘Permit’ means authorization without involving foreign exchange and

include import permit or clearance permit or export permit as the case my

be

o ‘Repeat License’ means a license issued after utilizations of earlier

license.

of 101


5.1.03. Payment of Import

Letter of Credit is the most important instrument used for payment of imports. It

is a legal instrument, which binds all relevant parties according to terms and

conditions incorporated therein. Generally, there are 4 (four) parties involved in

an L.C. They are:

o The importer/ Buyer Opening

o Bank/Issuing Bank

o Seller / Exporter Advising

o Bank/ Negotiating Bank.

According to payment terms, there are mainly three types of L/Cs such as:

o Sight Credit

o Acceptance Credit

o Deferred Payment Credit

In addition to the above, the following special types of credits are also used for

settlement of payments:

o Revolving LC

o Back to Back LC

o Red Clause LC

o Stand by LC

o Performance LC

(b) Import Procedure System

5.1.04. Documentary Requirements for Opening L/C

Importer shall submit following documents for opening L/C #

Valid Import Registration Certificate (commercial /industrial) IRC registration

and renewal fees to be paid for the current shipping period as per following

ceiling of annual import:

of 101


Registration / Renewal Fess Value ceiling of annual Import

Tk. 500.00 Tk. 5.00 Lac

Tk. 1,500.00 Tk. 15.00 Lac

Tk. 3,000.00 Tk. 50.00 Lac

Tk. 5,000.00 Above Tk. 50.00 Lac

The following persons/ purposes are exempted from Registration

Govt. Departments

Local Authorities & Statutory Bodies

Recognized Educational Institutions

Hospitals

Import of Capital Machinery for own use

o Tex Identification Number Certificate

o VAT Registration Certificate

o Membership Certificate of a recognized Trade Association as per

IPO

o A declaration, in triplicate, that the importer has paid income-tax

or submitted income tax return of the preceding year.

o Pro forma Invoice or Indent duly accepted by the importer

o Insurance Cover Note with Money Receipt covering value of

goods to be imported plus 10 (Ten) percent above.

o L/C application Form duly signed by the importer

o Letter of Credit Authorization from (LCAF), commercial or

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.

o IMP Form duly signed by the importer.

of 101


5.1.05 Sanctioning, Documentation & Legal Formalities

Approval of Head Office and/or Branch Manger (where L/Cs are to be opened

under his delegation is too obtained before opening L/C(s).Security

documentation is to be completed as per sanction/approval terms prior to

opening of L.C. Charge Forms such as Demand Promissory Note, Letter of

Undertaking, Letter of Debit Authority & Letter of Guarantee (where applicable)

to be obtained with due stamps as per prevailing Stamp Act rate.

5.1.06 Opening Letter of Credit

With the little understanding of L/Cs and after completing necessary formalities,

the branch may now proceed for opening the credit on behalf of their own

customers who maintain accounts with them, except government organization.

Necessary entries to be given in the L/C opening Register by allocating an L/C

number and following vouchers are to be passed for completing of opening

transactions at BC Selling rate (Spot):

(a) Creation of L/C liability:

Dr. Customers Liability on L/C Cash

Cr. Bankers Liability on L/C Cash

(Amount to be rounded off to the nearest thousand Taka)

(b) Margin/Commission & Charges:

Dr. Customers A/c: Margin + Commission + F.C.C

+ Postal / Telex + Stamp + Mise.

Cr. Sunday Deposit A/c: Margin on L/C (Cash)

Cr. Income A/c: Commission on L/C Foreign

Cr. Income A/c: Postal / Telex Recoveries

Cr. Income A/c: Miscellaneous earnings

(Handling charges, stationery charges, etc.)

Cr. Sunday Deposit A/c: F.C.C

of 101


Cr. Sunday Deposit A/c: F.C.C

Cr. Other Assets A/c: Stamps in Hand.

5.1.07. Amendment of Letter of Credit

1) To apply by the importer mentioning the specific terms which the wants

to amend supported by beneficiary consent whenever necessary.

2) To scrutinize the papers & to confirm whether amendment is to made.

3) To recover from the importer the proportionate amount of margin in case

of increase of L/C amount.

4) To recover banks commission, charges, FCC & to pass liability voucher

for the increased amount.

5) To make entry the particulars of amendment in L/C opening register &

L/C liability & margin ledger.

6) To prepare the L/C amendment form.

7) To send cable / Telex (if dividend by the importer) & original amendment

to be followed. Disposal of the amendment is same as the disposal of L/C.

5.1.08. Shipment Validity & Expiry

All L/Cs must specify shipment validity as per terms of the P/Invoice or indent

or L/C application. However, shipment validity under any circumstances shall

not exceed 9 (nine) months from the date of issuance of LCAF or registration of

LCAF with Bangladesh Bank, except capital machinery and spare parts,

shipment of which shall be made within 17 (seventeen) months. All L/Cs must

stipulate an expiry date and a place for presentation of documents for payment/

acceptance.

Vouching Procedure

Dr. Customer’s A/c

Cr. Income A/c: Commission on L/C (confirmed)

5.1.09. Stipulation of Reimbursement terms and issuance

of Reimbursement Authorization:

of 101


The branch shall stipulate reimbursement term in the L/Cs mentioning name of

the Reimbursing Bank and Nostro Account Number (preferably in the country of

the currency denominated in the L/Cs so as to avoid possible loss due to

conversion of differential currencies). The branch shall issue and send

Reimbursement Authorization to the Reimbursing Bank immediately after

opening of the L/Cs.

5.1.10 Amendments of Letter of Credit

The Branch may allow amendments to the L/Cs only upon requests of the L/C

applicants that do not violate foreign exchange regulations and import control

regulations. Necessary charges and/or margin (where L/C value in increased by

subsequent amendments) are also to be realized/recovered from the customer

before amending the L/Cs.

Vouching Procedure:

Dr. Party Account (for margin and/or commission + Postage/Tele

+ F.C.C)

Cr. C/D A/c: Margin on L/C (Cash) (if the L/C value is increased)

Cr. Income A/c: Commission on L/C Foreign

Cr. Income A/c: Postal/Telex Recoveries

Cr. Sundry Deposit A/c: F.C.C

We authorize you to effect following reimbursement by debiting out A/c.

No.............. with you.

L/C Number:

Date:

Currency & amount:

Claiming Bank Reference (if any):

Tolerance:

Charges:

This reimbursement authorization is issued. (subject to URR 525)

Authorized Signature Authorized Signature

Contra liability if the L/C value is increased

of 101


Dr. Customer’s liability on L.C cash (for increased amount)

Cr. Banker’s liability on L/C cash

5.1.11 Cancellation of Letter of Credit

An Irrecoverable L/C can not cancel without the agreement of the beneficiary

and the confirming bank, if any. The branch, at the request of the importer, may

approach the L/C advising bank for cancellation of the L/C and such cancellation

will only be effective upon consent of the beneficiary advised to the branch

through the L/C advising bank. However, the branch may cancel the L.C without

the consent to the beneficiary, advising bank and confirming bank, if any, if the

L/C expires and the branch receives no shipping documents within 15 days of

expiry of the L/C. The branch should send a message to the concerned bank

advising such cancellation and closure of L/C file due to expiry of the same. The

branch will then cancel the Reimbursement Authorization which has been

provided to the Reimbursing bank while opening the L/C. The branch will

reverse L/C contra liabilities, refund margin and recover charges from the L/C

applicant as per schedule of charges.

5.2. Import Demand for Payments System

5.2.01. Scrutiny/ Examination of Documents

Upon receipt of the documents the branch shall examine the documents with the L/Cs

and determine whether to take up or refuse the documents and to inform the negotiating

bank from which it received the documents within seven banking days following the

day of receipt of the documents. If the documents appear on their face not to be in

compliance with the terms and conditions of the credit, branch must reuse the

documents by sending Notice to that effect by telecommunication or by other

expeditions means to the negotiating bank without delay but not later than the close of

the seventh banking day following the day of receipt of the documents. Such Notice

must state all discrepancies in respect of which the bank refuses the documents and

of 101


must also state whether it is holding the documents at the disposal of or is returning

them to the presenter. The branch may then approach the L/C applicant for a waiver of

the discrepancy (i.e.).

5.2.02. Scrutiny and Examination of import document

It is the responsibility of A/D branch to make proper scrutiny and examination of

import documents to ensure that.

o Full set of document as stipulated in the credit had been received.

o The document has been drawn strictly as per L/C terms.

o The document is in order not discrepant.

Scrutiny and examination of import documents is very vital and important. FEB

keeps a record of their checking on the negotiating bank's bill forwarding

schedule with a rubber stamp notation "Documents checked and found correct"

duly authenticated by the respective officer.

Checking of import documents

Import documents are checked thoroughly and some specific points receive

crucial attention that delineated below:

The Letter of Transmittal

a) It must be addressed to L/C issuing bank

b) It has ac current date.

c) It relates to current Documentary number credit of the bank.

d) The documents enumerated are attached.

e) The value of documents and the value mentioned in the cover letter are

same etc.

The Documentary Credit

a) It is the correct referenced Documentary Credit

b) It is still valid that nit not expired or cancelled.

c) Available balance in tit is sufficient to cover value of drawing etc.

Bill of Exchange

a) The draft bears the correct L/C number.

of 101


b) The name of the drawer corresponds with the name of the

beneficiary.

c) It is drawn on the correct drawer indicated in the L/C

d) Amount in words agrees with the amount in figures.

e) The beneficiary as duly signed the draft.

f) The tenor is as required by the credit.

g) The value of draft and the value of invoice are identical.

Commercial Invoice.

a) Beneficiary as stated in documentary credit issues it.

b) The description of gods. Value and unit price matches that stated in

c) Credit as regards to the amount and currency.

d) Value of invoice does not exceed the available balance of the credit

e) The invoice is signed as required in the credit.

f) The correct number of original copies is presented.

g) The terms of delivery match with the terms of credit.

h) In case of partial shipment, the invoice amount corresponds

Proportionally to the dispatched quantity etc.

Marine Bill of Lading

a) The shipping company must issue it.

b) Full sets of originals issued and presented.

c) The consignee's name and address are correct as mentioned in the

credit.

d) The bill of lading bears issuing date, duly signed by the issuer and the

name of ship papers.

e) The port of departure and port of destination are correct.

f) The bill of lading bears the "on board shipped" notation.

g) It is correctly marked Freight prepaid of Freight to collect.

h) The goods are consigned as stipulated in the credit

i) The bill of Lading must be properly endorsed etc.

Airway Bill

of 101


a) The consignee's name and address and the airport of departure and

destination are stated in the Airway bill are consistent and in

agreement with the terms of credit.

b) The documents indicated the name of the carrier.

c) The issuer is the carrier or a named agent of the named carrier.

d) The airway bill indicates the actual flight date and flight number

e) The documents are signed by the courier.

f) The consignee's name and address and notify party's name address are

correct.

g) It is correctly marked "Freight prepaid" of "Freight collect" etc.

h) The consignor's copy is being presented.

Certificate of Origin

a) The country of origin of the goods as stated in the certificate agrees

with the terms of the credit.

b) The certificate has been signed as required by the credit.

c) The certificate has been authenticated by the stipulated authorities.

Packing List

a) It is unique a document and not combined with any other documents.

b) The list contains all necessary information specially concerning the

packing units.

c) The data on it is consistent with that of the other documents

After scrutiny of import document if the above mentioned points are found in

order ad drawn as per credit terms, A/D branch shall make lodgment of

documents.

Pre-shipment inspection:

To ensure the quality of imported goods and to become sure that imported goods

are not radio active pre-shipment inspection are performed by some government

approved PSI Company. For different block different PSI Company works.

Block A # ITS-Interlake Testing Service.

of 101


Country includes China and Europe.

Block B # Inspectorate Griffith.

Country includes India, Spelunker, Bhutan, Nepal, Myanmar,

Malaysia, Singapore, Thailand and south East Asia.

Block C # Bureau Varieties International

Country includes, Indonesia Japan, Korea, Taiwan, Indonesia,

Pakistan, Australia, and New Zealand, UAS, Meddle East, Africa and others.

PSI not required for items such items include Dyes, Capital machinery, Poultry

feed, Drug and medicine (They require manufacture and expiry date) Fruits,

Computer accessories, Surgical equipment, Food items (They require phy

posenatary certificate that is provided by chamber of commerce and industry of

exported country).

Documents sent to PSI Company

Importer sends following documents along with application to PSI Company.

o L/C copy

o Photocopy of insurance cover note

o Copy of indent/pro-forma invoice

o PSI information and other relevant papers.

5.2.03. Lodgment of Import Documents

While lodgment of the import bills under Cash L/C, A/D branch shall reverse

the liability vouchers passed at the time of opening L/Cs.

Reversal of the liability Vouchers:

Debit # Acceptance Liability under Foreign L/C

Credit # Customer Liability under L/C

Lodgment Voucher to be passed:

of 101


Debit # PAD Account (Payment against Document A/C)

Credit # Head office ID through PB General A/C

Credit # Interest Account

Credit # Commission Account L/C Misc. Handling Comm. A/C

Ruling rate of exchange BC selling rate prevailing o the date of lodgment of

document to be applied by A/D branch. A/D Branches shall charge interest form

the date of negotiation of Documents up to the date of lodgment. Counting of

interest is done from the date of the forwarding schedule of the documents to the

date of lodgment. All particulars of the L/C shall be recorded in the PAD

Register duly initiated by the authorized officials.IBCA is to be sent to Head

office, ID incarnating L/C number, value of documents in FC, conversion rate

applied, equ8valent taka amount, name of reimbursing bank, date of debit to

Head office A/C. a copy of the forwarding schedule of negotiating bank to be

sent along with the IBCA.

Transfer of Margin to PAD account

After passing the above lodgment voucher, L/C margin is also to be transferred

to the PAD Account. The following vouchers are to be passed

Debit # Other Deposit-Margin Deposit L/C (Foreign)

Credit # PAD Account

5.2.04. Lodgment with Copy Documents and Creation of

PAD

Many customers enjoy L/C limit and post import finance facilities by way of

LIM and LATR limits. After receipt of copy documents and to avoid demurrage

in the port, such customer approaches the A/D branch to endorse the copy

documents since. Original documents are not being received, the A/D branch

may not be aware of the total value of documents. In such situation, to meet the

requirement of the customer and for endorsing copy documents A/D branch

follows the following procedure: The customer is to submit a written request to

of 101


the bank along with the copy of transport documents and invoice for

endorsement. The customer must confirm in writing that the documents have

been accepted by him and even after receipt of original documents the same are

also treated as accepted by him.

The customer has to issue undertaking to the effect that after receipt of original

documents if it is detected that there exists any shortfall in the document value,

such shortfall will be recovered from him by debit to his account.

For regular customer, if the sanctioned term of the L/C is to retire the document

on first presentation by the customer, A/D branch shall recover full invoice value

of documents plus estimated bank charges form the customer. After having an

approval from Head office, ID for endorsing copy documents A/D branch

follows some procedure and creates PAD.

5.2.05. Retirement of Import Documents

A/D branch shall issue and intimation letter to the customer to retire the

documents on payment of bank's dues in full. Receiving bank's dues the branch

shall pass the following entry:

a) For application of up to date interest

Debit # PAD Account

Credit # Interest Account

b) Retirement Voucher

Debit # Importer's Current A/C

Credit # PAD A/C along with up to date interest

The documents will be delivered to the import of his authorized representative

with due endorsement on the back of the bill of Exchange.

of 101


5.2.06. Clearance of Goods by the Bank

Subject to prior arrangements, the bank clears the goods from the port and stores

the goods in Bank's go down. Bank clears the goods by the bank's approved

C&F agent and through C&F cell of the bank. The branch must issue a very

clear instruction as to the mode of transport for sending goods by road or road or

mode through the nominated C&F agent for storage. After clearance of the

goods, C&F agent shall arrange delivery of the goods to the branch authorized

representative and branch stores the goods in the bank's go down as per sanction

terms.

5.2.07. Disposal of IMP Forms & Matching Customs Bill

of Entry

All applications for payment for imports into Bangladesh should be made on

IMP forms. The IMP forms must be submitted in two folds by the importer or

his duly authorized agent. In all cases of remittances for imports into

Bangladesh, the importer must submit within 4 months from the date of

remittance the relevant exchange control copy of the custom bill of entry of

invoice certified by the custom authorities (in case of import by post). The

branch will obtain invoice, in duplicate, both of which will be certified by them

as usual. After recording in the IMP from the particulars of the remittance

affected, the original copy of the IMP form along with a copy of the certified

invoice shall be forwarded to Bangladesh Bank along with the usual monthly

returns. The duplicate copy of IMP form will be retained by the branch.

Subsequently when the exchange control copy of the bill of entry customs

certified invoice is submitted by the importer, the particulars therein should be

matched sand checked with those in the IMP forms and invoice filed earlier, to

see if the merchandise for which remittance was made has been duly received in

Bangladesh. If no material discrepancy in detected, the case should be

considered closed with the duplicate IMP form, invoice and custom bill of entry/

custom certified invoice filed together for eventual inspection by Bangladesh of

101


Inspection Team. Cases with material discrepancy between the particulars of

merchandise for which remittance was made and the merchandise actually

received as evidence by the exchange control copy of bill of entry/ customs

certified invoice, and cases of non-submission of bill of entry/customs certified

invoice within 4 months of remittance should be reported to the area office of

Bangladesh Bank quarterly by 15th day of the month following the quarters

ended March, June, September and December.

Certified that the amount of freight payable in Bangladesh Taka _______ as

indicated on the Bill of Lading No. ________ dated ________ in respect of

_______ imported by Messrs. ________ from ________ per s.s. _________ has

been duly endorsed on the Exchange Control Copy of the relative L.C. Authorization

Form No. ______ dated ________ under out stamp and signature.

Date............................

Signature and Stamp of the

Authorized Dealer

5.2.08. Creation of LIM

LIM stand for Loan against imported merchandise and LIM account is created

on the same day of storage of the goods in the bank's go down. The branch's

authorized representative shall take delivery of goods from the representative of

the C&F Agent/transport Company strictly as per invoice for storage of goods in

the bank's go down. Goods received from C&F Agent must be goods condition

and in original packing without any tampering in the box/ packing is found

tampered or broken, the delivery of goods be held up and the C&F

agent/importer and the transport company be contacted at once and joint survey

with the representative of the importer, bank official and transport/ C&F agent

shall be made before storage of the good. After storage of the goods in the bank's

go down the branch shall create LIM in the name of customer.

At the time of creation of LIM the branch shall pass the following vouchers.

Debit # LIM A/C

of 101


Credit # PAD A/C (with up to date interest)

After creating LIM A/C, the branch shall inform the importer to take delivery of

the imported goods from the Bank against full payment. The LIM Accounts shall

be properly maintained by the branches and to be balanced at the end of each

month with the figure of General Ledge of the branch.

Necessary document for LIM

Following documents are sent to CDA branch for LIM

Bill or exchange

Invoice Bill of lading

Packing list

Customer purpose copy of import license number

Letter of credit Copy

Insurance cover note

Indent

Certificate of origin

Others

5.2.09. Creation of LATR

LATR stands for Loan against Trust Receipt in such arrangements. The import

documents are delivered to importer by signing a Trust Receipt. Bank does not

clear the goods from the port and does not take control of goods. Importer cleat

the goods from the port and takes possession of goods under this control. On the

stipulated date, importer pays the bank's dues and LATR is liquidated for

creation of LATR the branch is to pass following entry.

Debit # LATR Account

Credit # PAD Account with up to date interest

of 101


B: (5. 1. EXPORT)

Literally, by the export we mean out earring of anything from one country to

another. Export as sending of visible things outside the country for sale. Export

trade plays a vital role in the development process of an economy with the

export earning we met out import. The total export business handled by PBL

amounted to the TK 15721.10 million as of December 31, 2005. Export items

handled by the bank in clouded jute goods, readymade garments, handicraft etc.

Export of frozen food or mainly shrimps has developed in recent years as an

important export activity in Bangladesh. The sector obviously has a promise. It

was the third largest foreign currency earner for the country in 2001-2002 fiscal

years but earning in that year was below that of the previous year. This pointed

to the urgency of tanking steps to ensure steady higher earning from the sector.

The country’s highest foreign currency earner, the ready-made garments (RMG)

industry, faced a similar situation of enforcing labor standards by getting rids of

child workers. Timely steps in this direction saved the RMG sector from serious

adverse experiences. In the same manner, producers and exporters in the frozen

food, Leather industry sector need to understand of importers and work sincerely

to fulfill them as a way of ensuring the viability of their business. A rich new

vein of export earnings for the country can open up at a time when there exists

much eagerness for understandable reasons to boost the foreign currency

reserve. This is possible through the development of an export-oriented silk

industry. Bangladesh has been on the world map as a silk producing country for

a long time. It’s production of natural silk industry in order part of the Indian

subcontinent. But India is among the top five countries of the world in respect of

silk production whereas Bangladesh is a very tiny player in the world silk

industry, not with standing the fact that it possesses hospitable natural conditions

for the establishment of a large silk industry with a strong export- oriented

component.

of 101


5. 1.1 Legal Requirements

Although payment aspect of exports in Bangladesh Bank’s concern, 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 regulations 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 notices of the following:

o The intended exporter shall have valid export Registration Certificate.

o Payment for goods exported from Bangladesh should be received though

the branch in freely convertible currency or in Taka form a non-resident

Taka account of a branch or a Correspondent abroad.

o 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.

o In order to avoid any loss of foreign exchange to the country, the branch

should see that

Arrangements have been made for realization of export proceeds within

prescribed period of 4 (four) months.

Arrangements has been made for receipt of little to goods like Bill of lading,

Airway Bill, etc. by the branch on shipment of goods.

The Exp form is signed either by the exporter or one holding valid legal power

of attorney form exporter and the terms of the power of attorney are such that

both the exporter and the attorney be held responsible jointly and severally for

realization of export proceeds.

Bonfires of the buyers/ consignees abroad and their credentials.

of 101


The branch and its officials certifying the export forms as well as exporter render

themselves liable to punitive action under the FER Act for delay in repatriation

or non-realization of export proceeds.

In respect of export of goods by land route or by sea, the Bill of lading, Railway

Receipt and documents of title to cargo should be drawn only to the order of

Mercantile Bank limited.

In respect of export of goods by air, the Airway Bill and other document of title

to cargo should be drawn to the order of a bank in the country of import

nominated by the branch.

5.1.2. Securitization, Negotiation & Collection of Export

Bill

Upon receipt of the documents the branch shall examine the documents with the

LC. If the documents appear on their face not be in compliance with the terms

and conditions of the credit, the beneficiary may be advised to rectify the

discrepancies, it possible. If the discrepancies are not possible to be rectified, the

following ways are open for disposal of the documents.

5.1.3. Handling of Export Bills

All export from Bangladesh must be declared on the EXP from prescribed by

Bangladesh Bank. In this regard exporters shall submit a requesting letter

whereby they confirm that all arrangement for shipment of gods have been made

under a valid L/C. the EXP forms are required to submit to customs authorities

after being certified by an A/D branch. The A/D branch will ensure that.

o Each set of EXP form is duly filled in and signed by the exporter and duly

certified by the branch.

o Full particulars of EXP forms have been recorded in the prescribed

register and assigned umber for each set of EXP form.

o A/D branch shall maintain EXP register in the prescribed form given by

Bangladesh Bank.

of 101


After the form is certified by the A/D branch it should be submitted to the

customer authorities by the exporter along with the shipping bill at the time of

shipment. The customer authorities, after filling the portion relation to them and

affixing their seal and signature therein, will return the duplicate, triplicate and

quadruplicate copies to the exporters. The original copy will be forwarded by the

customer authorities to Bangladesh Bank. The exporter must submit all the

remaining copies of the EXP form along with the invoice etc to the A/D branch

through whim payment in respect of goods exported is to be received. All

shipping documents covering goods exported from Bangladesh and declared on

EXP form must be passed through A/D branch within 14 days from the date of

shipment. Duplicate of EXP from is sent to Bangladesh Bank by A/D branch

within 14 days from the date of shipment of the goods covered by the form.

On receipt of the EXP and other documents A/D compare the signatures

appearing on the Bills of Lading with the specimen signatures of the duly

authorized officers of steamer companies on record to ensure genuineness do

documents. A/D satisfies himself that the declaration made on the form is correct

and the method of finance stated hereon is a permitted one. Here it is important

that in no case the invoice value should be less than the value declared for

customs purposes.

of 101


5.1.3 (a). Time Period for Repatriation of Export Proceeds

The period prescribed by Bangladesh Bank within which exporters must receive

full foreign exchange proceeds of export is 4 months. A quarterly statement

showing the particulars of overdue export bills is to be submitted to Head office

in prescribed form given by the Bangladesh Bank.

5. 1.3.(b). Scrutiny and Checking of Export Documents

Export bills and shipping documents should be scrutinized and checked

properly. Particular attention should be given on the under noted checklist while

examining the documents.

of 101


1. Export Letter of Credit

It has not yet expired.

It is the correct referenced export L/C

The available balance in the export L/C is sufficient to cover the value of

drawing.

2. Bill of exchange

The bill of exchange is properly stamped of requisite value.

The draft bears the correct L/C umber.

The drawn on the drawer corresponds with the name of the beneficiary.

It is drawn on the correct drawer indicated in the L/C

Amount in words agrees with the amount in figures.

The beneficiary has duly signed the draft.

The tenor is as required by the credit.

The value of draft and the value of invoice are identical.

3. Commercial invoice

Beneficiary as stated in documentary credit it.

The description of goods value and unit price marches that stated in credit

as regards the amount and currency.

Value of invoice does not exceed the available blanch of the credit All the

copies of invoices are sensed and certified as required in the credit. of

101


The correct number of original copies is presented

The terms of delivery match with the terms of credit.

In case of partial shipment the invoice amount corresponds proportionally

to the dispatched quantity etc.

of 101


4. Marine bill of Loading

The shipping company or its authorized agent must issue it.

Full sets of originals issued and presented.

The consignee's name and address are correct as mentioned in the credit.

The bill of lading bears issuing date, duly signed by the issuer and the

name of ship appears.

The port of departure and port of destination are correct.

The bill of lading bears the on board shipped' notation.

It is correctly marked Freight prepaid of Freight to collect.

The goods are cosigned as stipulated in the credit.

The bill of Lading must be properly endorsed etc.

5. Weight Certificate

The document is headed weight certificate.

The total weight must agree with that stated in other documents.

The various partial weights added up to the total weight.

6. Airway Bill

The consignee's name and address and the airports of departure and

destination are stated in the Air Way Bill are consistent and in agreement

with the terms of credit of

101


The documents indicate the name of the carrier.

The issuer is the carrier of a named agent of the named carrier.

The airway bill indicates the actual flight date and flight umber

The document is signed by carrier.

The consignee's name and address and notify to notifies name and address

are correct.

It is correctly marked "Freight prepaid" or "Freight collect" etc.

The consignor's copy is being presented.

7. Certificate of Origin

The country of origin of the goods as stated in the certificate agrees with

the terms of the credit.

The certificate has been singed as required by the credit.

The certificate has been authenticated by the stipulated authorities.

8. Packing List

It is unique a document and not combined with any other documents.

The list contains all necessary information specially concerning the

packing units

The data on it is consistent with that of the other document.

of 101


9. Inspection Certificate

The document is headed inspection certificate.

The details in the certificate agree with the terms of credit.

The certificate contains full description of goods corresponding to the

details given in commercial invoice.

The certificate must be singed.

5. 1.4. Negotiation of Export Bills

A/D branch should examine and scrutinize export documents thoroughly to

ensure that the export documents have been drawn in strict conformity with the

terms and condition of export L/C. after examination of export documents if it is

found that three is no discrepancy in the documents. A/D branch may negotiate

the documents. Branch shall prepare the forwarding schedule to be sent to L/C

issuing bank properly with specific instruction for remittance of the export

proceeds. For negotiation or export bill bank shall be pass the following entries.

Debit # F B P A/C

Credit # Customer's A/C

of 101


OD sight export bill buying rate prevailing on the date of negotiation shall be

applied. Separate FBP umber is to be allotted for each export bill to be sent for

realization of export proceeds. All particulars of export document are to be

entered in FBP register before dispatching the documents to L/C issuing Bank.

The forwarding schedule must be prepared properly with specific instruction

how remitting bank shall remit proceeds and in case of their default what they

should do. Branch must retain at least photocopy of the original bill of lading

duly endorsed and also a photocopy of invoice in file as record. The duplicate

copy of EXP form shall have to be submitted to Bangladesh Bank within 14 days

from the date of shipment by A/D branch.

5. 1.4 (a). Realization of Export Proceeds

After realization of export proceeds the A/D branch shall pass the following

entries

Debit # Head office ID

Credit # F.B.P A/C

Bank shall apply the same rate of exchange that earlier at the time of

debiting FBP A/C.

5.1.5. Opening of Back to Back L/C

The garment industry in Bangladesh is allowed to import raw materials/fabrics

and accessories free of duty under bonded warehouse arrangements. On receipt

of and export L/C a garments and specialized Textile unit under bonded

warehouse system is allowed to open Back to Back L/C for import up to

maximum 75% of net FOB value of export L/C. for computation of FOB value,

freight charges, insurance and commission involved in shipment of merchandise

under the export L/C are to be deducted. The export L/C which the Bangladesh

exporter has received from abroad is commonly refereed to as Master Export

of 101


L/C and the second L/C issued by the bank in favor of textile mill is referred to

as back to back L/C. the export L/C are separate transactions and are

independent to each other. Since the payment of Back to Back L/C is made out

of export proceeds, the Back to Back is to be established on basis covering

usance period of not more than 180 days and most of the time 90 days. The

import documents are to be delivered to the customer against acceptance and

execution of trust receipt. The customer clears the goods from the port,

manufactures the garments and makes the export. Export documents are

submitted to the bank for negotiation and collection of proceeds. The exporter is

only entitled to receive his CM portion (export boll value minus import

obligation) and banks pay the CM portion to customer by purchasing the amount.

After realization of export proceeds the import obligation under Back to Back

L/C is being set aside for payment on maturity date out of export proceeds

Before opening of any Back to Back L/C relevant documents should be

scrutinized properly A/D branch should ensure that’s areas follows

The export L/C issuing bank must be a reputed one

The export L/C is a sight L/C and freely negotiable

In case of terms of delivery FOB is preferable For C&F. freight

Certificate is to be obtained.

Reimbursement instruction of export L/C must be very clear.

Quantity of merchandise with price must clearly be mentioned

Port of destination must be clearly mentioned.

Shipment period shall not be insufficient.

L/C must bear the clause that it is transferable.

Beneficiary and transferor must be identical.

Transfer must be authenticated by advising bank.

The export L/C is to be authenticated by the advising bank in Bangladesh.

5.1.6. Opening of Back to Back L/C on account of

Garment Industry

of 101


The following paper and documents will be required to properly examine before

opening of Back to Back L/C.

Valid bonded warehouse license or current year. Back to Back

amount must not exceed the bonded warehouse limit.

Quota allocation letter from EPB mentioning quota category,

number and quantity for quota items.

Valid IRC can ERC.

Permission issued by Ministry of Textile.

BGMEA Membership certificates.

Tax identification number.

Valid trades authorize letter/C application form duly filled in and

signed by the applicant.

Original Master Export L/C duly authenticated by the advising

bank.

Pro-forma invoice of indent duly accepted by the applicant.

Insurance cover note with evidence of payment and premium

.LCAF duly filled in and signed by the applicant.

Credit report on supplier.

IMP form duly singed in Blank.

Undertaking form the applicant of L/C that import documents, if

drawn strictly as per L/C terms, accepted by bank shall be treated

as accepted by the applicant also. There is need proper scrutiny of

L/C application form, pro-forma invoice and quota allocation

letter.

5. 1.7. Shipment and unsance period

The shipment date is to be fixed on the basis of production capacity. Sufficient

gap period in between the last shipment date of Back to Back L/C and the last

date of Master Export L/C must be maintained. Usance period of Back to Back

L/C is to be counted form the date of acceptance of documents. In most of the

times it appears that gap period is insufficient. This is risky because bank deals

of 101


in documents and not in goods. The customer accepts the documents and clears

the goods from port. The bank is to convey the acceptance and maturity date to

foreign bank. The bank cannot withhold the payment on maturity date on plea

that his customer has failed to make export or export proceeds have not been

received. The bank has to make payment of import obligation on maturity date.

If the customer fails to export goods or even if the export proceeds has not been

received by the branch is it make payment of its import obligation on due of

payment by creating forced overdraft the account of customer.

5. 1.8. Payment of Back to Back L/C against realized

Export Proceeds

A/D branch is to retain or set aside the amount of import obligation out of export

proceeds to make payment of Back to Back L/C obligation on maturity date.

Therefore, A/D branch only negotiate the CM portion that is the difference

amount (value of export bill minus amount of import obligation) as admissible as

per rule and pay the proceeds to customer in Bangladesh taka.

Branch passes following voucher in this regard

Debit: FBP Account (CM Portion)

Credit: Customer's Account Prevailing OD sight export bill buying rate shall be

applied by A/D branch. The amount of import obligation is to be set aside by the

branch from the export proceeds for payment on maturity date of payment. After

realization of export precede A/D branch is to pass the following vouchers

Debit # Head office, ID

Credit # FBP A/C

(Conversion rate will be same as applied at the time of FBP)

Credit # Margin Deposit L/C Foreign A/C

(Mid value national rate will be applied)

Credit # Customer A/C

(Prevailing OD sight export bill buying rate will be applied)

Credit # Customers FC Retention A/C

of 101


(Mid value notional rate will be applied.)

Credit # Export Commission A/C

(a) Payment of Import Obligation:

While releasing the payment of import obligation the A/D branch shall pass the

following vouchers:

Debit # Margin Deposit L/C Foreign A/C

(Mid value notional rate will be applied)

Credit # Head office, ID

An IBCA is to be sent to Head office, ID mentioning the detail particulars the

transaction.

5. 1.9. Lodgment of import bill under Back to Back L/C

A/D branch shall make proper scouting and examination of documents after

receiving of import documents under bank to bank L/C it the documents are

found in order branch shall make lodgment of the same.

Reverse of L/C liability is to be made as under

Debit # Acceptance Liability under Foreign L/C

Credit # Customer Liability under Foreign L/C

Since the L/C is being opened on usance basis 30/60/90/180 days PAD account

must not to be created. Following vouchers are to be passed by the A/D branch

for lodgment of documents under Back to Back L/C

Debit # Customer's Acceptance under L/C

Credit # Bank's Acceptance under L/C

No fund in foreign currency shall be purchased by A/D branch under Back to

Back L/C the payment under Back to Back L/C will be made on maturity date

out of export proceeds in due course.

5. 1.10. Packing credit/Pre-shipment credit

Packing credit/Pre-shipment credit is a short term credit sanctioned to an

exporter to enable him to procure, process, manufacture, pack and ship the goods

of 101


to the buyers abroad in conformity with the terms of export letter of credit

received in favor of the exporter from 1st class foreign banks.

o Packing credit/pre-shipment credit is utilized solely for the procurement

of raw materials/goods to be shipped under the export L/C.

o Goods purchased/manufactured under this arrangement shall remain

pledged or hypothecated to the bank under direct supervision of Branch

Officials to ensure timely shipment.

Goods manufactured and purchased under this arrangement are kept separate

from all other good and stock report singed by the exporter and certified by the

approved shoppers or the approved forwarding and clearing agent or an authorized

officer of the branch is to the submitted to the Branch .Goods to be fully insured

against all risk Transit insurance to cover the good unto the port of shipment are

also to be obtained. The original letter of credit should be prominently marked

with stamp “Under Lien” and retained with the branch so that the exporters

cannot avail similar facility with any other bank against the same letter or credit.

Before allowing the credit, an undertaking to be obtained from the exporter to

deliver the shipping documents to the branch along with insurance policies and

other documents required to be presented strictly in terms of letter of credit

immediately after the consignment has been shipped. Insurance cover under

ECG (Export credit Guarantee scheme) from Sadharan Bima Corporation

covering all risk during pre-shipment/ post shipment period should obtained.

Shipment is to be made through Forwarding Agents & Shippers approved by the

bank within the validity period of the export L/C.Packing credit/pre-shipment

credit should be adjusted/liquidated by negotiation of export documents within

the stipulated times as per terms of sanction letter. If the shipment of the gods

covered by the exported letter of credit “under lien” with Bank is not made

within the validity period of L/C, the credit allowed to the credit allowed to the

exporter to be recovered by debiting the exporter account maintained with the

Branch. If sufficient balance is not available in the account, alternative

arrangement to be made with having the goods already hypothecation/pledged

of 101


with the bank remaining the basic security and simultaneously insurance claim

should be lodged with Sadharan--Bima Corporation under ECG Schemed after

obtaining necessary permission from Head Office.

5. 1.11.Opening of L/C under Export Development Fund

Loan

Bangladesh Bank has had created Export Development fund (EDF) in 1988 for

allowing re-finance to meet the import requirements of no-tradition exporters

Devitrifying in to higher value exports and new markets. Direct and indirect

non-traditional Exporter, high domestic contents and readymade garment

exporters will be eligible to use the EDF fund.

Instead of opening usance L/C the bank has to open Back to Back L/C at sight

basis for import of raw materials and accessories against the master Export L/C,

since the L/C will be at sight basis, the reimbursement or import obligation will

be made from the Nostro A/C of L/C issuing bank. A/D branch shall make

normal reimbursement instruction for payment of L/C by debiting Head office

Nostro A/C abroad. After receipt of import documents under EDF, if the

documents are in order and strictly drawn as per L/C terms. Branch shall submit

application to ID for obtaining refinance form Bangladesh Bank. While making

such application in prescribed form, FEB submit following documents along

with application form

Copy of bill of Exchange.

Copy of bill of lading.

Copy of invoice.

Negotiation Bank’s forwarding schedule.

Upon receipt of application form along with above documents. Head office, ID,

Shall debit the concerned branch through General A/C and shall send IBDA to

the branch mentioning FC amount, L/C number shall pass the following entry.

Debit # EDF Loan A/C

Credit # Head office, ID

of 101


An EDF Loan account is to be created in the name of the customer and the rate

of interest will be applicable as notified by Bangladesh Bank from time to time.

Re-finance facilities under EDF are allowed in foreign currency and up to

maximum period of 180 days form the date of payment under sight L/C. After

realization of export proceeds, branch shall adjust the EDF loan account with

interest out of the export proceeds. Thereafter A/D branch shall request Head

office to refund the amount drawn from Bangladesh Bank along with interest in

foreign currency. In this purpose Head office shall authorize Bangladesh Bank to

debit Head office Clearing Account with it.

The rate of interest of be charged to customers under EDF lain, is being fixed by

Bangladesh Bank on the basis of LIBOR+1% the rate of interest moves if

LIBOR moves. At the time of refund of any EDF loan to Bangladesh Bank, A/D

shall retain 3.5% in case of new exporters and 2.5 in case of old exporters. the

rate of interest prevailing on the date of negotiation will be applied for creation

for EDF loan account.

of 101


C:5.1 (Remittance/Foreign Remittance)

5.1.1 Remittance: Remittance means transfer of Money/Fund from one place to

another place/country through Banking channel.

5.1.2 Foreign Remittance: Foreign Remittance means transfer of money in the

form of Foreign Exchange/Currency from one country to another country

through Banking Channel. In a broad sense, Foreign Remittance includes

purchase and sales of all Foreign Bills and currency on account of Import &

Export transaction/payment and other purposes.

5.1.3 Foreign Exchange: Foreign Exchange relates to the process on

mechanism by which the currency of one country is converted into the currency

to another country. The process of converting one national currency into another

and of transferring the ownership of money from one country to another – Dr.

Paul Einzig.

5.1.4 Inward Foreign Remittance (Incoming Foreign Remittance): Private

Remittance, Indenting Commission, Recruiting Agents Commission, Export

Bills, Importers Claim, Gift, Donation, Foreign Loan, Service Charges, FC

Notes etc. (Inward Remittance by different Exchange House or Company

through the NRT account: Demand Draft, TT, Instant cash payment etc.)

of 101


5.1.5 Outward Foreign Remittance (Outgoing Foreign Remittance): Travel

Expenses (Cash FC, TC), Medical Expenses, Education Expenses,

Examination/Tuition Fees, Membership Fees, profit/dividend of Foreign

Investment, Service Charges, Insurance Premium, Hajj Travel Expense, Foreign

Loan Repayment, Consultation fees, Import Payment etc.

5.1.6 Modes of Foreign Remittance: TT (Telephonic Transfer), DD (Demand

Draft), TC (Traveller’s Cheque), International Money Order, Postal Order,

Bank’s Cheque etc.

5.1.7 Parties of Foreign Remittance: (1) Remitter, (2) Remitting Bank (3)

Receiving Bank (4) Beneficiary.

5.1.8 Inward Foreign Remittance through Exchange

Companies

Inward foreign remittance on account of Bangladeshi Expatriates living abroad

is a source of procuring foreign currency. Foreign currency primarily is required

for accommodating import payments. Subsequent to meeting import payments,

the surplus, if any, is sold out in the inter-bank market. At present Pubali Bank

have 35 windows for routing inward foreign remittance from different countries

on account of Bangladeshi Expatriates. A summary position of inward foreign

remittance since 1999 is furnished below:

Figures in Crore:

SL

No.

Year No. of

Companies

Amount of

Remittance

Except

KSA

Increase

/

Decreas

e

1. 1999 12 182.40 182.40

of 101


2. 2000 13 223.12 223.12 40.72

3. 2001 16 475.77 330.80 107.68

4. 2002 18 1854.42 537.66 206.86

5. 2003 25 3130.20 769.70 232.04

6. 2004 28 1123.14 965.68 195.98

7. 2005 29 1424.25 1424.24 458.56

8. 2006 35 1523.02 1518.67 98.77

Exchange rate offered for the inward foreign remittance plays a very vital role

for the remitters to choose bank for routing their remittance. The remitters

generally prefer to choose the banks to route their remittance which have

offered higher exchange rate than the bank where the beneficiaries maintain

accounts for getting better value of their money. The banks involved in the

remittance process may be grouped as seller bank and buyer bank. The buyer

banks which require buying foreign currency from the inter-bank market to meet

their import payments are in an advantageous position in offering better

exchange rate to the remitters. This helps them to minimize their dependency on

the inter-bank market for foreign currency and also to open windows for regular

source of foreign currency. There is no certainty that the buyer bank will get the

required Foreign Currency in the inter-bank market. But for the banks which

used to sell foreign currency in the inter-bank market after meeting their import

payments are to take the inter-bank foreign currency rate in consideration in

fixing up exchange rate to the remitters. Usually, the exchange rate for the seller

banks is lower than the exchange rate for the buyer banks. Seller banks fix up

exchange rate keeping in view the opportunities prevailing in the inter-bank

market where the buyer banks fix up the rate keeping in view the opportunities

of adjusting their foreign currencies against their import payments. Generally,

the rate for import payments is higher than the rate prevailing in the inter-bank

market.

of 101


5.1.9 Remittance position in USD:

Figures in Crore

Year Total Remittance

in USD

Remittance from

Saudi Arabia in

USD

Remittance other than

from Saudi Arabia in

USD

2002 32.21 22.75 9.45

2003 53.78 40.55 13.23

2004 19.13 2.70 16.43

2005 22.39 - 22.39

2006 22.00 0.63 21.37

5.1.10 Remittance position of GBP:

GBP 3.03 lac since January 2006 to October 2006.

Month Remittance in GBP Remittance in equivalent to Taka

January 35,697.52 42,48,004.88

February 29,578.29 35,50,496.66

March 37,294.56 46,58,160.34

April 29,393.95 36,88,940.73

May 24,205.05 31,20,462.67

June 36,562.07 47,16,507.03

July 60,838.45 78,48,160.05

August 17,528.99 22,67,208.62

September 8,208.19 10,55,438.81

October 24,295.84 30,63,021.87

Total = 303,602.91 382,16,401.65

of 101


5.1.11 Modus Operandi of Local/Foreign Remittance

5.1.11 Sending money from one place to other places for the customer is an

important service of banks and this service is an important part of countries

payment system. For this service, people specially businessmen transfer funds

from one place to another very quickly. There are various types of remitting

money, such as:

5.2 Pay Order (PO)/Telegraphic Transfer Payment Order

(TTPO)

5.2.1 Pay Order: Payment Order is used for making a remittance to the local

beneficiary. Pay Order gives the payee the right to claim payment from the

issuing bank. It can be encashed from issuing bank only. Unlike cheque, there is

no possibility of dishonoring pay order because before issuing pay order bank

takes out the money of the Pay Order in advance. Pay Order cannot be endorsed

or crossed and so it is not negotiable instrument.

5.2.3 Telegraphic Transfer Pay Order: Telegraphic Transfer Payment Order

(TTPO) is used for making a remittance to the local beneficiary. After receiving

telephonic transfer instruction, if the instructing beneficiary maintains his

account in other bank then the payee branch issues TTPO favouring beneficiary

bank. Beneficiary bank then collects the proceeds of the TTPO on behalf of its

beneficiary.

of 101


5.3 Demand Draft (DD)/Foreign Demand Draft

5.3.1 .Local DD: Demand Draft (DD) is an order of issuing bank on another

branch of the same bank to pay specified sum of money to the payee on demand

that is the named person or order of the demand. It is generally issued when

customer wants to remit money in any place, which is out side of the Clearing-

House area of issuing branch. Payee can be purchaser himself or another

mentioned in the DD. It is a negotiable instrument and it can be crossed or not

crossed.

5.3.2 Foreign DD: Foreign Demand Draft (FDD) is an order of issuing Foreign

Bank/Exchange Company on a branch of a bank to pay specified sum of money

to the payee on demand. It is generally issued when customer wants to remit

money in any place, which is out side of the country of issuing bank. Payee can

be purchaser himself or another mentioned in the FDD. It is a negotiable

instrument and it can be crossed or not crossed.

5.4 Telegraphic or Telephonic Transfer (TT)/Foreign

Telegraphic Transfer (FTT)

5.4.1 Telegraphic Transfer (TT): This Method transfers money from one place

to another place by telegraphic message. The sender branch will request another

branch to pay required money to the stipulated payee on demand. Generally for

such kind of transfer payee should have account with the paying bank.

Otherwise it is very difficult for the paying bank to recognize the exact payee.

When sending money is urgent then the bank uses telephone for remittance. This

service is only provided for valued customers, who is very reliable and with

which banks have long standing relationship.

5.4.2 Foreign Telegraphic Transfer (FTT): Foreign Telegraphic Transfer

(FTT) is an order of issuing Foreign Bank/Exchange Company on a bank to pay

specified sum of money to the payee. It is generally issued when customer wants

of 101


to remit money in any place, which is out side of the country of issuing bank.

After receiving the FTT’s order local bank can issue TT/TTPO like its local TT

operation for remitting the fund to stipulated beneficiary.

5.4.3. Mail Transfer Advice (MTA)

When the remitter desires the banker to remit the funds to the payee instead of

purchasing a draft himself the banker does it through a mail transfer advice. The

payee must have an account with the paying office as the amount remitted in

such a manner is meant for credit to the payee’s account and not for cash

payment. It is the least used technique for transferring fund. Where there is no

telex machine or telephone line then this method is used.

of 101


of 101


6.1 Foreign Remittance Trade Mechanism of Pubali Bank

Pubali Bank Ltd acquires Foreign Remittance by purchasing Foreign Currency

through exchange rate and Export business. Foreign Currencies sells through

Import business and also sells in local market. Actually, Foreign Remittance

includes all the areas of Banking activities like General Banking and Foreign

Exchange Business. I would like to describe all these as follows:

6.1.2. Purchasing of Foreign Currencies:

Pubali Basnk purchasing foreign currencies i.e. US Dollar, British Pound

Sterling, and any other currencies through exchange rate. At present, Pubali

Bank has established Taka Drawing Arrangement for purchasing Foreign

Currencies with 33 Exchange Companies in different countries like UK, USA,

Canada, UAE, Oman, Qatar, KSA, Bahrain, Kuwait etc. and also some proposals

of few Exchange Companies are under process. The Bank offers a unique

exchange rate for its all the Exchange Companies and prevailing exchange is

Taka65.80/US.Dollar as on 19.09.2006. For providing better customer service,

the Bank posted few employees in different Exchange Companies. The

expatriates of our countries are sent their earnings through Pubali Bank in a

remarkable amount. Bank is giving better and prompt customer service so that

the remittance can easily transferred. Payment system of the Bank has two

modes in connection with remittance payment one of which is Foreign Demand

Drafts (FDD) and another is Foreign Telegraphic Transfer (FTT). The FDD can

pays within 3 or 4 days of its issuance from abroad wherein the FTT requires

only 2 days for same Bank’s beneficiaries. But, the other Banks’ beneficiary’s

payment should requires 2 days more for clearing time. The Speed Cash or

Western Money Transfer system is absent in Pubali Bank Ltd still now, but it is

under process to introduce such system of remittance within short time. The

payment of Foreign Remittance in same Bank is easiest. This is why for

expanding its market; the Bank offers several marketing promotions offer in

several times. A marketing promotion offer was going on in July 01, 2006 to

July 31, 2006 naming as

of 101


61.3 Expatriate Service Month July 2006

For this promotion offer it gives extra 1% interest on deposits among all the

remitters’ account through all the exchange companies and it also declares a VIP

service will be given up to December 2006 among the top 50 remitters of the

said service month. The Bank also is providing all the General Banking facilities

in remitting their foreign currencies like Open a new account, Clearing facilities

form other banks, Fund Transfer locally, various Deposit scheme offers etc. As

the Foreign Remittance includes all the General Banking activities, I can say the

Foreign Remittance is an important product of General Banking in Pubali Bank.

6.1.4 Selling of Foreign Currencies:

Pubali Bank selling foreign currencies i.e. US Dollar, British Pound Sterling,

and any other currencies through competitive rate in local market and invests in

its Import business. In Bangladesh Import is an important business as our

country has a lot of deficiency in many sectors. Without Foreign currency

Import business is impossible. To purchase any kinds of goods/products from

abroad it is required to make Letter of Credit (L/C) which requires foreign

currency. Pubali Bank invests foreign currencies in its Import business while

making L/Cs through its 30 Authorized Dealer (A/D) Branches. The surplus

amount of foreign currencies sells in local market.

6.1.5 Selling of Foreign Currencies in local market:

The Bank maintains to offices in selling foreign currencies i.e. Front Office and

Back Office.

6.1.6 Front Office’s Activities (Dealing Room activities):

Dealer sells the surplus amount of foreign currencies in local foreign currencies

market (i.e. sells foreign currencies to other local banks/financial institutes) in a

specific competitive rate. On the other hand foreign currencies may also

purchase from other banks while deficiency in foreign currencies at the bank.

Dealer makes the deal confirmation to other bank over telephone in a specific

rate/period from Front Office then all other documentary works is done by the

of 101


Back Office. The Dealer maintains three rates while selling and purchasing

foreign currencies i.e. Spot Rate, Forward Rate and Cross Rate in Pubali Bank.

To analyze exchange rate the Dealer uses online software named Royter, which

always shows different currencies’ up and down trend.

Spot Rate is used in buying and selling of currencies in the same day. In this

system, purchase or sells of currencies in the prevailing rate of the purchasing

date.

Forward Rate is used in buying and selling of currencies in a specific forward

day. In this system, purchase or sell of currencies in the date of contact in a fixed

rate after certain date.

Cross Rate is used in buying and selling of currencies through cross rate i.e.

dividing one currency by another currency.

6.1.7 Back Office’s Activities:

Back Office provides all the documentary support of deal confirmation. After

completion of deal by the Dealer, Back Office makes all necessary papers in

respect of deal send it to respective bank to effect payment. Back Office

maintains all the required registers for proper handling currency market.

6.1.8 Selling of Foreign Currencies in Import business:

With the little understanding of L/Cs and after completing necessary formalities,

the branch may now proceed for opening the credit on behalf of their own

customers who maintain accounts with them, except government organization.

Necessary entries to be given in the L/C opening Register by allocating an L/C

number and following vouchers are to be passed for completing of opening

transactions at BC Selling rate (Spot):In Import business no local currency can

be used. On the other hand, only foreign currency can be used in Import

business. While making L/C payment should be made by Foreign Currency i.e.

US Dollar, British Pound Sterling, etc. Pubali Bank almost can make payment

their L/Cs in favors of their customers/clients from its own sources i.e. from its

own foreign currencies’ fund, which was earned from its Foreign Remittance

of 101


business. The Bank hardly should purchase foreign currency to make payment of

their L/Cs.

6.1.9 Impact of Foreign Remittance on Foreign Exchange

Business

As Foreign Exchange business depends on Foreign Currencies, it should not be

ignored the impact of Foreign Remittance on Foreign Exchange business.

Foreign Exchange business is a large thing on the other hand Foreign Remittance

activities is also large. A foreign Remittance activity includes all the General

Banking as well as Foreign Exchange business which I briefly discussed in

earlier pages. So, the impact of Foreign Remittance, I can say, influences on

both the General Banking and Foreign Exchange business simultaneously.

Foreign Remittance impacts on General Banking in its general customer service

level and expanding its business at rote level. On the other hand, Foreign

Remittance impacts on Foreign Exchange business in its global Foreign

Exchange business where corporate customers are engaged. Foreign Remittance

impact, however, I discussed earlier, on both the General Banking as well as

Foreign Exchange business. Thus the Foreign Remittance is acquired in the form

of Foreign Currencies and actually it is used in Foreign Exchange business, I can

say that impact of Foreign Remittance on Foreign Exchange business is

undoubted. But, impact of Foreign Remittance on General Banking business is

indirect and implicit works like all other customer services. In view of the above

fact, I can say that impact of Foreign Remittance on Foreign Exchange business

is a vast.

of 101


of 101


7.1 Mercantile Bank Ltd

Mercantile Bank Ltd is establish them self as a second-generation bank and

promises to there customers to accelerating the better service in the banking field

rather they are failed to meet up the demand of there customer and have some

reason.

7.2 Reason to choose Mercantile Bank Ltd.

In the background of liberalization of economic policy in the Bangladesh, MBL

emerged as a new commercial bank to provide efficient in banking service with

a view to accelerating social economical development of the country and also

provide the better foreign exchange service to there clients whose come to

operate foreign trade and accelerating the foreign currency for country and

regenerating the revenue in the GDP and also industrializations.

7.3 Comparative analysis MBL with PBL

MBL is promises to there customers to accelerating the better service in the

banking field whether they could failed to meet up the demand of there customer

and have some reason.

7.3.1 Number of branches:

The number of branches of MBL is less then the PBL, because the branches of

PBL remain 351 and the MBL also remain 65, so the ratios stand 5:3.

7.3.2 Permission of Central Bank:

Central bank also provide the MBL to establish only one foreign exchange

branch at commercial area and permit 10 of there branches as AD, but the

numbers of branches of PBL are so more then they because PBL get the facilities

when they under at Central bank.

7.3.3 Inter bank relation:

Relation create the trade with this proverb in banking sector the MBL as newly

establish bank operate themselves to transecting with the local and international

banks to transferred the cash. But PBL also create a strong relation with the local

and international arena to transfer of cash.

of 101


7.3.4 Human resources:

Recourses should be allocated properly in this scene MBL also try them self to

appoint the best and potentials candidate who to be serve the better service to

there customer, but unfortunately they have hade not any training center that

they build there employee and employers mope potential in the competitive

market rather they arrange the several banking related workshop a and

symposium.

7.3.5 Customer service and trust:

Service first with this cense they provide the service and create the trust in the

heart of there customers but as a newly establish bank they trying there level

best.

7.4 SWOT Analysis of Pubali Bank Ltd.

Strengths of PBL

Brand Value.

Product Range

Low Interest rate (@13%) then foreign banks

350 Branches all over the country

Effective human recourses

Minimum service Charge

Large number of Customers

No additional service charges impose.

Weakness of PBL

Poor Que. Management.

Less superior service quality.

Lack of Technology.

Minimum customer care.

of 101


Minimum use of Advertising.

No use of ATM and evening Banking.

Less contribution of management with employees

Opportunity of PBL

Large number of Share and Paid up capital

Several segments in investment

Threats of PBL

Local Private Bank.

PBL Vs Dhaka Bank

PBL Vs Eastern Bank

PBL Vs IFIC Bank

PBL Vs Mercantile Bank

Foreign Banks.

PBL Vs stander Chartered Bank

PBL Vs HSBC

PBL Vs American Express

of 101


of 101


8.1 Findings and Recommendation regarding PBL

In today’s world we consider time as money. So it needs prompt

action in making disbursement and collection of payment. In PBL

introduction of Speed Cash/Western Money Transfer System of

Foreign Remittance may resolve this problem. I recommend

introducing Speed Cash/Western Money Transfer system at the

earliest to expedite payment of remittance.

PBL has no Online Banking System yet so that customer service can

not be given promptly. Acquiring Foreign Remittance depends on

prompt customer service and instant payment, which requires Online

Banking system. I recommend introducing Online Banking system to

attract customer and provide better customer service.

PBL does not maintain database of other banks’ branches for which

communication with other bank in connection with payment of

Foreign Remittance can not be made smoothly. Maintain of other

banks’ database is highly recommended.

Problem solves section of Foreign Remittance in Pubali Bank is not so

organized like other banks. Shortage of equipment and manpower

hamper its problem solves operation. I recommend that problem

solves section should have more equipped along talented personnel.

Customer always wants the better banking services. Few banks also

provide the ATM and Evening banking facility from any of their

branches, but Pubali Bank does not have ATM and Evening facilities

in all the branches. So if they ahead that business comprehensibly then

it would be better for there customers and bank to regenerate revenue

and increase the profit index per annum from the customers and also

minimize the risk of robbery cash and the tension of the business men.

PBL hardly exercise sells promotion policy which will be a cause to

its survival among all other new banks as the other banks are

of 101


tremendously exercise to improve the sells promotion. I recommend

PBL should exercise sells promotion practice.

PBL extends credit only to running and old customers but

contemporaneous and new entrepreneurs also should encourage. In

this retard increase in efficiency and minimization of cost is crucial. I

recommend PBL should extend credit not only running and old

customers but also try to increase new customer for its improvement

and survival in future.

of 101


8.2 Conclusion

AS A student of BBA program, the entire report of my internship should held on

the Foreign Exchange Branch, Motijeel and the work related to the foreign

exchange activities of PBL. Foreign Exchange activities is also comprehensive

and complex task rather I be enjoyed myself as the internship period to learn it

and observe how the bankers should be done their activities to share my micro

level of knowledge to exchange with their decisions making and to help there

operation to compute the work and get it as an experience. After the introduction

of financial sector reform and Banking Company Act 1991, changes in banking

sector of the country are very remarkable. Activities of different dimension,

modern system and methods of workings and better policies have been taking

place in the banks. Successful application and operations for providing efficient

services a midge’s keen competition of different banks enhance performance of

them. PBL should also cope up with globalization as it had already been

improved itself in post reform environment.

of 101


Abbreviation use in Foreign Exchange Section

Convertibility : If a currency can be exchanged for another freely,

without any restrictions or interference from the

Government of Monetary Authority, irrespective of

the ownership or the purpose of conversion,

without requiring obtaining any prior permission

from the authority, then the currency is called

convertible.

Currency Rate : Rates of exchange quoted in terms of foreign

currency for a fixed unit of home currency (also

called indirect quotations).

Cross Rate : The rate arrived at by exchanging one foreign

currency for another foreign currency other than

the local currency.

Dealing Date : The date on which a contract for sale or purchase

of foreign currency is made is called Dealing Date.

Depreciation : When the rate of exchange of a currency falls, it is

called depreciation.

Devaluation : When the par value of a currency is refined at

lower level in terms of say, Gold or Dollar it is

called Devaluation.

Discount : If the forward exchange rate is cheaper than the

sport rate, it is at a discount. Discount means

cheaper.

ECU : European Currency Unit.

EEC : European Economic Community.

EMS : European Monetary System.

of 101


EURO Currency : Any currency owned by a non-resident of the

country of origin of the currency.

EURO Dollar : US Dollar owned by non-resident of USA in the

form of deposit with a commercial Bank outside

USA.

Firm Currency : When the value of a currency in terms of another

remains steady or develops the tendency to rise, it

is called Firm Currency.

Floating Rate : A system under which rates of exchange of a

exchange currency fluctuate freely in accordance

with the demand for and supply of the currency.

There is no fixed par value of the currency

concerned.

Forward Exchange: Contracts under whsich rates of exchange covering

a foreign exchange transaction to be settled at some

future date are settled now.

Hard Currency : When a currency becomes scarce and more

expensive to acquire, it is called hard or strong

currency.

LIBOR : London Inter Bank offered rate of interest for Euro

Currency transactions.

LONG : Long is a currency over bought (excess of purchase

over sale).

Long Rate : Rate or interest applicable to a DA Bill (after date

or after sight usance Bills).

Offer : The rate at which the price maker is willing to lend

or sell a foreign currency.

Open Position : Long or short position in a currency at any point of

time of which the bank is exposed to the risk of

fluctuation in the exchange rate.

of 101


Pence Rate : Rate of exchange quoted in terms of home currency

for a fixed unit of foreign currency. Also called

direct quotation.

Petro Dollar : Surplus sale proceeds of petroleum (Oil) in U.S.

Dollar kept in deposits with U.S. Banks is known a

Petro Dollar.

Pip or Point : One hundredth part of a unit of foreign currency.

Premium : Premium means darer. If the forward exchange rate

is costlier than the spot rat, it is a premium.

Prime Rate : Minimum rate of interest at which the bank lends

to his best customers in U.S.A.

Revaluation : When the par value of currency is refixed at a

higher level in terms of say Dollar it is Called

Revaluation.

SDR : Special Drawing Rights of IMF.

Short : Short is a currency over sold (excess of sale over

purchase).

Sport Rate : Ratge of exchange quoted for purchase or sale of

foreign currency which is to be delivered at he

foreign centre within a period of 2 working days

from the dealing date.

Spread : Point of difference between the dealers’s buying

and selling rate of exchange.

Swap : The simultaneous purchase of a foreign currency

spot against sale of the same currency forward or

vice-versa.

SWIFT : Society for World wide Interbank Financial

Telecommunication.

Telqual Rate : The rate of interest worked out to suit a bill which

has still some time to run before maturity.

of 101


Usance : The period or tenor for which a bill is drawn i.e. 90

days, 60 days, etc.

Value Date : The date on which the foreign exchange Value

Compensated transaction is to be settled by Value

compensated delivery/ receipt of funds in the

foreign money here & there of the date from which

the fund is subjected to interest is called value date.

Weak Currency : The currency, whose rates are falling in relation to

other currency i.e. becoming cheaper, is called

weak currency. As the supply of this currency is

large and price is cheaper, it is also called soft

currency.

of 101


REFERANCES

01. Annual Report 2007, Pubali Bank Ltd., 26, Dilkusha C/A, Dhaka-1000,

Bangladesh

02. www.pubalibangla.com

03. www.bangladeshBankbd.com

03. Business of Banking – Dr. R M Debnath

04. Foreign Exchange –L. R Chowdhury

05. Banking Law and Practice – P.N. Vershney

06. Prospectus of Pubali Bank Ltd.

07. Practical Banking Advances – Bedi and Hardikar

08. Uniform Customs and Practice for Documentary Credits

(UCPDC) ICC Publication 500.

10. Daily journals & Magazines.

11. BIBM Library Materials.

12. Documents & Papers provided by the PBL

13. Papers and Documents Provided by -

----- Mr. Shahin Shahria, SPO, Imp, PBL ForEx Branch.

-----Mr. Md. Maidul Islam, PO, Cr. PBL ForEx Branch.

----- Mr. Md. Arifuzaman, SO, Cr. PBL ForEx Branch.

----- Miss Lifonar Afrin, SO, GB, PBL ForEx Branch

------Mr. Ahteshamul Hoque Bhuia, Officer, GB, PBL ForEx Branch

of 101

http://www.bangladeshbankbd.com/

http://www.pubalibangla.com/


______End of the Report______

of 101

FAYSAL Report

Documents

Transcript of FAYSAL Report