1

Introduction:Banking Industry is one of the most promising industries of our country. The importance of the sector revealed through its contribution in the economic growth of the country. This sector accelerates economic growth through mobilizing funds from surplus unit to the deficit unit. Banking Industry is moving towards rapid changes due to technological innovation and diversified needs of its customers.

Banks deal with the most important factor of the economy i.e. Money. It flow funds from surplus unit to deficit unit and through this it facilitated the efficient allocation of the resources as well as accelerated economic growth. This sector is moving towards new dimension as it is changing fast due to competition, deregulation, financial, reforms.

As the pace of globalization competition in banking sector is increasing very fast. Banks are becoming more customers oriented and offer High tech customized products to its target market to hold the market .Our central bank always keep monitoring banks performances. Individual banks also need to assess their own performance to satisfy the parties those are related to its growth.

For Shareholders.

For depositor.

For Bangladesh Bank.

For its own Assessment to view the future growth and profit tried. 1.1 Rationale for Selecting the Report:Internship program offers an opportunity to know the environment of a particular organization. Through this program, I will be able to develop and refine my theoretical knowledge gained during my stay in the university. This program will provide an exciting opportunity to experience and learning, cultural behavior of employee and management, elegance of an organization, which will bridge the gap between theoretical and real practical experience. A perfect consideration between theory and practice is important in the context of modern business world. Therefore the American International University-Bangladesh arranges internship program as a partial completion of BBA program. Internship program brings students closer to the business theory and practical and thereby help them to substantiate their knowledge so that they can prepare themselves to start a fruitful career. Currently Im doing my internship in Agrani Bank in the Foreign Exchange Corporate Branch, Motijil. As it is the Corporate Branch of Agrani Bank most of its activities are totally different from the General Banks.1.2 Background Bank of Agrani Ltd:

Agrani Bank a nationalized commercial bank (NCB) of Bangladesh established on 26 March 1972 under the Bangladesh Banks (Nationalization) Order 1972 by taking over two abandoned Pakistani banks - Habib Bank and Commerce Bank. With its head office in Dhaka, the bank started its operational activities with an authorized capital of Tk .30 million and paid up capital of Tk 10 million. The paid up capital has increased to Tk 30 million in December 1973. In 1999-2000, the banks authorized and paid up capital were Tk. 8 billion and 2.5 billion respectively. Agrani Bank Limited (the Bank) has been incorporated as a Public Limited Company on May 17, 2007 vides Certificate of Incorporation No. E 66888(4380)/07. The Bank has taken over the business of Agrani Bank (emerged as a Nationalized Commercial Bank in 1972, pursuant to Bangladesh Bank (Nationalization) order no. 1972 (P.O. NO.-26 of 1972) on a going concern basis through a Vendor Agreement signed between the Ministry of Finance of the Peoples Republic of Bangladesh on behalf of Agrani Bank and the Board of Directors on behalf of Agrani Bank Limited on November 15, 2007 with a retrospective effect from July 01, 2007. The Banks current shareholdings comprise Government of the Peoples Republic of Bangladesh and other 10 (Ten) shareholders nominated by the Government. The Bank has 867 branches as on December 31, 2008 (with no overseas branch). The Bank, however, has two wholly-owned subsidiary Companies named Agrani Exchange House (Pvt.) Ltd. in Singapore and Agrani Remittance House SDN, BHD in Malaysia.

Agrani Bank Limited is governed by a Board of Directors consisting of 13(thirteen) members headed by a chairperson. The Bank is headed by the Managing Director & Chief Executive Officer; Managing Director is assisted by Deputy Managing Directors and General Managers. The bank has 7 Circle offices, 30 Divisions in head office, 52 zonal offices and 867 branches including 10 corporate and 40 AD( authorized dealer) branches. The corporate and AD branches are authorized to deal in Foreign exchange business. At the start of its operation in 1972, Agrani Bank had 246 branches, of which 37 were temporarily closed. It had a total deposit of Tk 581 million, advances of Tk 663.40 million and borrowing of Tk 294.80 million. Initially, it did not have any liquid asset to run its operations smoothly and to undertake development activities. Investment amounting to Tk 110 million was in unapproved securities.

Agrani Bank monitors its operations through a performance budget. It has a marketing intelligence unit. It conducts a program of human resources development through training and motivation and has adopted some important policy measures, including introduction of Lending Risk Analysis, suggested by the Financial Sector Reform Program. The business policies of the bank in 1990s included fulfilling capital adequacy requirements, mobilizing large amount of deposits, and making investment of assets in more profitable ways. The bank has diverted its activity toward off-balance sheet items during the last decade as a part of its strategy to increase its area of operation and non-interest based income. The management of the bank is vested in a 7-member board of directors appointed by the government. The managing director is the chief executive and he is assisted by deputy managing director, six general managers and other senior executives. The general managers are in charge of the bank's branches in six administrative divisions of the country namely dhaka, chittagong, rajshahi, khulna, sylhet and barisal. The bank has 22 departments at its head office, including a training institute at Dhaka. Total number of employees of the bank was 13269 on 30 June 2000. Up to 31 December 2000, the Bank had 903 branches, of which 586 were in rural areas and 38 were authorized to deal in foreign exchange transactions. Vision of the Organization:

To reach the top level by computing with all of our competitors by satisfying customers form our product quality and service.

Mission of the Organization: To help the government when money is needed. To be providing the most quality product. Always maintains delivery schedule according to buyers requirement.

To maintain business ethics.

To maintain quality requirement of the buyer choice.

The accounting policy comprises principles and basic assumptions, concepts, rules, practices, and procedures adopted by the Management for reporting the activities of the Bank and financial statements preparation and presentation.

The purpose of accounting policy is to provide the necessary organizational and methodological directions in carrying the accounting activity of the Bank.

The Bank's Principal Objectives:1. To mobilize national savings

2. To finance industries, micro-enterprises, trades, commerce, agriculture and other productive undertakings

3. To provide any other banking services as required for socio-economic development of the country1.3 Objective to study:

Broad Objective

To know the details of Foreign Exchange Functions in Agrani Bank Ltd. The functions of Foreign Exchange conducted by Agrani Bank in all over the world.

Specific Objectives To apply theoretical knowledge with practical situation.

To understand the real management situation and to gather practical knowledge.

To be familiar with banking environment, clients, working hours, values, conditions and other things related to bank.

To evaluate the performance of sanction, disbursement and recovery of Foreign Trade of ABL.

To determine the factors that influences the choice of a bank by the customers.

To identify the problems faced by the customers and the bankers.

To understand the Foreign Exchange Operation of ABL.

To examine the profitability and productivity of the Bank.

To acquire knowledge about the everyday banking operation of ABL.

2 Activities Undertaken: I learned many things during my internship in Agrani Bank, Foreign exc.cor Branch. Foreign Exchange corporate Branch consists of about 3 sections. General Banking, Foreign exchange and advance accounting. I got the opportunity to go through all the sections. The Foreign Exchange Section prepared a schedule for the interns, so we did have a chance to go through all the sections of the foreign exchange department of Agrani bank and spent some time in order to get a brief idea about their sections.

On the very first day when I joined Agrani Bank I was Placed into the General Section. Assistant General Manager was very busy with his work but still he took out some time for me and showed me what he was working on. The first day I learned ,how to open a account, cheque requisition also many rule to open a bank account.

From the second day I started to work on the same section where I was assigned the earlier day.

2.1 Works-Related:Well as discussed above I had the opportunity to work under the 3 sections of the department. All the employees of the department were generous and helpful in providing information. Overall, I have experienced a very friendly and supporting environment at Agrani Bank, which gave me pleasure and satisfaction to be a part of them for a while. I was also encouraged to learn from the bank employees, they have discussed in details about their respective tasks. I also participated in their work activity. In this report I have discussed clearly what my tasks were and what I have learned from Agrani Bank.

Tasks done under General Banking: Accounts Opening

Cheque clearing,

Documentation of account opening tasks,

Payment order,

Demand Draft. Practical Work under General Banking Section :

Distribute the Account opening, Payment order, Demand Draft form to the customer.

Help to fill up account opening form correctly.

Take the photocopy of National ID card/Passport/Citizenship certificate. Write down the Cheque requisition account holder Name and ID in register book. Receive the Clearing cheque and give a crossing seal.

Calculate total amount of clearing cheque (Savings account, Current account, Pay-order, Demand Draft) after that write down the register book.Foreign Exchange:

Foreign Exchange Department is an important one that deals with import, export, and foreign remittance and post import financing. Through this is an ancillary service provided by the Bank, The Bank is purchasing primary security by giving loan in form of loan against imported merchandise (LIM), and loan against trust receipt (LTR). Bank branch should be Authorized Dealer with the approval of Bangladesh Bank to run foreign exchange business. This department is playing an important role in enhancing export earning, which aids economic growth and, in turn, will be helpful for economic development. On the other hand, it also helps to meet those goods and services, which are more demandable and not adequate in our country.Practical Work under Foreign Exchange Section: Maintaining the FDBC register by filling up the Bill value in FC, Bill value in Taka, Credit date, Entry Reversal Date, Charges in Taka and Reserve for BBLC in DAD A/C. Maintaining the performance register (Client wise) by filling up the EXP number and date, EXP value, FDBC number, amount in foreign currency, Realized amount in foreign currency and Date of Realization.

Updating the EXP register by filling up the Shipment Date, FDBC number, and Date of Submission of Duplicate copy to Bangladesh Bank, Date of Realization, Amount realized in Foreign Currency and Taka amount paid to the exporter and rate of exchange applied.

Record keeping on the front page of the Folder of FDBC by filling up the Realization Date, Value Date, Value of FC, Value in Taka and the Exchange rate.

Reporting of Duplicate & Triplicate EXP to Bangladesh Bank.

Maintaining the LDBC register.

Filling of Bill of Entry.

LDBC Adjusted data entry. Cash incentive data entry.

LC advising, issuing and Register book maintaining.

Filling the IBDA voucher.

Filling the IBCA voucher.

The Major Tasks of Foreign Trade Department:The Functions of Foreign Trade dept. mainly covers the following areas:

Import

Export

Remittance

IMPORT:Import is when you buy something from another country and get it shipped to you Import is commodities, i.e. goods and services brought into one country from another country for the purposes of trade. Agrani Bank Limited, through 40 Authorized Dealer Branches, has been financing full range import business of many Importers who are Bank's clients. Import item given in below: Wheat, rice, sugar, milk food, oil seeds, fruits, textile fabrics, lime stone ,coal, cement , motor vehicle, onion etc.

Import Position of Agrani Bank Ltd Bangladesh for different Years:

Year/MonthAmount(TK) in lacGrowth (%)

201082037.650

201174985.99-8.59

201256396.15-24.79

2013-October37583.03-33.36

Source: Foreign exchange Department of Agrani Bank Ltd, Foreign Exchange corporate Branch Figure: 2:1 Years verses Total Import Income(Lac), ABL, Foreign exc. cor. Branch Figure: 2.2 Years verses Import growth rate(%), ABL , Foreign exc.cor. BranchResult: In figure, 2010 Agrani Bank Foreign Exchange corporate Branch import transaction was Tk 82037.65 lac. In 2011 Agrani Bank Foreign Exchange corporate Branch import transaction was TK 74985.99 lac and import growth rate was -8.59 %. In 2012 the transaction was Tk 56396.15 lac and the growth rate was -24.79%. In 2013-October the transaction was 37583.03 and growth was --33.36%. In 2010 Foreign Exchange corporate Branch transaction was large and the growth rate was large.

Tasks of Import procedure:The procedure from opening L/C to disbursement against L/C observed by me is given below-

Receive application for opening a L/C from importer.

Delivered forms by banker to importer,

Preparation of L/C by banker.

Desk Work done by banker.

Letter of credits:A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. In the event that the buyer is unable to make payment on the purchase, the bank will be required to cover the full or remaining amount of the purchase. There are two types of L/C. They are: 1) Revocable L/C 2) Irrevocable L/C

Types of documentary credits according to payment methods: Sight Credit

Deferred payment credit

confirmed

The flowchart shows the steps in a simple documentary letter of credit process:

Procedure from opening L/C to disbursement against L/C is given below:

Preparation of L/C by banker:

Banks officer prepares L/C when a officer saw all the document submitted by customer or importer. Before preparing L/C officer scrutinizes the application in the following manner.

The terms and conditions of the L/C must be complied with UCPDC 500 and Exchange Control & Import Trade Regulation.

Eligibility of the goods to be imported.

The L/C must not be opened in favor of the importer.

Radioactivity report in case of food item. Desk Work:

One debit voucher to be passed.

Corresponding credit voucher to be passed (Margin, commission, postage, stamp, F.F.C. and others).

Liability voucher to be passed.

EXPORT: To send goods or services across national frontiers for the purpose of selling and realizing foreign exchange is called export. There are many export item in Bangladesh. They are: Fashion item , Stationery goods , Dry & Dehydrated fish , Leather goods etc.Export Incentive Program:1) Financing industries of 100% foreign investment or of Joint Venture at Export Processing Zones

2) Obtaining EEF (Equity & Entrepreneurship Fund) from Government through Bangladesh Bank for building up Entrepreneurs' Equity.

3) Providing services to the exporters by the Bank's own logistical supports like SWIFT, Reuters Service, Internet, and Fax etc.

4) Consultancy and Advisory Services by an expert group of officials.

Financing of export credits is made in two stages:

1. Pre-shipment stage.

2. Post-shipment stage Parties to Export Transactions: L/C Issuing Bank Importer L/C Advising Bank Exporter Confirming Bank (If any) Negotiating Bank The paying/Reimbursing Export position bank Ltd Bangladesh for different of Agrani Years

Year/MonthAmount(TK) in lacGrowth (%)

201040185.630

201153018.0231.93

201251949.81-2.02

2013-October43088.25-17.06

Source: Foreign exchange Department of Agrani Bank Ltd, Foreign exc.cor.Branch.Figure: 2.3 : Years verses Total Export Income(Lac), ABL, Foreign exc.cor.Branch.

Figure: 2.4 : Years verses Total Export growth rate (%), ABL, Foreign exc.cor.Branch

In above figure export growth is not stable. In figure, 2010, Agrani Bank Foreign Exchange corporate Branch transaction was Tk 40185.63 lac and in 2011 transaction was 53018.02 Lac and the growth rate was 31.93%. In 2012 transaction was Tk 51949.81 Lac and growth was -2.02% and in 2013- October the transaction was Tk 43088.25 lac and growth rate was -15.50%. Here in 2011 Agrani Bank Foreign Exchange corporate Branch transaction was large and growth rate also.Remittances:A remittance is a transfer of money by a foreign worker to his or her home country. Remittances are the transfer of money by migrant workers back to their family and friends staying in another country. We can easily say , remittance is Transfer of funds, usually from a buyer to a distant seller, instrument of transfer (such as a check or draft), or funds so transferred Types of Remittance

Inward Remittance :Telegraphic transfer (T/T),Mail transfer (M/T),Bankers demand draft (D/DOutward Remittance:Demand Draft

Telegraphic Transfer

Payment Order (Local)

Remittance Position:Year/MonthAmount(TK) in LacGrowth (%)

20105810.490

201112107.68108.38

201215117.0324.85

2013-October 3397.01-77.52

Source: Agrani Bank Ltd, Foreign Exchange corporate Branch

Figure: 2.5 : Years verses Total Remittance Income(Lac), ABL, Foreign exc.cor.Branch.

Figure: 2.6: Years verses Total remittance growth rate (%), ABL, Foreign exc.cor.Branch.In above information Inward Remittance growth is not stable. In figure, 2010, in this branch Inward Remittances were Tk 5810.49 lac. In 2011 inward remittance was Tk 12107.68 lac and growth rate was 108.38% and in 2012 inward remittance was Tk 15117.03 lac and the growth rate was 24.85%. In 2013- October inward remittance was Tk 3397.01 lac and growth was -77.52%. Here, in 2011 inward remittance was large amount and growth was large.2.2 Organization-wide: In addition of Foreign Exchange facilities Agrani Bank Ltd. has other facilities including real-time online banking through nationwide intra-bank computerize networking facilities by which customer of any branch could deposit and withdraw money at any other branches, locker services for safekeeping of customer's valuable documents and goods like jewelries or ornaments. Agrani Bank also collections of Utility bills and give ATM card services, Remittance transfer through Western Union etc. There are three section in foreign exchange corporate branch.

i. General Banking.

ii. Accounts Department.iii. Foreign Exchange.Other Relevant Activities: They also provide some other services like-

Online Banking

ATM Banking

Loker Services 3 Constraints and Proposed course of action for improvement :

In our economy, Agrani bank is the most important part of our country. And also Agrani Bank try to develop in our agriculture sector and rural development and poverty alleviation and to develop in our industry sector in many ways like Agrani bank provide many types of facilities to them.

This report covers Foreign exchange system that has been observed in the last four weeks. The findings of this report describe the tasks that take place in The Foreign exchange corporate branch of Agrani Bank. Below I have mainly focused on some of the problems of Agrani Bank and these findings are completely from my personal point of view. Those are given below: The working environment of Agrani Bank is not good.

Agrani Bank is laggard much behind in terms of Information Technology & automation.

They are pretty much backdated in terms of their software & computerizations.

Agrani Bank is not able to make the proper utilization of their vivid human resources. The employs are paid very less in terms of their outstanding qualification & expertise. This may act as a demotivation for some of the work force. I have also faced some problems at the time of studying the performance of the bank. The limitations of my research work are as follows:

The main constraint of the study is insufficiency of information, required for the study. There are various information the bank employee can't provide due to security and other corporate obligations. Due to time limitations many of the aspects could not be discussed in the present report. Every organization has their own secrecy that is not revealed to others.

Since the bank personals were very busy, they could provide me very little time.I carried out such a study for the first time, so in experience is one of the main constraints of the study. Because of working in the Bank I could not even consult with my supervisor properly.

3.1 Identified/Observed in the Organization: Few number of Exporter and Importer: Foreign Exchange Department is not sufficient

Lack of efficient employees

Very few Branch level meeting is held: Lack of modern PC and comprehensive banking software:

3.2 Academic Preparation:Actually in university, I have to learn only the academic mechanisms so it is difficult to complete this theory over the professional life. In professional life I used my learning things practically which I have to learn theoretically in some portions. There are high changes things can be mismatched and my University should come forward regarding this issue. They should upgrade my present educational system. In every courses there should have coordination between academic and operational activities. Courses should be provided for the future job requirements as well as build a person suitable for the competitive world. From very beginning I faced problems to adjust with the operational activities. I could not able to match my academic knowledge into professional career. But after some time I used to comfortable with that. Everybody helped me a lot. That time I realized our education system should be based on both academic and operational mechanisms .4 Lessons Learned From Internship:

As a part of BBA Program American International University Bangladesh (AIUB) allow student for Internship. Its a big opportunity for me to know the corporate world and what really done in that world. So its a big chance to gather knowledge through practical experience. In these intern time a lot of thing I achieved. Its a big experience to know about the banking system, it is overall activities, activities of specific departments and so on. These following things I learned from my Internship Program.4.1 Implications to Organization:From the internship program I have learned so many valuable knowledge which helped me a lot to understand the banking activities and as well as to prepare this report. Those are:

To maintain an effective and efficient corporate culture.

To maintain rules & regulations in the office.

I have learnt how to work under pressure.

I have learnt how to maintain good relationship with supervisors & co-coordinators.

I have learnt the way and means of communication in a corporate environment.

I have learnt to work with group.

Better time management.

Corporate dress code and manner.

I have learnt how to interact with customers (mainly officers)

4.2 Implications to Universitys Internship Program:For an effective internship program University plays a vital role .Without the help of my university I could not be able to go for a practical life. University was the first platform which has given me the opportunity to prove myself in the competitive world. I thank my University as well as my supervisor for this internship program where I got chances to learn from the bank and to learn about the corporate culture just before completion of my graduation. Few Implications given in below: Add a new subject on Banking on university major course

Faculties can share practical example in the context of our own economy.

Send student on field in different financial organization

Make student familiar with some business related software use and its implication.

Invite different corporate personal from Banking & Finance sector to share their practical knowledge which helps student a lot for their future course of preparation

Make student familiar with different practical Banking documentation process.

5.1 Recapitulation or Summary: Agrani Bank Limited, a leading commercial bank with 895 outlets strategically located in almost all the commercial areas throughout Bangladesh, overseas Exchange Houses and hundreds of overseas Correspondents, came into being as a Public Limited Company on May 17,2007 with a view to take over the business, assets, liabilities, rights and obligations of the Agrani Bank. One thing can be noted that time horizon is too little to predict or evaluate the performance but the analysis clearly represents the better performance of the Agrani Bank Limited. Again, according to the CAMELS rating it has on an average rank 1 in its different basic parameters. Even though Agrani Banks different performance parameters are good, it should expand its operations to the rural mass people who basically are deprived from different quality services of Agrani Bank Limited. It is possible because it has a great linkage with the Agrani, a micro-finance institution, spreader all over the country. It has intends to set standards as the Market leader in Bangladesh. In Bangladesh Agrani has wide range of customer base and is operating efficiently in this country. Agrani has a bulk of qualified, experienced and dedicated human resources. Agrani has the reputation of being the provider of good quality services to its potential customers. This has fewer branches than its domestic competitors. It is more hierarchy-driven compared to other multi-national banks. In Bangladesh Agrani has wide range of customer base and is operating efficiently in this country. This Bank monitors its operations through a performance budget. It has a marketing intelligence unit. It conducts a program of human resources development through training and motivation and has adopted some important policy measures, including introduction of Lending Risk Analysis, suggested by the Financial Sector Reform Program. The business policies of the bank in 1990s included fulfilling capital adequacy requirements, mobilizing large amount of deposits, and making investment of assets in more profitable ways. The bank has diverted its activity toward off-balance sheet items during the last decade as a part of its strategy to increase its area of operation and non-interest based income.5.2 Recommendations: The number of exporter and importer who operate through this bank is not enough to achieve the bank goal. So ABL should offer more facilities to attract them to be their client.

In addition with the present services they should include more services. It is badly needed to provide more services to the customer in order to compete in the market. Foreign exchange department should be fully computerized that the exchange process would be convenient for both the bankers and the clients. The Bank should increase there number of branches and foreign exchange department in other branch. Because they can not compete in the market for their few number foreign exchange department.

Proper Banking software should be used to get best benefit from this department. Banking is a service-oriented marketing. Its business profit depends on its service quality. That's why the authority should always be aware about their service quality. On-line banking should be introduced for better customer services and to eliminate risk of sending document via post and risk of loss. It also increases quick fund transfer and better satisfaction from customer. Staff meetings and departmental meetings at the branch level must be increased to develop service quality as well as problem solving The bank should give an aggressive advertisement campaign to build up a strong image and reputation the potential customers.6.1 Suggestions for future strategic actions There are several recommendations have been realized from the whole internship program. Some of them mentioned below.

The banking system seemed to me as very traditional and modernization was hardly observed. Bank should keep eyes on it. Despite the good banking service, sometimes customer service was not up to the level to some extents. ABL should be engaging itself with research, survey and feedback system with its customers. As part of modern banking, their ATM booth service should be expanding. To enhance the image of the bank, ABL should be engaging itself with some social causes and responsibility.

Bank should introduce more retail products so that clients can choose among many options. The bank should go aggressive promotional activities to get a broad geographic coverage. ABL should be providing easy term and condition for account opening & any transaction to customer.

In some of the cases of Foreign Exchange operation, customers are dissatisfied. So, the banker should be more careful and sincere in customer services. The head office of the SEBL can form a committee to evaluate the customer services.

The overall Foreign Exchange service is sufficient enough but I accept as true it can be better with more workforce and further additional service for customers. References:

Agrani Bank Annual Report 2009 2010: Agrani Bank

Agrani Bank Annual Report 2010 2011: Agrani Bank

Agrani Bank Annual Report 2011 2012: Agrani Bank

Agrani Bank Annual Report 2012 2013 : Agrani Bank

Document Of Foreign exchange Department.

BOOKS:

MD. Ullah "Documentary Credit & foreign Exchange" 2nd Edition.

INTERNET:

http://www.agranibank.org/ http://www.investopedia.com/

http://en.wikipedia.org/wiki/Agrani_Bank Different dailys and web pages

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