Foreign Exchange Operations of Janata Bank Ltd

Internship Report On Foreign Exchange Operations of Janata Bank Limited (JBL)

Janata Bank Limited

Internship Report On Foreign Exchange Operation of Janata Bank Ltd (JBL)

Supervised by Md. Amdadul Hoque Chairman, Department of Finance Bangladesh University of Business & Technology (BUBT)

Submitted By Md. Alimur Razee 09102101039 21st Intake BBA Program Major In Finance

Bangladesh University of Business & Technology (BUBT) Date of Submission: December 19, 2013

DECLARATION

I declare that the report entitled “Foreign Exchange Operation of Janata Bank Limited”  embodies the results of my own effort after completion of 3 (three) months work at Janata Bank Ltd., perused under the supervisor supervisor of Mr. Md. Amdadul Hoque, Hoque, Assistant professor, professor,

Department of Finance, Finance,

Bangladesh University of Business & Technology (BUBT).

I also confirm that, this report is only prepared for my academic requirement not for any other  purpose. It has not been previously submitted to any other university/college/organization university/college/organization for an academic academic qualification/certificate/diplom qualification/certificate/diplomaa or degree.

I further affirm that the work reported in this internship is original and no part has been previously submitted to any books or in any other universities.

 _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

Md. Alimur Razee ID: 09102101039 Intake: 21st Program: BBA Major in Finance Bangladesh University of Business & Technology (BUBT)

CERTIFICATE OF SUPERVISOR

This is to certify that Md. Alimur Alimur Razee is is student of BBA program, program, ID No: 09102101039, has has successfully completed his “Internship Program” entitled “Foreign Exchange Operation of Janata Bank Limited” Limited” under my supervision as a partial fulfillment of the award of BBA degree.

He has done his job according to my supervision and guidance. He has tried his best to do this successfully. successfully. I think this program will help him in the future to build up his finer career.

I wish his success and prosperity.

Signature

 _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

Mr. Md. Amdadul Hoque Internship Supervisor Assistant Professor and Chairman, Department of Finance Bangladesh University of Business and Technology (BUBT).

Letter of Transmittal Md. Amdadul Hoque Chairman Department of Finance Bangladesh University of Business & Technology (BUBT) SUBJECT: Submission of Internship Report on Foreign Exchange Operation of Janata Bank Ltd

Dear Sir With due respect that, I am delighted to submit my Internship report on Foreign Exchange Operation Of Janata Bank Ltd  which is prepared by me. This report gives me a vast experience and

valuable knowledge of how to analyze Foreign Exchange Operation. This report has been giving me the practical implement of a theoretical knowledge. I had tried my best to collect information on this report. Finally, I would like to thank you for your valuable guidance and supportive in preparing this report. I would be grateful for any clarification when required. I will be highly obliged if you are kind enough to approve this report and provide your valuable judgment on it.

Sincerely your

 _ _ _ _ _ _ _ _ _ _ _ _ _ _

Md. Alimur Razee ID: 09102101039 21st intake Major in Finance

Acknowledgement

At beginning I will start my report by showing respect and give praise to our almighty Allah who takes care about me t o finished report successfully successfully I give thanks to our honorable teacher Md. Amdadul Hoque,  Chairman, Department of Finance of Bangladesh University of Business & Technology who gives me such a attractive prospect to make a report on “Foreign “Foreign Exchange operation” operation” as well as helped me in every step to accomplish my report and try to provide me a faire practical knowledge as should as it possible. I also will not miser to respect JBL that give me chance to obtain practical knowledge through their internship program. I thank the branch manager Md. Nurul Islam who helps me to do internship i nternship in his  branch and provide me a fear idea about practical knowledge of banking activities. I will show appreciation to Mrs. Shamshad Ara madam and Nusrat madam whose are teaches as well as suggest me to do work. Finally, I would like to thank authors of the books that I have take help from, which had made my understanding clear during the making of the report.

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Executive Summary Main objective of this report is to analyze the performance of foreign exchange operation of Janata Bank Ltd. This is descriptive in nature that has been administrated by collecting secondary data. Source of data were collected from annual report of JBL and reading material published by JBL etc. for analyzing data M.S Office and SPSS STATISTICS software ware used. This report has been shown that trend of export import and remittance increases year by year but in 2009 and 2012 the growth rate of export and import i mport got lowest due to world recession and inflationary  pressure respectively. Remittance flows are greatly affected in 2010. Operating profit has strong  positive relation with export export and import import with significant level level lower than .05remittance .05remittance also also has strong  positive relation but significant level higher than t han .05. In total national market share of export, import and remittance, JBL contribute with the proportion at 14%, 8% and 7% for export, import and remittance respectively. Huge amount of remittance come from UAE where most of Bangladeshi expatriate lives and almost 4 overseas branches are situated. Although export, import, remittance increase gradually and their relationship with profitability has strong positive relation JBL should concern that their export, import and remittance will not be fall down that’s why they can develop attractive financing packages such as Pre-Shipment and PostShipment Finance, Finance, Export Guarantee facility etc at a law rate for exporters and importers, JBL should increase strong network with the Overseas Exchange Companies and Banks in different parts of the world to ensure better remittance services for its customers and online Banking in every branch to  promote Remittance, Remittance, In case of L/C opening, Bank should provide low margin facility to clients. More Import and export item can be included JBL can provide Consulting facility by an expert

group of officials for foreign exchange, In case of payment of remittance, they should introduce debit card so that customer can withdraw money within a second at anywhere.

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Table of Contents  Part

Particulars Executive Summary

 Part one

1-4

Introduction

1.0 Introduction

2

1.1 Origin of the Report

2

1.2 Significance of the Report

2

1.3 Objectives of the report

3

1.3.1 Broad objective

3

1.3.2 Specific Objective Objectivess

3

1.4 Methodology of The report

3

1.4.1 Research design

3

1.4.2 Sources of Data Collection

3

1.4.3 Data Collection Procedure

4

1.4.4 Data Analysis and Reporting

4

1.5 Limitations

 Part Two

Page no ii

4

Organizationa Organiz ationall Profi le

5-11

2.0 An Over View of Janata Bank LTD

6

2.1 Corporate Information

6

2.2Vission of Janata Bank

7

2.3 Mission of Janata Bank

7

2.4 Core Value of Janata Bank

7

2.5 Business Prospec Prospectt of Janata Bank

7

2.6 Five Year Financial Performa Performance nce

8

2.7 Hierarchy of Janata Bank

9

2.8 Product of Janata Bank

10

Part Three

Theoretical Theoretic al Aspect

12-19

 Part Four

F oreign Ex change Ope Operr ation

20-42

4.1 Import

22

4.2 Export

30

43 Remittance

36

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Part Five

Performancee Analysis Performanc

42-59

5.1 Trend analysis

43

5.1.1 Import Finance:

43

5.1.2 Export Financing:

44

5.1.3 Foreign Remittance Remittance::

45

5.2 Income From Foreign Trade

46

5.2.1. Import Earning

46

5.2.2. Export Earning

47

5.2.3 Remittance Earnings

48

5.2.4. Comparison of Import, Export and Remittance Earnings 5.3. Correlatio Correlation n analysis

50

5.3.1 correlation between Operating profit and Export

50

5.3.2 correlation correlation between Operating profit and Import

51

5.3.3 correlation between Operating Operating profit and Remittance

52

5.4 Market Share of JBL’s in

53

total National Foreign

Exchange 5.4.1 Market Share Export of JBL

53

5.4.2 Market Share of Import of JBL

54

5.4.3 Market Share of Remittance of JBL

55

5.5 Division Wise Contribution

 Part Six

49

56

5.5.1. Division wise Contribution in Import

56

5.5.2. Division wise Contribution in Export

57

5.5.3. Division wise Contribution in Remittance

58

5.5.4. Country wise Inflow of Foreign Remittance Remittance::

59

F i ndin gs gs,, Conclusion & Re Reco commenda mmendati ti on

iv

60-63 60 -63

List of Table Table No.

Particulars

Page No.

Table: 1

Five year at a glance of JBL

Table: 2

Total Import financing of JBL

43

Table: 3

Total Export Financing of JBL

44

Table: 4

Total Foreign Remittance of JBL

45

Table: 5

Import Earning & Portion of Import Income on Total Foreign

46

8

Trade

Table: 6

Export Earning & Portion of Export Income on Total Foreign

47

Income

Table: 7

Remittance earnings & Portion of it on Foreign Trade

48

Table: 8

comparisons of Import, Export, Remittance earnings

49

Table: 9

Operating profit and Export of JBL

50

Table: 10

Correlations Correlation s between Export & Profit

50

Table: 11

Operating profit and Import of JBL

51

Table: 12

Correlation between Import & Operating Profit

51

Table: 13

Operating profit and Remittance Remittance of JBL

52

Table: 14

Correlation between Remittance & Operating Profit

52

Table: 15

Market Share of Export of JBL

53

Table: 16

Market Share of Import of JBL

54

Table: 17

Market Share of Remittance of JBL

55

Table: 18

Division wise Contribution in Import Financing

56

Table: 19

Division wise Contribution in Export financing

57

Table: 20

Division wise contribution of remittance

58

Table: 21

Division wise contribution of remittance

59

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List of Abbreviation

JBL

Janata Bank Limited

AD

Authorized Diller

TK.

Taka

L/C

Letter of Credit

SWIFT

Society for world-wide Intra-Bank Financial Telecommunication Telecommunication

ERC

Export Registration Form

CCI&E

Chief Controller of Import & Export

UCP

Uniform Customs & Practice

IRC

Import Registration Certificate

KSA

Kingdom Saudi Arabia

UAE

United Arab Emirates

USA

United States of America

T.M

Travel & Miscellaneous

IMP Form

Import Form

EXP Form

Export Form

Remt.

Remittance

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1.0 Introduction of The Report

For any business school student only curriculum activity is not enough for handling the real Business situation, there for it i s an opportunity for the students to know about the field of business through the internship program. This report is prepared on the purpose to better understand about foreign exchange operation in perspective of janata bank. Now a day’s international business has become very common activities in business and day by day it got an integrated part for doing business. In this globalization era a business organization faces worldwide competition so they have to compete for their existence and profitability that require them to engage in export and import activities and remittance for their financial transaction worldwide. Banks are the batter financial intermediaries to complete those activities.

1.1 Originating of the Report

Practical work is the best way to better understand about what is learned in theory, so after finishing my theoretical study I am sent for an internship program in janata bank and obtain practical knowledge and try to compare what I read and what I did in my internship program. For evaluating what I learned from internship program I prepare this report. I have always tried my best to reflect my experience of practical work in this report.

1.2 significant of the report This internship report is an important partial requirement of four years BBA graduation program. This is because knowledge and learning become perfect when it is associated with theory and practice. That is, student can train and prepare themselves for the job market. A poor country like Bangladesh has a huge number of unemployed educated graduates. As they have no practical experience been able to gain normal professional knowledge to establish networking, this is important in getting a job. While preparing this report, I had a great opportunity to have an in depth knowledge of all the t he foreign exchange activities of JBL. Therefore, it is obvious that the significance of internship is clearly  justified as the crucial crucial requirement requirement of four years years BBA graduation. graduation.

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1.3 Objective of the report

Objective is an important thing for different purpose. Objective helps to go in a good way that relates with the Report. Primary objective is to learn the real world experience because I have gathered theoretical knowledge of BBA program and try to match real world experience with the theoretical knowledge 1.3.1

Broad Objective

The broad objective of this report is to analyze the Performance Foreign exchange operations of Janata Bank Ltd. (JBL) 1.3.2

Specific Objectives

Furthermore, the specific objectives of this report are:To know the import, export financing procedure through JBL. To analyze the trend of import i mport and export financing through JBL. To examine the division wise import and export financing and remittance. To analyze the earnings from foreign exchange division of JBL. To show the relationship export, import and foreign remittance with profitability of Janata Bank Ltd. Assessment of the JBL’s import, Export, foreign Remittance with total national Import, Export, foreign Remittance

1.4 Methodology of the Report

1.4.1 Research design : This report is descriptive in nature which briefly reveals analyze the foreign exchange operation of Janata Bank Limited. It has been administered by collecting secondary data.

1.4.2. Sources of Data Collection: Mainly this report based on secondary sources of data. I also used some primary data to make the report more rich and informative

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Primary Source: Take expert opinion from higher officials of the bank. Observation with during the internship program.

Secondary Sources: The secondary data sources are followingAnnual Report of JBL(2007-2012) JBL(2007-2012) Website of JBL Brochures of JBL Manuals and Publications of JBL

1.4.3 Data collection Procedure: I have collected Primary data through informal discussion from concerned officer of JBL. Secondary data has been collected through different manuals, Annual report and other published papers.

1.4.4 Data Analysis and reporting: For analysis and interpretation of data some statistical tools like MS-Word, MS- Excel and MSPower point SPSS statistics software were used. 1.5 Limitation of The Study

Some limitations are faced to prepare this report. The limitations in preparing the report are described below. The main barrier of the study was insufficiency of information. Bank employee can’t provide the information due to security and other ot her corporate obligations. Due to time limitation many of the aspects could not be discussed in the present report. Learning all the functions within just 60 days is really tough. In many cases, up to date information was not published. Lack of experiences has acted as constraints in the way of meticulous exploration on the topic However, omitting the limitations, the r eport will help to understand the Foreign Exchange Operation Operation of the Bank.

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2.0 An overview of Janata Bank Limited (JBL)

Janata Bank Limited is the leading sector bank in Bangladesh offering full range of Personal, Corporate, International Trade, Foreign Exchange and Lease Finance. Janata Bank Limited is the  preferred choice in banking for friendly and personalized personalized services, cutting edge technology, tailored solutions for business needs, global reach in trade and commerce and high yield on investments, assuring Excellence in Banking Services.

2.1 Corporate Information: Name:

Janata Bank Limited

Registered Address:

Janata Bhaban, 110, Motijhil commercial commercial area Dhaka-1000, Bangladesh

Legal Status:

Public Limited Company

Date of Incorporation as PLC:

May 21, 2007

Authorized Capital:

Tk. 20,000 million (as on 31.12.12)

Paid up Capital:

Tk. 11000 million (as on 31.12.12)

No. of Branches:

Almost 884

2.2 Vision of Janata Bank Ltd: To become the effective largest commercial bank in Bangladesh to support socio-economic development development of the country and to be a leading bank in South Asia.

2.3 Mission of Janata Bank Ltd: Janata Bank Limited will be an effective commercial bank by maintaining a stable growth strategy delivering high quality financial products,  providing excellent customer service through an experienced management team and ensuring good corporate governance in every ever y step of banking network.

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2.4 Core Values of Janata Bank Limited:

Professionalism

Diversity

Growth

Core Value Of JBL

Dignity

Accountability

Integrity

Figure 1: Business Value of JBL

2.5 Business Prospect of the Bank Maintaining required capital adequacy Business expansion in capital market Gradual expansion of branch network Progressive automation of the branches Real online banking software will be in function soon Expansion of ATM and credit card

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2.6 Five Year Comparative Financial and Operational Performance: (TK in Millions) Particular

2008

2009

2010

2011

2012

Authorized Capital

8000

20000

20000

20000

20000

Paid up Capital

2595

5000

5000

8125

11000

Deposits

221336

246175

286567

361677

409767

Loans and Advances

144678

166359

225732

257801

305340

Investment

57824

72533

57514

90906

108342

Import

129413

118525

183744

197285

188283

Export

85418

88653

118515

153758

156525

Foreign Remittance

45924

56190

72285

52640

100089

Operating Profit

7003

8578

12037

15722

14534

Revenue

20922

24074

30614 3 0614

40635

49515.63

Deposit Advance Ratio

65.37%

67.58%

78.77%

71.21%

74.52%

Return on Investment

8.29%

8.24%

4.89%

7.72%

8.04%

Current Ratio

1.00

1.00

1.10

1.06

1.03

Income per Share

83.88

78.02

98.16

60.45

(148.00)

Net Profit

3145

2982

4907

4445

(16280)

No. of Branches

894

851

861

873

884

Source Annual report (2007-2012) Table1: Five year at a glance of JBL

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2.7 Hierarchy of Janata Bank Limited: Board of Director Chairman Directors

Managing Director

Deputy Managing Director

General Managers

Deputy General Managers

Assistant General Managers

Senior Principal Officers

Principal Officers

Senior Officers

Officers / Officers (Cash)

Attorney Assistants

Clerical Staff Members

Non-clerical Staff Members

Fig2: Hierarchy of Janata Bank Limited

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2.8 Product of Janata Bank Ltd: JBL has a very broad line products under the various business group, from short term to long term deposits, various types loans and advances, advances, account service, it provides finance for export and import, finance for working capital, project financing, capital investment, remittance service, trade service, foreign exchange service, cash management service, Profit & loss sharing and also has other miscellaneous miscellaneous product and services around the nation. Deposit Products: Current Deposit Account Short Term Account Saving Bank Deposit Account Fixed Deposit Monthly Saving Scheme Janata Bank Saving Pension Scheme Janata Bank Deposit Scheme Education Deposit Scheme Medical Deposit Scheme Janata Bank Monthly saving Scheme Janata bank special deposit scheme Janata bank shool banking saving karjokorom Retirement saving scheme Janata bank ltd retirement saving scheme Janata bank masik amanat prakalpa

Janata bank double benefit scheme Credit Product

Term loan Trade finance Import finance Export finance SME financing Micro credit Home loan Loan for merchant banking

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E-service

Speedy remittance western Union Money Service Automated Cleaning Internet Banking ATM banking ATM Operation Debt Card Operation Salary Card Credit Cart (Loan)

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3. Foreign Trade : Trade between two or more sovereign country is called foreign trade or international trade. This involves the exchange of goods and services between the citizens of two nations. When the citizens of one nation exchange goods and services with the citizens of another nation, it is called foreign trade; for example, India's trade with USA, Japan, France and Pakistan. Foreign trade is also known as external trade. Foreign trade transactions are classified under three categories: 

Import Trade



Export Trade



Remittance

3.1 Import Trade: Import trade refers to purchase of goods by one country from another country or inflow of goods and services from foreign country to home country.

3.2 Importer Importer/Applicant: /Applicant: An importer is one who wants to import goods from other country. In terms of the Importers (Registration) Order-1981 no person can import goods into Bangladesh unless he gets IRC with the Chief Controller of Import and Export (CCI&E). He is also called applicant. The bank opened L/C on the importer‟s application.

3.3 Export Trade : Export trade refers to the sale of goods by one country to another country or outflow of goods from home country to foreign country

3.4 Exporter: The seller or exporter is the beneficiary of the credit. The letter of credit is opened in his favor and addressed to him. The beneficiary has the obligation to make export as per the contract and produce the documents as required by the credit.

3.5 SWIFT: The Bank has become the member of SWIFT Alliance Access, a multi-branch secure financial messaging system provided by the Society for Worldwide Inter-bank Financial Telecommunication [SWIFT], Belgium. With the activation of the SWIFT system the Bank enjoys instant, low-cost, speedy and reliable connectivity for L/C transaction, fund transfer, message communication communication and other worldwide financial activities.

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3.6 Remittance: Transfer of funds, usually from a buyer to a distant seller, instrument of transfer such as a check or draft or funds so transferred. transferred.

3.6.1 Types of remittance Remittances are basically two types: 1) Local Remittance. 2) Foreign Remittance. Remittance.

1) Local Remittance Remittance is significant part of the general banking. The bank receives and transfers various types of  bills through the remittance within the country. Obviously the bank charges commission commission on the basis of bills amount. The t ypes of local remittance are:  Pay Order (PO)  Demand Draft (DD)  Telegraphic Transfer (TT)  Mail Transfer (MT)

A) Pay Order (PO) Pay Order is an instrument that contains an order for payment to the payee only in case of local  payment whether on behalf of the bank or its constitution. Unlike check there is possibility of dishonoring Pay Order.

B) Demand Draft A method used by individuals to make transfer payments from one bank account to another. Demand drafts are marketed as a relatively secure method for cashing checks. The major difference between demand drafts and normal checks is that demand drafts do not require a signature in order to be cashed.

C) Telephone Transfer T/T is a method of payment in which funds are transferred via telegraph or cable. Telegraphic transfers are most common in business conducted in countries.

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D) Mail Transfer A mail transfer or MT is like an order by a bank to its correspondent‟s bank but the instructions are sent by the mail. Therefore it takes longer time to reach its destination and sometime elapses between the purchaser paying for it and the payee receiving this payment.

2) Foreign Remittance: Foreign remittance is a transfer of money  by a foreign worker to his or her home country. „Foreign remittance‟ means purchase and sale of freely convertible foreign currencies as admissible under Exchange Control Regulations of the country.

There are two types of foreign remittances: A. Foreign Outward Remittance : The sending country, where the wage earner is located. The sender uses a bank or foreign exchange company to send money to foreign country

B. Foreign Inward Remittance : The receiving country, where the beneficiary resides. The bank receives the money that has been sent from t he sending person in the country in which the money has  been earned. earned.

3.7 Letter of Credit (L/C): Letter of Credit Credit L/C also known as Documentary Documentary Credit is a widely widely used term to make payment payment secure in domestic and international trade. Letter of credit (L/C) i s a written commitment commitment to pay, by a  buyer's or importer's  bank (called the issuing bank)  bank)  to the seller's or exporter's bank (called the accepting bank, negotiating bank, or paying bank).A letter of credit guarantees payment payment of a specified sum in a specified currency, provided the seller meets precisely-defined conditions and submits the  prescribed documents documents within a fixed timeframe. timeframe.

3.7.1 Types of Letter of Credit 1. Irrevocable Letter of Credit: It carries a definite undertaking; of the issuing bank to honour the documents drawn strictly in conformity with the terms and conditions of the credit. It cannot be amended nor cancelled without the consent of all parties concerned. concerned. Any Credit issued i ssued will be an irrevocable credit.

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2. Revocable Letter of Credit:

This credit can be amended / modified / cancelled any time by the opening bank without the consent of the beneficiary. Hence, this credit is not a safe credit from the point of view of the  beneficiary. However, in practice, this type of credit is seldom issued. Even though the credit can be cancelled any time, but the opening bank would be liable to the beneficiary for the shipments made by him prior to receipt of notice by him about the cancellation of credit by the issuing bank 3. Confirmed Letter of Credit: Confirmed Letter of Credit is a special type of L/C in which another bank apart from the issuing bank has added its guarantee.

4. Back to Back Latter of Credit The beneficiary of the export credit, who is not the manufacturer of the goods, may approach a bank to open a letter of credit in favors of the manufacturer who is ready to supply the goods. Such a letter of credit is opened on the t he strength of the export letter of credit and hence called back-to-back letter of credit. Such a documentary credit should be opened on behalf of the good exporters and suppliers.

5. Sight L/C A letter of credit that is payable once it is presented along with the necessary documents. An organization offering a sight letter of credit commits itself to paying the agreed amount of funds  provided the provisions provisions of the letter of of credit are met

3.8 Parties to Letters of Credit Applicant Applicant is the buyer of the goods or services supplied by the seller. Letter of credit is opened by the issuing bank as per applicant's request. However, applicant does not belong one of the parties to a letter of credit transaction. This is because of the fact that letters of credit are separate transactions from the sale or other contract on which they may be based.

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Beneficiary Beneficiary is the seller of the goods or the provider of t he services in a standard commercial letter of credit transaction. Letter of credit is opened by t he issuing bank in favor of the beneficiary.

Issuing Bank Issuing Bank is the bank that issues a letter of credit at the request of an applicant or its own behalf. Issuing bank undertakes to honor a complying presentation of the beneficiary without recourse. recourse.

Nominated Bank  Nominated bank is the bank with which the credit is available or any bank in the case of a credit available with any bank.

Advising Bank Advising bank is the bank that advises the credit at the request of the issuing bank. An advising bank that is not a confirming bank advises the credit and any amendmend without any obli gation to honor.

Confirming Bank: Confirming bank is the bank that adds its confirmation to a credit upon the issuing bank's authorization or request. Confirming bank may or may not add its confirmation to a letter of credit. This decision is up to confirming bank only.

Reimbursing Bank: Reimbursing Bank shall mean the bank instructed and/or authorized to provide reimbursement  pursuant to a reimburseme reimbursement nt authorization issued issued by the issuing bank.

3.9 Different Account in L/C Operation Nostro Account:  Nostro account means “our account with you”. A Nostro account is a foreign currency account of a  bank maintained its foreign correspondents correspondents abroad. For example, US Dollar Account of JBL maintained with Citibank, N.A, New York, USA is a Nostro account of JBL.

Vostro account: Vostro account means “your account with us”. The account maintained with foreign correspondent correspondent in a bank of a particular country is known as Vostro account. What is the nostro account for a bank in a

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 particular country is a Vostro account account for the bank abroad abroad maintaining the account account thus the account of JBL with City Bank N.A, New York is regarded as it‟s  Nostro account held with City Bank, while City Bank N.A, New York regards it as a it‟s Vostro account held for JBL.

Loro Account: Loro account means “their account with you”. Account maintained by third party is known as Loro account; suppose JBL is maintaining an account with City Bank N.A, New York and at the same time IBBL is also maintaining a Nostro account with City Bank N.A, New York. From the point of view of JBL IBBL‟s IBBL‟s account maintained with City Bank City Bank N.A New York is the Loro account.

3.9 Some Important Document used in Foreign Trade: 1. Indent Indent is an order placed by the importers to the exports. It contains the essential information regarding the goods to be imported i.e. quality, quantity, packing, packaging, mode of payment, insurance, price of good, etc

2. Pro-forma invoice: An abridged invoice sent by a seller to a buyer before of a shipment or delivery of goods for the final confirmation about goods/service. It notes the kind and quantity of goods, their value, and other important information such as weight and transportation charges.

3. Invoice A commercial document that is itemized a transaction between between a buyer and a seller which is prepared  by seller or exporter. An invoice will usually include the quantity of purchase, purchase, quality and price of goods and/or services, date, parties involved, unique invoice number, and tax information. If goods or services were purchased on credit, the invoice will usually specify the terms of the deal, and provide information on the available methods of payment.

4. Bill of Entry: A declaration by an importer or exporter of the exact nature, precise quantity and value of goods that have landed or are being shipped out. Prepared by a qualified customs clerk or broker, it is examined  by customs authorities authorities for its accuracy accuracy and conformity with with the tariff and regulations. regulations.

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5. Bill of Lading: A document issued by a carrier, or its agent, to the shipper as a contract of carriage of goods. It is also a receipt for cargo accepted for transportation, and must be presented for taking delivery at the destination. Among other items of information, a bill of lading contains: (1) Consignor's and consignee's consignee's name (2) Names of the ports of departure and destination (3) Name of the vessel (4) Dates of departure and arrival (5) Itemized list of goods being transported with number of packages and kind of packaging (6) Marks and numbers on the packages (7) Weight and/or volume of the t he cargo (8) Freight rate and amount.

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4.0 Foreign Exchange:

As per foreign exchange regulation act 1947 (Article 2nd) Foreign Exchange means Foreign Currency i.e. currencies other than Local Currency. It includes any instrument drawn, accepted, made or issued all deposits, credits and balances payable in any foreign currency and any draft, traveler’s cheque, letter of credit and bill of exchange expressed or drawn in Bangladesh currency but payable in any foreign currency. Many transactions with overseas countries are respects of import; export and foreign remittance come under the preview of foreign exchange transactions. International trade demands a flow of goods from seller to buyer and payment from buyer to seller. In this case the bank plays a vital role to bridge  between the buyer and seller.

The Importer (Buyer of Goods)

The Bank Third

The Exporter (Seller of Goods)

In JBL AD Branch (s) there are a lot of talented officials are working continuously with great effort, skill and teamwork are performed in this department. The Bangladesh Bank and the respected in charge (s) of this section control them. In exercise of the power conferred by section 3 of the Foreign Exchange Regulation Act, 1947 Bangladesh Bank issues license to schedule Bank to deal with exchange. These banks are known as Authorized Dealers. Licenses are also issued by Bangladesh Bank to person or firms to exchange foreign currency instruments such as T.C. Currency notes and coins. They are known as Authorized Money changers.

4.0.2 Foreign Exchange Department: There are three kinds of foreign exchange transaction t ransaction 1. Import 2. Export & 3. Remittance.

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4.1 Import

Import trade in Bangladesh is controlled under the Import and Export control Act 1950. Authorized Dealer Banks will import the goods into Bangladesh following the import policy, public notice, F.E. circular and other instructions from competent authorities from time to time. The whole import functions of the branch as far I have understood are discussed below:

4.1.1 Registration of importer i mporter In terms of the Importers, Exporters and Indenters (Registration) Order 1981, no person can import goods into Bangladesh unless he is registered with the Chief Controller of Import and Export or exempted from the provisions of the said order. So the following documents are required to be submitted to the licensing authority for registration as importers: Questionnaire form duly filled in and signed Income tax registration certificate Trade License from the Municipal or Local Authority Bank certificate  Nationality certificate Partnership Deed where applicable Certificate of Registration with the Registrar of Joint Stock Companies, Certificate from the Chamber of Commerce/Registered Trade Association Ownership documents or rent receipts of the place of business Any other documents required under the relevant import policy.

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4.1.2 Import procedure: To import through Janata Bank Ltd a customer requires:

Performa Invoice is received by the L/C applicant

L/C applicant submit it to the Bank 

Bank Issue L/C to the applicant favoring  beneficiary

L/C advised by advising Bank 

Goods shipped by Beneficiary & submit the documents to negotiate bank 

 Negotiate bank forward the documents to the L/C issuing bank.

Documents checked by L/C issuing bank & inform it to L/C applicant

If documents are ok, then L/C value is paid by L/C issuing bank to negotiate bank 

Goods release from the customs

Submission of Bill of Entry to L/C issuing Bank by the applicant

Report to Bangladesh Bank 

Figure: 3 The Import process

4.1.3 Import Policy Order: Under the import policy and export control act, 1950, the government of Bangladesh formulates the import policy through Ministry Ministry of Commerce. Commerce. As per the import policy policy goods and commodities commodities are divided into four groups 

List of items banned for import



List of items import of which is subject to certain condition



Foot Note: This list contains further conditions with regard to import of items on banned list and conditional list



Freely importable item: All items excepting those mentioned in the banned list and conditional list are freely importable.

4.1.4 Steps in an Import Letter of Credit Transaction STEP 1: The Sales Sales Contract Contract

The sales contract is the formal agreement between the buyer and seller specifying the terms of sale that both parties have agreed upon. The contract should include: a description of the goods; the amount; the unit price; the terms of delivery; the time allowed for shipment and presentation of documents; the currency; and the method of payment.

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2 Application & Agreemen Agreement: t: 1  IImport  L L/C  ((Letter  o of  C  Credit):

A letter of credit is a conditional Bank undertaking of payment. In other words letters of credit is a letter from the importer Bankers to the exporter that the bills if drawn as per terms & conditions complied with will be honored on presentation. As per UCPDC 500 a credit may be either: eit her: i)

Revocable.

ii)

Irrevocable.

The Credit, therefore, should clearly indicate whether it is revocable or irrevocable. In the absence or such indication the credit shall be deemed to be irrevocable.

2  P Parties  o of  D Credit  ((LC):  Documentary  C

1.  A A p plicant/  B Buyer /Im por ter  2. Issuing/O pening  B Bank  3.  A Advising B Bank  4.  B Benef iciar y/seller /Ex po  por ter  5. Ne  Negotiating B Bank  6.  C Conf ir ming  B Bank  7.  R  R eim bur sing/Paying B Bank 

Figur e:  P Par ties  o of  D Cr edit  Documentar y  C

3 Types of L/C: 

Commercial Letters of Credit

Commercial letters of credit are mainly used as a primary payment tool in international trade such as exporting and importing transactions. Majority of commercial letters of credit are issued subject to the latest version of UCP (Uniform Customs and Practice for Documentary Credits). The ICC publishes UCP, which are the set of rules that governs the commercial letters of credit procedures. 

Standby Letters of Credit

Commercial letters of credit are a means of payment to be utilized when the principal perform its duties. As an example, let us consider an exporter who ships the goods according to the sales contract and apply to the nominated bank for the payment. If the nominated bank decides that the presentation is conforming to the terms and conditions of the credit and the UCP rules then exporter will be paid. 24

This situation is just contrary in standby letters of credit. A payment is made to the beneficiary of a standby letter of credit when there is a breach of the principal's obligation. 

Revocable Letters of Credit

Revocable letters of credit give issuer the amendment or cancellation right of the credit any time without prior notice to the beneficiary. Since revocable letters of credit do not provide any protection to the beneficiary, they are not used frequently. In addition, UCP 600 has no reference to revocable letters of credit. All credits issued subject to UCP 600 are irrevocable unless otherwise agreed  between the parties. 

Irrevocable Letters of Credit

Irrevocable Letters of Credit cannot be amended or cancelled without the agreement of the credit  parties. Unconfirmed irrevocable letters of credit cannot be modified without the written consent of  both the issuing bank and the beneficiary. beneficiary. Confirmed irrevocable irrevocable letters of credit need also confirming confirming  bank's written consent in order order any modification or cancellation to be be effective. 

Local or Back to Back L/C:

Back -to -back L/C means one credit backs another. It is new credit in favor of another beneficiary. Sometimes beneficiary seller of a credit himself is unable to supply goods specified in the L/C and required to purchase from another supplier by opening second credit. Besides, the formalities and requirements for (L/C opening) the following formalities and documents are also required for opening  back-to-back L/C.

For opening L/C the client is to submit to the bank an application in the printed format of the designated bank. This is called L/C application form which is also an agreement between the importer and the bank. The form is to be stamped under stamp Act. in force in Bangladesh. The importer must submit the LCA & IMP and indent or contract. Purchase order/pro-forma invoice (duly accepted by the importer) along with L/C application. Application for opening of L/C duly signed by the importer, Membership certificate from Chamber of commerce or any other recognized business association, Valid IRC,TIN certificate, Three copies of declaration stating that that income tax for previous year has been paid or income tax return has been submitted, Trade license ,Vat registration certificate, Valid indent/pro forma invoice, Insurance cover note with money receipt, Any other permit if required as per instruction issued by CCI & E time to time under present IPO.

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The L/C application must be completed/ filled in and signed by the authorize person of the importer giving the following particulars:

Full name and address of the supplier of beneficiary and importer, brief description of the goods, L/C value for US$, etc. (CFR value) which must not exceed the LCA value, the unit price, quantity quality of the goods, Origin of the goods, port of loading and port of destination must be mentioned, Model of shipment (Sea, Air, Truck or Rail etc.),List date of shipment and negotiation time (must not be  beyond 30 days from the shipment date),Insurance cover note number and name or the company, Tenor of draft (1.e, sight/ issuance/ deferred etc, Mode of advising L/C (i.e. airmail/ full telex short cable etc.),Opening of L/C under UCPDC publication No. 500/- ICC revision 1993, Whether shipment/ transshipment is allowed, Instruction to add confirmation if required, LCA Number, Any other relevant information and instruction if any must be mentioned in the L/C application form. A written application from opener is verified a relevant license/ LCA/ permit of the loan/ Barter must remain valid up to that period the extension is sought. Increase of L/C amount may be done provided the LCA covers the increase in amount. L/C amount can be decreased provided the relevant Indent is amending accordingly and with the consent of beneficiary. Each of clauses of the L/C can be amended  provided the parties involve the L/C consent to it procedure or preparation and dispatch. Amendment is to be typed in the Banks printed format. The copies of the amendment must be dispatched to all concerned as done in dispatching the L/C. Amendment be kept in the L/C file chronologically date wise.

Step 3: L/C contains mainly mainly the following instruction: instruction: Issuing bank name and address, LC number, Date and place of Issue, Advising bank name and address, Beneficiary’s name and address, LC amount, Tenor and and availability of credit, Last date of shipment, Number of days allowed for negotiation, Date of expiry and place of presentation, Description of goods, Port of shipment and port of delivery, Mode of transportation, Instruction for negotiation bank, Reference of UCPDC, Signature of the authorized office of issuing bank 

Step 4: Preparat Preparation ion of L/C Proposal: Proposal: After checking all documents and other relative facts if the desk official gets satisfaction in all respects he will prepare the LC proposal in pre-audit memo and place the same to higher authority for approval.

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Step5: Transmissio Transmission n of LC LC:: Then transmission of L/C is done through tasted telex, fax or SWIFT to advice the L/C to t he advising  bank. The advising banks verify the authority of the L/C. JBL has corresponding relationship or arrangement throughout the world by which the L/C is advised. Actually the advising bank does not take any liability if otherwise not requested.

Mail L/C the L/C which is mailed by Beneficiary Form of L/C SWIFT L/C the L/C which is automatically sent to Beneficiary Figure: Types of L/C form Step6: Advising: The advising bank forwards the letter of Credit to the beneficiary (seller) stating that no commitment is conveyed on its part. However, if the advising bank has been asked to confirm the letter of Credit and agrees to do so, it will incorporate a clauseundertaking clause undertaking to honor the beneficiary’s drafts, provided the documents evidence that all terms and conditions of the letter of Credit have been complied with.

Step 7: Adding Confirmatio Confirmation n The confirming bank does the confirmation. Confirming bank is a bank, which adds its confirmation to the credit and it is done at the request of the issuing bank. The confirming bank, May or May not advising usually, does not do it if there is not a prior arrangement with the issuing bank. By being involved as a confirming agent, the advising bank undertakes to negotiate beneficiary’s bill without recourse to him. Before confirming, it has to observe followings-

L/C is issued and there is a request to add confirmation Review the L/C terms Provide reimbursement Drafts to be drawn on L/C opening bank Availability of credit facilities Line allocation from the business and ownership units in the importer’s country Confirm and advise L/C

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Step8: Amendments of letter of credit After issuance and advising of a L/C, it may be felt necessary to delete, add or alter some of the clauses of the clauses of the credit. All these modification are communicated to the beneficiary through the same advising bank of the credit. All these modifications are communicated to the  beneficiary through the same advising bank of the credit. Such modifications to a credit are termed as amendment to a letter of credit. There may be some of the conditions in a credit are not acceptable by the beneficiary. In that case, c ase, beneficiary contact applicant and request for amendment a mendment of the clauses. The issuing bank has to be done the followings  – 

Obtain written application from the applicant of the credit duly singed and verified by bank. Confirm that, in case of increase of value, application for amendment is to be supported by revised indent/pro-forma invoice evidencing consent of the  beneficiary; Ensure, in case of extension of shipment period, that relative LCA is valid/ revalidated/ increased up to the period of proposed extension. Confirm that amendment of insurance cover note also be submitted in case of  both credit amount and shipment shipment period extension amendment. amendment. Maintain proper recoding and filing of amendments; Recover charges for amendment (if on account of applicant) and pass necessary voucher. The following clause of L/C and increase/decrease of quality of goods-

Increase/ decrease value of L/C and Increase/decrease of quality of goods. Extension of shipment/negotiated period. Terms of delivery, i.e. FOB, CFR, CIF etc. Mode of shipment Inspection clause  Name and address of of the supplier  Name of the reimbursing reimbursing  Name of shipping etc Step9: Presentation of Document.

The seller is being satisfied with the term and condition of the credit make shipment of the goods as  per L/C. After making the shipment of the goods in favor of the importer to exporter submits the documents to the negotiating bank

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After receiving all document, the negotiating bank then check the documents against the credit. If the documents are found in order, the bank will pay, accept, or negotiate to JBL. Branch and bank receive seal to be affixed on the forwarding schedule. The bill of exchange and transport documents must immediately be crossed to protect loss or fraudulent JBL checks the document the usual document are 

Invoice



Bill of lading



 Non-negotiable copy of bill of lading



Certificate of origin



Packing list



Shipping Advice



Beneficiary certificate



Bill of Exchange



Pre-shipment inspection report



Shipment certificate.

Step 10: Settlement of letter of credit

Settlement means fulfillment of issuing bank in regard to affecting payment subject to satisfying the credit terms. Settlement may be done under three separate arrangements as stipulated I the credit. Step 11: Settlement by by payment: payment:

Here the seller presents the documents to the nominated bank and the bank scrutinizes the documents. If satisfied, the nominated bank makes payment to the beneficiary and in case, this bank is other than the issuing bank, it sends the documents to the issuing bank and claim reimbursement as par arrangement. Step12: Settlement by Acceptance:

Settlement in this arrangement, the seller submits the documents evidencing the shipment to the accepting bank (nominated by the issuing bank for acceptance) accompanied by draft down on the  bank at the specified tenor. Step 13: Settlement by by negotiation: negotiation:

This settlement procedure stars with the submission of documents by the seller to the negotiation restricted by the issuing bank, only nominated bank can negotiate the documents. A factor scrutinizing that the documents meet the credit requirement, the bank may negotiate the documents and give value to the beneficiary. The negotiating bank then sends the documents to the issuing bank. As usual, reimbursement will be obtained in the pre agreed manner. 29

4.2 Export

Mainly Export L/C is the confirming from the Bank that, if the importer fails to make payment to the exporter, then the bank will pay the exporter on behalf of the importer. The exporter can lien the L/C to bank and can get the payment before the L/C expire date.

4.2.1 Export L/C: L/C which is received to export/sale of goods from one country to another country or one place to another place within a country) is known as export L/C. it may be received from any bank of foreign country, local bank, another branch of the same local bank or received by the export desk from the import desk of the same bank. Exporters are allowed to export the t he commodity under irrevocable letter of credit. Under this type of export, exporter will ship the goods as pr terms of the credit and will get  payment as per arrangement arrangement of the credit.

L/c comes from the exporter 

Take the charge & Give the L/C value to the exporter 

Check the relevant document

Check the credit worthiness of importer 

Forwarding the L/C & add it to FDBP register 

Advice the L/C

Payment comes from the Importer to the  bank  Figure: 4 Export L/C process

4.2.2

Obtaining Export Registrat Registration ion Certificate (ERC):

 No exporter is allowed to export any commodity for export from Bangladesh unless he is registered with Chief Controller of Imports and Exports (CCI & E) and holds valid Export Registration Certificate (ERC). After applying to the CCI&E in the prescribed from along with the necessary  papers, concerned offices of the Chief Controller Controller of Imports and Exports Exports issues ERC. Once Once registered, exporters are to make renewal of ERC every year.

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4.2.3

Securing Export Order

After getting the ERC the exporter may proceed to secure the export order. He can do this by contacting the buyers directly or through agent. In this purpose exporter can get help from Liaison office, Buyer’s local agent, Export promotion, Organization, Bangladesh mission abroad,Chamber abroad, Chamber of commerce (local and foreign), Trade fair etc. 4.2.4 Obtaining EXP Form:

After having the registration, the exporter applies to Janata Bank Limited with the trade license, ERC and the Certificate from the concerned Government Organization to get EXP. If the bank is satisfied, an EXP is issued to the exporter.

4.2.5 Signing of the contract: After communicating with buyer the exporter has to get contracted for exporting exportable items from Bangladesh detailing commodity, quantity, price, shipment, insurance and mark, inspection, arbitration etc.

4.2.6 Receiving Letter of Credit After making contact with foreign buyers and reaching on agreed price and terms, conditions the exporters receive Letter of Credit.

4.2.7 Procuring the materials: After making the deal and on having the L/C opened in his favor, the next step for the exporter is to set about the task of procuring or manufacturing the contracted merchandise.

4.2.8 Endorsement on EXP: Before the exporter with the customs or postal authorities lodges the export forms, they should get all the copies endorsed by Janata Bank Limited. Before shipment, exporter submits EXP. form with commercial invoice. Then Janata Bank’s respective officers check it properly, if satisfied, certifie the EXP. Without EXP exporter cannot make shipment. The customer must declare all export goods on the EXP issued by the authorized dealers

4.2.9 Disposal of Export procedure Original:  Customs authority reports first copy of EXP to Bangladesh Bank after shipment of

the goods. Duplicate:  Negotiating bank reports the Duplicate to Bangladesh Bank in or after negotiation date but

not later than 14 days from the date of shipment. 31

Triplicate: On realization of export proceeds the same bank to the same authority reports Triplicate. Quadruplicate: Finally, the negotiating bank as their thei r office copy retains Quadruplicate.

4.2.10 Shipment of goods :  Exporter makes shipment according to the terms and condition of L/C. While shipment and after shipment the exporter should obtain or prepare the following documents: 

EXP Form



Photocopy of registration certificate



Photocopy of the contract



Photocopy of the L/C



Customs copy of ERF Form for shipment of jute goods and EPC Form for raw jute



Freight certificate from the bank in case of payment of the freight at the port of lading is involved



Bill of Lading, Railway receipt, Postal receipt, Air way bill or Truck receipt



Packing list



Certificate of origin



Shipping instructions



Insurance policy.

4.2.11 Presentation of export documents for negotiation :  After shipment, exporter submits the following documents to Janata bank Limited for negotiation. 

Bill of Exchange or Draft



Bill of Lading



Invoice



Insurance Policy/Certificate



Certificate of origin



Inspection Certificate



Consular Invoice



Packing List



Quality Control Certificate



G.S.P. certificate



Photo 32

4.2.12 Examination of Document: Banks deal with documents only, not with commodity. As the negotiating bank is giving the value before repatriation of the export proceeds it is advisable to

scrutinize

and examine

each

and every document with great care ca re whether any discrepancy(s) is observed in the documents. The bankers are to ascertain that the documents are strictly as per the terms of L/C Before negotiation of the export bill. Bank officers assigned for examining the export documents may use a checklist for their convenience.

4.2.13 Negotiation of export documents:  Negotiation stands for payment of value to the exporter against the t he documents stipulated in the L\C. If documents are in order, Janata Bank Limited purchases (negotiates) the same on the basis of  banker- customer relationship. This is known as Foreign Documentary Bill Purchase (FDBP).If the  bank is not satisfied with the documents submitted to Janata Bank Limited and gives the exporter reasonable time to remove the discrepancies or sends the documents to L/C opening bank for collection. This is known as Foreign Documentary Bill for Collection (FDBC).

4.2.14 Settlement of Local Bills: The settlement of local bills is done in the following ways, 

The customer submits the L/C to Janata Bank Limited along with the documents to negotiate



Janata Bank Limited officials scrutinize the documents to ensure the conformity with the terms and conditions.



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



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



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

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4.2.15 Modes of Payment The most common methods of payment under a L/C are as follows:

Payment methods under L/C

Deferred Payment Credit

Sight or Payment credit

Negotiation Credit

Acceptance Credit

Figure: Modes of Payment Sight or Payment credit

When the credit stipulates that drafts (bill of exchange) should be drawn under it on DP terms involving payment to the beneficiary on presentation of documents, it is known as a “Sight or Payment Credit”. In this credit the issuing bank nominates a bank in the exporter’s country as the  paying bank. If the paying bank accepts its it s nomination, its position is that of an agent of the issuing  bank. When the documents under the credit are presenter to it, it pays the beneficiary provided all the t he terms and conditions of credit have been complied with. It gets reimbursement from the issuing bank for the amount paid. Deferred Payment Credit

The term “Deferred” means postponed to a future period or date. When a credit does not require the  payment to the beneficiary immediately on presentation of the documents but after a specified period has elapsed, it is known as “Deferred Payment Credit”. According According to this type of credit, the payment is hot made in full on the tender of documents but by installments at pre-determined future dates.

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Deferred payment credit may be used where the beneficiary wishes to allow the importer time to pay for the document. Acceptance Credit

When under the terms of a letter of credit drafts are drawn on DA terms involving payment to the  beneficiary on the maturity of the accepted Bill of Exchange drawn under it, the letter or credit is referred to as an “Acceptance Credit” or a “Term Credit”. In this form of credit the beneficiary draws a draft for particular usance (e.g. 30, 60, 90 days sight or even longer), payable upon either the correspondent bank or the issuing bank. Negotiation Credit

In a negotiation credit the documents are accompanied by a sight draft (bill of exchange). The bill of exchange may be drawn on the issuing bank or the importer or any other bank stipulated in the credit. The bank, which negotiates documents under the credit, purchases the bill of exchange and pays the amount to the beneficiary who tenders the documents. The issuing bank reimburses the negotiating  bank

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4.3 Remittance

Remittance means sending or transfer money or money-worth from one place to another The word Remittance originates from the word remit which means to transmit money/ fund. In banking terminology, the work remittance means transfer of fund one place to another. When money transferred from one country to another is called Foreign Remittance. Foreign remittance of JBL may be classified into:

Inward Foreign Remittance Outward Foreign Remittance

Remittance

Inward Remittance

Outward Remittance

Figure: Types of Remittance of JBL

4.3.1 Instruments of Foreign Remittance Cash: Dollar, Pound, France Fr. Riyal or any other ot her currency. T.C.: Travelers Cheque. F.D.D: Foreign Demand Draft. F.T.T: Foreign telephonic Transfer T.T: Telegraphic Transfer, Cable transfer or swift transfer. M.T: Mail Transfer. I.M.O: International Money Order. Cheque: By any person & institution. P.O: Payment Order D.D: Demand Draft O.B.C: Outward Bill Collection I.B.C: Inward Bill Collection

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4.3.2 Inward Remittance Remittance:: Inward Foreign Remittance Means Remittance received from foreign countries from abroad. In other words remittance coming into our country from other countries by the remitter by way of permissible  banking channel c hannel through freely freel y convertible Foreign Currencies C urrencies is called Inward Foreign Remittance i.e. payless point of view it is inward foreign remittance. On the other hand remitter’s point of view it is called outward Foreign Remittance. Two forms as prescribed by Bangladesh Bank are used for purchase of Foreign Currencies such asEXP Form: Form: Remittances received against exports of goods from Bangladesh are done

 by form EXP. Form C:  Inward remittances equivalent to US$2000/- and above are done by Form”

C”. However, declaration in Form C is not required in case of remittances by Bangladesh Nationals working abroad. Utmost care should be taken while purchasing Currency Notes, Travelers cheque, Demand Draft & similar Instrument for protecting the bank from probable loss as well as safety of the Bank officials concerned.

4.3.3 Mode of Inward Remittance of JBL : T.T. = Telegraphic transfer D.D. = Demand Draft I.M.O. = International Money Order M.T. = Mail Transfer T.C. = Travelers Cheque

4.3.4 Outward Remittanc Remittance: e: The remittance when we sent to abroad is called outward remittance.The remittance. The term “Outward remittances” include not only remittance i.e. sale of foreign currency by TT. MT, Drafts,Traveler’s Drafts, Traveler’s cheque but also includes payment against imports into Bangladesh & Local currency credited to Non-resident Taka Accounts of Foreign Banks or Convertible Taka Account. Two forms are used for Outward Remittance of foreign Currency such as IMP Form: All outward remittance on account of Imports is done by form IMP. T.M. Form: For all other outward remittances form f orm T.M. is used.

4.3.5 Mode of Outward Remittance: Outward remittance may be made by T.T, D.D, M.T, T.C etc payment of import bills are also included as outward remittance. 37

4.3.6 Remittance Chain: 4.3.6.1 Step-1 (Remittance Sending Process): Remittance rush to the bank/exchange house nearest to their residence /work place. Fill in the application form (in the case first time ti me remittance)/submit membership card. Go to tellers, deposit form and currency. c urrency. FDD:: FDD

Teller make FDD Hand over to the remittance for sending the t he same to the beneficiary Send to beneficiary’s bank branch through courier. FTT:

Teller prepare FTT massages Send soft copy to their processing unit at head office. Deliver one copy of the massage to the t he remitter for remittance. Processing and Sending:

Processing unit at head office compiles messages Sends to the drawee banks.

4.3.6.2 Step-2 (Remittance Receiving Process): FDDs:

Drawee branch receive FDDs from beneficiary or through courier. Make payment of FDDs drawn on the branch Send FDDS for collection that are drawn on their banks/branches. Credit proceeds of FDDs upon collection. Send IBDAs to head office. FTTS:

Processing unit at head office processes FTT massages Sends T.Ts to the branches. Branches make payment of own remittances. Issue and send payment order to the branches of other banks beneficiaries. Spot Cash payment:

Branches receive secret number from the beneficiary Download remittance masseges from web application of concerned institution. Get an application form filled in by the beneficiary. Ensure identity of the beneficiary. Make cash payment to the beneficiary. 38

Send IBDAs to head office.

4.3.7 Remittance Product/Ser Product/Service vice of JBL: Foreign Remittance Foreign remittance section of Janata Bank Ltd. is an integral part of Foreign Exchange Department. And this section of Foreign Exchange Department deals with Inward foreign remittance Outward foreign remittance Opening Foreign Currency Accounts. Governing Wage Earner’s Bond. Opening Student File etc. Medical Purpose Ravels Purpose

Inward Foreign Remittance:  Normally, Inward Foreign Remittance comprises all incoming foreign currencies. Remittances issued  by the correspondent banks situated in the foreign countries and thereby drawn on Janata Bank, are ar e considered to be its Inward Foreign Remittances. Followings are the Inward Foreign Remittances, FDD Payable FTT Payable TC Payable Purchase of foreign currencies.

Outward foreign Remittances: Remittances issued by Janata Bank to their foreign f oreign correspondents to fulfill their customers’ needs are considered to be the Outward Foreign Remittances. It comprises the followings: FDD Issued FTT Issued TC Issued Endorsement of foreign currencies in the passport. Sale of foreign currencies.

39

Foreign Demand Draft (FDD) Issued: People used to send money abroad for various purposes. JBL issues most of the FDD for the purpose of payment of the application fees to the foreign universities. universities. For the issuance issuance of FDD; T/M Form has to be filled up duly. This form is filled up under the Foreign Exchange Regulation Act, 1947. This form contains The purpose of travel,  Name of the country where where the applicant will go,  Name of the air or shipping shipping company, Passport number, Signature, name & address of the applicant Traveler’s Cheque

(TC) Issued:

JBL issues only American Express Traveler’s Traveler’s Cheque (TC). For TC, customer customer has to fill up T/M form. He has to fill up the purchase form also. For TC, JBL charges commission.

Procedure for issuing TC There are some requirements that are to be fulfilled by the Traveler’s  Traveler’s  Cheque purchaser. The requirements are: 1. The client must be an account holder or proper reference from the bank is required 2. The passport must be a valid one 3. Air ticket has to be confirmed 4. Passport holder must be present physically

Steps involved in issuing of TC: 1. After verifying all these documents the customer is asked to fill up prescribed application

form. 2. In the application the customer states the amount he is willing to endorse and it is to be

verified that his required amount is within the stipulated. 3. Then the customer pays cash or by debiting his account the Traveler’s Cheque Traveler’s Cheque is issued. 4. Endorsement is given on the passport and on the ticket. Customer fills up the T/M Form. 5. Purchased application form has to be filled up by the purchaser. 6. Entry has to be given in the Foreign Currency Currency Register and in the Traveler’s Cheque Traveler’s Cheque Register.

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Following Documents must be retained form the clients: Photocopy of passport T/M form (Travel & Miscellaneous) Others Copy of government order (in case of government employee) Copy of invitation letter if issuance is against conference/training quota

Endorsement of Cash: Cash foreign currency can also be remitted through the cash endorsement in the passport. In case of endorsing cash in the passport, the requirements are similar to those of Traveler’s  Traveler’s  Cheque. But according to the foreign exchange Regulation Act, 1947 an individual cannot take more than $1500.00 in cash in a year. That’s why; the concerned officer checks the last voyage of the purchaser. If he/she made any voyage and if he/she purchased dollar at that time, then the officer will deduct the amount and will give the rest to the purchaser. JBL cannot endorse more than $1500.00 as cash at a time. For more than $1500.00, the customer has to purchase TC. For cash endorsement SEBL maintains a separate register. For giving cash foreign currency, JBL charges Tk. 200.00 as service charge per passport.

Foreign TT Payable: Foreign remittance section also pays the claim of the foreign TT. After receiving TT payable, SEBL  performs the following functions: 1. Customer has to fill up a “C Form” if the amount exceeds $2000.00. “C Form” describes the  purpose of sending the TT. 2. The dollar amount comes to the Head office of JBL through American Express, New York. 3. JBL, branch sells the dollar to Head Office and collects the money in local currency.

Student File Opening: Student can endorse $200.00 at a time in his own name. But if the amount exceeds $200.00, then the student has to open a student student file. For opening a student student file, the following documents documents are required: Preliminary application and information for admission. Letter of approval by the university of the student. A filled-in application form for foreign currency in abroad. Transcript of Records” given for the last degree by the university. Certificate given by the Board for S.S.C. / H.S.C. or equivalent examination. A photocopy of I-20 form 41

42

5.0 Trend analysis

5.1.1 Import Finance: Year

2008

2009

Import Finance (In Million Tk)

129413

118525

Growth (%)

54%

-8%

2010 183744 55%

2011

2012

197285

188284

7%

-5%

Source: Annual Report of JBL (2008-2012) Table2: Total Import financing of JBL Graphical Presentation:

Import Financing (In Million) Import Financing 250000 200000 150000

183744

197285

188284

129413

118525

2 00 8

2 00 9

2 0 10

2 01 1

2 01 2

1 29 41 3

11 8 52 5

18 3 74 4

1 97 28 5

1 88 2 84

100000 50000 0 Import Financing

Figure 5: Total Imports Financing of JBL

Import Growth (%) 60% 40% 20% 0% -20% Import Growth

Import Growth 55%

54%

7% -8%

-5%

2 00 8

2 0 09

20 1 0

2 01 1

20 12

54%

-8%

55%

7%

-5%

Figure 6: Imports Financing Growth Rate of JBL Interpretation: From the trend analysis it has seen that the amount of import financing though JBL

has increased over over the years except in2009 and 2012. The import financing negative growth in 2009 and 2012

43

5.1.2 Export Financing: Year

2008

Export Business

2009

85418

2010

2011

2012

88653

118515

153758

156525

4%

34%

30%

2%

(In Million TK) Growth (%)

19%

Source: Annual Report of JBL Table 3: Total Export Financing of JBL Graphical Presentation

Export Financing (In Million) Export Financing 200000 150000

153758

156525

118515

100000

85418

88653

20 08

20 09

2 0 10

20 11

20 1 2

8 541 8

8 86 5 3

11 85 1 5

1 53 75 8

15 6 525

50000 0 Export Financing

Figure 7: Total Exports Financing of JBL

Export Growth (%) Export Growth 34%

40% 30%

30%

19%

20% 4%

10%

2%

0% 20 08

2 0 09

20 1 0

2 0 11

20 1 2

19 %

4%

34%

30%

2%

Export Growth

Figure: 8 Exports Financing Growth Rate of JBL Interpretation: From the trend analysis it has seen that there is an increasing trend in amount of export financing of JBL over the years of analysis. The export financing has increased from TK 85418 (million)  in 2008 to Tk   156525  (million) in 2012.But the export financing growth rate was

fluctuating over the year.

44

5.1.3 Foreign Remittance: Year

2008

2009

2010

2011

2012

Remittance(In Million TK)

45924

56190

52640

72285

100089

Growth (%)

25%

22%

-6%

37%

38%

Source: Annual Report of JBL (2007-2012) Table: 4 Total Foreign Remittance of JBL J BL Graphical Presentation:

Remittance (IN Million) Remittance 150000 100089 100000

72285

56190

52640

20 0 8

20 0 9

2 0 10

2 0 11

2 01 2

4 5 92 4

5 6 190

5 26 40

7 22 85

10 00 8 9

45924 50000 0 Remittance

Figure: 9 Foreign Remittance Performance of IBBL

Remittance Growth (%) Remittance Growth 60% 40%

25%

37%

38%

22%

20%

-6%

0% -20% Remittance Growth

20 0 8

2 00 9

2 01 0

2 01 1

2 01 2

25%

22%

-6%

37 %

38%

Figure: 10 Foreign Remittance Business Growth Rate Interpretation: From the trend analysis it has seen that the Foreign Remittance of JBL was

increasing year to year. Highest Remittance was found during the year in 2012that was Tk 100089 million which was higher than previous years. The foreign remittance growth rate was high in 2012.

45

5.2 Income From Foreign Trade

5.2.1. Import Earning and Portion of Import earnings on Total Foreign Trade Earnings: Year

2008

2009

2010

2011

2012

Total Earnings From Foreign Trade

2852.9

3417.69

4035.1

5149.21

5835.13

Import Earning (In million TK)

1235.47

1590.6

1995.77

2287.35

2515.49

43%

47%

49%

44%

43%

Portion of Import Earnings

Source: Annual Report of JBL (2008-2012) Table 5: Import Earning & Portion of Import Income on Total Foreign Trade Graphical Presentation:

Import Earnings Import Earnings 3000 2287.35

2500

1995.77

2000 1500

2515.49

1590.6 1235.47

1000 500 0 Import Earnings

2 00 8

20 0 9

2 01 0

2 0 11

2 012

1 2 3 5. 4 7

1 5 90 . 6

1 9 9 5. 7 7

2 2 8 7. 3 5

25 15 . 4 9

Figure 11: Earning from Import of JBL

Interpretation: From the trend analysis it has seen that the earning from import was gradually

increasing while the highest earning from import of JBL obtained in the year 201.Every year performs  better than previous previous year.

46

5.2.2. Export Earning & Portion of Export Income on Total Foreign Trade Earnings: Year Total Earn in gs F rom Foreign Foreign Trade  Export Export Earni ng  (In mill ion ion TK) 

Portion of Export Earnings

2008

2009

2010

2011

2012

2852.9

3417.69

4035.1

5149.21

5835.13

1050.6

1125.64

1543.36

1991.86

2139.3

37%

33%

38%

39%

37%

Source: Annual Report of JBL (2008-2012) Table: 6 Export Earning & Portion of Export Income on Total Foreign Income Graphical Presentation:

Export Earnings Export Earnings 2500 1991.86 2000 1500

2139.3

1543.36 1050.6

1125.64

2 008

2 00 9

2 01 0

2 01 1

2 01 2

10 5 0 . 6

1 1 2 5. 6 4

1 54 3 . 3 6

19 91 . 8 6

2 1 39 . 3

1000 500 0 Export Earnings

Figure 12: Earning from Export of JBL

Interpretation: From the trend analysis it has seen that the earning from export is in rising trend from

2008 to 2012. In 2012, export earnings were the highest. Export earnings performance performance is not awful

47

5.2.3

Remittance Earnings and Portion of

Remittance on Total Gain of Foreign Trade Trade

Incpme:-

Year

2008

2009

2010

2011

2012

Total Earnings From Foreign Trade

2852.9

3417.69

4035.1

5149.21

5835.13

Remittance Business (In million TK)

566.83

701.45

495.97

870

1180.34

20%

21%

12%

17%

20%

Portion of Remittance

J BL (2008-2012) Source:  Annual Report of JBL Table: 7 Remittance earnings & Portion of it on Foreign Trade

Gr aphical Pres Prese entati on: 

Remittance Earnings Remittance Earnings 1400 1200

1180.34

1000 870

800 600

701.45 566.83

495.97

400 200 0 Remittance Earnings

20 08

20 0 9

2 0 10

2 011

201 2

5 6 6 . 83

7 0 1. 4 5

4 95 . 9 7

87 0

1 1 8 0. 3 4

Figure 13: Remittance on Foreign Trade

Interpretation: From the trend analysis it has seen that the earning from remittance is in rising trend

 but in 2010 the earnings fall dawn to t o 495.97 million from its i ts previous year and after that the trend rising again upward. In 2012, remittance r emittance earnings earnings were the highest

48

5.2.4. Comparison of Import, Export and Remittance Earnings: Proportion of Export Income

Proportion of Import Income

Proportion of Remittance Income

39%

42%

20%

37%

43%

20%

33%

47%

21%

38%

49%

12%

39%

44%

17%

37%

43%

20%

Source: Annul report of JBL Table: 8 comparisons of Import, Export, Remittance earnings Graphical presentation:

Earning Parcentage of Export Import & Remittance 60% 50% 40% 30%

42% 39%

20%

43% 37%

47%

49% 38%

44% 39%

33%

20%

21%

20%

12%

17%

43% 37% 20%

10%

Propotion of Export Income Propotion of Import Income Propotion of Remittance Income

0% 1

2

3

4

5

6

Figure: 14 earning percentage percentage of Import, Export, Remittance Interpretation: From the last five years analysis it has seen that JBL earnings from import financing

were highest, and bank earns also from export financing significantly and earnings from remittance section were fluctuating trend. .

49

5.3.0Correlation 5.3.0Corre lation analysis: Profit vs. Remittance, Export, and Import

Calculation measures: measures: Its calculation measure measure following: following: 

If the result are between 0.00 to 0.25 than, it measure that Profit and remittance are poorly correlated. That means the change in one taka remittance profit will changes will 0.25 taka or lower.



If the result are between 0.25 to 0.50 than, it measure measure that Profit and remittance have have medium correlation.



If the result are between 0.50 to 0.75 than, it measure that Profit and remittance have good correlation.



If the result are between 0.75 to 1.00 than, it measure that profit and remittance have very good correlation.

5.3.1 Coefficient correlation between Operating profit and Export: Year Export Operating Profit

2008

2009

2010

2011

2012

85418

88653

118515

153758

156525

7003

8578

12037

15722

14691

Table 9: Operating profit and Export of JBL

Correlations

Export Pearson Correlation Export

1

Sig. (2-tailed)

**

.981

.003

N Pearson Correlation Operating profit

Operating profit

5

5

**

1

.981

Sig. (2-tailed)

.003

N

5

5

**. Correlation is significant at the 0.01 level (2-tailed). Source: SPSS Statistics Table: 10 Correlations between Export & Profit Interpretation: The Pearson correlation “r=.981” so we can say that the operating profit and export have very strong positive relation and have .01 significant level

50

5.3.2 Coefficient correlation between Operating profit and Import: Year Import Operating Profit

2008

2009

2010

2011

2012

129413

118525

183744

197285

188284

7003

8578

12037

15722

14691

Table 11: Operating profit and Import of JBL

Correlations

Import Pearson Correlation Import

1

Sig. (2-tailed)

*

.937

.019

N Pearson Correlation Operating Profit

Operating Profit

5

5

*

1

.937

Sig. (2-tailed)

.019

N

5

*. Correlation is significant at the 0.05 level (2-tailed). Source: SPSS Statistics Table 12: Correlation between Import & Operating Profit

Interpretation The Pearson correlation

“r=.937”

so we can say that the operating profit and import have very

strong positive relationship and the correlation is significant at .05 level.

51

5

5.3.3 Coefficient correlation between Operating profit and Remittance: Year Remittance Operating Profit

2008

2009

2010

2011

45924 7003

2012

56190

52640

72285

100089

8578

12037

15722

14691

Table 13: Operating profit and Remittance of JBL

Correlations

Remittance Pearson Correlation Remittance

Operating Profit 1

Sig. (2-tailed)

Operating Profit

.756 .139

N Pearson Correlation

5

5

.756

1

Sig. (2-tailed)

.139

N

5

Source: SPSS Statistics Table 14 Correlation between Remittance & Operating Profit Interpretation: The Pearson correlation

“r=.76”

so we can say that the operating profit and export have strong

 positive relationship but but their significant level is large than than .05 level.

52

5

5.4 Market Share of Export, Import, & Remittance in total National Export, Import & Remittance

5.4.1 Market Share of JBL ’s Export in Total National Export: Year

JBL's Export

National Export

Market Share of JBL

2007

71855

850309

8%

2008

85418

985931

9%

2009

88653

1074992

8%

2010

118515

1021482

12%

2011

153758

1134589

14%

Table15: Market Share of Export of JBL

Graphical Presentation

Market Share of Export Market Share of Export 16%

14%

14%

12%

12% 10%

8%

9%

8%

20 0 7

2 0 08

2 00 9

2 010

2 01 1

8%

9%

8%

12%

14%

8% 6% 4% 2% 0% Market Share of Export

Figure 15: Market Share of Export of of JBL

From table and figure it has seen that JBL’s market share of export increase gradually slope of 2007 was 8% in 2008 the rate was 9% in the year 2009 the growth got downward to 8% and in the year 2010 the growth got huge upward at at 12% in the year 2011 market share was was 14%.

53

5.4.2 Market Share of Import of JBL year

JBL's Import

National Import

Market Share of JBL

2007

84066

1118664

8%

2008

129413

1496722

9%

2009

118525

1580898

7%

2010

183744

1642434

11%

2011

197285

2400279

8%

Table 16: Market Share of import of JBL

Graphical Presentation

Market Share of Import Market Share of Import 11%

12% 10% 8%

9% 8%

8%

7%

6% 4% 2% 0% Market Share of Import

20 07

2 0 08

20 09

20 1 0

2 01 1

8%

9%

7%

11%

8%

Figure 16: Market Share of Import of JBL

From table and figure it has see that JBL’s market share of import in 2007 the share was 8% and 2008 it was 9% but in 2009 the slope got down again in2010 market share is up warded at 11% in the year 2011 once more it got down at 8%

54

5.3.3 Market Share of Remittance of JBL Year

JBL's Rem

National Rem

Market share of REM

2007

36788

451890

8%

2008

45924

616442

7%

2009

56190

738773

8%

2010

52640

763134

7%

2011

72285

903738

8%

Table 17: Market Share of Remittance of JBL

Graphical Presentation

Rem. Market Share of JBL Rem. Market Share of KBL 10% 8% 6% 4% 2% 0% Rem. Market Share of KBL

2 0 07

2 00 8

20 09

2 0 10

2 011

8%

7%

8%

7%

8%

Figure 17: Market Share of Remittance of JBL

From above it is show that JBL’s market share of remittance is not stable the market share is 8%, 7%, 8%, 7% & 8% in the t he year of 2007, 2008, 2009, 2010 & 2012

55

5.5 Division Wise Contribution of Import, Export and Remittance

5.5.1. Division wise Contribution in Import financing (%): Division wise contribution of import financing is given belowName of the Division

Contributions Dhaka

61.53%

Chittagong

25.34%

Khulna

4.34%

Rajshahi

7.53%

Sylhet

0.86%

Barisal

0.25%

Rangpur

0.15%

Source: Annul report of JBL Table: 18 Division wise Contribution in Import Financing Graphical Presenta Presentation: tion:

Division Wise Contribution in Import 7.53%

0.86% 0.25% 0.15%

4.34%

Dhaka Chittagong Khulna Rajshahi

25.34% 61.53%

Sylhet Barisal Rangpur

Figure:18 Division wise contributions in Import financing of JBL Interpretation: The pie diagram shows the division wise import financing of JBL. Highest

 percentage of total import financing of JBL is in Dhaka Division that was 61.34%. Whereas Chittagong division and Rajshahi division contributed respectively 25.34% and 7.53% in total import financing of IBBL 56

5.5.2. Division wise Contribution in Export financing (%): Name of the Division

Contributions

Dhaka

89.57%

Chittagong

9.02%

Khulna

0.97%

Rajshahi

0.31%

Sylhet

0.06%

Barisal

0.04%

Rangpur

0.03%

Source: Annual report of JBL Table: 19 Division wise Contribution in Export financing Graphical Presentation:

Division wise contribution of Export 0.06% 0.97% 0.31% 0.04% 0.03% 9.02% Dhaka Chittagong Khulna Rajshahi Sylhet Barisal 89.57%

Rangpur

Figure: 19 Division wise Export financing Contributions of J BL Interpretation::  The pie diagram shows the division wise export financing of JBL. Highest Interpretation

 percentage of total export financing of IBBL is in Dhaka Division that was 89.57%. Whereas Whereas Chittagong division contributed 9.02% in t otal export financing of JBL.

57

5.5.3. Division wise Contribution in Remittance (%): Name of the Division

Contributions

Dhaka

32.96%

Chittagong

33.26%

Khulna

6.20%

Rajshahi

8.05%

Sylhet

7.79%

Barisal

9.68%

Rangpur

2.06%

Source: Annul report of JBL Table: 20 Division wise contribution of remittance Graphical Presentation:

Division wise contribution of Remittance 2.06% 9.68% Dhaka 7.79%

32.96%

Chittagong Khulna

8.05%

Rajshahi Sylhet

6.20%

Barisal Rangpur 33.26%

Figure: 20 Division wise Remittance Contribution of JBL

Interpretation:   The pie diagram shows the division wise remittance business of JBL. Highest  percentage of total remittance business of JBL is in Chittagong Division that was 33.26%. Whereas Dhaka division and Rajshahi division contributed respectively 32.96% and 8.05% in total remittance  business of JBL

58

5.5.4. Country wise Inflow of Foreign Remittance: Remittance:

Country

Percentage

Kingdom of Saudiarabia

22.04%

UAE

34.93%

Malaysia

3.41%

Kuwait

10.54%

USA

13.52%

Other countries

15.56%

Source: Annual Report of JBL Table: 21 Contribution of different countries in remittance

Graphical Presentat Presentation: ion:

Country Wise remittances

Kingdom of Saudiarabia

15.56% 22.04%

UAE Malaysia

13.52%

Kuwait 10.54%

USA

34.93%

Other countries 3.41%

Figure: 21 Contribution of different di fferent countries remittance

Interpretation: The pie diagram shows that lion’s share of remittance of J BL has been coming from UAE over the years. Other major remittance source countries are KSA, USA & Kuwait with contribution of 22.0413.52% & 10.54% respectively.

59

60

6.1 Findings:

The major objective of the report is to analyze the foreign exchange operation of JBL. The analysis of foreign exchange operation of JBL reveals the following major findings. From the analysis It has seen that both import and export financing growth was lowest in 2009 because of global rescission and in 2012 the growth rate also shrink because the inflationary pressure in FY 2012 started rising from previous year, and the remittance flow greatly affected in 2010

Highest percentage of export and import executed by the client though JBL is in Dhaka division as there have almost 43 corporate branches out of 68. The largest portion of remittance of JBL is executed executed in Chittagong because huge number of Bangladeshi expatriate expatriate from Chittagong division

The largest share of remittance of JBL has been coming from UAE over the years as most of the Bangladeshi immigrant lives in UAE as well as almost 4 overseas branches of JBL are situated in UAE. Other major remittance source countries are KSA, USA & Kuwait with contribution of 22.04%, 13.52% & 10.54% respectively. respectively.

The earning from import, export financing and foreign remittance has gradually increased. As import volume is higher than export and remittance so proportion of import earning also larger than export and remittance

Relationship of export and import has a strong positive relation with operating profit and has a significant level lower then .05. Remittance has also strong positive relation with operating  profit but significant level level larger than than .05 because of lower remittance remittance volume. volume.

Market share of export, Import, and Remittance are gradually increasing year by year in compare with the total national export, import, and remittance. It has seen that highest  percentage  percentage of market share is captured by export is 14% compare to national export. Import and remittance also have satisfactory market share to national import and remittance

61

6.2 Conclusion

There are a number of nationalized and foreign banks operating their activities in Bangladesh. Among them Janata Bank Limited is one of the leading commercial bank. Janata Bank Ltd has introduced a new dimension in the field of innovative and benevolent banking in our country. The bank has successfully made a positive contribution to the economy of Bangladesh. Its profit is gradually increasing. increasing. It plays a great role in International Trade etc. The Bank ensures quality services to the customers. For better growth and healthy economic position, it should introduce i ntroduce new and Import, Export finance especially for new investors. I hope Janata Bank Ltd will do more work for socio-economic development besides their banking  business. To keep pace with ever-changing ever-changing uncertain domestic business environment environment and face the challenges of revised global economic scenario, the bank should be more pro-active pro-act ive and responsive to introduce new marketing strategy to hold the strong position in home and abroad. For the future planning and the successful operation in its prime goal in this current competitive environment I hope this report can provide a good guideline. I wish continuous success and healthy  business portfolio of Janata Bank Bank Limited.

62

6.3 Recommenda Recommendations: tions:

After analysis of foreign exchange operation of JBL I would like to make some recommendation that may improve their export, import and foreign remittance in future.

The export and import import financing of JBL has increased increased over over the years. JBL can develop attractive financing packages such as Pre-Shipment Pre-Shipment and Post-Shipment Post-Shipment Finance, Export Guarantee facility etc at a law rate for exporters and importers to maintain and increase the trend of its import and export business. JBL should increase strong network with the Overseas Exchange Companies and Banks in different parts of the world to ensure better remittance services for its customers and online Banking in every branch to promote Remittance Highest portion of export, import executed by client through JBL is in Dhaka division and remittance in Chittagong division. Bank should concentrate more on other division also to increase its export, import and remittance client in this case they can increase number of corporate branches in other division. In case of L/C opening, Bank should provide low margin facility to clients. More Import and export item can be included Interest could be provide at concession rate on export, and import finance finance to customers

JBL can provide Consulting facility by an expert group of officials for foreign exchange In case of payment of remittance, they should introduce debit card so that customer can withdraw money within a second at anywhere. I believe these steps will be helpful to improve the performance of Janata Bank Limited and the financial sector of Bangladesh. Bangladesh.

63

Bibliography

Books: Business Statistics ( New Edition) by S.P Gupta, M.P Gupta Research Methodology Methods and Technique (second Edition) by C.R Kothari.

Foreign Exchange Regulation Regulation Act, 1947; Act No. VII of 1947

Annual Reports: Annual Report of JBL 2007-2012

Articles: Foreign Exchange Manual, Janata bank Limited. Bangladesh Bank’s Monthly major Economic Trends, Statistics table Statistics table

Web Sites:

http://janatabank-bd.com/ www.bangladesh-bank.org http://data.worldbank.org/indicator/NY.G http://data.worldbank.org/indicator/NY.GDP.DEFL DP.DEFL.KD.ZG .KD.ZG

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