Foreign Exchange and Foreign Trade of Islami Bank

Major purpose of this report is to analysis Foreign Exchange and Foreign Trade of Islami Bank Bangladesh Limited: Problems and Prospects. Here Foreign Exchange Business handled By IBBL classified as under Import Export Business, Foreign Remittance and Necessary service relating to Foreign Exchange and Foreign Trade. This report focus also includes organizational structures and key functions, Shariah Council and its functions, mode of investment of IBBL.

Objectives of the Report:

The main objective of the study is to gather practical knowledge regarding banking system and operation. The practical orientation gives me a chance to coordinate out theoretical know3ledge with the practical experience. The followings are the objectives for the practical orientation of bank:

• To evaluate the handling of Remittance (Both Inward and Outward) Procedure follow By Islamic Bank Bangladesh Limited.
• To suggest some remedial measure to improve the above procedure.
• To meet the course requirement.
• To suggest some remedial measure to improve the above procedure.
• To acquire the theoretical and operational knowledge in Foreign Trade.
• To apply the theoretical knowledge in the practical field.
•  To identify the problems and probable solutions related to import and export business and remittance faced by IBBL.
• To study Export financing procedure follow by Islamic Bank Bangladesh limited.
• To find out the overall performance of Foreign Exchange Business of IBBL.
• To identify the strength and weakness of the Foreign Exchange Business of IBBL.

• To study the financing procedures of the Import by the client of Islami Bank Bangladesh Limited

Methodology:

The study is performed based on the information extracted from different sources collected by using a specific methodology. The information to be presented in this report has been collected from both primary and secondary source. Secondary data has been collected from Islami Bank Training & Research Academy, Islami Bank Central Library, Islami Bank Annual Report, Bangladesh Bank Annual Report, Journals and Foreign exchange related papers. This report is analytical in nature. The methodology is-

Population: All the branches of IBBL located in everywhere in Bangladesh have been taken into consideration as population.

Sample: Islami Bank Bangladesh Limited, Head Office Complex Branch, Foreign Exchange Branch & Islami Bank Training and Research Academy (IBTRA).

Data Collection: Sources of data f this report can be classified into the following categories:

Primary Sources:

• Face to face conversion with the respective officers and the staffs of the Branch of IBBL.
• Interviewing of the officers and the staffs.
• Sharing practical knowledge of the officials.
• Relevant file study provided by the officers concerned.
• In-depth study of the selected cases.

Secondary Sources:

• Annual Report of IBBL
• Managers Conference Report
• Audited reports.
• Relevant Books, research Papers, Newspapers and Journals
• Banks Manuals
• Statements
• Periodicals
• Website
• Various Study Selected Reports.

Features of Islami Bank Bangladesh Limited:

The bank is committed to run all its activities as per Islamic Shariah. IBBL through its steady progress and continuous success has earned the reputation of being one of the leading private banks of the country. The distinguishing features of IBBL are as follows:

1. All its activities are conducted on interest-free banking system according to Islamic Shariah.
2. Establishment of participatory banking instead of banking on debtor-creditor relationship.
3. Investment is made through different modes permitted under the Islamic Shariah.
4. Investment income of the bank is shared with the Mudaraba depositors according to a ratio to ensure a reasonable fair rate of return on their depositors.
5. Its aims are to introduce a well-fare orient banking system and also to established equity and justice in the field of all economic activities.
6. It extends the Socio-economic and financial services to the poor, helpless and low-income group of the people for their economic upliftment particularly in the rural areas.
7. It plays a vital role in human resource development and employment generation particularly for the unemployed youths.
8. Its aims to achieve a balance growth and equitable development of the country through diversified investment operations particularly in the priority sector and in the less developed areas.
9. It extends cooperation to the poor, the helpless and the helpless and the low-income group for their economic development.

Functions of Islami Bank Bangladesh Limited:

The functions of Islami Bank Bangladesh Limited are as under:

• To maintain all types of deposit accounts.
• To make investment.
• To extent other banking services.
• To conduct social welfare activities through Islami Bank Foundation.

The operation of Islami Bank Bangladesh Limited can be classified into three (3) major categories:

General Banking:

1. Receipt and payment of cash.
2. Mobilization of deposits.
3. Handling transfer transactions.
4. Operations of clearing houses.
5. Maintenance of accounts with Bangladesh Bank and other banks.
6. Collection of cheque and bill.
7. Issue and payment of Demand Draft, Telegraphic Transfer and Pay Order.
8. Executing customers standing instructions.
9. Maintenance if internal accounts of the bank.
10. Maintenance of safe deposit lockers.

While doing all the above noted work IBBL issue Cheque book, Deposit account opening form, SS Card, deposit account ledgers, preparation of statements of accounts, pass book, Balance of different accounts and calculate profits.

Products & Services

IBBL Offers the Following Accounts to the Depositors:

1. Al-Wadeeah current Account.
2. Mudaraba Saving Account.
3. Mudaraba Term Deposit Account. (3/6/12/36 months)
4. Mudaraba Special Notice Account.
5. Mudaraba Hajj Saving Account.
6. Mudaraba Special Saving (pension) Account (5 to 10 years).
7. Mudaraba Saving Bond Scheme (5 to 10 years term).
8. Mudaraba Foreign Currency Deposit Account.
9. Mudaraba Monthly Profit Deposit Account.
10. Mudaraba Moharana Account.
11. Mudaraba Waqf Cash Deposit Account (MWCDA).

Foreign Currency Deposit Accounts:

1. Foreign currency deposit ( USD, EURO, GPB)
2. Mudaraba Foreign Currency Deposit
3. FC Deposit ERQ

 Investment Modes:

1. Bai- Muajjal;
2. Bai-Muravaha;
3. Hire purchase under Shirkatul Melk;
4. Mudarabah;
5. Musharaka;
6. Bai-Salam;
7. Bai-As-sarf.

Welfare oriented special Investment Schemes

1. Household Durables Scheme;
2. Housing Investment Scheme;
3. Real Estate Investment Program;
4. Transport Investment Scheme;
5. Car Investment Scheme;
6. Investment Scheme for Doctors;
7. Small Business Investment Scheme;
8. Agriculture Implements Investment Scheme;
9. Rural Development Scheme;
10. Micro Industries Investment Scheme;
11. SMEs Investment Scheme;
12. Women Entrepreneurs Investment Scheme;
13. Rural Housing Investment Scheme;
14. Mirpur Silk Weavers Investment Scheme;
15. Equity and entrepreneurship Fund of Bangladesh Bank;

Sector under SME Investment:

1. Manufacturing;
2. Trading;
3. Service.

ATM Services:

1. Cash withdraw;
2. Fund transfer;
3. Mini Statement of accounts;
4. Balance enquiry;
5. Payment of utility bills (Electricity, Water, Phone & Gas etc.)

 Other Banking & Value Added Services:

1. The Bank issues payment Order;
2. The Bank remits money from one peace to another within & Outside the country through Demand Draft (DD), Telegraphic Transfer(TT) & on time transfer.
3. ATM service has been introduced in selected Branches / places;
4. Locker Service is available in selected Branches to preserve valuable documents and materials;
5. The Bank gives counseling on different Banking issue;
6. Online Banking;
7. SMS Banking;
8. SWIFT:

Foreign Remittance:

There are 16 (Sixteen) Representatives of IBBL in 5(Five) Countries to serve expatriate customers to open account, encourage and enhance Foreign Remittance.

Treasury Activity:

Dealing Room Operation.

Special Services through Islami Bank Foundation:

1. Islami Bank Hospital;
2. Islami Bank Medical College Hospitals;
3. Islami Bank Community Hospital;
4. Islami Bank Nursing Training Institute;
5. Islami Bank Homeopathic Clinics:
6. Monorom: Islami Bank Crafts & Fashion;
7. Islami Bank Institute of Technology;
8. Islami Bank International School and College;
9. Islami Bank Model School;
10. Islami Bank Mohila Madrasah;
11. Bangladesh Culture Centre;
12. Distressed Women Rehabilitation Centre.

 Training Services:

1. International: Officials of Foreign Banks on Islamic Banking;
2. National: Training own manpower & others on Islamic Banking;
3. Islami Banking Diploma.

Foreign Exchange Business:

Foreign Exchange Business plays a vital role in providing substantial revenue in the bank income. Like all modern banks IBBL operates in the area of Foreign Exchange business. IBBL performs the following tasks:

• Opening Letter of Credit on the principle of Mudaraba sale, on the principle of Musharaka sale and under wage earner scheme.
• Opening of Letter of Credit against commission for importing industrial, agricultural and other permissible items under Islamic Shariah and import policy.
• Handling of import and export documents.
• Financing in import under MPI (Mudaraba Post Import).
• Financing to export on profit and loss sharing.
• Handling inward and outward remittance.
• Negotiation of export or import document when discrepancy occurs.

Special Scheme:

• Islami Bank Hospital.
• Islami Bank Medical College, Rajshahi.
• Islami Bank Community Hospital.
• Islami Bank Nursing Training Institute.
• Islami Bank Institute of Health Technology.
• Islami Bank Homeopathic Clinic.
• Monorom Islami Bank Crafts & Fashion.
• Islami Bank Service Centre.
• Islami Bank Institute of Technology.
• Islami Bank International School and College.
• Islami Bank Cultural Centre.
• Distressed Women Rehabilitation Centre.

Successful Achievements of Islami Bank Bangladesh Limited:

IBBL is pioneer institution for introduction of Islamic Banking in Bangladesh. The success of IBBL has embedded other sponsors at home and abroad to establish Islamic Banking in Bangladesh. Several existing and proposed traditional Banks have also expressed their intention to introduced Islamic Banking; Achievements of IBBL can be given as under:

• The Islamic Banking products, which are offered by IBBL through its 196 branches, located at important centers all over the country and spontaneous acceptance of those products by the people proves the superiority of Islamic Banking.
• IBBL has successfully mobilized deposits for a section of people hither to before do any deposit with interest-based Banks.
• IBBL’s market share of deposit, investment and ancillary business is steadily increasingly.
• IBBL, through still a tiny bank, handles more than 10 of country’s export and import.
• Among the contemporary commercial Banks IBBL’s position is first in respect of mobilization of deposit, deployment of fund and earning profit.
• Investment in the industrial sector occupies 25 of IBBL’s investment portfolio. This unique example of industrial finance by a commercial bank.
• More than 115000 workers are employed in the industrial projects financed by IBBL. IBBL has thus made significant contribution to the solving unemployment problem of the country.
• IBBL has earned reputation in the country7 as a corruption free institution.
• IBBL has introduced several other software oriented investment schemes, such as small Transport Investment Scheme, Household Durable Investment Scheme, and Housing Investment Scheme etc.
• IBBL launched a rural development scheme for overall development of the rural people.
• At the initiative of IBBL, several Universities in Bangladesh have introduced course on Islamic Banking and Finance.
• IBBL has been continuously persuasion the Government t to allow formation of more Islamic Insurance Company.
• Under the leadership of IBBL, Bangladesh Association of Banks (BAB) has been formed.
• This is platform to ventilate the standpoints on banking issues of the private sector banks.
• IBBL has taken initiatives to form on Association of Islamic Banking in Bangladesh for further ness of the cause of Islamic Banking.

SWOT Analysis of Islami Bank Bangladesh Limited:

SWOT analysis is a planning exercise in which managers identify organizational Strengths (S), Weakness (W), Opportunities (O), and Threats (T).

Strength:

• Strong base in reserve.
• Strong base in equity.
• Strong base in deposit.
• Skilled manpower.
• Goodwill in market.
• Modern Technology & Equipment.
• Stable source of fund.
• Largest network among private commercial Banks.
• Strong liquidity position.
• Low cost of fund.
• Internal resources that is available of things that an organization dose well.
• The organization is going to start highly skilled technical service and On-line.
• Banking software, which will help customers with some of the most difficult existing computing application systems.
• Strong net work (total 151 no. of Branches under online)

So, strength of the Bank is enough.

Weakness:

Resources that an organization lacks or activities that it does not do well are:

• In the organization, decision-making is more or less centralized at top of the organization. A group of senior managers made all significance operating decisions and then communicated the decisions down a very tall hierarchy to the managers at lower level. The organization’s tall centralized structure slowed decision making and its conservative orientation made managers reluctant to change.
• Lack of skilled manpower-Islami Bank is a new subject people and adequate knowledge and skilled about Islamic Banking is not big in number.
• There is no Islamic money market in the country for that idle fund can not utilize in the market.
• Lack of proper Rules & regulations govern in Islamic Bank.
• Islamic Banking Law in the market.
• Lacks of Islamic money market instrument.
• IT and E-Banking status dose not match with Bank’s other strength.

Opportunities:

It is positive external environmental factors:

• In the organization, one opportunity is the Internet Banking. Customers are looking for better services from Bank. So, Internet Banking can help the customers to see their account information from their home personal Computer.
• On Line banking system, customers will be attracted to the Bank.
• Most of our people are pious; they want to deposit their fund in interest free organization. For this Islami Banks enough opportunity for deposit mobilization also for strong base of equity IBBL can disburse large scale of Investment, which can help to achieve more profit and poverty elevation.
• Increasing awareness of Islamic Banking.
• Opportunities to develop Islamic Investments.
• Being large bank it can provide large investment.

Threats:

It is negative external factors:

• In the Banking sector, the main threats for an organization is the rise of global organizations, that operate and compete in more than one country, has put severe pressure on many organizations to improve their performance and to identify better ways to use their resources.
• There are more new Islamic Banks are come forward to operate their business and some conventional Banks also opening their Islamic Banking Branches. So, increased competition in the market for public deposits.
• Market pressure for lowering the profit/interest rate.
• Dissatisfaction-Pay-package of IBBL employees is less enough in comparison to other private commercial Bank. As a result efficient manpower may switchover from the Bank which is also a threat for the Bank.

Rules and Regulations Under Foreign Exchange:

Foreign Exchange transactions as well as business are controlled by both local and international rules and regulations.

Local Rules and Regulations:

Our Foreign Exchange transactions are being controlled by the following local regulations:

Foreign Exchange Regulations Act: Foreign Exchange Regulations (FER) Act 1947 enacted on 11^th March 1947 in the British India, provides the local basis for regulating the foreign exchange. This Act was adapted in Pakistan and lastly in Bangladesh.

Guidelines for Foreign Exchange Transactions: The publication issued by Bangladesh Bank in the year 1996 is in two volumes. This is compilations of the instructions to be followed by the Authorized Dealers in transactions relating to the Foreign Exchange.

Foreign Exchange Circular: Bangladesh Bank issues Foreign Exchange circular from time to time to control the export import business and remittance to control the foreign exchange. It has one kind of supplementary and complementary action to the guideline for Foreign Exchange Transactions.

Import –Export Policy: Ministry of Commerce issue Export Policy and Import Policy giving basic formalities and instructions for Import and Export Business.

Public Noice: Sometimes Chief Controller of Import & Export issues public notice for any kind of change in Foreign Exchange Transactions.

Instructions from Different Ministry: Different Ministry of the Govt. sometimes instructs the authorized Dealer directly or through Bangladesh Bank to follow something required for the government.

Shariah Principle: Along with the above and international rules and regulations Islami Bank is bound to follow the principle of Islamic Shariah in the foreign exchange.

International Rules and Regulations for Foreign Exchange:

There are some international organizations influencing the foreign exchange transactions. Few of them are discussed bellow:

International Chamber of Commerce (ICC): ICC is a world wide non-governmental organization of thousand of companies. It was founded in 1919. Its Headquarters is in Paris. For managing and controlling the international trade ICC issues some publications which were being followed by all the member countries. It has also an International Court of Arbitration to solve the international business dispute. The major Publications of ICC are:

• Uniform Customs and Practices for Documentary Credit.
• Uniform Rules for Collection.
• Uniform Rules for Reimbursement.
• International Standard for Banking Practice.

World Trade Organization (WTO): WTO is another international trade organization established in 1995. This organization has vital role in international trade through its 124 member’s countries.

Incoterms:

Incoterms means International Commercial Terms, Trade Terms, and Delivery Terms. These terms have been prepared and named by the ICC Paris. First it is published in 1936 and latest in 2000. At present there are 13 Incoterms.

1. EXW e. Ex Works
2. FCA e. Free Carrier
3. FAS e. Free Alongside Ship
4. FOB e. Free on Board
5. CFR e. Cost and Freight
6. CIF e. Cost Insurance and Freight
7. CPT e. Carriage Paid To
8. CIP e. Carriage & Insurance Paid To
9. DAF    e. Delivered At Frontier
10. DES e. Delivered Ex Ship
11. DEQ e. Delivered Ex Quay
12. DDU e. Delivered Duty Unpaid
13. DDP e. Delivered Duty Paid

Uses of Incoterms:

A sale contract determines quantity and quality of the goods as well as the price, which should be paid for them. But there remain the following questions unsettled.

• Who should clear the goods for import and export?
• Who should pay the cost of loading and discharging the goods?
• How should the risks of loss or damage of the goods be divided between them?
• Who should take out insurance as a protection against these risks?

To settle these question arise the necessity of Trade terms or Incoterms. So, Incoterms will:

1. Fix up the risk and responsibility of the buyer and the seller/
2. Provide a uniform Trade Terms.

Import Trade Control Act and Authorities:

1. Foreign Exchange Regulation Act-1947
2. Import Export control Act, 1950
3. Importer, Exporter, Indenter Registration Order-1981
4. Chief Controller of Imports and Exports (CCI & E)
5. Bangladesh Bank.

Main Guidelines for Foreign Exchange Operation:

1. Guidelines for Foreign Exchange Transactions (Published by Bangladesh Bank)
2. Import Policy Order –IPO (Published by Ministry of Commerce)
3. Uniform Customs & Practices for Documentary Credits (UCPDC), ICC Publication No. 600.
4. Uniform Rules for Collection (URC), ICC Publication No. 522.
5. Uniform Rules for Bank- to – Bank Reimbursement (URR), ICC Publication No. 525.
6. Incoterms-2000.
7. International Standby Practice- (ISP-98).
8. International Standard Banking practice- (ISBP-2008). ICC Publication No. 645.
9. eUCP – Supplement to UCP-600 for Electronic Presentation.
10. Foreign Exchange (FE) Circulars (issued by Bangladesh Bank).
11. Public Notice Issued by CCI & E.
12. SRO- issued by Ministry of Finance or NRB.
13. Circulars/Letters issued by IBBL, Head Office from time to time.

Introduction:

Foreign trade can be easily defined as a business activity, which transcends national boundaries. These may be between two parties or governments. Trades among nations are a common occurrence and normally benefits both the exporter and importer in many countries international trade accounts for more than 20% of their national incomes.

Foreign trade can easily be justified on the principal of comparative advantage according to this economic principle. It is economically profitable for a country to specialize in the production of that commodity in which the producer country has the greater advantage and to allow the other country to produce that commodity in which it has the lesser advantage. It includes the spectrum of goods, services, investment, technology transfer etc. this trade among various countries pauses for close linkage between the parties dealing with trade. The bank, which provides such transactional trade, demands of a few goods from seller to buyer and of payment from buyer to seller. And this flow of goods and payment are done through letter of credit (L/C).

Foreign Exchange:

As more than one currency involved in foreign trade, it gives rise to exchange of currencies whish is known as foreign exchange. The term “Foreign Exchange” has three principal meaning. Firstly, it is a term used referring to the currencies of the other countries in terms of any single one currency. Secondly, then term also commonly refers to some instruments used in international trade, such as Bill of Exchange, Drafts, Traveler’s Check and other means of international Remittance. Thirdly, the term foreign exchange is also quite often referred to the balance of foreign currencies held by a country. In terms of section 2(d) of the foreign exchange regulations 1947, is adopted in Bangladesh. Foreign exchange means foreign currency and includes any instrument drawn accepted issued or made under clause (13) of article 16 of the Bangladesh Bank order 1972, all the deposits, credits and balances payable in any foreign currency and draft check, letter of credit and bill of exchange expressed or drawn in Bangladesh currency but payable in foreign currencies.

In exercise of the powered conferred by section 3 of the foreign exchange regulation, 1947 Bangladesh Bank issues license to the schedule banks 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 changes.

Functions of Foreign Exchange Department:

Exports:

1. Pre-shipment advanced.
2. Purchase of foreign bills.
3. Negotiating of foreign bills.
4. Export guarantees.
5. Advising or confirming letters- letter of credit.
6. Advance for deferred payments exports.
7. Advance against bills for collection.

Imports:

1. Opening of letter of credit.
2. Advance bills.
3. Bills for collection.
4. Import loan and guarantees.

Remittances:

1. Issue of DD, TT, MT etc.
2. Payment of DD, TT, MT etc.
3. Issue and enhancement of travelers check.
4. Sale and enhancement of foreign notes.

Documents Used in Foreign Exchange:

Bank deals with documents not goods. Foreign trade involves the movement of goods from one country to another, passing of ownership of goods from the seller to buyer, the payment for the goods and its remittance from the importer’s to the exporter’s country. For these process documents are only the prime evidence of all activities. Therefore, a good number of documents are use in foreign trade. The major or important documents are described as under:

• Bill of Exchange:

The bill of exchange is the most important and most widely used instrument in international trade by which sellers can obtain the payment from their buyers for the invoiced value of goods.

Bill of exchange is a negotiable instrument. It is an unconditional order, signed by the maker, directing a certain person to pay on demand or a fixed determinable future time a certain some of money only of or to the order of a certain person, or to the bearer of the instrument.

On analysis of the definition, the features of the bill of exchange may be observed as follows:

• It must be in writing.
• It must contain an order to pay on demand or at a fixed or determinable future time.
• The order must be an unconditional one.
• It must be signed by the drawer.
• The drawee must be the certain.
• The instrument must contain an order.
• The bill of exchange must be properly steamed.

Bill of exchange carries six parties. As such:

1. The Drawer
2. The drawee
3. The Payee
4. The Endorser
5. The Endorsee and
6. The Acceptor.

The Drawer: The Drawer is a person who draws the bill. He is the creditor to whom the money is owed.

The drawee: The drawee is a person to whom the bill is drawn. He is the debtor who owes money to the Drawer.

The Endorser: The Endorser of the bill is the person who has placed his name and signature at the back of the bill signifying that he has obtained title of the bill and payment is due to him on his own account or on account of the original payee.

The Endorsee: The Endorsee is a person to whom the bill is endorsed. The endorsee can obtain payment from the drawee.

The Acceptor: The Acceptor is a person who undertakes to pay the issuance or time bill by accepting the same. The drawee himself may be the acceptor of the bill.

Transport Documents:

Transport Documents which evidence that the goods have been delivered to the named slippers, airlines or transporters for carriage to a named port, airport or place of delivery. Following transport documents are being used at present in the international trade:

• Airway bill or Consignment Note
• Mate’s Receipt
• Bill of Lading
• Railway Receipt or Railway Consignment Note
• Truck Receipt or Roadway Receipt
• Postal Receipt

Bill of Lading:

A Bill of Lading is defined as “a document which evidences a contract of carriage by sea and the taking over a loading of the goods by the carries, and by which the carrier undertakes to deliver the goods against surrender of the document”.

A bill of lading renders of the following three functions:

1. It is an evidence of the contract of carriage.
2. It is a receipt for the goods received by the carrier.
3. It is a document of the title of the goods.

Contents of the Bill of Lading:

Though the form of a bill of lading differs from one shipping company to another, its general contents can be stated as follows:

1. It describes the general nature of the goods.
2. Shipping marks for the identification of the goods.
3. An express statement, if applicable, as to the dangerous character of the goods.
4. The number of packages or pieces.
5. The weight of the goods or their quantity otherwise expressed. All these particulars are based on the information furnished by the shipper.
6. The apparent condition of the goods; normally the bill of lading declares that the goods has been received in ‘apparent good order and condition’.
7. The name and the principal place of business of the shipping company.
8. The name of the shipper, i.e. consignor.
9. Notify address; the person to whom notice should be sent of arrival of cargo at the port of discharge; normally the importer.
10. The port of lading.
11. The date on which goods were taken charge by the shipping company.
12. The port of discharge.
13. The number of originals of the bill of lading issued, if more tan one.
14. The place of Issuance of the bill of lading.
15. The signature of the master of the ship or agent of the shipping company. The freight to the extent payable by the consignee or other indication that freight is payable by him or particulars of freight paid.

Classification of Bill of Lading:

On the basis of situation and conditions bill of lading are classified as the following name:

1. ‘Clean’ and ‘claused’ or ‘dirty’ or ‘foul’ Bill of Lading.
2. ‘On-board’ or ‘shipped’ and ‘received for shipment’ Bill of Lading.
3. Through’ or ‘Port to Port’ Bill of Lading.
4. State Bill of Lading.
5. Charter party Bill of Lading.
6. ‘Negotiable’ or Non- negotiable’ and ‘Straight’ or order Bill of Lading.
7. Liner Bill of Lading.
8. House Bill of Lading.
9. Short form or Blank Back Bill of Lading.
10. Third Party Bill of Lading.
11. Combined Transport Bill of Lading.

Invoices:

Proforma Invoice:

Proforma invoice is the offer or quotation of the supplier to the buyer. If the buyer accepts the offer or quotation, the invoices become the contract between the buyer and the seller. Before opening of L/C the applicant will submit the Proforma invoice to the issuing bank as a contract with the supplier.

Commercial Invoice:

When the supplier shipped the goods, he prepares the final invoice which is used commercial invoice. This has no define form but usually commercial invoice includes description of goods, unit price, name of the buyer and other specification as per credit term.

Consular Invoice:

This is an invoice issued or certified by the consulate or embassy of the importing country, situation in the exporting country. This type of invoice is called legalized invoice.

 Custom Invoice:

These are the specific form supplied by the Consular Office of the importer dully filled and signed by the shipper and serve the purposes of making easy entry of the merchandise into the importing country. These invoices are for easy custom clearance.

Certified Invoice:

Certified invoice is an invoice bearing a signed statement by some one in the importer’s country, who have inspected the goods and found in accordance with those specific in contract.

Certificate of Origin:

A certificate of origin is a statement evidencing the origin of goods, in which the goods are produced or manufactured. It may be the required by the importer to meet the trade control requirement or custom duty of his country. In Bangladesh it is a part of shipping document. This is generally issued by the Chamber of Commerce of the exporting country.

Packing List:

It is a statement showing the goods item by item, the content of the containers or cases to enable the importer of the goods to check the shipment. It should give description of the goods, net weight and gross weight, measurement etc.

Insurance Document:

Insurance is a contract between the insurer and the insured whereby the former in consideration of the payment of the premium from the later, agrees to indemnify the letter against loss incurred in respect of goods to expose to. All shipment must be covered by the insurance.

Inspection Certificate:

This is a certificate declaring that the goods have been examined and found to be in accordance with the contract of sale. It is signed by the manufactured or supplier or recognized independent inspection body as required by the importer.

Financing in Foreign Trade:

In modern banking Foreign Trade is taken into a shape where customers are provided with various products and services, by the bank. They get financial assistance at all stages of their import and export trade from bank. The general principals in financing in import and export business are elimination and avoiding of interest in all operations. The different Islamic modes are as under:

Import Finance:

Mainly three types of import are done in purpose wise. They are-

1. Import of trading item for ultimate user or consumer under Bai-Murabaha/ Bai- Muajjal Mode.
2. Import of raw materials or industrial item for further processing or further production under Bai-Murabaha/ Bai- Muajjal Mode.
3. Import of Capital Machinery & Capital Item under Hire Purchase Shirkatul Melk (HPSM).

In all types of import usually the importer take bank finance. Import finance can also be made under Bai-Salam or Musharaka or Mudaraba modes. Islami banks has to perform its all transactions related to import and export by aiding the National and International rules and regulations in addition to its own rules/ regulations/ guidelines etc.

Import under Bai-Murabaha:

Bai-Murabaha is a contract between a buyer and a seller under which the seller sells certain specific goods permissible under Islamic Shariah and the Law of Land to the buyer at a cost plus agreed profit payable in cash or any future date in lump sum or by installment. The profit mark-up may be fixed in lump sum or in percentage of the cost price of the goods.

Procedure of Import of goods under Bai-Murabaha:

Under this mode bank purchase goods from foreign supplier and sale the same to the importer or client. As per international banking practice and as per UCPDC goods consigned to the opening bank i.e. the owner of the goods is bank till transfer the ownership by endorsement on the back of Bill of Lading (B/L) or other transport document. Also as per UCPDC payment claim by the supplier of the goods to the L/C opening through drawing Bill of Exchange of Bank.

But only the indent or Proforma invoice against which bank open L/C is issued in favor of importers. To resolve the problem a Letter of Authority from the client can be taken authorizing bank to purchase the goods at the ownership of bank.

Bai-Murabaha is made under single deal covering the investment at L/C stage, Bills stage, and the post import stage as under:

• Murabaha Import L/C
• Murabaha Import Bills
• Murabaha Post Import

The main head is Murabaha Post Import

Murabaha Post Import (MPI):

If the importer/ client like to take the financial facility for paying custom duty, VAT and other cost along with other import payment, back may provide the facility under Murabaha mode, which is called the single deal Murabaha or MPI.  The agreement is made at the time of import and the whole process of (1) Murabaha L/C, (2) Murabaha Bills and (3) Murabaha Post Import is covered under one agreement as a single deal.

Calculation of Purchase Price, Profit & Sale Price:

1. Amount paid to the supplier as per L/C value.
2. Other expenditures in connection with purchase such as Conveyance- TA/DA, Commission paid to the agent. Cost of the remittance of Fund, Transport Cost up to bank’s godown, Transit insurance and incidental charge, godown rent staff salary if any before sale, Duty, VAT, License Fees, C&F Agents Commission etc.
3. Purchase price or total cost =(a+b)
4. Total Mark-up profit
5. Sale price = (c+d)

Import under Bai-Muajjal:

It is a contract between a buyer and a seller under which the seller sells certain specific goods (permissible under Islamic Shariah and law of the land) to the buyer at an agreed fixed price payable at a certain fixed future time in lump sum or within a fixed period by installment.

Important Features of Bai-Muajjal: most of the features of Bai-Muajjal and Bai- Murabaha are same, except the following:

1. It is pure the sale on credit.
2. The seller (Bank) may sell the goods at an agreed price which will include both the cost price and the profit, unlike Bai- Murabaha; the bank may not disclose the cost price and the profit mark-up separately to the client.

Procedure of import under Bai- Murabaha and Bai-Muajjal are almost same. Only Bai-Muajjal agreement is taken instead of Bai- Murabaha agreement.

Import under Hire Purchase under Shirkatul Melk (HPSM):

For import of machinery and other durable and reusable item import is made under HPSM mode. HPSM is a mechanism as combination of three systems namely- Izarah, Shirkat and Bai- (Purchase and Sale).

Bank and client import the item jointly sharing money as per agreement i.e. Shirkat. Bank gives lease of their portion at an agreed rent. Bank sale their portion of the property gradually by receiving periodical payment from the client.

Import under Musharaka:

Musharaka is a mode of investment where the equity participation of both the bank and client is essential. In this case unlike Bai- mechanism no sale price is fixed. The profit earned is shared between the bank and the clients at agreed ratio. In case of any loss arises then it will also be shared between the bank and the clients as per equity ratio.

General Principles of Import under Musharaka:

• the bank from time to time decide the type of import, purpose of the import, source of import and item of import for which such investment may be extended.
• The ratio of the capital and profit between the bank and the importer or client shall be as per mutually agreed upon.
• While the bank and the importer or client shall share their actual profit of such investment as per ratio to be mutually agreed upon, the loss if any. Shall be bone on the basis on their equity ratio or participation.
• The importer shall manage the business and as such may be allowed to share the profit of the business at a ratio more than his capital contribution.
• The client shall ensure maintenance of proper books of accounts to which the bank shall have access and the client shall at all times be obliged to produce the same to the authorized officials of the bank.
• The bank shall supervise the business operations at all stages as the success of such investment mostly depends on close and constant supervision by the bank.
• The bank shall take the part in the policy and decision making where felt necessary.

Import under Mudaraba

When the capital user or the entrepreneur has no capital and the capital holder has no direct participation in the business, then such type of business is called Murabaha.

In case of import bank may finance under Murabaha mode paying full cost of the imported goods. In such case bank may supervise the utilization of capital, its return and operation process involved. Client is under obligation to maintain all documentation and record of sale and purchase of goods. Profit will be shared as per agreed ratio, and loss will be borne if genuine by the bank.

Export Finance

Export means flow of gods and services produced with a country but purchased by economic agents (individuals, firms or government) of other countries. In other words in case of exports products sold outside the country. So getting payment against such sale usually requires different time span depending on the terms of sale contract or relative payment terms of export L/C.

In view of above exporter require immediate fund and other financial facilities to execute their export order. It is the bank who extends such facilities as needed by the exporter. And facilitating export by financing at different stages is now important part of banks activities.

Exporter requires financial assistance at two stages namely-

1. Pre-shipment stage and
2. Post shipment stage.

So, export finance can be classified into two categories-

1. Pre-shipment finance
2. Post shipment finance

Different Islamic modes are there for financing export at two different stages as mentioned above.

Pre-shipment Finance

Pre-shipment finance as the name suggest, given to finance the activities of an exporter prior to the actual shipment of the goods for export. The purpose of such finance to meet Working Capital needs starting from the point of purchasing raw materials to transportation of goods to foreign country. Pre-shipment finance is given for the following purposes.

1. Finance for local procurement of goods.
2. Procuring and processing of goods.
3. Packing and transportation of goods.
4. Payment of insurance premium
5. Payment of utility bill
6. Payment of wages and salary
7. Freight charge.

Pre-shipment finance can be made under the following Islamic Modes as follows:

Back to Back L/C:

To purchase or procure goods for export processing bank may provide facility in the way of back to back L/C opened under Bai-Muajjal mode. If the back to back L/Cs are opened in deferred payment basis no finance by the bank is required except if they fail to make shipment in time.

Raw Materials Purchase under Bai- Muajjal:

It is a contract between a buyer and a seller under which the seller sells certain specific goods (permissible under Shariah and the law of land) to the buyer at an agreed fixed price payable at a certain future date in lump sum or within a fixed period by installment.

Important Features of Bai-Muajjal:

Most of the features of Bai-Murabaha & Bai-Muajjal are same except the followings:

1. It is purely a sale o credit.
2. The seller (Bank) may sells the goods at an agreed price which will include both the cost price and the profit, un like Bai-Murabaha, the bank may not disclose the cost price and the profit separately to the client.

Procedure of import under Bai-Muajjal is almost same. Bai-Muajjal agreement is taken instead of Bai-Murabaha agreement.

Raw Materials Purchase under Bai-Murabaha TR:

For purchase of raw materials or goods for export bank can finance under Bai-Murabaha TR mode. That means the exportable goods or raw materials are purchased under Bai-Murabaha mode and delivered to the exporter or client against Trust Receipt duly signed by the client. After processing or producing of the finished goods by using the raw materials, the exporter shipped the same for export. Upon realization of proceeds bank adjust the liability under Bai-Murabaha TR.

Finance under Musharaka Pre-shipment:

Pre-shipment investment covers credit facilities extended to the exporters by the Islamic bank prior to the actual shipment of the goods. The purpose of such investment is to meet working capital requirements starting from the point of purchasing of raw materials to the transportation of goods for export to foreign countries. Before extending a loan to an exporter, the bank takes into consideration the credit worthiness; export performance of the exporter together with all the other necessary information required for sanctioning the investment in accordance with existing rules and regulations of the bank. Financing at the pre-shipment stage is generally called ‘Packing Credit’. It is also referred to as Pre-shipment Investment (PSI) or Pre-shipment Finance. Islamic banks follow the Musharaka mode of investment to sanction this kind of finance.

Bai-salam:

It may be defined as an advance purchase of a commodity or product by the bank on execution of a written contract wherein it is clearly mentioned that the commodity shall be delivered as per specification, size, quality, quantity at a fixed future time I a particular place. The burden of the cost of transportation and storage is also specifically mentioned in the contract to avoid confusion. Generally industrial and agricultural products are purchased in advance under the Bai-salam mode to provide the capital necessary to produce the purchased goods.

The mechanism of Bai-salam is- goods purchased in advance against payment now but delivery of goods will be made after a specified time. For meeting up the expenses other than procurement of goods bank make finance under Bai-salam mode to the exporter. Through Bai-salam bank purchase a portion of exportable goods in advance and make payment. After production exporter makes shipment of the goods, this is already sold to the bank.

Post-shipment Finance:

The bank makes post shipment finance to the exporters after shipment of the goods by them. Exporters may require post-shipment financing to cover the operation expenses. This is the case because they have to wait a long time to receive payment from abroad for the exported goods, depending on the terms of payment stipulated in the respective export L/C.

Export made or arranged all document as per requirement of the L/C terms or as per contract terms, then submit to their bank. Upon received of the documents IBBL provides finance under the following modes:

Bai-As-Sarf on Foreign Documentary Bill:

Recently IBBL introduced a new mode of post-shipment finance named ‘Bai-as-sarf’ instead of Foreign Bill Purchase/ Negotiate (FBP/N). Under Bai-as-sarf Bank purchases the foreign currency i.e. value of the documents from the client.

Bai-as-Sarf is a trading mechanism where the bank buys foreign currency from the client at an agreed rate. Incase of Bai-as-Sarf: FDB bank purchase the value of the export documents expressed in Foreign Currency and paid equivalent taka in favor of the client. The client will gate net amount after adjustments of their respective liabilities, if any.

Musharaka Documentary Bill (MDB):

In order to avoid the risk associated with the Foreign Currency Positions against purchase of Inland Export Bills and at the same time to meet the finance need of the valued clients, IBBL introduced Musharaka mode of finance in place of Inland Bills Purchased (IBP) as Post Shipment finance. The new investment mode is titled “Musharaka Documentary Bills (MDB) inland”.

Under this “Musharaka Documentary Bills (MDB) inland” investment mode, after shipment of goods, the client will submit their proposal for Musharaka finance in the prescribed format declaring his/ their equity portion and profit of the deal and the ratio at which profit to be shared with the bank accompanying the required documents as per L/C contract. Branch will appraisal of the proposal (as per prescribed format) to see the profitability of the proposal. If the proposal is found profitable and satisfactory (keeping in view the anticipated minimum profit/R.R.) of the bank branch will first enter into the Musharaka agreement with the client and then will send the documents to the L/C issuing bank for acceptance. Upon receipt of the acceptance, Branch will issue Sanction Advice in favor of the client & after preparing proper documentation; Branch will disburse the Musharaka investment taking into consideration the equity f the client and anticipated profit of the deal.

Business Achievement Target:

By challenging the nation and international challenges Islami Bank Bangladesh Limited has achieved its goals in each and every sphere of the business in 2010. And thus the bank has declared 2010 as a year of successful. The management performance of IBBL has been given below:

Tk. In Million

Sector-wise Investment:

As on December 31, 2010, rather than the previous years the investments of Islami Bank Bangladesh Limited are given below: Million Tk.

Mode-wise Investment: Figure in Million Tk.

Investment Flow in Industrial Sector from 2006 to 2010:

Islami Bank Bangladesh limited has given most priority to invest in the Industrial sector. Rather than the other banks the investment of IBBL is more in the industrial sector. The investment flow of IBBL in the industrial sector is shown below:

Foreign Trade:

Islami Bank Bangladesh Limited plays a vital role in the foreign trade. In 2010 the bank has earned Handled total Tk.609331 million. The following is the distinguishing figure of IBBL in the Foreign Exchange and Foreign Trade:

Figure in Million Tk.

Import:

In 2009 IBBL opens 38717 L/C’s in against of Tk.161230 million. And in 2010 IBBL opens 46736 L/C’s in against of Tk.246281 million. The rate of growth is 53%. The main goods that are imported are as follows:

Figure in Million Tk.

Export:

In 2009 IBBL opens 44291 L/C’s in against of Tk.106424 Million and in 2010 IBBL opens 46699 L/C’s in against of Tk. 148421 million. The growth of export in 2010 rather than in 2009 is as follows: Figure in Tk.

Remittance Flow of IBBL from 2006 to 2010:

In spite of economic disvalue in the total worlds IBBL has achieved or handled the most percentage of remittance rather than the other banks of Bangladesh. It has Achieved 27.66% inward remittance in 2010. as for the result the total foreign remittance was in Figure in Tk.214629 million.

Market Share in Remittance from 2006 to 2010:

Problems of Islami Bank Bangladesh Limited in Foreign Exchange Business:

The problems that are faced by Islami Bank Bangladesh Limited in operating Foreign Exchange Business are as follows:

Negative Propagation against IBBL:

During early months of this year, some newspapers & electronic media published lot of misleading news against IBBL which created confusion among expatriates in sending remittance to the bank. However, we maintained regular contract with expatriates & well wishers and the situation has improved later on.

Higher Exchange Rate:

Due to restriction in funded investment, import business of the bank has decreased in few months. As such we have to sell huge Foreign Currency received against foreign remittance to Inter bank Foreign Exchange Market at a lower price. If we could utilize such fund in our own import requirement, we could offer higher rates to Exchange Houses and get more remittances.

Volatile Foreign Exchange Market:

Due to frequent up and down in Foreign Exchange Market of the country, the remittance flow has been affected substantially. The country as a whole experienced negative growth of remittance prior of Eid-ul-Fitr which is quite unusual in the history of Bangladesh. At a certain Nationalized Commercial Banks offered more than Tk. 2 per USD to Exchange Houses than the rate prevailed in the Foreign Exchange Market.

Delay in Full Automation:

Due to lion automation of all remittance services & logistics supports in sonic Branches, our customer services have not yet fulfilled the requirement of Exchange Houses. However we are trying to improve the procedure of handling remittance with the help of ICID.

Aggressive Marketing by Some Banks:

Some local private banks are undertaking vigorous or aggressive marketing. Offering lucrative rate on deposits and providing excellent customer services. Through the Branch network & customer base of those banks are not so wide, yet they are able to get media coverage in case of remittance handling as well.

Issue Related to Fixing up Profit:

Profit can be charged only once specific goods. As mentioned earlier, in many cases exporter can not deliver goods at a time, he has to effect partial shipment. But bank realizes commission and charges at a time while opening L/C for the full value of goods. Thread able the cost of goods and related profit fixation is not done on deal basis.

Insufficient of Foreign Exchange Knowing Person:

IBBL is a largest bank which deals a vast volume of foreign Exchange Business. And day by day foreign exchange is increasing but proportionately Foreign Exchange knowing persons do not increase. As a result IBBL faced problem to run the Foreign Exchange Business Smoothly

Lack of Foreign Exchange Treasury Product:

For Islami Bank there is no treasury product in the market. For this reason they can not deal in foreign exchange treasury market under forward buying and selling of the currency.

Relationship with Foreign Banks:

Another important issue facing Islamic Banks in Bangladesh is how to organize their relationships with foreign banks, and more generally, how to conduct international operations. This is, of course, an issue closely related to the creation of financial instruments, which would be simultaneously consistent with the Islamic Principles and acceptable to the interest based banks, including the foreign banks.

Shortage of Supportive and Link Institutions:

Any system, however well integrated it may be, can not thrive exclusively on its built in elements. It has to depend on a number of link institutions and so is the case with Islamic Banking. For identifying suitable projects, Islamic Banking can profitably draw the services of economists, lawyers, insurance companies, management consultants, and auditors and so on. They also need research and training forums in order to promoting entrepreneurship amongst their clients. Such support services properly oriented towards Islamic Banking are yet to be developed in Bangladesh.

Contradiction between the Law of Land and Shariah Law:

It is one of the great problems of IBBL. As Shariah Law is not available in our country, it is difficult to continue business according to Shariah.

Lack of Modern Communication Instruments:

Due to the lack of modern communication instruments Islami Bank Bangladesh Bank Limited has facing a lot of problems in operating Foreign Exchange Business smoothly in our country like the other banks.

Absence of Islamic Money Market:

Due to absence of Islamic Money Market in Bangladesh, the Islamic banks can not invest their surplus fund i.e. temporary excess liquidity to earn any income as all the Government Treasury Bonds, approved securities and Bangladesh Bank Bills in Bangladesh are interest bearing. Naturally, the Islamic Banks can not invest the permissible part of their Security Liquidity Reserve and liquid surplus in those securities. As a result they deposit their whole reserve in cash with Bangladesh Bank. Similarly, the liquid surplus also remains uninvited. The profitability of the Islamic Banks in Bangladesh is therefore adversely affected. Introduction of Islamic instruments by Bangladesh Bank is a long demand of the Islamic Banks in Bangladesh which is yet to be executed.

Recommendations

With a view to overcoming the weak points & utilizing the strengths, IBBL may take proper steps for deriving benefits out of all opportunities & successfully facing all issue related to the foreign exchange business. At this critical juncture, I would like to propose some suggestions or recommendations to IBBL for improving Foreign Exchange Business Portfolio in genera; which are:

1. To develop quality service in respect of speedy disposal both at Branch and Head Office regarding Foreign Trade Operations.
2. To accumulate automated service for foreign trade for facilitating the importer and the Exporter.
3. To induce quality client and select best project for risk free International Trade.
4. To introduce new Foreign Exchange products to adjust with the global foreign trade.
5. To research about the principles of Shariah issue in respect of new Foreign Exchange products.
6. To study or survey of the local and foreign markets for the potential of import and export business.
7. To meet all types of unique needs of the clients in the changing pattern of the world trade.
8. To integrate and strengthen the treasury and fund management at Head Office through automation.
9. To formulate the sustainable import and export policy.
10. To strengthen, supervision and monitoring squared for RMG sector to promote the foreign trade.
11. To ensure supervision & Technical support for bulk import from Head Office.
12. To offer competitive commission rate.
13. To maintain rapport with Bangladesh Bank for AD license and other business policy.
14. To organize training and workshop for AD Branch Managers and Officials, Non-AD/Forwarding Branch Managers & officials for developing the personnel skill.
15. To ensure complete compliance of Bangladesh Bank’s Guidelines.
16. To increase the supports and facility to the exporters and motivates them to maximize the export earnings.
17. To emphasize on opening of L/C of government and semi government organizations for risk free operations.
18. To diversify the foreign trade operations.
19. L/C’s for import of machinery may be made easier.
20. All AD Branches should try to perform at optimum level.
21. Discretionary power for L/C and MPI should be same.
22. To encourage for exporting of non-traditional items.
23. To develop and active the properly the Management Information Systems for import and export business.
24. Data bank of credit reports may be maintained carefully.
25. To gather of all import and export clients.
26. To modernize the decoration of Foreign exchange Departments of the branches identically.
27. To increase the import under cash retirement.
28. To appearance the marketing term for procurement of import and export business.
29. To hunt of the best of the best clients for meeting their non-funded working capital needs.
30. To allow the L/C’s with deferred payment clause.
31. To strengthen Dealing Room to increase the foreign exchange business.
32. To enhance Foreign Exchange trading increase ancillary income of the bank.
33. To secure low cost fund from abroad especially IDB for financing our projects.
34. To issue and perform of foreign guarantee against counter guarantee.
35. To ensure of ICTD for implementation of eIBS and prompt service.
36. To drive for Foreign Exchange Marker share to be a pioneer in Inter Bank Foreign Exchange Market.
37. To integrate money market and Foreign Exchange Dealing Rom in the same Roof for prompt services.
38. Marketing by Mangers for the introduction of corporate clients of other banks for selling of FC.
39. Capacity building in respect of professional knowledge & skill at Branch & Head Office level through training & practice.
40. Hunting non-funded clients (facilities in working capital i.e. BBL/C, Bills, MDB, Bai-As-Sarf, FBC, BG etc.) both our clients banking with other banks and clients of other banks also.
41. To initiate by the authority of IBBL for expert presser on government bodies to run proper and sufficient application of Islamic Banking Laws in Bangladesh in respect of import and export finance.
42. To recruit a sufficient number of women employees to deal women entrepreneurs and professionals and understand their needs regarding foreign trade.
43. To appoint a customer relation officer as Branch level for developing banker-customer relationship.

Conclusion:

For any banking business foreign trade is the key part of it. Foreign trade consists of export and import. Since Bangladesh is an import based county, so huge payments are made through the hard earnings foreign currency from export and foreign remittances. In conducting of this case study, it reveals that out of the total foreign trade and foreign  Remittance business of Bangladesh, Islami bank Bangladesh has got good will in terms of volume of foreign volume of foreign exchange business and among the banking business in the banking industries it has achieved a remarkable achievement in growth in all areas and is playing in an important role for the creation in the employment as well as through the diversification of its investment and finance. The bank has achieved the market share 14.16% against import, 8% against export and 18.59% against remittance.Today Islami Bank Bangladesh Limited is the market leader in the foreign exchange market and it is keeping an important role to establish the foreign exchange business within the regulatory framework. It is influencing huge foreign currency through export and remittances that strengthening the banking channel and at the same time it is contributing the boosting up the essential food items and also capital machinery and so many ones. Today’s six billion dollar foreign exchange reserve of our country is the outcome of all efforts of Islami bank Bangladesh limited as well as efforts of the whole banking industry.In this study, we see that the bank has good perspective and there are also some challenges in the future. Negative Propagation against Islami Banking, Volatile Foreign Exchange Market, Lack of Automation etc. and some Shariah complaint issues are the challenges for the bank.For the growth and development of our economy, import of capital Machinery, export and remittance earnings should be groomed up and import also should be enriched. Because foreign trade help to optimize the growth and development of our country. That will ultimately develop the professionalism of our banking industry. According to the economic cycle, the more export finance, the more employment, the more income, the more saving and the more investment again. Islami Bank Bangladesh Limited is doing the needful according to the earlier mentioned economic cycle. Not only IBBL but all banking industry should be come forward to develop and enriched foreign trade procedure and its finance and then it is possible to remark in the banking industry.