Internship Report Performance Evaluation Of Exim Bank Limited

INTRODUCTION:

The internship program is an integral part of the BBA program that all the students have to undergo of East West University of Bangladesh. The students are sent to various organizations where they are assigned to one or more projects. At the end of the program, the internships are required to place the accomplishments and findings of the project through the writing of the internship report covering the relevant topics. During this program, supervisor guides each student- one from the university and the other from the organization.

objective of the study:

This study is aimed at providing me valuable practical knowledge about banking operation system especially Islamic banking in Bangladesh. It will also help me to develop my concept of Islamic banking system and its operations. The objectives are:
To know about the previous and present banking system of EXIM Bank Bangladesh Ltd.
To study strengths and weakness of EXIM in comparisons with the competitors.
To relate theoretical knowledge to practical experience in several functions of the bank.
To be acquainted with how bank perform its operation.
To present my observation and suggestions to the bank.
To make myself more confident active in future to handle my job.

Purpose:

Knowledge and learning become perfect when it is associated with theory and practice. Theoretical knowledge gets its perfection with practical application. As our educational system predominantly text based, inclusion practical orientation program , as an academic component is as exception to the norm. as the parties educational institution and the organization substantially benefit from such a program, it seems a “win-win situation”. It establishes contracts and networking contracts. Contracts may help to get a job. That is, students can train and prepare themselves for the job market. A poor country like Bangladesh has an overwhelming number of unemployed educated graduates. As they have no internship experience they have not been able to gain normal professional experience or establish networking system, which is important in getting a job. that’s why practical orientation is a positive development in professional area. Recognizing the importance of practical experience. In such state of affairs the present aiming at analyzing the experience of practical orientation related to an appraisal of Export Import Bank of Bangladesh Limited, Islamic banking Branch.

Scope:

This report will be dealing with an appraisal of Islamic banking system, its history and mechanism, policies and appraisal of Export Import Bank of Bangladesh Limited.

Area of study:

My project was the converting of EXIM Bank Bangladesh Ltd. from conventional Banking system into Islamic banking system.

Information Probe & Sources:
Two sources of data and information have been used widely.
The primary sources are as follows:
• Face to face conversation with the respective officers and staffs of the branch.
• Face to face conversation with clients visited the branch.
• Practical work experience in the different desks of the departments of the branch covered.
• Relevant file study as provided by the officers concerned.

The “secondary sources” of data and information are:
• Annual report of EXIM Bank Ltd.
• Website of the EXIM Bank
• Various books, articles regarding general banking functions.
• Different ‘Producer Manual’, published by EXIM bank.
• Different circular sent by Head Office of EXIM Bank and Bangladesh Bank.

Methodology:

This report has been prepared on the basis of experienced gathered during the period of internship from 2nd of May to 30th July of the year 2006. For preparing this report, I have also get information from annual report and website of the EXIM Bank Ltd. I have presented my experience and findings by using different charts and tables, which are presented in the analysis part.

Limitations:

• It was very difficult to collect the information from various personnel for their job constraint.
• Bank’s policy of not disclosing some data and information for obvious reasons
• Because of the limitation of information, some assumption was made. So there may be personal mistake in the report.
• The time, 3 months only, which is insufficient to know all activities of the branch and prepare the report.

CHAPTER: 2

ORGANIZATION:

Historical Background of EXIM Bank Limited:

EXIM Bank Limited was established under the rules and regulations of Bangladesh Bank and the Bank companies Act 1991, on the 3rd August 1999 with the leadership of Late Mr. Shahajahan Kabir, founder chairman. A group of highly qualified and successful entrepreneurs joined in Exim Bank. Among them, Mr. Najrul Islam Majumder Became the honorable chairman after the demise of the honorable founder chairman.
From its inception, EXIM Bank Bangladesh limited was known as BEXIM Bank, which stands for Bangladesh Export Import Bank Limited. But for some legal constraints the bank renamed as EXIM Bank, which means Export Import Bank Bangladesh Limited. the bank starts it’s functioning from the 3rd August 1999 with Mr. Alamgir Kabir, FCA as the advisor and Mr. Mohammad Lakiotullah as the Managing Director. Both of them have long experience in the financial sector of our country. By their pragmatic decision and management directives in the operational activities, this bank has earned a secured and distinctive positioning the banking industry in terms of performance, growth and excellent management.
The authorized capital and paid up capital of the bank are Tk. 100 million and Yk. 253.13 million respectively.

Corporate culture:

This bank is one of the disciplined banks with a distinctive corporate culture. Here we believe in shared meaning, shared understanding and shared sense making. Our people can see and understand events, activities, objects and situation in a distinctive way. They maintain their manners and etiquette, character individually to suit the purpose of the bank and the needs of the customers who are of paramount importance to us. The people in the Bank see themselves as a tight knit team/family that believes in working together for growth. The corporate culture we belong has not been imposed; it has rather been achieved through our corporate conduct.

Slogan of the EXIM bank-“Together, Towards, Tomorrow”:

Export Import Bank of Bangladesh Limited as the name implies, is not a new type of bank in global but is the first in Bangladesh. It believes in togetherness with its customers, in its march on the road to growth and progress with services. To achieve the desired goal, it has intention to pursuit of excellence at all stages with a climate of continuous improvement. Because it believes, the line of excellence is never ending. It also believes that its strategic plans and business networking will strengthen its competitive edge over in rapidly changing competitive environment. Its personalized quality services to customers with the trend of constant improvement might be cornerstone to achieve its operational success.

Social commitment:

The purpose of banking business is, obviously, to earn profit but the promoters and the equity holders are aware of their commitment to the society to which they belong. A chunk of the profit is kept aside and/or spent for socioeconomic development through trustee and in patrionization of art, culture and sports of the country. The institution wants to make a substantative contribution to the society where it operates, to the extent of its separable resource.

Export Import Trade Handling and Financing:

As a commercial Bank, EXIM Bank Limited performs all traditional Banking business including the wide range of savings and credit scheme products, retail banking with the support of modem technology and professional Excellency. But its main focus is, on export and import trade handling and the development of entrepreneurship of private sectors.

Sources and uses of fund:

The composition of sources of banks fund are paid up capital, reserve, customer deposit and call loan from different banks. The bank used major portion of this fund for investment in loans and advances. The bank also invested in securities and shares. The surplus fund was applied in call money market to earn satisfactory returns.

Deposit:

The total deposit of the bank increased to Tk. 15,242.97 million as on December 31, 2003 from Tk. 9945.23 million as at the end of the previous year indicating an increase of 53.27% than the previous year. The EXIM Bank remains committed to increasing its deposit base on lowering the banks over all cost of fund.

Loans and advances in EXIM Bank Limited:

During the year 2003, total loans and advances increased by tk. 4334.56 million, 54.49% growth over the preceding period. This is due to increased commercial and trade financing, team leading and working capital support. The classified loan position is almost nil. This was achieved by rendering due attention and monitoring high-risk advance. As a result, classified advance is amounted to Tk. 298.03 million in 2003. the bank is trying to operate its credit activities with the target of achieving Zero classified loans.

Investment of EXIM Bank Limited:

The size of investment portfolio of the bank as on December 31, 2003 stood at Tk. 2377.073 million against Tk. 1419.00 million in the previous year showing an increase of 67.52%. the notable investment represents deployment in treasury bills and Shares, Prize bond and others.
Import business:
The total import business handled by the EXIM Bank during the year 2003 was Tk. 19260.01 million as compared to Tk. 13152.50 million in the previous year showing an increased rate of 46.44%. the significant items of imports were industrial raw materials, comsumer goods, machinery, Fabrics and accessories etc.

Export Business:

The total volume of export handled by the bank during 2003 was Tk. 15124.60 million compared to Tk. 10088.30 million in the previous year are showing an increased rate of 49.92%. the export trade continuous to be a major growth area for the bank and the bank intends to concentrade in this business in the coming years.

SWIFT Service:

The SWIFT services helped the bank in sending and receiving the messages and instructions related to its NOSTRO account operations and L?C related matters. The bank has brought 8 of its branches under SWIFT network. Other branches will come under the network hopefully by the year 2005.

Strategies of EXIM Bank Limited:

The business of banking consists of borrowing and lending. As in other businesses operations must be based on capital, but banks employ comparatively little of their own capital in relation to the total volume of their transactions. The purpose of capital and reserve accounts is primarily to provide an ultimate cover against losses on loans and investments.
Hence there are readily insurance agents who are mostly there to assure the prospective customers as to how they can restore themselves should there be any losses. Furthermore deposit they have to gather within a given span of time. Now that, to some extent assures the constant inflow of cash. Most importantly, the contracts of the bank Manager and the senior Vice President mostly assure highly valued corporate clients to make deposits and in return

the bank is benefited. It is mainly a familiar management style that prevails in the corporate climate of EXIM Bank as rather than strictly being a bureaucratic organization.
This bank gives the employees the flexibility to open up their minds in cases of discrepancies and they are always been heard and looked after.
Another strategy being the fact that compared to other banks EXIM Bank is comparatively new; hence; it is slow to emerging in the banking arena, but considering amount of time. It has taken to be at the current position is really remarkable, and it was only possible because of that fact that EXIM Bank has its mission in line and does not go off track just to be highly competitive. So, in other words, it is well aware of its position and it takes the help of traditional banking areas where making simple pay orders, telegraphic transfers, and standing orders and other retail banking facilities where it accumulates a huge share its profits.
Altogether important fact worth mentioning remains that customer based of EXIM Bank especially the corporate customers; who are highly valued and specially treated; the bank considers them to be their own assets and these individuals have concrete and well established business. So, hence it is of premium looking after the needs of these individuals. The bank is now opening the credit card with the cooperation of Prime bank from 2003.

Value of EXIM bank limited:

To have a strong customer focus and to build relationship based on integrity, superior service and mutual benefit.
To work as a team to serve the best interests of the organization.
To work for continuous business improvement.
To value and respect people and make decisions based on merit.
To provide recognition and reward on performance.

Special feature of EXIM Bank Limited:

Though EXIM Bank is engaged in conventional commercial banking it also consider the inherent desire of the religious Muslims, and has launched Islamic banking system and inaugurated two Islamic banking Branches in the year 2002 and one branch in 2003. And finally on 1st of July 2004the Bank fully converted a shariah Based Islami Bank.
It is pioneer in introducing and launching different customer friendly deposit schemes to tap the savings of the people for challenging the same to the productive sectors of the economy.
For up lifting the standard of living of the limited income group of the population the bank has introduced monthly saving schemes to encourage the common and fixed income group of people.
The bank is committed to continue research and development so as to keep pace with modern banking.
The bank has introduced customer relations management system to assess the needs of various customers and resolve any problem on the spot.
The bank has introduced camera surveillance system (CCTV) to strengthen the security services inside the bank premises.
The bank has also decided to go for online banking facility to the customer in near future.

CHAPTER:3

3. An overview of financial performance

3.1 Capital structure

From the above table we can understand that last four years from 2002 to 2005 surplus in profit account had a great contribution to increase in capital of this bank.

3.3 Deposit Measures

From the above table and the figures bellow we can understand that the major portion of deposit came from saving deposit, fixed deposit. In 2004, 82.35% of its deposit came from fixed deposit. It is good for the bank’s operation because they can use this stable fund in long term loan or in long term investments which increase interest earning. One the other hand fixed deposit has a bad impact on net income of the bank because it is the most costly fund. It increases means cost of fund increase.

3.4 Growth of net profit

The table shows net profit of EXIM Bank Ltd. in different years. Its profit increases gradually. From the end of 2003 to the end of 2004 the percentage change in net profit was 49.85; it is the highest change in net profit within last four years.

The chart also shows net profit of EXIM Bank Ltd. in different years. Its profit increases gradually. Every year it earns positive return which has a positive impression on shareholders. So the bank is able to maximize its shareholder equity. To see the chart it can be said that the performance of EXIM Bank Ltd. is good. Though there are some factors which determine the performance level, initially we can take a decision about performance by seeing net profit.

3.5 Profitability ratio

Now there are 49 scheduled banks operating in Bangladesh market. Among them four are Nationalised Commercial Bank (NCB), five are Specialised Bank, ten are Foreign Commercial Bank (FCB), and thirty are Private Commercial Bank (PCB) including Islamic Banks.

Return on Asset (ROA) the ratio of net income to total assets; it provides an idea of the overall return on investment earned by the firm. Return on Equity (ROE) the ratio of net income to common equity; it measures the rate of return on common stockholders’ investment.

Above table and figure shows the profitability of overall Banking Industry in Bangladesh. Here it is observed that every year ROA and ROE of Foreign Commercial Banks (FCBs) is higher among all banks. So the overall return on investment and the rate of return on common stockholders’ investment of FCBs are higher than other. And after FCBs the position of Private Commercial Banks (PCBs) is strong. PCBs also are in profitability. But Nationalised Commercial Banks (NCBs) and Specialised Banks are in trouble, because they incurring huge loss every years. Let’s see what about the EXIM Bank Ltd..

In 2004 EXIM’s 1.75 percent return is well above the 0.70 percent average for the industry. And in 2003 EXIM’s 3.15 percent return is well above the 0.50 percent average for the industry. And in 2002 EXIM’s 3.40 percent return is well above the 0.50 percent average for the industry.

In 2004 EXIM’s 27.27 percent return is well above the 13 percent average for the industry. And in 2003 EXIM’s 34.05 percent return is well above the 9.8 percent average for the industry. And in 2002 EXIM’s 36.53 percent return is well above the 11.6 percent average for the industry.

In terms of profitability EXIM Bank Ltd. is doing well because its return on assets (investment) and equity are above average industry return. The bank’s ROA and ROE are well above of market average of private commercial bank (PCB).

3.6 Assets Expansion

The assets of EXIM Bank Ltd. are fluctuating. It is a good sing for the bank. Assets means cash, loan, investment etc. the bank performs well in operation, so its assets increasing gradually. From 2002 to 2003 assets expansion was 57.27% and from 2003 to 2004 assets expansion was 36.15%. From 2004 to 2005 assets expansion was 38.43% and from 2003 to 2004 assets expansion was 36.15%

Above figure shows the assets of EXIM Bank Ltd. in different years. We see that assets are increasing rapidly.

3.7 Earning per Share (EPS)

Above table and figure show the Earning per Share of EXIM Bank Ltd. in different years. It earned positive returned in every years. So the shareholders of the bank are in profitable position. So we can say that the management team was able to maximize shareholders wealth.

3.8 Capital to Risk Weighted Assets

A bank’s capital is used as a cushion against risky assets. Capital was categorized into two tires: Tire 1 i.e. Core Capital comprising the highest quality capital elements and Tire 2 i.e. Supplementary Capital represent other elements, which fall short of some of the characteristics of the core capital but contribute to the overall strength of a bank.

Bank’s risky assets are loans and advances, investments etc. Both balance sheet assets and off-balance sheet exposures are to be weighted according to their relative risk. Presently, there are four categories of risk weights-0, 20, 50 and100 percent. Off-balance sheet transactions are to be converted into balance sheet equivalents for the purpose of assessing the capital adequacy before assigning a risk weight.

In January 1996, Bangladesh Bank (BB) announced a new policy on Capital Adequacy along the lines recommended by the Basel Committee on banking supervision. The Revised policy on capital adequacy requires scheduled banks to maintain at least 9% of off-balance sheet risk and risk in different types assets as capital.3.9 Net interest income

Table 3.12 and figure 3.12 show Net Interest Income (Million Taka) of EXIM Bank Ltd. in different years. It earned positive returns means it earned interest without incurring any losses. So we can assume that the operational performances of the bank is good for which it earned interest by spending low cost.

3.10 Overall Productivity

Above table shows Expenditure-Income ratio of overall banking industry in different years. In 1997 to raised 100 taka from market a bank needed to spend 95.3 taka and in 2004 to raised 100 taka from market a bank needed to spend 90.9 taka. In 1997 to

raised 100 taka from market a Private Commercial Bank (PCB) needed to spend 85.9 taka and in 2004 to raised 100 taka from market a Private Commercial Bank (PCB) needed to spend 87.1 taka.

Above table shows Expenditure-Income ratio (%) of EXIM Bank Ltd. in different years. In 2002 to raised 100 taka from market EXIM Bank Ltd. needed to spend 34.24 taka which was well bellow than average industry cost 93.3 taka. In 2003 to raised 100 taka from market EXIM Bank Ltd. needed to spend 33.06 taka which was well bellow than average industry cost 93.9 taka and in 2004 to raised 100 taka from market EXIM Bank Ltd. needed to spend 31.00 taka which was also well bellow than average industry cost 90.1 taka. In 2005 to raised 100 taka from market EXIM Bank Ltd. needed to spend 27.04 taka. So we can say that EXIM Bank Ltd. doing its business well because it can able to raise money form this hyper competitive market with lower than average industry cost.

Chapter: 3

THE CONCEPT OF ISLAMIC BANKING & EXIM BANK:

Islamic Economy
An Islamic economy is a market economy guided by moral values. Economic activities are based on principles of cooperation and responsibility. Cooperation means that an economic exchange will be beneficial to both parties involved in. transactions in which one party wins at the expense of the other are not permissible in Islam. Thus, monopolistic dealings, usury and exploitation are prohibited. Transactions that allow both parties to win are permissible, and these include most types of activities needed for economic prosperity. Permissible and these include most types of activities needed for economic prosperity. Performance based arrangements, like profit sharing or partnership, represents the most cooperative form of beneficial agreements, and thus is highly encouraged in Islam. Responsibility means that each individual is entitled for reward or return based on his effort and contribution. Thus gambling and lotteries are not permissible. Gambling lows an individual to gain based on pure luck, not on merit or effort. It shifts wealth blindly among participants leading to improper distribution of wealth. Gambling is a clear form of zero-sum game where one party wins only if the other losses, and causes hatred and enmity among participants. A society where lotteries or gambling- like activities prevail is a zero-sum society, where the winner takes all, and the rest is doomed to fail.
Islamic economics is a framework for studying economic activities that allow mutual benefit of exchange to be realized. It provides proper tools and techniques for evaluating economic decisions, showing when and how to achieve win/win outcomes and avoid win/lose or lose/lose ones. Islamic economics is based on the principle that Allah, the Almighty created this world with plenty of resources that satisfy the needs of everyone. Thus one person’s success is not necessarily achieved at the expense or excluding of the success of the others. This “win/win” framework leads to better economic behavior and performance, and thus promises better future for mankind.

Islamic Banking
Islamic banking is an inseparable part of Islamic economy. During the fifty’s it was only a subject matter of research and was limited to the writing of scholars and philosophers. During the sixty’s actual experiment were made and in the seventy’s Islamic Banking Institutions started gaining strength. The eighty’s and ninety’s are the period of consolidation and now Islamic Banking is coming up as the only welfare banking system of the modern world.

There has always been a desire to establish financial institution to operate as per the tenets of Islamic Shariah. A successful Islamic banking venture in My Gamer, Egypt was launched in 1963. subsequently, Islamic banking movement achieved steady progress and assumed significant dimension and role with the establishment of the Nasser Social Bank (1972), Dubai Islamic Bank (1975),Islamic Development Bank (IDB) (1975), Faisal Islamic Bank in Egypt and Sudan (1977). Emergence of the Islamic Development Bank as an International Islamic Financial Institution with a view to involving all the Islamic countries in the establishment of Islamic Banks and Financial Institutions was considered as a milestone in the history of Islamic Banking. In August 1974, Bangladesh signed the charter of Islamic Development Bank and committed itself to reorganize its economic and financial system as per Islamic Shariah.
Earlier in November 1980, Bangladesh Bank, the country’s central Bank sent a representative to study the working of several Islamic Bank’s abroad. In January 1981, at the 3rd Islamic summit conference held at Mecca and Taif, a great emphasize were given on that the Islamic countries should develop a separate banking system of their own in order to facilitate their trade and commerce.
In November 1982, a delegation of IDB visited Bangladesh and showe keen interest to participate in establishing a joint venture Islamic Bank in the private sector. They found a lot of work had already been done and Islamic banking was in ready for immediate introduction. Islamic Economic Research Bureau (IERB) and Bangladesh Islamic Banker Association (BIBA) made contributions towards introduction of Islamic Banking in the country.
Development of Islamic Banking in Bangladesh
At present full fledged Islamic Banks viz.
Export Import Bank of Bagladesh Limited (EXIM)
Islamic Bank Bangladesh limited (IBBL)
Ai-Baraka Bank Bangladesh Limited (ABBL).
Al- Arafah Islamic Bank Limited (AIBL)
Social Investment Bank Limited (SIBL).
Shahajalal Bank Limited (SBL).
shamil Bank of Bahrain EC (Islamic Bankers).
The first Islamic Bank, Islamic Bank Bangladesh Limited was established in March 1983 to conduct banking activities on the basis of the basic tenets of Islamic Shariah.
Later, Al Baraka Bank Bangladesh Limited was established as the second interest free Islamic Bank in March 1987.
The third and fourth Islamic Banks of Bangladesh namely, Al-Arafah Islamic Bank Limited and Scial Investment Bank Limited has started functioning in Bangladesh from September 27, 1995 and November 25, 1995 respectively.
Fifth private sector Islamic Bank “ Shahjalal Bank Limited” has been started banking operation very recently from mid-May 2001.

Last and sixth private sector bank “Export Import Bank of Bangladesh Limited” has been started banking operation from 1st July 2004.
The only Foreign Islamic Bank “Shamil Bank of Bahrain e.g (Islamic bankers)” which is the largest Islamic Bank of the world opened a Branch in Dhaka, Bangladesh, in August 1997.
Present status of Islamic Banking in Bangladesh
The growth of Islamic Banking in Bangladesh is progressing day by day. Islamic Banking is a brighter reality now a days in the competitive business and financial world. The present status of the Islamic Banking in Bangladesh has been highlighted in the ongoing passage.
Problems of Islamic Banking in Bangladesh
Presently 60%-70% investment of Islamic Banks is made on mark-up profit basis (Murabaha and Bai-Muajjal etc.). as a result, ideal mode of investment (Mudaraba and Mushraka) is quite absent. Some of the typical problems faced by the Islamic Banks are:
Absence of Islamic Money Market.
Absence of Legal framework for Islamic Banking
Shortage of support and link institutions
Shortage of trained manpower, and
Lack of co-ordination and co-operation among Islamic Banks.

EXIM BANK AS A SHARIAH BASED ISLAMI BANK

Conversion (Islamization) of EXIM Bank Bangladesh Ltd.

Bangladesh is the 2nd greatest Muslim country in the world. The peoples of the country are very religious. Such as fanaticism is strongly present here, also the liberal Islamic rules has been practicing in the country since many years. After free from British administration, demand for a separate land was constructed to the people of this country. It became truth slowly by a very bloody war in1971. the country started its run with a broken economy. Bangladesh announced as a Muslim country in 1981. beside of conventional system it was trying to begin Islamic Banking System from many government and non-government platforms. After passing a prickly way the first Islamic bank of Bangladesh “Islami Bank Bangladesh Limited” was opened on 27th march in 1983. unbelievable response about Islamic banking observed from the people of Bangladesh. After the tremendous success of Islamic banking, five Islamic Banks were established in Bangladesh. Expect it some conventional banks was opened one or more that one Islamic branch after observing more confident of

customers on Islamic bank. Although some experts expressed comments that, this system is not the proper Islamic banking system. Though there are some technical defect, but these Islamic branches of conventional banks was enable to earned more profit than other conventional branches. So, now it has been proved that people are become more confident to the Islamic banking system. It has been observed from the comparative study of some bank’s yearly profit, “ Islami Bank Bangladesh Limited” was earned four or five times more profit than other conventional banks. This is the present actual picture of Islamic Banking in Bangladesh.
Recently “Export Import Bank of Bangladesh Limited” has established a historical example in the world. The bank has fully converted into Islamic Banking system fro conventional banking with all of its 19 branches on 1st July 2004. it is easy to say but the work was not at all an easy work. It was really a difficult work. Though the work

has been completed successfully by untiring effort of the policy makers, all executives and officers of the bank.
It is very important to transform all conventional banks in a country into Islamic Banking if we want to conduct Islamic banking properly on the basis of Islami Shariah.
In this context Sixth International Conference on Islamic Economics & Finance will take a vital role to spread Islamic banking all over the world. As an employee of Export Import Bank of Bangladesh Limited I feel proud for my participation of the transformation directly. That’s why I want to express my experience about Islamization of a conventional bank to encourage the people who are interested to do the job.
Here I try to describe the shariah based Islami bank and the reason of conversion as a Shariah based Islami bank.

RIBA and Its Basic Features

The word used by the Holy Quran concerning ‘interest’ is Riba. The literate meaning of Riba are money increase, increase of anything or increment of anything from its original amount. However, all increases are not considered as Riba in Islam. Money may increase in business activities as well. This increase is not at all considered as Riba. The increase, instead of being prohibited (Haram), is approved (Halal) Islam, Islam prohibits only those increases that are charged on the loan with a prefixed rate.
Muslim scholars equate Interest with Riba. In the Shariah, Riba technically refers to the premium that must be paid by the borrower to the lender along with the principal amount as a condition for the loan or for an extension in its maturity. In other words, Riba is the predetermined return on the use of money. In the past there has been dispute about scholars that the term covers all forms of interest and not only ‘excessive’ interest.
In the era of ignorance (Jahiliah) moneylenders in Arabia charges a prefixed extra amount on their money lent out. Some of them lent goods or crops and took back prefixed extra amount on and above the principal amount. In those days the extra

amount charged on the principal amount of money or goods was also termed as Riba. The term in the Quran has been used in the same sense.
Imam al Rajhi describes, “During the era of Jahiliah people invested their money and charged Riba on a monthly basis, though the invested amount remained unchanged. So invested money was called back at the time of repayment- Incase of the borrower being unable to pay back, the lender extended the period of repayment enhancing the amount to be paid on and above the principal amount.” Abu Bakar al Jasas writes, “During the period of Ignorance the lender and borrower came to an agreement that the borrower would pay back within a specified period the principal amount along with the agreed upon excess.” Ibne Hajar Askalani says,”Excess goods or money charged on and above principal amount is riba.”
Thus, any prefixed extra amount charged on a specified amount of money or goods lent out is called Riba.
The most important characteristic of Riba is that it is the positive and definite result of money when changed. In other words, when money begets money, without being exchanged for goods or services, it is called Riba. Its basic characteristics are:
• It must be related to loan;
• A prefixed amount of money to be paid when due;
• A time is fixed for the repayment; and
• All these elements for repayment are taken as conditions for loan.

RIBA and Profit
There are some persons who try to equate Riba with profit. In effect, they are fundamentally different from each other as can be seen from the following:

Riba Profit
1 when money is “charged”, its imposed positive and define result is Riba. 1. When money is used in trading (for e. g) its uncertain result is profit.
2. By definition, Riba is the premium paid by the borrower to the lender along with principal amount as a condition for the loan. 2. By definition, profit is the difference between the value of production and the cost of production.
3. Riba is prefixed, and hence there is no uncertainity on the part of either the givers or the akers of loans. 3. Porfit is post determined, and hence its amount is not known until the activity is done.
4. Riba can not be negative, it can be best, be very low or zero. 4. Profit can be positive, zero or even negative.
5. From Islamic Shariah point of view, it is Haram. 5. From Islamic Shariah point of view, it is Halal.

Distinguishing Features of Islamic Banking

An Islamic bank has several distinctive features compared to its conventional counter party the six essential differences as below:
Abolition of interest (Riba) : since Ribs is Prohibited in the Quran and interest in all its asking to Riba , as confirmed by Fuqaha and Muslim economists with rare exceptions, the first distinguishing feature of an Islamic bank must be that it is interest-free.
Adherence to Public Interest: Activity of commercial banks being primarily based on the use public funds, public interest rather than individual or group interest will be served by Islamic commercial banks. The Islamic banks should use all deposits, which come from the public for serving public

interest and realizing the relevant socio-economic goals of Islam. They should play a goal oriented rather than merely a maximizing role and should adjust themselves to the different needs of the Islamic economy.
Multi-purpose Bank: another substantial distinguishing feature is that Islamic banks will be universal or multi-purpose banks and not purely commercial banks. These banks are conceived to be a crossbreed of commercial and investment banks, investment trusts and investment management institutions, and would offer a variety of services to their customers. A substantial part of their financing would be for specific projects ventures. Their equity- oriented Investments would not permit them to borrow short-term funds and lend to long-term investments. This should make them less crisis-prone compared to their capitalist counterparts, since they would have to make a greater effort to match the maturity of their liabilities with the maturity of their assets.
More careful evaluation of Investment Demand: another very important feature of an Islamic band’s its very careful attitude towards evaluation of applications for equity oriented financing. It is customery that conventional banks evaluate applications, consider collateral and avoid risk as much as possible. Their main concern does not go beyond ensuring the security of their principal and interest receipts. Since the Islamic bank has a built in mechanism of risk sharing, it would need to be more careful in how if evaluates financing requests. It ads a healthy dimension in the whole fending business and eliminates a whole range of undesirable lending practices.
Work as catalyst of development: profit- loss sharing being a distinctive characteristic of an Islamic bank. Fosters closer relations between banks and entrepreneurs-It helps develop financial expertise in non-financial firms and also enables the bank to assume the role of technical consultant and financial adviser, which acts as catalyst in the process of industrialization and development.
Conventional and Islamic Banking
The principle regarding financial transactions in Islam is that there should not be any reward without taking a risk. This principle is applicable to both labor and

capital. As no payment is allowed for labor , unless it is applied to work ,there is no reward for capital unless it is exposed to business risk.

Thus, financial Intermediation in an Islamic framework has been developed on the basis of the above two principles. Consequently financial relationships in Islam have been participatory in nature. Several theorists suggests that commercial banking in on interest free system should be organized on the principle of profit and loss sharing. The institution of interest is thus replaced by a principle of participation in profit and loss.
That means a fixed rate of interest is replaced by a variable rate of return based on real economic activities. The distinct characteristics which provide Islamic banking with its main points of departure from the traditional interest-based commercial banking system are: (a)the Islamic banking system is essentially
profit and loss sharing system and not merely an interest (Riba) banking system; and (b) investment (loans and advances in the Conventional sense) under this system of banking must serve simultaneously both the benefit to the investor and the benefit of the local community as well. The financial relationship as pointed out above is referred to in Islamic jurisprudence as Mudaraba.
For the interest of the readers, the distinguishing features of the conventional banking and Islamic banking are shown in temrs of a box diagram as shown below:

1) the functions and operating modes of conventional banks are based on manmade principles. 1) the functions and operating modes of Islamic banks are based on the principles of Islamic Shariah.
2) the investor is assured of a predetermined rate of interest. 2) in contrast, it promotes risk sharing between provider of capital (investor) and the user of funds (entrepreneur).
3) it aims at maximizing profit without any restriction. 3) it also aims at maximizing profit but subject to Shariah restrictions.
4) it does not deal with Zakat. 4) in the modern Islamic Banking system, it has become one of the service-oriented functions of the Islamic banks to collect and distribute Zakat.
5) leading money and getting it back with interest is the fundamental function of the conventional banks. 5) Participation in partnership business is the fundamental function of the Islamic banks.
6) Its scope of activities is narrower when compared with an Islamic bank. 6) Its scope of activities is wider when compared with a conventional bank. It is, in effect, a multi-purpose institution.
7) It can charge additional money (compound rate of interest) in case of defaulters. 7) The Islamic banks have on provision to charge any extra money from the defaulters.
8) In it very often, babk’s own interest becomes prominent. It makes no effect to ensure growth with equity. 8) It gives due importance to the public interest. Its ultimate aim is to ensure growth with equity.
9) For interest-based commercial banks, borrowing from the money market is relatively easier. 9) For the Islamic banks, it is comparatively difficult to borrow money from the money market.
10) Since income from the advances is fixed, it gives little importance to developing expertise in project appraisal and evaluations. 10) Since it shares profit and loss the Islamic banks pay greater attention to developing project appraisal and evaluations.
11) the conventional banks give greater emphasis on credit worthiness. 11) The Islamic banks, on other hand, give greater emphasis on the viability of the projects.
12) The status of a conventional bank, in relation to its clients, is that of creditor and debtors. 12) The status of Islamic bank in relation to its clients, is that of partners, investors trader.
13) a conventional bank has to guarantee all deposits. 13) Strictly speaking an Islamic bank cannot do it.

WHY ISLAMIC BANK
The objective if Islamic Banking is not only to earn profit, but also to do good and welfare to the people. Islam upholds the concept the money, income and property belong to the Allah and this wealth is to be used for the good of the society.
Islamic Banks operate on Islamic principles of profit and loss sharing, strictly avoid interest, which is the root of all exploitations and is responsible for large-scale inflation and unemployment.

An Islamic bank is committed to do away with disparity and establish justice in the economy, trade, commerce and industry; build socio-economic infrastructure and create employment opportunities.

DIFFERENT DIVISION IN HEAD OFFICE OF EXIM BANK LTD.

The head Office has different divisions as :

Human Resources Division.

Investment Division

General Banking Division

Marketing Division

International Division

Financial Administration Division

Internal Control & Compliance Division

General Service Division

MANAGEMENT OF EXIM BANK LTD.

The Organization structure and corporate governance of Exim Bank Ltd. strongly reflect its determination to establish, uphold and gain a stronger footing as an organization which is customer oriented and transparent in its management.

BOARD COMMITTEE OF EXIM BANK LTD.

The responsibilities of each committee are determined by the board of directors who also decides on the composition of each committee.

EXECUTIVE COMMITTEE OF EXIM BANK LTD.

All routine matters beyond delegated powers of management are decided by or routed through the executive committee, subject to ratification by the board of directors.

POLICY COMMITTEE OF EXIM BANK LTD.
All matter relating to the principals, policies, rules and regulation, ethics etc. for operation and management of bank recommended by the committee to the board of directors

ORGANIZATIONAL STRUCTURE OF EXIM BANK LTD.
Exim Bank Ltd. is a centralized organization and operates in a functional oriented structure. Activities are designed on the basis of traditional banking business, such as credit, international division, administration etc. Exim Bank Ltd. has a formal
organizational structure that is highly specialized and centralized. The whole organizational structure is given below:

Board of Directors

Managing Directors

Deputy Managing Director

Executive Vice President

Senior Vice President

Vice President
Senior Assistant Vice President

Assistant Vice President

Senior Principal Officer

Principal Officer

Executive Officer

Officer

Junior Officer

Assistant Officer

SWOT ANALYSIS OF EXIM BANK LTD.

STRENGTH
Strong management and highly satisfied employees is the main strength of EXIM Bank. Provide adequate level of service and ability to keep the customers are the key to makes the bank success. Skilled employees and their well manner make the Service attractive to the customers. Customers are satisfied here to make relationship with EXIM Bank.
WEAKNESS
The main weakness of the Jessore branch is lack of coordination between the employees. However, it is a famous private bank but customers are still deprived from the prompt online banking.
OPPORTUNITY
Location is the opportunity for this branch. This bank makes the transaction easy for Benapol Border. Being a Shoria based bank it attracts the attention of the religious people as well as general people. Though it’s a Sharia based bank other religious people are also interested to communicate with them.

THREAT
Jessore is a small place but too many banks are situated here. Those private and public banks are the main threat for the EXIM bank. Property owner’s threat is a big problem for the bank. That is why the bank cannot expand their operation system.

STRATEGIC FRAMEWORK OF EXIM BANK LTD

OPERATION OF EXIM BANK LTD.

The importance of the mobilization of savings for the economic development of our country can hardly be over emphasized. The bank considers savings and deposits as

its lifeblood. More the deposits – the greater the strength of the bank. So the bank launched various savings schemes with prospect of higher return duly supported by a well orchestrated system of customer savings.

There are three types of operational divisions in Exim Bank Ltd. are:
• General Banking
• Investment
• Foreign Exchange.

GENERAL BANKING

It is most important side of the bank. Bank is nothing but a middleman between lenders and borrowers. To provide investment facilities, a bank needs a huge amount of money from the depositors. General banking is the side where banks offer different alternatives to the clients to deposit and remit their money. To encourage the clients, bank offers different options in front of their clients. Most of these options are very much similar between the banks, but the customer services and facilities may not be the same.

General Banking of Exim Bank Ltd. is divided into four divisions:
• Account opening
• Clearing
• Remittance
• Accounts

01) ACCOUNT OPENING

The relationship between the banker and the customer begins with the opening of an account by the customer. Initially all the accounts are opened with a deposit money by the customer and hence these accounts are called deposit account. Usually a person needs to open an account to take services from bank. Without opening an account, one can get only a few services from the bank. So the banking begins actually by opening an account with a bank. Generally, following types of account can be opened in Exim Bank Ltd.

A. Al-wadia Current Deposit Account
B. Mudaraba Savings Bank Deposit Account
C. Mudaraba Term Deposit Accounts
D. Other Schemes Deposit Accounts

A) Al-wadia Current Deposit Account

Al-wadia Current account is purely demand deposit account because the bank is bound to pay the amount to the account holder on demand at any time. It is running and active account, which may be operated upon any number of times during a working day. There is no restriction on the number and the amount of withdrawals from a current account. The special characteristics of an Al-wadia current account are as follows:
• The primary objective of Al-wadia current account is to serve big customers such as businessmen, joint stock companies, private limited companies, public limited companies etc. from the risk of handling cash by themselves.
• The cost of providing Al-wadia current account facilities is considerable to the bank since they undertake to make payments and collects the bills, drafts, cheques for any number of times in particulars day. The bank therefore does not pay any interest on Al-wadia current account deposit while in the other hand some banks charge for incidental charges on such account.
• For opening of a Al-wadia current account minimum deposit of Tk.2,000/- is required. Introductory reference is also required for opening of such account

The following documentations and formalities are required for opening Al-wadia current account.

DOCUMENTATION

a) Proprietorship
• Up-to-date copy of Trade license
• Introducer
• Two copies of Photograph
• Seal
b) Partnership
• Up-to-date copy of Trade license
• Introducer
• Two copies of Photograph
• Seal
• Photocopy of Partnership deed
• Agreement and letter of partnership.
c) Limited company
• Certified copy of Memorandum and Articles of Association, signed & sealed by the managing director
• Copy of incorporation certificate
• Introducer
• Two copies of Photograph
• Seal
• List of Directors
• Resolution for opening account with the bank
• Certificate of commence of business.
d) Societies, Clubs, Associations etc
• Up-to-date trade license
• Registration from concerned authority
• By laws

• Resolution for opening account with the bank
• Introducer
• Seal

FORMALITIES

1. Application on the prescribed form
The person willing to open an Al-wadia current deposit account with the bank has to make application in the prescribed form. This form must be properly filled in and signed by the applicant.

2. Introducer of the Applicant
The applicant also required to furnish in the application form the name of referees from whom the banker may make inquires regarding the character, integrity and respectability of the applicants. In most cases the introduction is done by the customer of the bank or some other person acceptable to the bank by signing on the application form with his / her account number.

3. Specimen Signature
Every customer is required to supply to his banker with one or more specimen of his/ her signature. These signatures are taken on cards, which are preserved by the banker and his/her signature of the account holder on the cheques is compared with the specimen signature.

4. Opening and operating the account
After the above formalities are over, the banker opens an account in the name of applicant. Generally the minimum amount to be deposited initially is Tk. 2,000/- for opening an Al-wadia current accounts. Then the bank provides the customer with a pay in slip/deposit book.

5. A pay in slip/ deposit book
With a view to facilitate the receipt of deposit items paid in by a customer, the bank will provide him/her pay in slip either loose or in a book forms. The customer has to

fill in the pay in slip at the time of deposit in the money with the bank. The cashier with his / her initials and stamps will return the customer foil to the customer on the receipt of the money.

6. Cheque Book
To facilitate withdrawals and payments to third parties by the customer, the banker will also supply a cheque book to the customer. But it is noted that to get a cheque book, the customer has to duly fill up the cheque requisition slip to the banker.

B) Mudaraba Savings Bank Deposit Account

A Mudaraba Savings Bank Account is meant for the people of the lower and middle classes who wish to save a part of their incomes to meet their future need and intend to earn an income from their savings. It aims to encouraging savings of non trading persons, institutions, society and clubs etc. by depositing small amount of money in the bank. Both the elements of time and demand deposit are present in this account.
The following documentations and formalities are required for opening Al-wadia current account.

DOCUMENTATION
• Introducer
• Two copies of Photograph
• Nationality Certificate
• Nominee declaration form.

FORMALITIES

1. Application on the prescribed form
The person willing to open a Mudaraba Savings Bank Deposit account with the bank has to make application in the prescribed form. This form must be properly filled in and signed by the applicant

2. Introducer of the Applicant
The applicant also required to furnish in the application form the name of referees from whom the banker may make inquires regarding the character, integrity and respectability of the applicants. In most cases the introduction is done by the customer of the bank or some other person acceptable to the bank by signing on the application form with his / her account number.

3. Specimen Signature
Every customer is required to supply to his banker with one or more specimen of his/ her signature. These signatures are taken on cards, which are preserved by the banker and his/her signature of the account holder on the cheques is compared with the specimen signature.

4. Opening and operating the account
After the above formalities are over, the banker opens an account in the name of applicant. Generally the minimum amount to be deposited initially is Tk. 1,000/- for opening a Mudaraba Savings Bank Deposit account. Then the bank provides the customer with a pay in slip/deposit book.

5. A pay in slip/ deposit book
With a view to facilitate the receipt of deposit items paid in by a customer, the bank will provide him/her pay in slip either loose or in a book forms. The customer has to fill in the pay in slip at the time of deposit in the money with the bank. The cashier

with his / her initials and stamps will return the customer foil to the customer on the receipt of the money.

6. Cheque Book
To facilitate withdrawals and payments to third parties by the customer, the banker will also supply a chequebook to the customer. However, it is noted that to get a chequebook, the customer has to duly fill up the cheque requisition slip to the banker.

C) Mudaraba Term Deposit Receipt

These are the deposits, which are made with the bank for fixed period specified in advance. It is purely a time deposit account. The bank does not maintain cash reserve against these deposits and therefore the bank offers higher provisional rates of profit on such deposits. At present the provisional rate of profit for MTDR in Exim Bank Ltd. are as follows:

D) Other types of Deposit Account

a) Mudaraba Short term deposit account
It is also a time deposit account. The formalities for opening of this account are to those required for Al-wadia current deposit account. The only difference is that 7 days notice required for withdrawal of any sum and profit is paid.

b) Other savings schemes
To attract depositors and encourage saving Exim Bank Ltd. introduced various savings schemes. Like:
• Money Grower
• Steady deposit scheme
• Super savings scheme
• Multi plus savings scheme
• Education savings scheme
• Hajj deposit scheme

02) CLEARING

Clearing house is an assembly of the locally operating scheduled banks for exchange of cheques, drafts, pay orders and other demand instruments drawn on each other and received from their respective customers for collection. The house meets at the appointed hour on all working days under the supervision of central bank or its agent as the case may be and works within the regulations framed therefore based on prevailing banking practices. In Bangladesh, clearing house sites at Bangladesh Bank where there is no office of Bangladesh Bank, Sonali Bank acts as agent of Bangladesh Bank.
The entire numbers bank representative daily conducts two meetings at a fixed time in their first meeting, they handover instruments that were drawn upon them. In case

there are certain cheque, which could not be honored are returned to the presenting banks with the reasons of non-payments in the second meeting at the clearinghouse.

03) REMITTANCE

Sending money from one place to other places for the customer’s is another important service of banks and this service is an important part of countries payment system. For this service, people specially businesspersons transfer funds from one place to another very quickly. There are various types of remitting money:

Pay Order
The Pay Order is issued for making a remittance to the local creditor. Pay Order gives the payee the right to claim payment from the issuing bank. It can be en-cashed from issuing bank only. Unlike cheque, there is no possibility of dishonoring pay order because before issuing pay order bank takes out the value of pay order in advance.

Demand Draft
Demand Draft is an order of issuing bank on another branch of same bank to pay specified sum of money to the payee on demand that is the named person or order of the demand. It is generally issued when customer wants to remit money in any place, which is out of side of the clearinghouse area of issuing branch. Payee can be purchaser or another mentioned in the DD.

Telephonic Transfer
This method transfers money from one place to another place by telephonic message.

On-line Transfer
This method transfer money from one place to another place through internet.

INVESTMENT
INVESTMENT IN CATEGORIES
Investment has primarily been divided in to two major groups:

01. Izara Bill Baia:
These are the investments made by the bank with fixed repayment schedules. The term of investment are defining by follows:
Short term : up to 12 months
Medium term : more than 12 and up to 36 months
Long term : more than 36 months

02. Continuing Investment:
These are the investments having no fixed repayment schedule, but have an expiry date which it is renewable a satisfactory performance.

Further all categories of investments have been accumulated under the 7 prime categories as under:
(1) AGRICULTURE
Investment facilities to the agricultural sector fall under these category. It is sub divided in two major heads:

I. Investments to primary producer
Financing under these categories refers to the investment facilities allowed to production units engaged in farming, fishing, forestry or livestock.

II. Investment to dealers/distributors

It refers to the financing allowed to input dealers and (or) distributors in the agricultural sectors. Agricultural investments may include short, medium and long investment as well as continuing investment.

(2) IZARA BILL BAIA FOR LARGE & MEDIUM SCALE INDUSTRY
This category of investment accommodate the medium and long term financing for capital structure formation of new industries or for BMRE of the existing units who are engaged in manufacturing goods and service.

(3) IZARA BILL BAIA TO SMALL & COTTAGE INDUSTRIES
This are the medium and long term investments allowed to small and cottage manufacturing industries does not exceed 30 million taka and investment in machinery and equipment.

(4) WORKING CAPITAL
Investment allowed to the manufacturing units to meet their working capital requirements, irrespective of their size-dig, medium or small, fall under the category. These are the usually continuing investment and as such fall under the head “Bai-Muazzal”.

(5) INVESTMENT ON EXPORT
Investment facilities allowed facilitating export of all items against Letter of credit and/or conformed export orders fall under this categories. It is accommodated under the heads “Musharaka Pre-shipment (ECC), “Musharaka Pre-shipment (PC), Foreign Documentary Bills Purchased (FDBP), local documentary bills purchase (LDBP) etc.

(6) COMMERCIAL LENDING
Short term investments and continuing investment allowed for commercial purposes other than export fall under this category. It includes import financing, financing for internal trade, service establishment etc.

(7) OTHERS
Any investment that does not fall in any of the above categories is considered under the category”Others”. It includes investment to (1) Transport equipments, (2) Construction works including housing (commercial/residential), (3) work order finance,(4)personal investment, etc.

INVESTMENT ASSESSMENT & RISK GRADING

Investment assessment

A through investment and risk assessment should be conducted prior to the granting of investments and at least annually there after for all facilities. The results of these assessments should be presented in an investment proposal that originates from relationship manager/account officer and is approved by head of investment division. The relationship manager/account officer should be the owner of customer relationship and must be held responsible to ensue the accuracy of the entire investment proposal submitted for approval.

Risk Management
Investment proposal should summaries the risk assessment and include, as a minimum, the following details:
Amount and type of investment(s) proposal.
Purpose of investments.
Investments Structure ( Tenor, Covenants, Repayment Schedule, Profit)
Security Arrangements.

In addition, the following risk areas should be addressed:
Borrower analysis
Industry analysis
Supplier/Buyer analysis
Project Financial Performance
Accounts Conduct
Adherence of lending guidelines
Mitigating factors
Investment Structure
Security
Name lending

RISK GRADING

The risk grading system should define the risk profile of borrower’s to ensure that account management, structure and pricing are commensurate with risk involved. Risk grading is a key measurement of a Bank’s asset quality, and as such, it is essential that grading is a robust process. All facilities should be assigned a risk grade. Where deterioration in risk is noted, the Risk Grade assigned to a borrower and its facilities should be immediately changed. Borrower Risk Grades should be clearly stated on investment proposal.

Here, in this report we have discussed about the 7 Ps’ of Exim Bank and developed Gaps Model of the 7 Ps’. In the Gaps Model we tried to find out why the gaps are occurring and how these are affecting services of Exim Bank.

Introduction

These days life has become very busy and people needs bank a lot. One of the latest transaction systems provided by Exim Bank. A significant number of people of our country using online banking. But to meet the ever-growing demand Exim Bank is failing to coup up. Service provided by the Exim Bank has not developed in significant manner as people expected due to demand and lack of proper planning and implementation of planning and lack of effective and efficient management. Whereas all over the world this sector is regarded as one of the most lucrative and successful sector.

7 Ps’ of Exim Bank

Exim Bank is service-oriented organization. For any organization that provides service- it is extremely important that all the 7 Ps’ (4 Ps’ of Traditional Marketing Mix and 3 Ps’ of Expanded Service Mix) are implemented properly. Here, we have discussed all the 7 Ps’ of Exim Bank:

1. Product.
2. Price.
3. Place.
4. Promotion.
5. People.
6. Physical Evidence.
7. Process.

Product

Product is the core of all marketing activities. If there is no product then there will be no marketing activities. There are two types of organizations according their product. Some organization’s core product is good. On the other hand some organization core product is service. There are very few pure services or pure goods.

Now when we define product then we go through some criteria:

1. What are physical goods features?
2. What is the quality level?
3. What extra benefits are provided with the product?
4. How is the packaging?
5. Do they offer any warranty benefits?
6. What are the product lines?
7. What is the brand name of the product?

A service-oriented firm may not be judged through all the above criteria but they will definitely cover some criteria from the above. The Exim Bank provides transportation service. So the core objective of Exim Bank is to ensure its customer their desired level of service. But beside customer it needs to provide some other facilities to its customers. First of all, they should take care about money of their customer according to their expectation; branch must be available. There should be enough ventilation system in the branch, especially in the main branch. Exim Bank Authority must ensure its customer proper security’ of money. Account should check in a continual period. If all these factors can be fulfilled gap between and customers expectations can be reduced.

Gaps Model- Product

Exim Bank sometimes doesn’t know what the customers want from them. Because they don’t want to know and cared for them. The service is not also according to the standard. If a customer has a complaint to make he or she has problem in his account and the customer don’t take it properly. In their branch they serve moderate quality of service. There are also some other problems:

The center focus of gaps model is the customer gap, the difference between customer expectation and perceptions. Expectations are the reference points’ customers have coming in to a service experience; perceptions reflect the service as actually perceived. The provider gaps are the underlying causes behind the customer gap. (Page- 32, Services Marketing: 2004)

Now why and how these gaps are being created in case of “Product” of Exim Bank are discussed below:

Gap 1: Not knowing what customers expect.
Exim Bank authority don’t tried to know what customers want. For example sometime there is nobody that comes and ask the customer whether there is any problem or not.
There are some research works done by the Exim Bank authority.
Actually they may never realize building relationship with customers.
Finally, they don’t care about services they provide. They think passengers are bound to Exim Bank.

So, here is gap growing between customer expectation and company perception of customers’ expectation.

Gap 2: Not selecting the right service design and standards.

Exim Bank service design is moderate. They don’t think about updating or redesigning their service according to customers’ expectation.
Environment inside the train is not so much good, floor space is not enough for the customer, sometimes it is totally impossible to use the floor because of good number of customer.

So, here is gap growing between customer driven service designs and standard and management perception of customers’ expectation.

Gap 3: Not delivering to service standards.
First of all there are lack of skilled human resources.

In peak season Exim Bank fails to meet the demand.
There is no efficient customers’ complaint processing system.

The ATM system is not so efficient and not operated by skillful personnel.

So, here is gap growing between service delivery and customer driven service designs and standards.

Gap 4: Not matching performance to promises.

Exim Bank authority doesn’t take actions against customer complaints poorly.
They don’t care about what type of facilities and benefits customers’ want from them.

So, here is gap growing between service delivery and external communication to customers.

Price

Price is a very important factor for serving any product and it is very much important for the market like Bangladesh as Bangladeshi people are very much price sensitive. Before discussion of price we need to define what is price.

Price is nothing but amount of money for which a unit of goods or services is exchanged. Price is equivalent to market value and may/may not measure the intrinsic value of the goods or services to the buyer or seller.

Exim Bank always believes in low price, as it is a government regulated service provider. From the following diagram we can describe their strategy.

The black portion is the strategy what Exim Bank follows. They are providing high quality service against low price.

It’s true that price is related with customer cost. From that point of view Exim Bank pricing strategy is acceptable. But they also should consider the alternative available in the market.

Gaps Model- Price

Customer Gap: Customer expectation vs. customer perception.

Exim Bank doesn’t know what customer expects. They don’t arrange any survey to know customer expectation.
Their price is not go with the quality what they are providing. People have so many alternatives.
Exim Bank is not careful to keep their promise.

Gap1: Customer expectation vs. company perception of customer expectation.

Exim Bank doesn’t take any comment, interview or they don’t make any relation with customer. As a result their perception about customer expectation is not appropriate. To develop a competitive price strategy, this sort of relationship is important.

Gap 3: Service Delivery vs. Customer driven service design and standards.

In case of developing price strategy Exim Bank should consider supply and demand, and this strategy should revised regularly. But Exim Bank rarely does this.
The employee of ticket counter can play an important role for Exim Bank. As they can talk with customer directly, they can collect information and provide it to Management. But they don’t follow this responsibility.

Gap4: Service delivery vs. External communication to customer.

Management body of Exim Bank is not proactive. They don’t consider the market. They don’t try to create any relation with customer. As a result they don’t know what problem in pricing hindering the profit.

Place
Exim Bank has 28 branch all over the country. Only the divisional branch are situated in good locations. So they should expand their branches in different district also.

Gaps Model- Place

Gap 1: Not knowing what customers expect.

Customers expect that stations should be in a suitable location from where they can buy tickets for their destination.
No research takes place before establishing a new branch to study location feasibility.
Customers never get the chance to communicate with concerned authority to inform them about their expectation.

Gap 2: Not selecting the right service design and standards.

There are no efforts by Exim Bank to make sure they are establishing stations at the right places for its customers.

Gap 3: Not delivering to service standards.

Exim Bank has failed to provide sufficient no. of branch at the right locations for its customers.

Gap 4: Not matching performance to promises.

Management body of Exim Bank are not proactive. They don’t consider the market. They don’t try to create any relation with customer. As a result they don’t know what are the problems regarding locations (place) of branch.

Promotion

Exim Bank don’t have sufficient promotional activities. So people are switching from Exim Bank to another bank for services. So to retain customers, the authority should take some promotional activities. As at the moment Exim Bank does have some
promotional activities to attract customer, they can undertake the following promotional activities.

1. They can change the interior environment so that the customers feel good to take the service.
2. They can arrange some sorts of event for their customers like some kind of game, some sort of music festival etc.
3. They can offer free service charge with every valuable customer.
4. They can introduce new system of money transaction that will be very convenient of the passengers.

People

People are the most important part of any organization whether it is the employees or the clients or customers. Behind every organizations success these are the people who play the most significant role, especially if it is an organization that provides service and Exim Bank is an organization that provides banking service. But, before we start our discussion about Exim Bank employees and their valuable customers- that is passengers, we need to know what do we understand by “People” in services marketing.

All human actors who play a part in service delivery and thus influence the buyers’ perceptions: namely, the firm’s personnel, customer and other customers in the service environment. (Page-24, Services Marketing: 2004)

In every situation in service marketing there are always two types of people are involved- employees and customers and both are influenced by each other’s action.

All of the human actors participating in the delivery of a service provide cues to the customer regarding the nature of the service itself. How these people are dressed, their personal appearance, and their attitude and behaviors all influence the customer’s perceptions of the service. In many service situations, customers themselves can also influence service delivery, thus affecting service quality and their own satisfaction.

Customers not only influence their own service outcomes, but they can also influence other customers as well. (Page-25, Services Marketing: 2004)

Exim Bank, covers 28 branches over the country with employing about 750 regular employees.
Gaps Model- People

The center focus of gaps model is the customer gap, the difference between customer expectation and perceptions. Expectations are the reference points’ customers have coming in to a service experience; perceptions reflect the service as actually perceived. The provider gaps are the underlying causes behind the customer gap:
Gap 1 – Not knowing what customers expect.
Gap 2 – Not selecting the right service design and standards.
Gap 3 – Not delivering to service standards.
Gap 4 – Not matching performance to promises.
(Page- 32, Services Marketing: 2004)

Now why and how these gaps are being created in case of “People” of Exim Bank are discussed below:

Majority of employees working for Exim Bank from top level to bottom are extremely inefficient.

Though a good number of customers are buying services- but the reality is they are not getting their expected service as quality of service is ever declining and the customer are facing problems.

Physical Evidence

The environment in which the service is delivered and where the firm and customer interact, and any tangible components that facilitate performance or communication of the service is called physical evidence. (Page- 25, Services Marketing: 2004)

As Exim Bank is a service-oriented company, they must ensure their customer a good and pleasant service. The Branch should be clean and well equipped that will enhance the service quality. The Branch should be informative so that the customer can find their information easily. There should be enough space in the branch. The internal environment of the Branch should be net and clean. That is, every thing should be in proper condition. The ATM booth should be checked and repair regularly to avoid unwanted accident.

Gaps Model- Physical Evidence

The center focus of gaps model is the customer gap, the difference between customer expectation and perceptions. Expectations are the reference points’ customers have coming in to a service experience; perceptions reflect the service as actually perceived. The provider gaps are the underlying causes behind the customer gap:

Gap 1 – Not knowing what customers expect.
Gap 2 – Not selecting the right service design and standards.
Gap 3 – Not delivering to service standards.
Gap 4 – Not matching performance to promises.
(Page- 32, Services Marketing: 2004)

Now why and how these gaps are being created in case of “Physical Evidence” of Exim Bank are discussed below:

Though the branch in the divisional city are in good condition but it is opposite for the district branch. The branch are not so informative, as a result, the customer most of the time find difficulty to find their compartment. The toilet and the rest room facility are so poor that people hardly use that. The internal environment is not enough clean. Some times the ATM booth is out of order. The seats are not so comfortable. There is

insufficient facilities for toilets. The ATM booth are not regularly checked and repaired. So accident occurs.

Process

Process is nothing but a series of actions, changes, or functions bringing about a result.

We can define process from both customer and producer point of view. From customer point of view, process is the way that a customer can obtain a service and from producer point of view, the flow of activities to provide a goods or service to the customer.

Exim Bank follows an organized process in case of providing service to the customer. The following diagram is able to describe the process.

Illustration 2: Process of providing service

This process also can be defined from customer point of view. But the outcome will be same.

Gaps Model- Process

Customer Gap: Customer expectation vs. customer perception.

Some of the customer is not happy with long process. They are expecting more facilities. But Exim Bank doesn’t know about this expectation.
The time has been changed. So many modern model and technology has been developed in case of providing service. Exim Bank adopted with that change.

Gap1: Customer expectation vs. company perception of customer expectation.

Exim Bank thinks people are expecting low price service. But the reality is that people want better quality product with stander procedure.
As Exim Bank is not keeping long-term relation with customer, they are not aware about customer expectation.

Gap2: Customer driven service designs and standards vs. Management perceptions of customer expectation.

They have no interaction with customer to develop a stander-customized model.

Exim Bank is a very new and modern organization of the country. Though it is going through a difficult time. Still it has ample of opportunities to develop and become true profitable service oriented organization. But to do so it has to erase all its inefficiencies in correct manner. We believe it will be able to do so if it can have the right resources and the ability to use those resources effectively and efficiently.

MANUAL:
Questionnaires:
1. How often do you go to Exim Bank?
Less than 7 days.
Less than 10 days.
Less than 15 days.
Less than 20 days.
1 in a month.
2. Exim Bank has huge demand in Banking sector.

3. Exim Bank service charge is reasonable.

4. Internal environment of Exim Bank is satisfactory.

5. Security arrangements inside Exim Bank is adequate.

6. Facilities provided by Exim Bank is adequate.

7. Overall management of Exim Bank is satisfactory.

8. Advertisements of Exim Bank is attractive.

9. Government support is required for Exim Bank to perform better.

10. Branch of Exim Bank is sufficient.

11. Employees treat all Exim Bank customers equally.

12. Customer Service of Exim Bank is the level of satisfactory.

ANALYSES AND FINDINGS:

I have divided my Analysis & Findings Part into two major segment, these are:
a) Analysis of Major Findings.
b) Analysis of Associated Findings.

I choose those analyses, which fit best with our objectives. Thus, I have used basically two types of analysis, these are:
1. One Sample T test
2. Frequency Distribution & Bar Chart

I have used One Sample T test to analyze question, where I have used Likert scale for my major findings and I have also used Frequency Distribution and Bar Chart to analyze question no. 1 because data was collected under nominal scale.

ANALYSES OF MAJOR FINDINGS:

Here, we will use One Sample T test for analyzing questions range from 2 to 12.

Question no. 2: Exim Bank has huge demand in Banking sector.

H0: Exim Bank has not huge demand in Banking sector.
H1: Exim Bank has huge demand in Banking sector.
Significance level: 0.05

So, alternate hypothesis H1 should be accepted as probability, that alternate hypothesis can be true (.000) is less than significance level 0.05.

Interpretation of the findings: We can conclude that, Exim Bank has huge demand in banking sector.

Question no. 3: Exim Bank service charge is reasonable.
H0: Exim Bank service charge is not reasonable.
H1: Exim Bank service charge is reasonable.
Significance level: 0.05

So, alternate hypothesis H0 should be accepted as probability. Here, alternate hypothesis can not be true because significance level(.129) is greater than significance level 0.05.

Interpretation of the findings: We can conclude that, Exim Bank service charge is not reasonable.

Question no. 4. Internal environment of Exim Bank is satisfactory.

H0: Internal environment of Exim Bank is not satisfactory.
H1: Internal environment of Exim Bank is satisfactory.

Significance level: 0.05

So, alternate hypothesis H1 should be accepted as probability, that alternate hypothesis can be true (.000) is less than 0.05.

Interpretation of the findings: We can conclude that, Internal environment of Exim Bank is satisfactory.

Question no. 5. A security arrangement inside Exim Bank is adequate.

H0: Security arrangements inside Exim Bank is not adequate.
H1: Security arrangements inside Exim Bank is adequate.
Significance level: 0.05

So, alternate hypothesis H1 should be accepted as probability, that alternate hypothesis can be true (.000) is less than significance level 0.05.

Interpretation of the findings: We can conclude that, a Security arrangement inside Exim Bank is adequate.

Question no. 6. Facilities provided by Exim Bank are adequate.
H0: Facilities provided by Exim Bank are not adequate.
H1: Facilities provided by Exim Bank are adequate.
Significance level: 0.05

So, alternate hypothesis H1 should be accepted as probability, that alternate hypothesis can be true (.000) is less than significance level 0.05.

Interpretation of the findings: We can conclude that, Facilities provided by Exim Bank are adequate.

Question no. 7. Overall management of Exim Bank is satisfactory.

H0: Management of Exim Bank is not satisfactory.
H1: Management of Exim Bank is satisfactory.
Significance level: 0.05

So, alternate hypothesis H0 should be accepted as probability, that alternate hypothesis can be true (.01) is less than significance level 0.05.

Interpretation of the findings: We can conclude that, management of Exim Bank is satisfactory.

Question no. 8. Advertisements of Exim Bank is attractive.

H0: Advertisements of Exim Bank is attractive.
H1: Advertisements of Exim Bank is attractive.
Significance level: 0.05

So, Null hypothesis H0 should be accepted as probability, that Null hypothesis can be true (.297) is greater than significance level 0.05.

Interpretation of the findings: We can conclude that, Advertisements of Exim Bank is not attractive.

Question no. 9. Government support is required for Exim Bank to perform
better.

H0: Government support is not required for Exim Bank to perform
better.
H1: Government support is required for Exim Bank to perform
better.

Significance level: 0.05

So, alternate hypothesis H1 should be accepted as probability, that alternate hypothesis can be true (.000) is less than significance level 0.05.

Interpretation of the findings: We can conclude that Government suport is required for Exim Bank to perform better.

Question no. 10. Branch of Exim Bank is sufficient.

H0: Branch of Exim Bank is not sufficient.
H1: Branch of Exim Bank is sufficient.
Significance level: 0.05

So, alternate hypothesis H1 should be accepted as probability, that alternate hypothesis can be true (.000) is less than significance level 0.05.

Interpretation of the findings: We can conclude that Branch of Exim Bank is sufficient.

Question no. 11. Employees are not treating all Exim Bank customers equally.

H0: Employees are not treat all Exim Bank customers equally.
H1: Employees are not treat all Exim Bank customers equally.
Significance level: 0.05

So, Null hypothesis H0 should be accepted as probability, that Null hypothesis can be true (.000) is greater than significance level 0.05.

Interpretation of the findings: We can conclude that Employees are not treat all Exim Bank customers equally.

Question no. 12. Customer Service of Exim Bank is the level of satisfactory.

H0: Customer Service of Exim Bank is not the level of satisfactory.
H1: Customer Service of Exim Bank is the level of satisfactory..
Significance level: 0.05

So, alternate hypothesis H1 should be accepted as probability, that alternate hypothesis can be true (.02) is less than significance level 0.05.

Interpretation of the findings: We can conclude that Customer Service of Exim Bank is not the level of satisfactory.

ANALYSES OF ASSOCIATED FINDINGS:

1.How often do you go to Exim Bank?
 Less than 7 days.
 Less than 10 days.
 Less than 15 days.
 Less than 20 days.
 1 in a month.

Interpretation of the findings: We can conclude that from the above illustration that majority of the respondents that is 26.67% goes to Exim Bank Less than 7 days, 13.33% goes to Exim Bank Less than 10 days, 30% goes to Exim Bank Less than 15 days, 20% goes to bank less than 20 days , 10% respondents go to Exim Bank with in a month.

PROBLEMS:

While preparing this report I have had some limitations. I didn’t get enough time as I am continuing a semester .I also could not collect all the secondary data that I needed to prepare this report. Though I have fulfilled the required sample size of 30 respondents – another limitation for me was I could not collect data from more than 30 respondents as Exim Bank authority allowed me to conduct my survey only for a day.

CONCLUSION:

EXIM bank has converted all of their system and policy of traditional banking to Islamic Banking, which indeed a very practical and bold decision. As there are lots of local and foreign banks in Bangladesh the EXIM bank ltd. is promising bank among the others. In this competitive global era EXIM bank has to compete not only with the other commercial banks but also with the public banks. EXIM bank is more capable of contributing towards economic development as compared with other bank. The bank invested more funds in export and import business. It is obvious that the right thinking of this bank including establishing a successful network over the country and increasing resources will be able to play a considerable role in the portfolio of development.

During the course of my practical orientation I have tried to learn the practical banking activities to realize it with my theoretical knowledge, which I have gathered and going to acquire from various courses of my BBA program.