Report on Janata Bank Limited

1.1 Introduction of the Study

The primary purpose of this report is to get an idea about the operations of Janata Bank Limited, a second-generation bank of the country and make an industry analysis on the banking sector of Bangladesh.

Banks are profit – earning concern. The ‘word “Bank” refers to the financial institution deals with money transaction. Banks collect deposits at the lowest possible cost and provide loans and advances at higher cost. The difference between two is the profit for the bank. Commercial banks are the primary contributors to the country.

The revenue earning sources of banks are mainly loans and advances. The credit facility can be of two types: funded and non-funded. Funded credit can be expensive for the banks, as the bank has to pay interests. Non-funded credit includes Letter of Credit, which is the main source of income for the foreign exchange business.

If a bank can increase its import and export transactions, its profit will obviously reach a higher level, as the costs are negligible.

This report is an attempt to reflect the position of Janata Bank Limited in the banking industry procedures, policies and activities with emphasis on foreign exchange business.

After completion of 130 credit hours of BBA program demands a report on practical experience. Internship program is a must criterion for Bachelor of Business Administration (BBA) students, designed to put them in a challenging environment of the relevant field, where the students get sample opportunity to apply their theoretical knowledge into practical applications. During the internship training, students have the opportunity to adopt themselves into the particular environment of the organization. It provides a unique opportunity to see the reality of business during student life, which enables them to building confidence and working knowledge in advance of the start of their career. To fulfill this requirement every university of business arrange a program of internship. Here we get a chance to apply our theoretical knowledge that we acquired from class lectures, books, journals, case studies, seminar, project, workshop, etc and compare them with practical setting.

Bank is a financial institution, which accepts money from its customers as deposit and gives money as loan to the borrowers. A bank is financial intermediary a dealer in loans and debts. ; After completing my Bachelor of Business Administration (BBA) as a student of “Stamford University”, I wanted to complete my Internship program from a reputed Bank which would be helpful for my future professional career. I got the opportunity to perform my internship in the Janata Bank Limited. I was sent to Mohammadpur Corporate Branch. It was three months practical orientation program. This report is originated as the requirement of Janata Bank Limited

This is the last part of BBA program. As a graduated, it is essential to fulfill all, the requirements the program demand. Only after preparing & submitting the report this program becomes completed. Internship is highly needed to gain practical idea, knowledge and experience. I have selected Foreign Exchange department of Janata Bank Limited because here all international transaction occur through Import and Export. And anyone can easily trade with other foreign countries through L/C. The report entitled “Performance & Activities of Foreign Exchange of Janata Bank Limited” has been prepared as a partial fulfillment of BBA program authorized by the supervisor, Faculty of Business administration, Stamford University. In today’s world only academic education does not make a student perfect to become competitive with the outside world.    

I had to prepare a report under the supervision of Arif Ahmed Imran of this course, Department of Finance, Stamford University Bangladesh. On the other hand, in charge of foreign exchange department of Janata Bank Limited (Mohammadpur Corporate Branch), supervised me in the organization. As an intern, I got the opportunity to perform my internship in the JBL. I was sent to Mohammadpur Corporate Branch. It was three months practical orientation program. This report is originated as the requirement of JBL.

• To analyze the real Foreign Exchange performance of Bangladesh.
• To know the Foreign Exchange Import and Export guideline, police, rules and regulation of Bangladesh.

 This study would focus on the following areas of Janata Bank Limited.

• Actual Foreign Trade management of Janata Bank Limited.
• Overview the current procedure of export & import management.
• Opening LC and maintenance of other formalities of foreign trade.
• Organizational structures and responsibilities of management.
• Each of the above areas would be critically analyzed to determine the proper efficiency of Janata Bank’s Foreign Trade Management system.

Updating and liberalizing the trade regime in accordance with the needs and requirements of the World Trade Organization and globalization;

Encouraging labor-intensive (especially female labor) export-oriented production;

Ensuring availability of raw materials for manufacturing export goods;

Increasing productivity and diversity of products;

Improving the quality of products; encouraging the use of modern, appropriate and environment-friendly technology, producing high-end products, and improving the design of the products;

Enhancing efficiency and dynamism by using e-Commerce and e-Governance;

Initiating new strategies for the expansion of the markets for export products, making proper utilization of computer technology and encouraging all modern technologies including e-Commerce;

Assisting the development of necessary infrastructure, particularly for backward and forward linkages in order to encourage the production of exportable goods;

Providing all-out support to new exporters as well as to existing exporters;

Assisting the development of a skilled labor-force through proper training for managing international trade; and providing adequate guidance to trade bodies, business organizations, business people-and related individuals in understanding the changing international trading system, etc.    

Analysis techniques

Both qualitative and quantitative methods were applied for preparing this report. The data were analyzed and presented by Microsoft excel and shows percentage, graphical presentation and different types of charts. Best effort was given to analyze the numerical findings.

Required data

The main focus is on numerical data in preparing the report. Also theoretical portion of the report has been used as the demand of the report. Analyzing foreign trade management of a bank, both theoretical and technical knowledge are necessary for execution, then everything with accuracy.

Sources of data:

Sample information

Main source of the information is annual report of Janata Bank Limited, report of annual meeting, brochures and web sites. The information incorporated in this report is heavily collected both from the primary sources and as well as from the secondary sources.       

Primary sources of data

The data collection has been accomplished directly from the different sectors of Janata Bank head office. This is called primary source of data.

Secondary sources of data

The secondary data is collected from annual report, distinguished conceptual matters, websites and several published matter as articles in different versions of printings.

Secondary Sources are:

• Annual Reports of different years of Janata Bank Limited.
• Bangladesh Bank web site
• Other published documents of Janata Bank Limited.
• Janata Bank web site
•  Respective sectors of foreign matter of the head office.

Time limitation:

 It was one of the main constraints that affected covering all aspects of the study.

Lack of Secondary Information:

The import export data of Bangladesh is not much available over the net. Secondary source     of information was not sufficient for the completion of the report.

Limitation of the Study:

Much confidential information was not disclosed by respective personnel of the department.

CHAPTER: 2

PROFILE OF JANATA BANK       LIMITED

JANATA Bank Limited welcomes you to explore the world of progressive Banking in Bangladesh. It is a state owned commercial bank and is catering the need of the mass business people. It was corporatized on 15^th November 2007. Janata Bank was born with a new concept of purposeful banking sub serving the growing and diversified financial needs of planned economic development of the country.

Our commitment and the people’s belief in us have given us the edge over others to earn this trust about the safe keeping of their money in the right kind of banking channel.

Janata Bank Limited, one of the state owned commercial banks in Bangladesh, has an authorized capital of Tk. 20000 million (approx. US$ 283.33 million), paid up capital of Tk. 5000.00 million, reserve of Tk.10823.01 million and retained surplus Tk. 5167.18 million. The Bank has a total asset of Tk. 345233.92 million as on 31^st December 2010. Immediately after the emergence of Bangladesh in 1971, the erstwhile United Bank Limited and Union Bank Limited were renamed as Janata Bank. On 15^th November, 2007 the bank has been corporatized and renamed as Janata Bank Limited.

Janata Bank Limited operates through 874 branches including 4 overseas branches at United Arab Emirates. It is linked with 1202 foreign correspondents all over the world.

The Bank employs more than 15(fifteen) thousand persons.

The mission of the bank is to actively participate in the socio- economic development of the nation by operating a commercially sound banking organization, providing credit to viable borrowers, efficiently delivered and competitively priced, simultaneously protecting depositor’s funds and providing a satisfactory return on equity to the owners.

The Board of Directors is composed of 13 (Thirteen) members headed by a Chairman. The Directors are representatives from both public and private sectors.

The Bank is headed by the Chief Executive Officer & Managing Director, who is a reputed banker.

The corporate head office is located at Dhaka with 10 (ten) Divisions comprising of 38 (thirty eight) Departments.

Name                                                   :           Janata Bank Limited

Registered Address                            :           Janata Bhaban

                                                                        110, Motijheel Commercial Area

                                                                        Dhaka – 1000.  Bangladesh

Legal Status                                        :           Public Limited Company

Date of Incorporation                         :           21 May, 2007

Authorized Capital                             :           TK. 20,000 Million

Paid up Capital                                   :           TK. 5,000 Million

Reserve                                               :           TK.10823.01 Million

Retained surplus                                 :           Tk. 5167.18 Million

Asset                                                   :           Tk. 345233.92 Million

Face value of per share                       :           TK. 100 per share

Shareholding Pattern                          :           100% Share owned by the

Government of Bangladesh

Domestic Network                             :

Numbers of Branch                             :           874

Numbers of Divisional Office            :           08

Numbers of Area Office                     :           15

Numbers of Regional Office              :           29

Overseas Network                             :

Numbers of Branch                             :           04

Location                                              :           UAE – Chief Executive’s office

                                                                        Obeid Sayah Al – Mansuri Building

                                                                        Zayed the 1st Street (Electra Road)

                                                                        Post Box No 2630 Abu Dhabi

                                                                        United Arab Emirates

Subsidiaries                                        :

1. Janata Capital and Investment Ltd.            :           Dhaka.

2. Janata Exchange Company srl.       :           Italy

Numbers of Correspondent                :           1,215

Departments                                        :           38

Numbers of Employees                       :           More than 15(fifteen) thousand

Banking License (obtained from        :           31 May, 2007

Bangladesh Bank)

Telex                                                   :           675840 JBDBJ, 671288 JBHOBJ

Phone                                                  :           PABX- 9560000, 9566020, 9556245-49, 9565041-45, 9560027-30.

Fax                                                      :           88-02-9564644, 9560869

E-mail                                                  :           md@janatabank-bd.com

Website                                               :           www.janatabank-bd.com

SWIFT Code                                      :           JANB BD DH

Branch Name                                   : Janata Bhaban Corporate Branch

Opening Date                                    : 18-05-1989

Address                                             : Janata Bhaban 110, Motijheel C/A

                                                            Dhaka – 1000.  Bangladesh

Phone                                                : 9560000, 9560039, 9566020,

                                                            9556245-49, 9560027-30, 9560042- 43,

                                                            9565041-45, 9566028-29

FAX                                                 : 9568624

E-mail                                              : jbcb@janatabank-bd.com

SWIFT (Branch)                            : JANBBDDHJBC

Department                                    : 9

Total Number of Employees          : 139

Recently The Bank has been recognized internationally and domestically for its good performance.

International Award-The Bank of the year-2011 in Bangladesh

Janata Bank Limited has been awarded ‘The Bank of the Year-2011 in Bangladesh’ by the London based Financial Magazine The Banker of the Financial Times Group. This is for the sixth time the bank has been awarded ‘The Bank of the Year’. Janata Bank Limited achieved remarkable progress in the year 2010.

ICMAB Best Corporate Award-2011

Janata Bank Limited has been awarded ICMAB Best Corporate Award – 2011 by the Institute of Cost and Management Accountants of Bangladesh. This Bank secured the first position among the state owned Commercial Banks in Bangladesh.

International Award -“World’s Best Bank Award-2009 in Bangladesh

Janata Bank Limited was awarded Best Bank-Bangladesh in the Global Finance, World’s Best Bank Awards, 2009 by New York based Financial Magazine “Global Finance”. “Global Finance” has identified winning banks based on number of criteria including growth in Assets, Profitability, Strategic relationships, Customer Service, Competitive pricing and innovative products.
International Award -“World’s Best Bank Award-2008 in Bangladesh

Janata Bank Limited was awarded Best Bank-Bangladesh in the Global Finance, World’s Best Bank Awards, 2008 by New York based Financial Magazine “Global Finance”. “Global Finance” has identified winning banks based on number of criteria including growth in Assets, Profitability, Strategic relationships, Customer Service, Competitive pricing and innovative products.

International Award -“World’s Best Bank Award-2007 in Bangladesh

Janata Bank Limited was awarded Best Bank-Bangladesh in the Global Finance, World’s Best Bank Awards, 2007 by New York based Financial Magazine “Global Finance”. “Global Finance” has identified winning banks based on number of criteria including growth in Assets, Profitability, Customer Service, Product innovation and Advanced Technology.

International Award -“World’s Best Bank Award-2006 in Bangladesh

Janata Bank Limited was awarded Best Bank-Bangladesh in the Global Finance, World’s Best Bank Awards, 2006 by New York based Financial Magazine “Global Finance”. “Global Finance” has identified winning banks based on number of criteria including growth in Assets, Profitability, Customer Service, Product innovation and Advanced TechnologyInternational Award –The Bank of the year-2005 in Bangladesh

 Janata Bank Limited has been awarded ‘The Bank of the Year-2005 in Bangladesh’ by the London based Financial Magazine the Banker of the Financial Times Group. This is for the fifth time the bank has been awarded ‘The Bank of the Year’. The award has been given considering the growth and performance measure of the bank.

 International Award -The Bank of the Year-2004 in Bangladesh

Janata Bank Limited has been awarded as ‘The bank of the year 2004 in Bangladesh’ by the London based Financial Magazine The Banker of the Financial Times Group. This is for the second consecutive year that the Janata Bank Limited has been awarded ‘Bank of the year’. Janata Bank Limited shows a remarkable progress in the year 2003. Its return on assets was 1.36% and return on investment was 6.47% respectively. Janata Bank Limited is also emerging as the strong and innovative bank within the country. The profile of its success is enriched by a package of new qualitative product lines, prudent liability and assets management and others. Most of the key financial indicators of the bank showed a very positive improvement at the year ended December 2003.

Janata Bank Limited receives “Asian Banking Awards 2004” on financing Program for Women Entrepreneurship:

Financing program for Women Entrepreneurship of Janata Bank Limited has highly been commended as a Runner-Up in the Micro-Finance Product or Program category of the Asian Banking awards 2004. The Awards were presented by the Asian Bankers Association (ABA) and Bank Marketing Association of the Philippines (BMAP) in the Asia Pacific Bankers Congress (APBC) 2004 on March 26, 2004 in Manila, Philippines.

Janata Bank Limited gets “The Banker Award-2003”

The Banker, an International Banking Magazine of the Financial Times group in London has selected Janata Bank Limited as “The Bank of the Year, 2003” among all other banks in Bangladesh. The Banker’s assessment for award is based on a number of criteria.
International Award-The Bank of the Year-2002

The Banker, a magazine of the London based Financial Times Group of Companies, has voted Janata Bank Limited as the bank of the year for Bangladesh for 2002. While making this selection the panel has recognized the efforts made by Janata Bank Limited in recent times for Improving IT based performances

International Award-The Bank of the Year-2001

The Banker, a magazine of the London based Financial Times Group of Companies, has voted Janata Bank Limited as the bank of the year for Bangladesh for 2001. While making this selection the panel has recognized the efforts made by Janata Bank Limited in recent times for improving its performances. The bank has also been included in the listing of top 200 Asian Banks for the year 2001. This listing will be available to delegates attending the forthcoming  IMF/World Bank meeting in Washington. The September edition of the Banker will also highlight the recent achievements of Janata Bank Limited. Besides, a certificate of merit and a bank of the year logo will be given to Janata Bank Limited for exclusive use on all publicity and advertising.

It may be noted here that Janata Bank Limited has been working hard in improving the customer services in recent times by introducing a number of  IT-based reform measures.

 List of Region/Area of Janata Bank Limited

Vision

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

Mission

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

Corporate Governance of Janata Bank Ltd. Is defined as the framework by which the bank is directed and controlled and the relationships between the management, the Board of Directors, Shareholders and other stakeholders such as employees, clients and lenders.  The aim of the Corporate Governance framework is to ensure disclosure and transparency, to define the responsibilities of the board and the management, to define the rights and role of shareholders and stakeholders, to ensure the equitable treatment and to avoid conflicts of interests.  It is the behalf of the management and the Board that banks lend money that is in effect borrowed from depositors and the failure of banks could result in a monetary loss for the depositors.  The interest of depositors should be protected and for this reason amongst others, the importance of corporate governance of banks differs from that of other companies and needs special attention.  The bank adopted the following strategies and techniques to ensure the application of corporate governance in attaining its objectives with efficiency and transparency.  The following are in place in order to ensure corporate good governance of Janata Bank.

CHAPTER: 3

GENERAL BANKING

General banking department is the heart of all banking activities. This is the busiest and important department of a branch, because funds are mobilized, cash transactions are made; clearing, remittance and accounting activities are done here.

Since bank is confined to provide the services every day, general banking is also known as ‘retail banking’. In JBL, the following departments are under general banking section:

• Account opening section

• Deposit section

• Cash    section

• Remittance section

• Clearing section

• Accounts section

Opening of an account binds the banker and into a contractual relationship. Customer relationship establish through opening an account. Generally who are receiving bank’s service we may call them as a customer. But bank consider them as a customer who have an account with them.

Major information’s are essential for identification of the account holders individually so that banker can discharge his obligations to everyone correctly and to the extent due. Following are the customer must complete the formalities

Application on the prescribed form

Furnishing photographs (2 copies)

Introduction by an account holder

Recording of specimen signature in the specimen card

Mention nominee on the prescribed form

Furnishing nominee’s photograph (one copy)

National ID card or Passport (Photo copy)

Deposit is the lifeblood of a bank. From the history and origin of the banking system we know that deposit collection is the main function of a bank.

Banks, as a financial institution, accept surplus money from the people as deposit and give them opportunity to withdraw the same by cheque, etc. But among the banking activities, cash department play an important role. It does the main function of a commercial bank i.e. receiving the deposit and paying the cash on demand. As this department deals directly with the customers, the reputation of the bank depends much on it.

Carrying cash money is troublesome and risky. That’s why money can be transferred from one place to another through banking channel. This is called remittance. Remittances of funds are one of the most important aspects of the Commercial Banks in rendering services to its customers.

The amount of Cheque, Pay Order (P.O), and Demand Draft (D.D.) Collection of amount of other banks on behalf of its customer is a basic function of a Clearing Department. 

Deposit Products:     

Current Deposit Account

Short Term Deposit

Savings Bank Deposit Account

Fixed Deposit

Foreign Currency Deposit

Monthly Savings Scheme

Monthly Profit Based Savings Scheme

Janata Bank Savings Pension Scheme (JBSPS)

Janata Bank Deposit Scheme (JBDS)

Education Deposit Scheme (EDS)

Medical Deposit Scheme (MDS)

Janata Bank Monthly Savings Scheme (JBMSS)

Janata Bank Special Deposit Scheme (JBSDS)

Janata Bank School Banking Savings Karjakram

New/Special Products:

Financing IT Sector

Financing of Industries

Ready Cash

Windows for SMEs

Loan to Travel Agencies

Loan to Diagnostic Centers

NRB Escrow Account

NRB Gift Cheque

Description of the New Products and services

Financing IT sector

The importance of Information Technology and the role it can play in the socio-economic development of a nation cannot be over emphasized. The world has witnessed a phenomenal growth in IT over the last two decades, and the countries, which made a conscious decision to take advantage of such growth, have made unprecedented progress. Today we are living in the Internet world. To hasten the growth of information Technology and to attract young energetic IT professional Janata Bank Limited has launched a credit scheme titled “Financing Computer Software Development & Data Export”. The maximum loan amount  is Tk. 10 million, with debt to equity ratio being 80 : 20. The rate of interest is 11%. But anybody with export market exposure can get the benefit at 7% interest rate plus 1% service charge. The main feature of this scheme is to set up industrial based IT projects for development of software for data export and that took on a very soft term. Janata Bank Limited has issued detailed guidelines for facilitating IT entrepreneurs.

Ready Cash

Janata Bank Limited has entered into an agreement with American International Investment (AII) to provide financial plastic card services to Janata Bank Limited’s clients. This product is a “Debit Card” called the Ready Cash.

• Currently, the Ready Cash system is operating in Dhaka and will soon be expanded to other urban areas of Bangladesh.
• Cardholder’s primary benefits are Safety, Shopping at a wide merchant network, Payment of Utility Bills, flexible saving plan and the convenience of not having to carry cash.
• As the only micro-processor chip based debit card available in Bangladesh for financial payment, the Ready Cash card is very reliable and secure.
• It combines the most desirable aspects of the credit card, together with the advantages of the Debit or ATM card.
  • It is the first step that most Bangladeshi citizens will take on the path to a cashless economy.
  • Ready Cash is a debit card as it allows the cardholder to spend no more money than he/she has in his/her Bank account – unless a credit line has been extended.
  • It increases the consumption base and allows the cardholder to establish a credit history.
  • For these and many other reasons, the Ready Cash card is the fastest growing system in Bangladesh.

CHAPTER: 4

LOANS AND ADVANCES

This is survival unit of the bank. The reason is, until and unless the success of this section, the survival is a big question. This is main earning unit of the bank. Banks accepts deposits from the depositors in condition of providing interest to the depositors in condition of providing interest to them. Now the question is how bank provides interest to their clients. The simple answer is—interest from advances. The bank provides interest to the borrowers because:

• To earn interest from borrowers and give depositors the interests get bank. The rest are the profit of the bank.
• To accelerate economic development.
• Ro meet the interest groups.

Credit is a continuous process. Recovery of one credit gives rise to another credit. In this process of revolving fund, bank earns income in the form of interest. A bank can invest its fund in many ways. Bank provides loans and advances to traders, businessmen and industrialists. Moreover, nature of credit may differ in terms of security requirement, disbursement provision, terms and conditions etc.

Bank often uses loans and advances as an alternative to one another. But, academically this concept is incorrect.  Academically, Advances is the combination such items where loans is a part only. For this credit section of the banks is known as advance section.

Advance division is heart for any bank. A big portion of income of the Janata Bank Ltd is comes from this advance division. This income comes from different types of investment of depository money. Investment decision is the most important which is taken by the management of the Janata bank Ltd. JBL advance division plays a vital role for economical development.

JBL has an investment committee they are responsible following things:

• To ensure the cash liquidity requirement and can this cash liquidity meet.
• To identify new investment portfolio and this is profitable for the Janata Bank.
• To examine banks deposit, investment and identify their surplus money. They should be active for recovery their substandard, doubtful and bed loan.
• They should be take short-term investment but this investment return is comparably high.

They should aware about market study and existing portfolio of investment.

They should aware to identify new sources of investment.

JBL invests in two ways which is

• Head office investment.
• Branch investment.

Types of loan:

By the name of loans are three types. Following describe different types of loan by a structure

1. Current Loan:

            a) Cash Credit: Hypo & Pledge.

            b) SOD: General and FDR.

2. Demand Loan:

            a) Import: LTR, LIM & PAD.

            b) Export: IDBP, FDBP, ABP & PC.

3. Term Loan:

            a) HBL. b) EHBL, c) CCS & d) Car Loan.

A vast majority of the Bangladeshis live in the rural areas and their main source of income is agriculture and agro-business. Janata Bank Limited has opened branches in rural areas to cater to the banking needs of rural people. Apart from accepting deposits from the rich and moderately well-off villagers, Janata Bank Limited encourages the poor people to make small savings through different mechanisms.

So far lending in rural areas is concerned; Janata Bank Limited has been financing agricultural production and poverty alleviation programs since 1977. It also lends to the poor landless so that they can make a living. The average loan size is about Taka 20,000.00 (around US$ 285).

Rural Banking / Credit Program:

To increase agricultural production and improvement its quality.

To gear up socio-economic activities among rural people.

To create employment opportunities among rural people through providing economic support.

Creating confidence among the beneficiaries on institutional credit and their access to improved production practices / activities.

To build up asset by creating saving habit among the rural population.

Poverty reduction.

The main features of the major agricultural / rural credit programs are narrated below: ­

1. Special agricultural credit program / Short term crop production loan program:

 Table 1: Special agricultural credit program / Short term crop production loan program

2. Horticulture development loan program:

                                    Table 2: Horticulture development loan program

 3 (A) Fishery Loan Program:

                                                Table 3: Fishery Loan Program

 3. (B) Shrimp Culture Credit Program:

                                                Table 4: Shrimp Culture Credit Program

4. Irrigation & Agricultural Equipment Credit Program.

                        Table 5: Irrigation & Agricultural Equipment Credit Program

• Janata Bank Limited has been financing Small and Medium Enterprises with a view to developing a balanced and dynamic industrial sector having a strong base of SMEs throughout the country.
• Besides normal financing special tailor-made programs are undertaken by the Bank.
• Under this program a credit line has been extended to MIDAS while another program is under way.

CHAPTER: 5

FOREIGN EXCHANGE OPERATION OF JANATA BANK LIMITED

Foreign exchange is the means and methods by which rights to wealth in a country’s currency are converted into rights to wealth in another country’s currency. Foreign Exchange Department (FED) is the international department Bangladesh Bank issues license to scheduled banks to deal with foreign exchange. These banks are known as Authorized Dealers.  If the branch is authorized dealer in foreign exchange market, it can remit foreign exchange from local country to foreign countries.

Foreign exchange means foreign currency and includes:

All deposits, credits and balances payable in any foreign currency and any drafts,  travelers

           cheques, letters of credit and bills of exchange, expressed or drawn in Indian currency but   Payable in any foreign currency;

Any instrument payable, at the option of the drawee or holder thereof or any other party thereto. Either in Indian currency or in foreign currency or partly in one and partly in the other. Thus, foreign exchange includes foreign currency; balances kept abroad and instruments payable in foreign currency.

The Foreign Exchange department of the bank provides various foreign exchange services, which are:

Foreign Remittance

Import

Export

Remittance means sending or transfer money or money-worth from one place to another. Generally the process of remittance can be divided into two major categories:

• Inward Remittance
• Outward Remittance

Foreign remittance section of Janata Bank Ltd, Mohammadpur Corporate Branch is an integral part of Foreign Exchange Department. And this section of Foreign Exchange Department deals with

• Inward foreign remittance
• Outward foreign remittance
• Opening Foreign Currency Accounts.
• Governing Wage Earner’s Bond.
• Opening Student File etc.
• Medical Purpose
• Travels Purpose

 Inward Foreign Remittance:

Normally, Inward Foreign Remittance comprises all incoming foreign currencies. Remittances issued by the correspondent banks situated in the foreign countries and thereby drawn on Janata Bank, Mohammadpur Corporate Branch are considered to be its Inward Foreign Remittances. Followings are the Inward Foreign Remittances, Janata Bank Mohammadpur Corporate Branch.

FDD Payable

FTT Payable

TC Payable

Encashment of foreign currencies endorsed in the passport.

Purchase of foreign currencies.

Outward foreign Remittances:

Remittances issued by Janata Bank Mohammadpur Corporate Branch to their foreign correspondents to fulfill their customers’ needs are considered to be the Outward Foreign Remittances. It comprises the followings:

FDD Issued

FTT Issued

TC Issued

Endorsement of foreign currencies in the passport.

Sale of foreign currencies.

Foreign Demand Draft (FDD) Issued:

People used to send money abroad for various purposes. JBL issues most of the FDD for the purpose of payment of the application fees to the foreign universities.   For the issuance of FDD; T/M Form has to be filled up duly. This form is filled up under the Foreign Exchange Regulation Act, 1947. This form contains

The purpose of travel,

Name of the country where the applicant will go,

Name of the air or shipping company,

Passport number,

Signature, name & address of the applicant

Accounting Treatment:

JBL gives the following entries while issuing FDD:

Client’s Account/ Cash                       Dr.

Commission                                               Cr.

IDT                                                                      Cr.

Traveler’s Cheque (TC) Issued:

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

Procedure for issuing TC

There are some requirements that are to be fulfilled by the Traveler’s Cheque purchaser. The requirements are:

i)                    The client must be an account holder or proper reference from the bank is required

ii)                  The passport must be a valid one

iii)                Air ticket has to be confirmed

iv)                Passport holder must be present physically 

Steps involved in issuing of TC:

1)   After verifying all these documents the customer is asked to fill up prescribed application form.

2)    In the application the customer states the amount he is willing to endorse and it is to be verified that his required amount is within the stipulated.

3)    Then the customer pays cash or by debiting his account the Traveler’s Cheque is issued.

4)   Endorsement is given on the passport and on the ticket. Customer fills up the T/M Form.

5)   Purchased application form has to be filled up by the purchaser.

6)   Entry has to be given in the Foreign Currency Register and in the Traveler’s Cheque Register.

Following Documents must be retained form the clients :

/    Photocopy of passport

/    T/M form (Travel & Miscellaneous)

/    Others Copy of government order (in case of government employee)

Copy of invitation letter if issuance is against conference/training quota

Endorsement of Cash:

Cash foreign currency can also be remitted through the cash endorsement in the passport. In case of endorsing cash in the passport, the requirements are similar to those of Traveler’s Cheque. But according to the foreign exchange Regulation Act, 1947 an individual cannot take more than $1500.00 in cash in a year. That’s why; the concerned officer checks the last voyage of the purchaser. If he/she made any voyage and if he/she purchased dollar at that time, then the officer will deduct the amount and will give the rest to the purchaser.

JBL cannot endorse more than $1500.00 as cash at a time. For more than $1500.00, the customer has to purchase TC. For cash endorsement SEBL maintains a separate register. For giving cash foreign currency, JBL charges Tk. 200.00 as service charge per passport.

Foreign TT Payable:

Foreign remittance section also pays the claim of the foreign TT. After receiving TT payable, SEBL performs the following functions:

1) Customer has to fill up a “C Form” if the amount exceeds $2000.00. “C Form” describes the purpose of sending the TT.

2) The dollar amount comes to the Head office of JBL through American Express, New York.

3) JBL, Mohammadpur corporate branch sells the dollar to Head Office and collects the money in local currency.

Student File Opening:

Student can endorse $200.00 at a time in his own name. But if the amount exceeds $200.00, then the student has to open a student file.  For opening a student file, the following documents are required:

• Preliminary application and information for admission.
• Letter of approval by the university of the student.
• A filled-in application form for foreign currency in abroad.
• “Transcript of Records” given for the last degree by the university.
• Certificate given by the Board for S.S.C. / H.S.C. or equivalent examination.
• A photocopy of I-20 form.

In case of tuition fees, applicant must send the currency in favor of the institute. He cannot take the fees of the institute with him personally. Usually a student has to endorse at least one third of the fees of a year.

Foreign nationals leaving Bangladesh permanently after expiry of period of service in terms of relevant employment contracts may transfer abroad their genuine savings out of salaries/benefits clearly stated in the employment contracts duly approved by the Board of Investment (BOI). They shall also be eligible to transfer abroad the retirement benefits such as provident fund, pension, and gratuity due as per employment contracts approved by the BOI.

1. 1.    The ADs may, without prior approval of Bangladesh Bank, effect remittance of retirement benefits and savings including sale proceeds of investments in government securities (but not including sale proceeds of real assets such as household articles, real estates and other real assets, requests if any for remittance of such sale proceeds should be forwarded to Bangladesh Bank).

 Nostro Account:

 Nostro account means “our account with you”. A Nostro account is a foreign currency account of a bank maintained by its foreign correspondents abroad. For example, US Dollar Account of Southeast Bank Limited is maintained with Citibank, N.A, New York, USA is a Nostro account of Southeast Bank Limited i.e. from the point of view of Southeast Bank Limited, it is their Nostro Account.

Vostro Account:

 Vostro account means “your account with us”. The account maintained with foreign correspondent in a bank of a particular country is known as Vostro account. For example, State Bank of India’s Taka account maintained with Southeast Bank Limited Dhaka is the vostro a/c i.e. from the point of view of Southeast Bank Limited it is a vostro account held for state bank of India.

What is the Nostro account for a bank in a particular country is a Vostro account for the bank abroad maintaining the account thus the account of Southeast Bank Limited with Standard Charted Bank, London regarded as it’s Nostro account held with Standard Charted Bank, while Standard Charted Bank, London regards it as it’s Vostro account held for Southeast Bank Limited.

Loro Account:

 Loro account means “their account with you”. Account maintained by third party is known as Loro account; suppose Southeast Bank Limited is maintaining an account with Citi Bank N.A New York and at the same time Janata Bank is also maintaining a nostro account with Citi Bank N.A New York. From the point of view of Southeast Bank Limited Janata Bank’s account maintained with Citi Bank N.A New York is the Loro account.

 Comparison foreign remittance Janata Bank Ltd   Mohammad Corporate Branch from 2007-2011

Table 6: Foreign Remittance of Janata Bank Ltd  

Introduction

Letter of Credit  L/C also known as Documentary Credit is a widely used term to make payment secure in domestic and international trade. The document is issued by a financial organization at the buyer request. Buyers also provide the necessary instructions in preparing the document.

The International Chamber of Commerce (ICC) in the Uniform Custom and Practice for Documentary Credit (UCPDC) defines L/C as:

“An arrangement, however named or described, whereby bank (the Issuing bank) acting at the request and on the instructions of a customer (the Applicant) or on its own behalf:

Is to make a payment to or to the order third party (the beneficiary) or is to accept bills of exchange (drafts) drawn by the beneficiary.

Authorized another bank to effect such payments or to accept and pay such bills of exchange (draft).

Authorized another bank to negotiate against stipulated documents provided that the terms are complied with.

A key principle underlying letter of credit (L/C) is that banks deal only in documents and not in goods. The decision to pay under a letter of credit will be based entirely on whether the documents presented to the bank appear on their face to be in accordance with the terms and conditions of the letter of credit.

Parties to Letters of Credit

Applicant (Opener):

Applicant who is also referred to as account party is normally a buyer or customer of the goods, who has to make payment to beneficiary. LC is initiated and issued at his request and on the basis of his instructions.

Issuing Bank (Opening Bank):

The issuing bank is the one which create a letter of credit and takes the responsibility to make the payments on receipt of the documents from the beneficiary or through their banker. The payments have to be made to the beneficiary within seven working days from the date of receipt of documents at their end, provided the documents are in accordance with the terms and conditions of the letter of credit. If the documents are discrepant one, the rejection thereof to be communicated within seven working days from the date of receipt of documents at their end.

Beneficiary:

 Beneficiary is normally stands for a seller of the goods, who has to receive payment from the applicant. A credit is issued in his favor to enable him or his agent to obtain payment on surrender of stipulated document and comply with the term and conditions of the L/C.
If L/C is a transferable one and he transfers the credit to another party, then he is referred to as the first or original beneficiary.

Advising Bank:

 An Advising Bank provides advice to the beneficiary and takes the responsibility for sending the documents to the issuing bank and is normally located in the country of the beneficiary.

Confirming Bank:

Confirming bank adds its guarantee to the credit opened by another bank, thereby undertaking the responsibility of payment/negotiation acceptance under the credit, in additional to that of the issuing bank. Confirming bank play an important role where the exporter is not satisfied with the undertaking of only the issuing bank.

Negotiating Bank: 

 The Negotiating Bank is the bank who negotiates the documents submitted to them by the beneficiary under the credit either advised through them or restricted to them for negotiation. On negotiation of the documents they will claim the reimbursement under the credit and makes the payment to the beneficiary provided the documents submitted are in accordance with the terms and conditions of the letters of credit.

Reimbursing Bank:

 Reimbursing Bank is the bank authorized to honor the reimbursement claim in settlement of negotiation/acceptance/payment lodged with it by the negotiating bank. It is normally the bank with which issuing bank has an account from which payment has to be made.

Second Beneficiary:

Second Beneficiary is the person who represents the first or original Beneficiary of credit in his absence. In this case, the credits belonging to the original beneficiary is transferable. The rights of the transferee are subject to terms of transfer.

1. Revocable Letter of Credit L/C

A revocable letter of credit may be revoked or modified for any reason, at any time by the issuing bank without notification.  It is rarely used in international trade and not considered satisfactory for the exporters but has an advantage over that of the importers and the issuing bank.

There is no provision for confirming revocable credits as per terms of UCPDC, Hence they cannot be confirmed. It should be indicated in LC that the credit is revocable. if there is no such indication the credit will be deemed as irrevocable.

2. Irrevocable Letter of Credit L/C

In this case it is not possible to revoke or amended a credit without the agreement of the issuing bank, the confirming bank, and the beneficiary.  Form an exporter’s point of view it is believed to be more beneficial. An irrevocable letter of credit from the issuing bank insures the beneficiary that if the required documents are presented and the terms and conditions are complied with, payment will be made.

3. Confirmed Letter of Credit L/C

Confirmed Letter of Credit is a special type of L/C in which another bank apart from the issuing bank has added its guarantee. Although,  the cost of confirming by two banks makes it costlier, this type of  L/C is more beneficial for the beneficiary as it doubles the guarantee.

4. Sight Credit and Usance Credit L/C

Sight credit states that the payments would be made by the issuing bank at sight, on demand or on presentation. In case of usance credit, drafts are drawn on the issuing bank or the correspondent bank at specified usance period. The credit will indicate whether the usance drafts are to be drawn on the issuing bank or in the case of confirmed credit on the confirming bank.

5. Back to Back Letter of Credit L/C

Back to Back Letter of Credit is also termed as Countervailing Credit. A credit is known as back to back credit when an L/C is opened with security of another L/C.

A back to back credit which can also be referred as credit and counter credit is actually a method of financing both sides of a transaction in which a middleman buys goods from one customer and sells them to another.

6. Transferable Letter of Credit L/C

A transferable documentary credit is a type of credit under which the first beneficiary which is usually a middleman may request the nominated bank to transfer credit in whole or in part to the second beneficiary.

The L/C does state clearly mentions the margins of the first beneficiary and unless it is specified the L/C cannot be treated as transferable. It can only be used when the company is selling the product of a third party and the proper care has to be taken about the exit policy for the money transactions that take place.

This type of L/C is used in the companies that act as a middle man during the transaction but don’t have large limit. In the transferable L/C there is a right to substitute the invoice and the whole value can be transferred to a second beneficiary. The first beneficiary or middleman has rights to change the following terms and conditions of the letter of credit:

Reduce the amount of the credit.

Reduce unit price if it is stated.

Make shorter the expiry date of the letter of credit.

Make shorter the last date for presentation of documents.

Make shorter the period for shipment of goods.

Increase the amount of the cover or percentage for which insurance cover must be effected.

Substitute the name of the applicant (the middleman) for that of the first beneficiary (the buyer).

Standby Letter of Credit L/C

Initially used by the banks in the United States, the standby letter of credit is very much similar in nature to a bank guarantee.  The main objective of issuing such a credit is to secure bank loans. Standby credits are usually issued by the applicant’s bank in the applicant’s country and advised to the beneficiary by a bank in the beneficiary’s country.

 Unlike a traditional letter of credit where the beneficiary obtains payment against documents evidencing performance, the standby letter of credit allow a beneficiary to obtains payment from a bank even when the applicant for the credit has failed to perform as per bond.

The Import Letter of Credit guarantees an exporter payment for goods or services, provided the terms of the letter of credit have been met.

A bank issue an import letter of credit on the behalf of an importer or buyer under the following Circumstances

When a importer is importing goods within its own country.

When a trader is buying good from his own country and sells it to the country for the purpose of merchandizing trade.

When an Indian exporter who is executing a contract outside his own country requires importing goods from a third country to the country where he is executing the contract.

The first category of the most common in the day to day banking Fees and Reimbursements

The different charges/fees payable under import L/C is briefly as follows:

1. The issuing bank charges the applicant fees for opening the letter of credit. The fee charged depends on the credit of the applicant, and primarily comprises of :

(a) Opening Charges

 This would comprise commitment charges and usance charged to be charged upfront for the period of the L/C. The fee charged by the L/C opening bank during the commitment period is referred to as commitment fees. Commitment period is the period from the opening of the letter of credit until the last date of negotiation of documents under the L/C or the expiry of the L/C, whichever is later. Usance is the credit period agreed between the buyer and the seller under the letter of credit. This may vary from 7 days usance (sight) to 90/180 days. The fee charged by bank for the usance period is referred to as usance charges. 

(b) Retirement Charges

1. This would be payable at the time of retirement of LCs. LC opening bank scrutinizes the bills under the LCs according to UCPDC guidelines , and levies charges based on value of goods.

1. The advising bank charges an advising fee to the beneficiary unless stated otherwise the fees could vary depending on the country of the beneficiary. The advising bank charges may be eventually borne by the issuing bank or reimbursed from the applicant.
2. The applicant is bounded and liable to indemnify banks against all obligations and responsibilities imposed by foreign laws and usage.

4. The confirming bank’s fee depends on the credit of the issuing bank and would be borne by the beneficiary or the issuing bank (applicant eventually) depending on the terms of contract.

5. The reimbursing bank charges are to the account of the issuing bank.

The basic risk associated with an issuing bank while opening an import L/C’s are:

The financial standing of the importer as the bank is responsible to pay the money on the behalf of the importer; thereby the bank should make sure that it has the proper funds to pay.

The goods Bankers need to do a detail analysis against the risks associated with perish ability of the goods, possible obsolescence, import regulations packing and storage, etc. Price risk is another crucial factor associated with all modes of international trade.

Exporter Risk
There is always the risk of exporting inferior quality goods. Banks need to be protective by finding out as much possible about the exporter using status report and other confidential information.

Country Risk
these types of risks are mainly associated with the political and economic scenario of a country. To solve this issue, most banks have specialized unit which control the level of exposure that that the bank will assumes for each country.

Foreign exchange risk
Foreign exchange risk is another most sensitive risk associated with the banks. As the transaction is done in foreign currency, the traders depend a lot on exchange rate fluctuations.

Export Letter of Credit is issued in for a trader for his native country for the purchase of goods and services. Such letters of credit may be received for following purpose:

For physical export of goods and services from India to a Foreign Country.

For execution of projects outside India by Indian exporters by supply of goods and services from Indian or partly from India and partly from outside India.

Towards deemed exports where there is no physical movements of goods from outside India But the supplies are being made to a project financed in foreign exchange by multilateral agencies, organization or project being executed in India with the aid of external agencies.

For sale of goods by Indian exporters with total procurement and supply from outside India. In all the above cases there would be earning of Foreign Exchange or conservation of Foreign Exchange.

Banks in India associated themselves with the export letters of credit in various capacities such as advising bank, confirming bank, transferring bank and reimbursing bank.

In every case the bank will be rendering services not only to the Issuing Bank as its agent correspondent bank but also to the exporter in advising and financing his export activity.

Advising an Export L/C

The basic responsibility of an advising bank is to advise the credit received from its overseas branch after checking the apparent genuineness of the credit recognized by the issuing bank.
It is also necessary for the advising bank to go through the letter of credit, try to understand the underlying transaction, terms and conditions of the credit and advice the beneficiary in the matter.
The main features of advising export LCs are:
1. There are no credit risks as the bank receives a onetime commission for the advising service.
2. There are no capital adequacy needs for the advising function.

Advising of Amendments to L/Cs
Amendment of LCs is done for various reasons and it is necessary to fallow all the necessary the procedures outlined for advising. In the process of advising the amendments the Issuing bank serializes the amendment number and also ensures that no previous amendment is missing from the list. Only on receipt of satisfactory information/ clarification the amendment may be advised.

Confirmation of Export Letters of Credit
It constitutes a definite undertaking of the confirming bank, in addition to that of the issuing bank, which undertakes the sight payment, deferred payment, acceptance or negotiation.

Banks in India have the facility of covering the credit confirmation risks with ECGC under their “Transfer Guarantee” scheme and include both the commercial and political risk involved.

Discounting/Negotiation of Export LCs
When the exporter requires funds before due date then he can discount or negotiate the LCs with the negotiating bank. Once the issuing bank nominates the negotiating bank, it can take the credit risk on the issuing bank or confirming bank.

However, in such a situation, the negotiating bank bears the risk associated with the document that sometimes arises when the issuing bank discover discrepancies in the documents and refuses to honor its commitment on the due date.

Reimbursement of Export LCs
Sometimes reimbursing bank, on the recommendation of issuing bank allows the negotiating bank to collect the money from the reimbursing bank once the goods have been shipped. It is quite similar to a cheque facility provided by a bank.

In return, the reimbursement bank earns a commission per transaction and enjoys float income without getting involve in the checking the transaction documents. Reimbursement bank play an important role in payment on the due date (for nuisance LCs) or the days on which the negotiating bank demands the same (for sight LCs).

Regulatory Requirements

Opening of imports LCs in India involve compliance of the following main regulation:

Trade Control Requirements

The movement of good in India is guided by a predefined se of rules and regulation. So, the banker needs to assure that make certain is whether the goods concerned can be physically brought in to India or not as per the current EXIM policy.

Exchange Control Requirements

The main objective of a bank to open an Import LC is to effect settlement of payment due by the Indian importer to the overseas supplier, so opening of LC automatically comes under the policies of exchange control regulations.

UCPDC Guidelines

Uniform Customs and Practice for Documentary Credit (UCPDC) is a set of predefined rules established by the International Chamber of Commerce (ICC) on Letters of Credit. The UCPDC is used by bankers and commercial parties in more than 200 countries including India to facilitate trade and payment through LC.

UCPDC was first published in 1933 and subsequently updating it throughout the years. In 1994, UCPDC 500 was released with only 7 chapters containing in all 49 articles.

The latest revision was approved by the Banking Commission of the ICC at its meeting in Paris on 25 October 2006. This latest version, called the UCPDC600, formally commenced on 1 July 2007. It contains a total of about 39 articles covering the following areas, which can be classified as 8 sections according to their functions and operational procedures.

FEDAI Guidelines

Foreign Exchange Dealers Association of India (FEDAI) was established in 1958 under the Section 25 of the Companies Act (1956). It is an association of banks that deals in Indian foreign exchange and work in coordination with the Reserve Bank of India, other organizations like FIMMDA, the Forex Association of India and various market participants.
FEDAI has issued rules for import LCs which is one of the important areas of foreign currency exchanges. It has an advantage over that of the authorized dealers who are now allowed by the RBI to issue stand by letter of credits towards import of goods.

As the issuance of standby of letter of Credit including imports of goods is susceptible to some risk in the absence of evidence of shipment, therefore the importer should be advised that documentary credit under UCP 500/600 should be the preferred route for importers of goods.

LC throughout swift

SWIFT is the industry-owned co-operative supplying secure, standardized messaging services and interface software to nearly 8,100 financial institutions in 207 countries and territories, SWIFT members include banks, broker-dealers and investment managers. The broader SWIFT community also encompasses corporate as well as market infrastructures in payment, securities, treasury and trade. Over the past ten years, SWIFT message prices have been reduced over 80% and reliability 99.999% of uptime.

SWIFT Stands for:

         S=SOCEITYY

           W=WORLDWIDE

              I=INTERBANK

                F=FINANCIAL

                  T=TELECOMMUNICATION.

Janata Bank Limited is the member of SWIFT (Society for Worldwide Inter-bank Financial Telecommunication). SWIFT is a member owned co-operative, which provides a fast and accurate communication network for financial transactions such as Letters of Credit, Fund transfer etc. By becoming a member of SWIFT, the bank has opened up possibilities for uninterrupted connectivity with over 5,700 user institutions in 150 countries around the world.

SWIFT is a highly secured messaging network enables Banks to send and receive Fund Transfer, L/C related and other free format messages to and from any banks active in the network.

1. (A) In terms of Bangladesh Bank Notification Nos FE-1/03-BB dated 6th January, 2003 and FE-1/04-BB dated 23rd March, 2004 any person may bring into Bangladesh from any place outside Bangladesh without any limit foreign currency notes or bank notes other than-

(i) Un-issued notes and coins.

(ii) Notes legal tender in Bangladesh in excess of Taka 500 in value. Provided that the concerned person makes a written declaration to the Customs Authorities at the time of arrival, in FMJ Form (See Appendix 5/7) of the entire amount; no declaration will however, be necessary if the amount brought in does not exceed US$ 5000 or its equivalent in foreign currency and does not exceed Taka 500 in notes legal tender in Bangladesh.

(B) Sending into Bangladesh by post/courier or otherwise of any currency note, bank note or coin by any person from abroad without general or specific permission from the Bangladesh Bank is prohibited.

(C) Any traveler entering into Bangladesh may bring with him at every time Bangladesh currency notes/coins within the limit as prescribed hereunder:

(i) Members of the crew of a ship or an aircraft or the staff of a railway may bring Bangladesh currency notes up to Tk. 500 at any one time.

(ii) An incoming/outgoing passenger may bring in/take out up to Taka 500 (five hundred) in Bangladesh currency at the time of arrival into/departure from Bangladesh.

(D) An incoming person may retain foreign exchange up to US$ 5000 or equivalent brought in by himself/herself without declaration and takes out the same at the time of departure from Bangladesh without endorsement in passport and air ticket. Such amounts may also be deposited in RFCD account by a resident Bangladeshi and in NFCD account/private non-resident FC account by a non-resident Bangladeshi any time after arrival in Bangladesh. Amount in excess of USD 5000, brought in by the resident Bangladeshis, should however be encased or deposited in appropriate foreign currency account within 30 days of arrival. Such amounts brought in by non-resident Bangladeshis can be encased or deposited in foreign currency account any time after return to Bangladesh. For a foreign national, the entire amount brought in with declaration on Form FMJ or up to USD 5000 brought in without declaration may be taken out freely at the time of departure. Such amounts brought in by foreign nationals can be encased or deposited in foreign currency account any time after their enter into Bangladesh.

2. In terms of Notification No. 1(2) ECS/48 dated 1st July, 1948 issued pursuant to sub-section (1) of Section 8 of the FER Act, 1947 Government have prohibited, except with the general or special permission of the Bangladesh Bank, the import into Bangladesh from any place outside Bangladesh of:

(a) any gold coin, gold bullion, gold sheet or gold ingot whether refined or not, and

(b) any silver bullion, silver sheet or plate which has undergone no process of manufacture subsequent to rolling or any incurrent silver coin. Import of gold and silver

Import of gold and silver into Bangladesh from any place outside is, therefore, subject to the Bangladesh Bank’s general or specific authorization. General permission has been accorded by Bangladesh Bank allowing an incoming Bangladesh national to bring in up to 2(two) kilograms of gold or silver in ingot /bullion form at the time of arrival into Bangladesh, subject to payment of duties and taxes as levied by the Govt.

 3. Gold, as defined under Section 2 of the FER Act, includes gold in the form of coin whether legal tender or not or in the form of bullion or ingot whether refined or not. Silver, as defined under the same Section of the Act includes silver bullion or ingot, silver sheets and plates which have undergone no process of manufacture subsequent to rolling and incurrent silver coin which is not legal tender in Bangladesh or elsewhere.

4. There are no restrictions under the FER Act on the import of jewelers and precious stones. Import of jewelers and precious stones is, however, subject to the Import Trade Control Regulations.

5. The terms jewelers and precious stone are deemed to include all articles made wholly or mainly of gold, platinum, diamonds of all kinds, precious or semi-precious stones, pearls, whether or not mounted, set or strung and articles set or mounted with diamonds, precious or semi-precious stones or pearls.

6. There are no restrictions under the FER Act on import of securities into Bangladesh.ACK LCs

Import means purchase of goods or services from abroad. Normally consumers, firms and Government organizations import foreign goods or services to meet their various necessities. So, in brief, we can say that import is the flow of goods and services purchased by economic agent staying in the country from economic agent staying abroad.

Regulation of Import:

Import of goods into Bangladesh is regulated by the Ministry of Commerce in terms of the Import and Export (Control) Act, 1950 with Import Policy Order issued periodically and public notices issued from time to time by the office of the Chief Controller of Import and Export (CCI&E). At present, it is regulated by the Import Policy (1997-2002), which has come into effect on June14, 1998. And Import Policy directs certain Import Procedure, which administers the whole activity.

Import Procedure Followed by JBL:

As an Authorized Dealer, Janata Bank Ltd Mohammadpur Corporate Branch is always committed to facilitate import of different goods into Bangladesh from the foreign countries. Import Section, which is under Foreign Exchange Department of the branch, is assigned to perform this job. And to serve its client’s demand to import goods, it always maintains required formalities that are collectively termed as The Import Procedure.

a) At first, the importer must obtain Import Registration Certificate (IRC) from the CCI&E submitting the following papers:

• Up to date Trade License.
• Nationality and Asset Certificate.
• Income Tax Certificate.
• In case of company, Memorandum & Articles of Association and Certificate of Incorporation.
• Bank Solvency Certificate etc.
• Required amount of registration fee

b) Then the importer has to contact with the seller outside the country to obtain the Pro forma Invoice. Usually an indenter, local agent of the seller or foreign   agent of the buyer makes this communication. Other sources are:

• Trade fair.
• Chamber of Commerce.
• Foreign Missions in Bangladesh.
• Journals etc

c) When the importer accepts the Pro forma Invoice, he/she makes a purchase      contract with the exporter detailing the terms and conditions of the import.

d) After making the purchase contract, importer settles the means of payment with the seller. An import procedure differs with different means of payment. The possible means are Cash in Advance, Open Account, Collection Method and Documentary Letter of Credit. In most cases, the Documentary Letter of Credit in our country makes import payment. Purchase Contract contains which payment procedure has to be applied.

Different Means of Payment:

• Cash in advance: Importer pays full, partial or progressive payment by a foreign DD, MT or TT. After receiving payment, exporter will send the goods and the transport receipt to the importer. Importer will take delivery of the goods from the transport company.
• Open Account: Exporter ships the goods and sends transport receipt to the importer. Importer will take delivery of the goods and makes payment by foreign DD, MT, or TT at some specified date.
• Collection Method: Collection methods are either clean collection or documentary collection. Again, Documentary Collection may be Document against Payment (D/P) or Document against Acceptance (D/A). The collection procedure is that the exporter ships the goods and draws a draft/ bill on the buyer. The exporter submits the draft/bill (only or with documents) to the remitting bank for collection and the bank acknowledges this. Then the remitting bank sends the draft/bill (with or without documents) and a collection instruction letter to the collecting bank. Acting as an agent of the remitting bank, the collecting bank notifies the importer upon receipt of the draft. The title of goods is released to the importer upon full payment or acceptance of the draft/bill.

Comparison import of Janata Bank Ltd   Mohammad Corporate Branch from 2007-2011

Table 7: Import of Janata Bank Ltd

Export is the process of selling goods and services to the other countries. Creation of wealth in any country depends on the expansion of production and increasing participation in international trade. By increasing production in the export sector we can improve the employment level of such a highly populated country like Bangladesh. Bangladesh exports a large quantity of goods and services to foreign households. Readymade textile garments (both knitted and woven), Jute, Jute-made products, frozen shrimps, tea are the main goods that Bangladeshi exporters export to foreign countries. Garments sector is the largest sector that exports the lion share of the country’s export. Bangladesh exports most of its readymade garments products to U.S.A and European Community (EC) countries. Bangladesh exports about 40% of its readymade garments products to U.S.A. Most of the exporters who export through SEBL are readymade garments exporters. They open export L/Cs here to export their goods, which they open against the import L/Cs opened by their foreign importers.

Export L/C operation is just reverse of the import L/C operation. For exporting goods by the local exporter, bank may act as advising banks and collecting bank (negotiable bank) for the exporter.

Commercial Invoice:

 There is no standard form for commercial invoice.  Each exporter designs his own commercial invoice from usually a commercial invoice is required to be duly signed by the exporter.

Consular Invoice:

It is made out on a prescribed format form certified by the consulate of the importing country stationed in the exporter’s country.  In some cases it is also seen that exporter’s own invoice are authenticated by the embassy or consulate instead of issuing consular invoice.  This type of invoice is called legalized invoice.

Pro forma Invoice:

Another type of invoice is pro forma invoice which is a form of quotation to a potential buyer.  Exporters send pro forma invoice to the importer to get a general understanding regarding the product with terms and conditions.

Certified Invoice:

Certified invoice is an invoice bearing a signed statement by someone in the importers country that have inspected the goods and found them in accordance with those specified in the contract

The Invoice must be tallied as under:

• It is addressed to the importer.
• It is dated and signed
• It must bear detail description, price, quality and quantity of the goods which must tally with description in B/L & L/C
• Invoice tallies with the draft amount and L/C value
• The marks and number on the packing list shown in the B/L identical with those in the invoice.
• Value of the goods calculated in the invoice is correct on the basis of indent.
• It must bear, LCA No. Importers  & Indenters registration and L/C number
• Any commission to Bangladeshi agent is payable must be deducted from the invoice value.
• Invoice must be prepared as per the language of L/C
• It bears the origin of the goods
• Consular invoice should bear the sign and stamp of the local consulate / embassy of the importers country.

Certificate of origin: It should be obtained from the competent authority as called by the L/C terms. In Bangladesh it is usually issued by the Chamber of Commerce, Bangladesh Jute Association or Ministry of Commerce etc.  The description of merchandise in the certificate should be the same as that given in the invoice.  It must indicate the origin of the goods.  It must be signed the authorized person.

Packing List: Packing list in duplicate is required; there are weight list, inspection certificate, Measurement Certificate, Chemical analysis certificate, Phytosanitary, Health consumption certificate which are often required as per contract.   Each of these documents should describe the goods invoiced as per L/C terms.   These certificates are usually dated before the date of shipment.

Letter of Trust (LTR): By executing the standard letter of trust (or trust receipt) the customer acknowledges receipt of the documents of title to the goods, or the goods when delivery thereof is taken by him, in trust as agents for the bank until the goods are sold or used for the express purpose for which they were released to him.  The customer also undertakes to keep the transaction separate and assign and deposit with the bank the sale proceeds immediately after realization but in any case not later than the time period stipulated in the letter.  Further, the customer undertakes to keep the goods insured and in the event the goods or any part thereof cannot be used by him for the declared purpose or on demand being made by the bank for the return of the documentation to the bank’s custody.  The trust receipt thus enables the importer customer to take redelivery of the documents pledged to the pledge bank.

Bill of exchange: The bill of exchange is a particular instrument through which payment is effected in Internal and International Trade. 

The payment for the goods is received by the seller through the medium of a bill of exchange (commonly) called draft or bill drawn on the buyer for the amount depending on the contract.  It is a Negotiable instrument.  Negotiable Instruments act 1881(section-5) defines the bill of exchange as “an instrument in writing containing an unconditional order” signed by the maker, directing a certain person to pay a certain sum of money only to or to the order  of a certain person or to the bearer of the instruments.

Parties involved in a bill of exchange are normally three: drawer, drawee and the payee. But in case the B/E is endorsed, the number of parties may be five: drawee, drawer, payee, endorser and endorsee

Export Policy:

Export policies formulated by the Ministry of Commerce, GOB provide the overall guideline and incentives for promotion of exports in Bangladesh. Export policies also set out commodity-wise annual target.

It has been decided to formulate these policies to cover a five-year period to make them contemporaneous with the five-year plans and to provide the policy regime.

The export-oriented private sector, through their representative bodies and chambers are consulted in the formulation of export policies and are also represented in the various export promotion bodies set up by the government.

Export Procedures:

The import and export trade in our country are regulated by the Import and Export (Control) Act, 1950.

Under the export policy of Bangladesh the exporter has to get valid Export registration Certificate (ERC) from Chief Controller of Import & Export (CCI&E). The ERC is required to renew every year. The ERC number is to incorporate on EXP forms and other papers connected with exports.

Signing the Contract:

After communicating buyer, exporter has to get contracted (writing or oral) for exporting exportable items from Bangladesh detailing commodity, quantity, price, shipment, insurance and marks, inspection and arbitration etc.

Receiving Letter of Credit:

After getting contract for sale, exporter should ask the buyer for Letter of Credit (L/C) clearly stating terms and conditions of export and payment.

The following are the main points to be looked into for receiving/ collecting export proceeds by means of Documentary Credit:

(1)   The terms of the L/C are in conformity with those of the contract;

(2)   The L/C is an irrevocable one, preferably confirmed by the advising bank;

(3)   The L/C allows sufficient time for shipment and negotiation.

Terms and conditions should be stated in the contract clearly in case of other mode of payment:

I. Cash in advance;

II. Open account;

III. Collection basis (Documentary/ Clean)

Procuring the materials:

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

Shipment of goods:

Then the exporter should take the preparation for export arrangement for delivery of goods as per L/C and incomers, prepare and submit shipping documents for Payment/ Acceptance/ Negotiation in due time.

Documents for shipment:

ü   EXP form,

ü   ERC (valid),

ü   L/C copy,

ü   Customer Duty Certificate,

ü   Shipping Instruction,

ü   Transport Documents,

ü   Insurance Documents,

ü   Invoice,

ü   Bills of Exchange (if required)

ü   Certificate of Origin,

ü   Inspection Certificate,

ü   Quality Control Certificate,

ü   G.S.P. Certificate,

Final Step:

Submission of the documents to the Bank for negotiation.

Export Financing:

Financing exports constitutes an important part of a bank’s activities. Exporters require financial services at four different stages of their export operation. During each of these phases exporters need different types of financial assistance depending on the nature of the export contract.

Pre-shipment credit

Post-shipment credit

Pre-shipment credit:

Pre-shipment credit, as the name suggests, is given to finance the activities of an exporter prior to the actual shipment of the goods for export. The purpose of such credit is to meet working capital needs starting from the point of purchasing of raw materials to final shipment of goods for export to foreign country. Before allowing such credit to the exporters the bank takes into consideration about the credit worthiness, export performance of the exporters, together with all other necessary information required for sanctioning the credit in accordance with the existing rules and regulations. Pre-shipment credit is given for the following purposes:

Cash for local procurement and meeting related expenses.

Procuring and processing of goods for export.

Packing and transporting of goods for export.

Payment of insurance premium.

Inspection fees.

Freight charges etc.

An exporter can obtain credit facilities against lien on the irrevocable, confirmed and unrestricted export letter of credit in form of the followings:

Export cash credit (Hypothecation)

Export cash credit (Pledge)

Export cash credit against trust receipt.

Packing credit.

Back to back letter of credit.

Credit against Red-clause letter of credit.

Post Shipment Credit:

This type of credit refers to the credit facilities extended to the exporters by the banks after shipment of the goods against export documents. Necessity for such credit arises, as the exporter cannot afford to wait for a long time for without paying manufacturers/suppliers. Before extending such credit, it is necessary on the part of banks to look into carefully the financial soundness of exporters and buyers as well as other relevant documents connected with the export in accordance with the rules and regulations in force. Banks in our country extend post shipment credit to the exporters through:

1. Negotiation of documents under L/C;
2. Foreign Documentary Bill Purchase (FDBP):
3. Advances against Export Bills surrendered for collection; 

Negotiation of documents under L/C:

The exporter presents the relative documents to the negotiating bank after the shipment of the goods.  A slight deviation of the documents from those specified in the L/C may raise an excuse to the issuing bank to refuse the reimbursement of the payment already made by the negotiating bank. So the negotiating bank must be careful, prompt, systematic and indifferent while scrutinizing the documents relating to the export.

Foreign Documentary Bill Purchase (FDBP):

Here the exporters are also made on the basis of contract between the buyer and the seller without the cover of a letter of credit. In such case, documents are delivered to the buyer through the intermediary of the foreign correspondent of the authorized dealer against payment/acceptance.

Comparison export of Janata Bank Ltd   Mohammad Corporate Branch from 2007-2011

Table 8: Export of Janata Bank Ltd

CHAPTER: 6

DATA ANALYSIS AND FINDINGS      

The Export Policy 2009-12 has underscored the need for expanding export, increasing the productivity of export-oriented industries and facilitating the overall development of the export sector through capacity building of local export-oriented industries. Five Business Promotion Councils are already in place under public-private partnership to enhance the capacity and awareness of the exporters and mitigate the supply constrains paving the way for enhanced uninterrupted supply of export products. The scope of these councils will be gradually expanded. Export statistics of the last few years reveal that export earnings have witnessed growths of 15.69%, 15.87% and 10.23% during export years 2006-07, 2007-08 and 2008-09 respectively. The “Export Policy 2009-12” has been formulated on the basis of recommendations of a Consultative Committee comprising of representatives from the main industries/trade associations, chambers, research organizations, respective Ministries, Divisions and organizations so to ensure the sustainability of the export growth during the policy period. It is expected that this Export Policy will play the pioneering role in employment generation and poverty alleviation through burgeoning growth of our export.

Formalities for export procedures: 

There are a number of formalities, which an exporter has to fulfill before and after shipment of goods. These formalities or procedures are enumerated in brief as follows:

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

(The following documents are required)

• Application Form
• Nationality certificate
• Partnership Deed (Registered)
• Memorandum & Articles of Association and Incorporation Certificate
• Bank Certificate
• Income Tax Certificate
• Valid Trade License
• Copy of Rent Receipt of the Business Firm

Securing the order:

After getting ERC, the exporter may proceed to secure the export order. He can do this by contracting the buyers directly through correspondence.

Obtaining EXP:

After registering, the exporter applies to Janata Bank Ltd. With the trade license, ERC and the Certificate from the concerned Government Organization to get EXP. If the bank is satisfied, an EXP is issued to the exporter.

EXP form generally is of 4 (four) copies:

• Original: Customs authority reports first copy of EXP to Bangladesh Bank after Shipment of the goods.
• Duplicate: Negotiating bank reports the Duplicate to Bangladesh Bank in or after Negotiation date but not later than 14 days from the date of shipment.
• Triplicate: On realization of export proceeds the same bank to the same authority reports Triplicate.
• Quadruplicate: Finally, the negotiating bank as their office copy retains Quadruplicate.

Signing of the contract:

After communicating with buyer the exporter will contract for exporting products from Bangladesh detailing commodity, quantity, price, shipment, insurance and mark, inspection, arbitration etc.

To boost up country’s Export, Janata Bank Limited has been providing different kinds of assistance to exporters. Some of which are as under:-

Providing Pre-Shipment and Post-Shipment Finance, Export Guarantee and bonding facility etc.

Concessional rate of interest for exports Finance.

Back to Back L/C under bonded Warehouse facility

Sight & Unasked L/C against Firm Contract for import of raw materials.

Sight L/C under EDF

Exporter’s Retention Quota A/C both interest bearing and non-interest bearing.

Export incentive Program.

Banking at Export Processing Zone

Scope for establishment of export oriented industry by 100% foreign investment and by joint-venture

The sole bank to disburse Government Export Promotion Fund against export of Computer Software & Data Entry Processing

Undergone to an agreement with Bangladesh Bank to obtain fund from Government EEF (Equity & Entrepreneurship Fund) to build up entrepreneur’s equity.

Providing services to the exporter by utilizing most modernized technology like Swift, Reuters, Internet, and Fax etc. Janata Bank’s  E-mail no. is id-obd@janatabank-bd.com any latest business information will be available at website; www.janatabank-bd.com

Consultancy and advisory services by an expert group of officials.

Special export financing program towards computer software data entry and service export.

Salient Features:

A  Firm or Company having valid ERC, necessary infrastructural and technical facilities and sufficient skilled man power related computer.

Member of BASIS or BCS.

Having Computer Literacy or related professional background.

Preference to the firm/company having prior experience

Satisfactory performance Certificate/Acceptance Letter from Counterpart abroad.

Valid Export Orders are in hand.

Export Growth of Janata Bank Limited (2006-2010)

Table 9: Export Growth of Janata Bank Limited (2006-2010)

Import finance:

Through quite a good number of Authorized Dealer Branches and 1198 nos. foreign correspondents world wide Janata Bank Limited has been extending full range import and relevant finance facilities.

Import Items:

Capital Machineries and Industrial raw materials.

Fuel & Lubricants.

Intermediate goods.

Consumer durable, spare parts and equipments.

Consumer goods  : Food & Food Grains, Baby food,  Petroleum, CDSO (Crude Degummed Soya bean Oil), CPO (Crude Palm Olin) Oilseeds, Cement Clinker, Construction Materials, Fertilizer, Chemicals and many other goods permissible by Import by Import Policy of the country.

Facilities Offered:

Opening of L/C at competitive/ reasonable margin and commission

Interest at concession rate on import finance to the prime customers & interest rebate facilities.

Import Trend

Setting Industrial vision to facilitate optimally, bank’s involvement has been showing sharp rising trend as under:

Table 10: Import Trend of JBL

Table 11: Budget and Performance

 (Under EXPORT Policy 2009-2012)

The conditions stipulated in this Policy or in other related laws, and the rules and regulations related to foreign currency exchange issued from time to time by the Bangladesh Bank have to be followed in case of export of goods from Bangladesh. Besides, relevant documents within the scope of the above-mentioned conditions and rules and regulations have to be followed.

Control of Export of Products:

 Under this Policy, export of products will be controlled in the following ways such as:-

Export Prohibited Products:  Unless otherwise stated, products prohibited under this Export Policy cannot be exported. Annex -1 reads the list of export prohibited products.

Products under Conditional Export:

Products which are exportable under some   conditions can be exported only after fulfilling those conditions. Such products have been listed in Annex-2.

Exportable Products:

Unless otherwise stated, all other products except the products enlisted in Annex-1 and Annex-2, i.e. export prohibited products and the products whose export is contingent upon certain conditions shall be freely exportable.

Nothing in this policy shall be applicable to the following:

Store, equipment or spare parts of ships, vehicles or aircrafts bound for going abroad, and products declared as their kitchen items, or the baggage accompanied by the sailors or the crews and passengers of those ships, vehicles or aircrafts.

Export of samples subject to fulfillment of the following conditions:

• The product is not export prohibited;
• A maximum of US$ 5,000 worth of products (except medicine) based on FOB price (free on board) per exporter per year;
• Products sent as samples free of cost; provided that in case of medicine the maximum shall be (1) US$ 30,000 if there is no export L/C (letter of credit), or (2) 5% of the total value of the L/C or US$ 5000, whichever is less. Bangladesh Bank can increase these limits examining each case, if necessary.
• For 100% export-oriented garment industries, a maximum of US$ 7,500 worth of samples of readymade garments per year;
• The diamond processing farms having bond licenses issued from the Customs bond Commission rate or diamond producing/ diamond-studded jewelry processing farms registered as producers with VAT Commission rate, under National Board of Revenue can send abroad cut and polished diamond/diamond-studded jewelry worth of US$ 50,000 annually with a view to participating in international trade fair or showcasing for export market development. In this case the samples must be brought back to the country after the show. However, if the samples are sold, all sale proceeds must be repatriated through legal banking channel and the amount of the proceeds shall not be less than the value of the samples;
• Promotional materials (brochure, poster, leaflet, banner etc.) of any price or weight;
• Gift parcel worth of US$ 1,000 or equivalent in Bangladeshi Taka;
• Bonafide baggage of travelers traveling outside Bangladesh; and
• Relief materials exported by the Government. 

Business Strength

Second Largest bank of the country

Wide network of 874 Branches across the countries

Holds a sound reputation in the banking industries

Sponsoring by the government

Personalized services

Well connected distribution channel from Head Office to all branches

Healthy correspondents relationships with foreign banks

Provide a record business in international trade and remittance

Majority of the branches run with computers under centralized network

Sound and large capital base

Sustainable growth.

Weakness

Lack of using single softer to integrate all the branches of the bank.

Lack of new product

Not implementing the Online Banking in all activities

OpportunityMaintaining required Capital Adequacy

Business expansion in capital market

Gradual expansion of branch network

Progressive automation of the branches

Real online banking software will be in function soon

Expansion of ATM and Credit Card

Consideration of prime customers.

Threat

Mismanagement of administration

Strong interference of CBA (Collective Bargaining Agent)

CHAPTER: 7

RECOMMENDATION AND CONCLUSION

General Banking Department:

If the enter general Banking system is fully computerized then they satisfy the customer by provide fast service.

If they establish most powerful networking system with their branches then it can easily transfer data within short time.

If they cancel the introducer system then they can collect more deposit through new account and it also satisfied the customer.

Loan and Advance Department:

Try to avoid giving loan the political person who had bad reputation of loan repaying.

Evaluate the securities value properly to avoid the risk of loan recovery. The punishment system should be established to discourage the unlawful activities of employee.

Bangladesh Bank should more active to provide CIB report.

Foreign Exchange Department:

In Foreign Exchange Department it is require communicating with foreign bank frequently and quickly. To make the process easy and quick the whole system should be computerized and modern communication media for example e-mail, fax, Internet should be used.

If they are Communicate more foreign countries then they provide more services to their customers.

If they establish direct procedure of Letter of Credit for their customer import and export then they achieve more customer.

This is recommended that some aspect of Janata Bank Ltd can be supportive for management to get some pioneering ideas for the probable situations of the identified problems to ensure better progress in future; some necessary steps are recommended below on the basis of collected data, observation, expert staff’s opinion and my knowledge and judgment.

►For improving customer satisfaction the information related to customer should be available to the branch.

►For improving customer satisfaction so many facilities should be emphasized by the bank on priority basis.

►For the customer’s satisfaction service delivery should be given within 10-15 minutes.

►While delivering of services friendly behaviors should be ensured by the employees because it becomes a necessity of customers.

►For better customer satisfaction the interest rate of the bank should be as fewer as possible.

►The product and services of the bank should be new and competitive.

►For improving customer satisfaction bank should launch customer complain box in every branch.

►For better satisfaction bank could initiate to establish customer service center for its customers.

►The better interior and nice location of the branch could be an incentive for customer satisfaction.

►Available sitting arrangements for customers in the bank could be a good sign for satisfaction of customers.

►Definitely to be competitive and ensuring of faster services for customer’s satisfaction online banking system should be start all over the branches as fast as possible.

►Customers are delighted with services of the bank but not in greater extent.

►Online banking services should be introduced by all over the branches as soon as possible.

►Banking services may be given 24 hours on the main branches if possible.

►ATM booth should be available especially in the major areas. Like city and commercial areas.

►Token system can be introduced in case of service providing in the bank.

►Product and services should be according to customer’s satisfaction and new one.

►The bank may use the intern student in research work to measure the customer satisfaction, product and service demand and current market situation of their bank besides the daily work.

Internship is a bridge between theoretical knowledge and practical knowledge. Now that I have completed my Internship, I believe the experience I have gathered working in the official environment will be proven vital for me to go ahead in my professional life. During my internship I have realized how modern Science and Information Technology have been contributing more and more to the development of operational and management process. To serve customers well, companies need to be skillful in many areas faster development of new business strategies, shrinking company formalities, reducing procedure times, improving customer service and increasing and maintaining knowledge for accomplishing all these goals.

As an internee of JBL, I have truly enjoyed my internship from the learning and experience viewpoint. I am confident that this three months internship program at JBL will definitely help me to realize my further carrier in the job market.

The bank is maintaining a well-structured communication from top to bottom level. Each official needs to be valued and treated as a part of the bank and they must have the privilege to devote themselves for the betterment of service of the bank. Janata Bank places utmost importance on managing credit risk. The whole process includes management of Credit Risk, Foreign Exchange Risk, Prevention of money Laundering, Asset liability Management, Internal control and Compliance.

As there are lots of local and foreign banks in Bangladesh the JBL is promising commercial Bank among them. In this competitive market JBL has to compete not only the others commercial banks but also with the public Bank. JBL is more capable of contributing towards economic development as compared with other bank of JBL. JBL 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. Success in the banking business largely depends on effective lending. Less the amount of loan losses, the more the income will be from Credit operations the more will be the profit of the JBL Limited and here lays the success of Credit Financing.

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 greathearted and going to acquire from various courses of my BBA program.