FOREIGN TRADE OPERATION & PERFORMANCE TRENDS
OF
DHAKA BANK LIMITED
Foreign Trade
Operation and Performance trends
of
Dhaka Bank
Limited
Submitted To
Professor Md.
Ashraf Hossain
Dean
School of
Business (AUB)
Supervised by
Dr. Mahbub Alam
Faculty Member
Submitted By
Md. Ghulam
Murshed
ID: 201110318
Batch: 41st
Major: Finance
Asian University of Bangladesh
Date of
Submission: April 06, 2015
ASIAN UNIVERSITY
OF BANGLADESH
April
06, 2015
Dr.
Mahbub Alam
Faculty
Member
Subject:
Submission of Internship Report
Dear
Sir,
I
take the pleasure to submit an elaborate internship report on “Foreign Trade
operation and performance Trend of Dhaka Bank Limited” as the requirement of my
BBA program. I was assigned to work at Dhaka Bank Limited, Foreign Exchange Branch,
where I have learnt a great deal about banking practices in Bangladesh
It
was undoubtedly a marvelous opportunity for me to work on this assigned topic
to actualize my knowledge of BBA program. To formulate this report up to the
standard I have tried my best to fulfill the requirements, by implementing the
knowledge, which I have gathered from my study.
I have given my utmost effort to reflect
experience, skill and knowledge, which I acquired at the time of orientation in
Bank through this report. All of my efforts will be successful if the report
can serve its purpose.
Thank
you very much for your kind cooperation and guidance.
Sincerely
yours,
Md
Ghulam Murshed
ID:
201110318
Batch:
41st
Major:
Finance
Student Declaration
I am Md. Ghulam Murshed, a student of the
Bachelor of Business Administration (BBA) Asian University of Bangladesh,
hereby declare that the internship report title “Foreign Trade Operation and Performance Trends of Dhaka Bank Ltd”
is prepared after the completion of my internship at Dhaka Bank Ltd, Foreign
Exchange Branch under the supervision of Dr. Mahbub Alam, Faculty Member,
School of business, Asian University of Bangladesh (AUB) I hereby seriously
declare that this report has not been previously submitted to any other
university, college or organization for an academic qualification,
certification, diploma or degree.
I hereby warrant that the work I
have presented does not beach existing copyright.
Md
Ghulam Murshed
ID:
201110318
Bathch:
41st
Major:
Finance
Supervision Certification
This is to
certify that Md. Ghulam Murshed, is a
student BBA, Asian University of Bangladesh, ID: 201110318. He has completed
the internship program entitle “Foreign
Trade Operation and Performance Trends of Dhaka Bank Ltd”. He has completed
the internship program under my supervision for the partial fulfillment of the
award of BBA Degree.
As far I
know he tried his best to conduct this successfully. I think this study will help
him in the future to build up his career.
I wish him every
success in life.
______________________
Supervisor
Dr. Mahbub Alam
Faculty Member
School of Business
Asian University of Bangladesh
At the
instigation of preparing this report, I would like to convey gratitude to the
Almighty Allah for special blessing in completing this report. This internship
report is an accrual of many people’s effort. For this, I am obliged to a number
of people who helped me to organize this report and for their kind opinion,
suggestions, instructions and support and appropriate guidelines for this.
Firstly, I
would like to thank my internship supervisor, Dr. Mahbub Alam, Faculty Member, Asian
University of Bangladesh for his proper suggestions, moral support and precious
co-operation from time to time in completing the internship program especially
in the last three months.
My
heartfelt thanks goes Dhaka Bank Limited and special thanks to my internship
supervisor, Zinnat Sultana, VP & Manager operations, Dhaka Bank Limited
under whom I worked and who helped me to prepare this report well.
Finally, I
want to give my thanks to the clients of Dhaka Bank Limited who participated in
the survey that I conducted to make this internship report.
This Internship report aims headed for
providing an overview on Foreign Trade Operation & Performance trends of
Dhaka Bank Ltd. While preparing this report it has been tried to reveal the
insights of the foreign trade operation of the bank. A few recommendations and
suggestions were also prescribed based on the observation and findings.
Dhaka Bank Limited (DBL) is Scheduled
Bank that was incorporated as a public limited company on April 06, 1995 under
the Companies Act, 1994. The Bank started its commercial operation as a Private
Sector Bank on July 05, 1995 with a target to play the vital role in the
socioeconomic development of the country. Aiming at offering Commercial Banking
Service to the Customers’ door around the country, the DBL established 81 locations
including 2 Islamic Banking Branches; and 1 Offshore Banking Unit, 3 SME
Service Centers, 1 Business Kiosk and 47 ATMs across the country. Catering to
the needs of Capital Markets, the Bank has established a subsidiary company
named ‘DBL Securities Ltd.’ having 6 countrywide Branches up-to this year. This
organization achieved Customers’ confidence immediately after its
establishment. This bank offers full range of Personal, Corporate, International
Trade, Foreign Exchange, Lease Finance and Capital Market Services. Dhaka Bank
Limited is the preferred choice in Banking for Friendly and Personalized
Services, cutting edge Technology, tailored solutions for Business needs,
Global reach in Trade and Commerce and high yield on Investments, assuring
Excellence in Banking Services. Within this short time the bank has been
successful in positioning itself as progressive and dynamic financial
institution in the country. This is now widely acclaimed by the business
community, from small entrepreneur to big merchant and conglomerates, including
top rated corporate and foreign investors, for modern and innovative ideas and
financial solution.
The aim of this paper is to analyze
Performance development of Dhaka Bank Ltd. To make it more competitive in the
banking industry with a view to how to counter the ensuing challenges in the
industry as a consequence of changing global business nature and technological
development. For this purpose, business philosophy, mission, objectives,
activities and current strategies of Dhaka Bank are analyzed at the initial
stage. Then SWOT analysis is conducted in light of internal and external
environment. Finally, identifying the shortcomings of strategies Dhaka Bank is
currently applying an attempt has been made to recommend the strategic options
for this Bank to become more competitive in the banking industry.
List of
Abbreviation and Acronyms:
1. DBL : Dhaka Bank Limited
2. A.D. Bank : Authorize Dealer Bank
3. IRC : Import Registration Certificate
4. ERC : Export Registration Certificate
5. H.S. Code : Harmonize System Code
6. SWIFT : Society for Worldwide Inter bank Financial
Telecommunication
7. FDBC : Foreign Document Bill Collection
8. FDBP : Foreign Document Bill Purchased
9. LDBC : Local Document Bill Collection
10.CCI & E : Chief Controller of Imports & Export
11. EXP : Export Permit Form
12.LCA : Letter of Credit Authorization
7. FDBC : Foreign Document Bill Collection
8. FDBP : Foreign Document Bill Purchased
9. LDBC : Local Document Bill Collection
10.CCI & E : Chief Controller of Imports & Export
11. EXP : Export Permit Form
12.LCA : Letter of Credit Authorization
Chapter 1 Introduction
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SL
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Subject
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Page
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1
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1.1 Background of the Study
|
1
|
2
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1.2 Rationale of the study
|
1
|
3
|
1.3 Research Objectives
|
2
|
4
|
1.3.1 Primary
Objective
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2
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5
|
1.3.2 Specific
Objectives
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2
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6
|
1.4 Methodology of the Study
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2
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7
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1.4.1 Data Collection
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2
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8
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1.5 Scope of the report
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3
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9
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1.6 Limitation of the Report
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3
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Chapter 2: Organization Overview
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SL
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Subject
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Page
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1
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2.1 Historical Perspective of Dhaka Bank
Limited
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5
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2
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2.2 Mission & Vision of Dhaka Bank Limited
|
5
|
3
|
2.3 Goals of the Bank
|
6
|
4
|
2.4 Values
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6
|
5
|
2.5 Objectives of the Bank
|
7
|
6
|
2.6 Management System
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7
|
7
|
2.7 Correspondent Relationship
|
8
|
8
|
2.8 Departments of DBL
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8
|
9
|
2.9 Current Performance
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8
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10
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2.10 Environment of
Dhaka bank
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9
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11
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2.11 Corporate Banking
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9
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Chapter 3: Working experience at Dhaka Bank Limited
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SL
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Subject
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Page
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1
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3.1 Working Experience at the Dhaka Bank
Limited
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11
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2
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3.1.1 General Banking
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11
|
3
|
3.1.2 Retail Banking
Unit
|
11
|
4
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3.1.3 Foreign Trade
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11
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5
|
3.2 SWOT Analysis of my working experience
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13
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Chapter 4: Foreign Trade Operation
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SL
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Subject
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Page
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1
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4.1 Foreign Trade
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16
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2
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4.2 Global Trade
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16
|
3
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4.3 Activities in Foreign Trade Department
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18
|
4
|
4.3.1 Concept of
Export
|
18
|
5
|
4.3.2 Concept of Import
|
19
|
6
|
4.3.3 Import/ Export
Documentation
|
19
|
8
|
4.4 Trade Finance department
|
23
|
9
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4.4.1 Letter of credit
(L/C)
|
24
|
10
|
4.4.2 Types of LC
|
24
|
11
|
4.4.3 Special
Documentary Credit
|
25
|
12
|
4.4.4 Parties to a
letter of credit
|
26
|
13
|
4.5 Summary of Procedure: Letter of Credit
|
27
|
14
|
4.6 L/C Advising
|
28
|
15
|
4.7 Foreign L/C Amendment
|
28
|
16
|
4.8 Foreign L/C Amendment
|
29
|
17
|
4.9 Issuing of Export Authorization
|
30
|
Chapter 5: Performance development of Dhaka Bank
Limited
|
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SL
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Subject
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Page
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1
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5.1 Deposit
Performance
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33
|
2
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5.2 Profit Performance
|
33
|
3
|
5.3 Capital &
Reserve
|
34
|
4
|
5.4 Loan and Advances
|
35
|
5
|
5.5 International
Trade
|
36
|
6
|
5.6 Investment Banking
|
37
|
Chapter 6: SWOT Analysis of Dhaka Bank Limited
|
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SL
|
Subject
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Page
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1
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6.1 Strength
|
39
|
2
|
6.2 Weakness
|
39
|
3
|
6.3 Opportunity
|
40
|
4
|
6.4 Threat
|
40
|
Chapter 7: Customer Satisfaction as regards of
Foreign Trade Operations
|
||
SL
|
Subject
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Page
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1
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7.1 Data Analysis and
Interpretation
|
42
|
Chapter-8: Findings, Recommendation & Conclusion
|
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SL
|
Subject
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Page
|
1
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8.1 Findings
|
47
|
2
|
8.2 Recommendation
|
48
|
3
|
8.3 Conclusion
|
49
|
Appendices
|
50
|
|
Survey on customer
satisfaction as regards of Foreign Trade Operations
|
50
|
|
Reference
|
52
|
|
 |
1.1 Background of the Study
|
1.2 Rationale of the study
|
1.3 Research Objectives
|
1.3.1 Primary Objective
|
1.3.2 Specific Objectives
|
1.4 Methodology of the Study
|
1.4.1 Data Collection
|
1.5 Scope of the report
|
1.6 Limitation of the Report
|
1.1 Background of the
Study
1.2 Rationale of the study
The
banking sector is one of the strongest sectors in our country. Banks provide
necessary funds for executing various programs underway in the process of
economic development. They collect savings of large masses of people scattered
throughout the country, which in the absence of banks would have remained idle
and unproductive. These scattered amounts are collected, pooled together and
made available to commerce and industry for meeting the requirements. Economy
of Bangladesh
is in the group of world’s most undeveloped economies.
One of the reasons may be its undeveloped
banking system. Government as well as different international organizations
have also identified that undeveloped banking system causes some obstacles to
the process of economic development. So, one country must be efficient in
banking if it wants to be developed. My study on the bank has created an edge
on my professional learning. In today’s globalised world, one of the most
important banking activities is foreign trade. So, the importance of my study
on “Foreign Trade Operation of Dhaka Bank LTD” is beyond description.
1.3 Research Objectives
My primary objective behind this report is to get
acquainted with the different issues of foreign trade. Without the specific
objectives, any study cannot become the fruitful one. Before preparing the
report, I would like to set up objective of my study as:
1.3.1 Primary Objective
• To get acquainted
with the different issues of foreign trade.
1.3.2 Specific Objectives
• To understand the overall procedure of export &
import to familiarize with the
issues of
international trade.
• To understand & identify the functions of Foreign
Trade in Dhaka Bank
Limited.
• To understand the
legal formalities required in foreign trade.
• To understand the importance of foreign trade
1.4 Methodology of the Study
The study is performed based on the information extracted
from the different sources collected by using a specific methodology. The
details are given below:
1.4.1 Data Collection
The Primary sources are:
• Practical desk work
• Conversation with the officers
• Conversation with the clients
• Appropriate file study as provided by the concerned
officer.
The Secondary sources are:
• Annual reports of Dhaka Bank Limited
• Different “Procedure Manual” published by the Dhaka Bank
Limited
• Publications obtained from different libraries and from
the internet.
1.5 Scope of the report
The main objectives of my short time practical learning
were basically to get introduced with related laws, principles, documentations,
procedures & practical knowledge regarding Export & Import business of Bangladesh .
Since it was a very short period of time, I wasn’t able to collect more data to
acquire deep understanding. Since this topic is related to export import policy
order, guidelines issued by Bangladesh bank & practical information based
on DBL, it wasn’t easy to collect all the data within the shortest of time. The
report covered the following areas:
• Synopsis of the Dhaka Bank limited
• Foreign exchange operation of Dhaka Bank Limited
• Opening of LC and procedures and maintenance of other
formalities of foreign
exchange.
• To know the satisfaction of customers on the basis of the
foreign exchange service of
1.6 Limitation of the Report
There are some specific limitations that I faced while
doing my internship. These are as follows:
• The data and information related to the topic was not
easily available.
• Supply of more practical and up to date data was another
shortcoming.
• Many officers have not been interviewed.
• Though the employee of the Dhaka Bank tried to assist,
sometimes there working
pressure could not
give me proper assistance.
• Another limitation of this report was the Bank’s policy
of not disclosing any data and
information for
obvious reasons, which could have been very useful.
2.1 Historical Perspective of
Dhaka Bank Limited
|
2.2 Mission & Vision of
Dhaka Bank Limited
|
2.3 Goals of the Bank
|
2.4 Values
|
2.5 Objectives of the Bank
|
2.6 Management System
|
2.7 Correspondent Relationship
|
2.8 Departments of DBL
|
2.9 Current Performance
|
2.10 Environment of Dhaka bank
|
2.11 Corporate Banking
|
2.1 Historical Perspective of Dhaka Bank Limited
Dhaka
Bank Limited (DBL) is the leading Private Sector Bank in Bangladesh offering
full range of Personal, Corporate, International Trade, Foreign Exchange, Lease
Finance and Capital Market Services. Dhaka Bank Limited is the preferred choice
in Banking for Friendly and Personalized Services, cutting edge Technology,
tailored solutions for Business needs, Global reach in Trade and Commerce and
high yield on Investments, assuring Excellence in Banking Services. The Bank
started its commercial operation as a Private Sector Bank on July 05, 1995 with a target to play the
vital role in the socioeconomic development of the country. Aiming at offering
Commercial Banking Service to the Customers’ door around the country, the DBL
established 81 locations including 2 Islamic Banking Branches; and
1 Offshore Banking Unit, 3 SME Service Centers, 1 Business Kiosk and 47 ATMs
across the country. Catering to the needs of Capital Markets, the Bank has
established a subsidiary company named ‘DBL Securities Ltd.’ having 6
countrywide Branches. This organization achieved
Customers’ confidence immediately after its establishment. Within this short
time the bank has been successful in positioning itself as progressive and
dynamic financial institution in the country. This is now widely acclaimed by
the business community, from small entrepreneur to big merchant and
conglomerates, including top rated corporate and foreign investors, for modern
and innovative ideas and financial solution. The Authorized Capital of the DBL
was Tk.10,000 Million and Paid up Capital of Tk.5685 million.
2.2 Mission & Vision of Dhaka Bank Limited
Mission
To be the premier financial
institution in the country providing high quality products and services backed
by latest technology and a team of highly motivated personnel to deliver
Excellence in Banking.
Vision
At Dhaka Bank, we draw our
inspiration from the distant stars. Our vision is to assure a standard that
makes every banking transaction a pleasurable experience. Our endeavor is to
offer you supreme service through accuracy, reliability, timely delivery,
cutting edge technology and tailored solution for business needs, global reach
in trade and commerce and high yield on your investments.
Our people, products and
processes are aligned to meet the demand of our discerning customers. Our goal
is to achieve a distinct foresight. Our prime objective is to deliver a quality
that demonstrates a true reflection of our vision- Excellence in Banking.
2.3 Goals of the BankLong-term Goal: To be the Market Leader both in terms of Deposits and good advances among Private Commercial Banks in Bangladesh.
Short-term Goal: To increase Current Market Shares at least 0.35%
Financial Goal: To reduce the existing Cost of Fund by 1%.
Other Goals:
•
To be one of the best
Banks of Bangladesh.
•
To achieve Excellence
in Customer Service next to none and superior to all competitors. • To cater to
all differentiated segments of Retail and Wholesale Customers.
•
To be a High Quality
Distributor of Product and Services.
•
To use state of the
Art Technology in all spheres of Banking.
2.4 Values
•
Customer Focus
•
Integrity
•
Team Work
•
Respect for Individual
•
Quality
•
Responsible
Citizenship
2.5 Objectives of the Bank:
1. DBL has the objectives to conduct transparent and high
quality business operation based on market mechanism within the legal and
social framework spelt in their mission and reflected in their vision.
2. Their greatest concerns are their customers to provide
them continually efficient, innovative and high quality products with excellent
delivery system.
3. Their motto is to generate profit with qualitative
business as a sustainable ever-growing organization and enhance air returns to
their shareholders.
4. Their employees are their backbone. DBL promote their
well being through attractive compensation package, promoting staff morale
through training, development and career planning.
5. They strive for fulfillment of their responsibility to
the government through paying entire range of taxes and duties and abiding the
other rules.
6. DBL is cautious about environment & climatic change
and dutiful to make their homeland a green and clean soil.
2.6 Management System
Since its journey as Commercial Bank in 1995 DBL has been
laying great emphasis on the use of improved Technology. It has gone to Online
Operation System since 2003. And the new Banking Software FLEXCUBE is
newly installed. As a result the Bank will able to give the services of international
standards.
2.7 Correspondent Relationship The Bank
established correspondent relationships with a number of Foreign Banks, namely
American Express Bank, Bank of Tokyo, Standard Chartered Bank, Mashreq Bank,
Hong Kong Shanghai Banking Corporation, CITI Bank NA-New York, AB Bank Ltd etc.
The Bank is maintaining Foreign Exchange Accounts in New York, Tokyo, Calcutta,
London, Germany etc. The Bank has set up Letter of Credit on behalf of its
valued Customers using its Correspondents as advising and reimbursing Banks.
The Bank maintains a need based Correspondent Relationship Policy, which is
gradually expanding.
2.8
Departments of DBL
If the jobs are not organized considering their
interrelationship and are not allocated in a particular Department it would be
very difficult to control the system effectively. DBL has does this work very
well. Different Departments of DBL are as follows:
•
Human Resources
Division
•
Treasury Division
•
Computer and
Information Technology Division
•
Credit and Risk
Management
•
Finance & Accounts
Division
•
Financial Institution
Division
•
Audit & Risk Management Division
•
Global Trade Service
2.9 Current Performance
DBL is committed to deliver
better service to valuable customers. Customers are their first priority and
driving force. Superior quality customer service through the integration of the
latest state-of- the-art technology is our motto. Customers come from all walks
of life. They are professional, businessmen, public servants, entrepreneurs,
homemakers, men & women, residents and non-residents maintaining local
& foreign currency accounts. Introducing new products and developing the
quality of the existing products is the strategies adopted by the Bank to serve
the customers. They are always committed to sustain the commitment "Excellence
in Banking".
2.10 Environment of Dhaka bank
Quality of working life is
easy, fast, durable, safe, furnished, updated. Environment of the workplace is
fully air condition, computerized equipment, on lining each branch, mobile
network facilities etc. Politics & practice are unseen in working
environment. A proper hygiene is maintained. Sustainable economic, ecological
and social developments of the surroundings are the key elements of business
decisions of DBL. DBL environmental management policy stipulates adherence with
environmental health and safety regulations and guidelines, refraining from
businesses that impairs the ability of our future generations to meet their own
needs. The policies with regard to safety, health and environment management
are being observed in our lending decisions; several steps have also been taken
within the Bank such as declaring all Dhaka Bank Branches and offices smoking
free zones. Internal Control System are processes designed by the management
and effected by the board of directors on all tiers of management to provide
reasonable assurance regarding the reliability of financial reporting,
operation and risk management and the preparation of financial statements.
2.11 Corporate Banking
Dhaka Bank offers a full
range of tailored advisory, financing and operational services to its corporate
client groups combining trade, treasury, investment and transactional banking
activities in one package. Whether it is Project finance, Term Loan, Import or
Export Deal, Working Capital Requirement or Forward Cover for a Foreign
Currency Transaction, DBL Corporate Banking Managers will offer the right
solution. Person will find top-class skills and in-depth knowledge of market
trends in DBL Corporate Banking Specialists, speedy approvals and efficient
processing fully satisfying your requirements - altogether a gratifying
experience.
3.1 Working Experience at the
Dhaka Bank Limited
|
3.1.1 General Banking
|
3.1.2 Retail Banking Unit
|
3.1.3 Foreign Trade
|
3.2 SWOT Analysis of my
working experience
|
3.1 Working Experience at the Dhaka Bank Limited
During the three months of
my internship I was placed Foreign Exchange branch under Ms. Zinnat Sultana,
Vice President and Operations Manager, Dhaka Bank Limited. I heavily enjoyed
the working environment of this office. The working experience gave me a good
idea of the overall banking system and taught me the professionalism of the
working place. During the internship period in Dhaka Bank Limited, I was placed
in different departments. At first, I was in General banking section for two
weeks, then in retail banking units for another two weeks and rest of the time
I was in foreign trade department.
3.1.1 General Banking
• Helping clients to fill up
account form and pay order form
• Writing pay order
instrument
• Provide customers' product
related information
• Provide assistance support
according to the need of the customers
• Helping officers to prepare
for the Bangladesh bank reports.
3.1.2 Retail Banking Unit
• Fill up CIB (Credit
Information Bureau) form for clients and sent to Bangladesh Bank
to check whether the client has any other
any other bank or not.
• Preparing to head office
forwarding for loan approval
• Making customer sanction
advice about disbursing amount, after head office approval
• Preparing purchase orders
for car loan, personal loan on the basis of clients quotation.
3.1.3 Foreign Trade
One of the most important parts
in the DBL (Dhaka Bank Limited) Foreign Exchange Branch is a Foreign Trade
department that deals with Export, Import and Foreign Remittance. In my
internship period, I worked in Export department and Import department. My
lists of works or responsibilities are given below:
Export Department
Issuing and Updating EXP on Online Export Monitoring System: When one company takes the EXP form from the bank, officer from the bank has to put some information to the Bangladesh bank online system. This information is divided into two parts.
One is Related LC/ Contract
info. These information are– giving LC / Contract number, date, terms of sale
type like LC or Contract, currency, country, Exporters registration number ,
Importers name and address.
Other is Issue EXP. Issue
EXP are- giving EXP serial, EXP year, HS code, destination port, unit(ISO),
invoice amount, incoterm used ( FOB, CIF, CFR, FCA), name of carrier/vessel,
transport document type(airway bill, bill of lading, HAWB, truck receipt),
issuing officer name, correcting officer name then create.
When LC opened, and changes
of invoice amounts occurred then clients has to inform bank that amendments has
been occurred and particular LC needed to be updated. To update the EXP,
- First
have to put the ADS code which is the branch code. For Dhaka bank it is 1407. Then have to put EXP serial,
year, destination port, quantity, invoice, unit, B/L no or Airway bill no,
date of shipment.
- Giving
clients vouchers or advices like Debit advice or credit advice. The
advices can be for LC opening, LC amendments, LC SWIFT uses, charges,
accounts, loans etc.
- When
LC request come to the bank, first I had to make a forwarding letter like
giving the beneficiary name, product description, HS code, PSI
requirement, LC amount, VAT, stamp charge, SWIFT etc.
- Preparing
the documents by putting stamps, sealing them and preparing files for the
documents.
- Making
certificates when clients needed. Like CFR certificate, Fob certificate.
- Updating
the register book by putting realized amount of goods, shipment date,
documents sent to Bangladesh bank etc.
3.2 SWOT Analysis of my working experience
Strengths
•
When I started working in the Foreign Trade Department, I was
assigned to fill up more than 200 forms of imports IPO on behalf of the account
holders and prepare necessary documents required for application. I completed
the job within the short period of time and my accuracy was making pleased the
SAVP of Dhaka Bank Limited Mr Asaduzzaman Mia, and achieved his
trustworthiness.
•
I was assigned to prepare Bangladesh Bank reporting for import
payment which is called E2P2 for the month of February and March. For
completing each month’s E2P2 I only got one week. I had to fill up more than 50
IMP forms for each month and prepare different excel sheet for different
currencies. I successfully achieved my given target for these two months.
Weaknesses:
• My work could be done quickly, if there were sufficient amount of software in
computers. The technology which is used by
Dhaka bank is not sufficient.
• Software is too slow to use. The employee could not use any computers when
the server was down.
Opportunities:
•
I was the first who was given a work which is to report to the
Bangladesh bank. So, I think in the coming days many interns will be given
these types of works and they can understand the procedures of exports and
Imports.
Threats:
•
Some employees think that interns have no work to do but only to
scan and photocopy the documents. These types of work create demoralizing to
employees. Interns are taken to experience the real corporate or official
practices so; officers should be cooperating to their work.
Recommendation:
As a finance student, I
always prefer to do a job in a financial organization. So, obviously banks get
the first priority to me. An internship in a bank, like Dhaka bank is a great
way to demonstrate interest in the sector and for me to learn more about the
actual job, I would be doing on a routine basis. During the internship period,
employees of DBL were very supportive & always helped me to learn. But it
was not possible for me to know about all the departments within 3 months. In
the follow, I found out some problem over in the Dhaka bank as a critical
observation, and some recommendation regarding the observation:
•
During my internship I observed that work load in General banking
department, foreign exchange and retail department at Foreign Exchange Branch
was more than compared to the number of working employees. As their work
pressure was being doubled, so motivational levels of those employees were
getting down. So, the authority is required to be a little careful about their
employees. May be their current policy is not to recruit any new employee, but
they can solve this situation by transferring employees from other departments.
Otherwise, the motivation level will be low
•
In Dhaka bank Foreign Exchange Branch, the management is not
strict about punctuality. As a result, the tendency of being not on time is
growing among employees. To change this practice management may need to be a
little harsh about their rules and regulation.
4.1 Foreign Trade
|
4.2 Global Trade
|
4.3 Activities in Foreign
Trade Department
|
4.3.1 Concept of Export
|
4.3.2 Concept of Import
|
4.3.3 Import/ Export Documentation
|
4.4 Trade Finance department
|
4.4.1 Letter of credit (L/C)
|
4.4.2 Types of LC
|
4.4.3 Special Documentary Credit
|
4.4.4 Parties to a letter of credit
|
4.5 Summary of Procedure:
Letter of Credit
|
4.6 L/C Advising
|
4.7 Foreign L/C Amendment
|
4.8 Foreign L/C Amendment
|
4.9 Issuing of Export
Authorization
|
4.1 Foreign Trade
Foreign
Trade is termed as the means and methods by which rights to wealth expressed in
terms of the currency of one country are converted into rights to wealth in
terms of the currency of another country. Foreign Trade means trade of foreign
products, services and currency between two countries. If we consider “Foreign
Trade” as a subject then it means all kind of transactions related to foreign
currency. In other words foreign trade deals with foreign financial
transaction. Foreign Trade department is an international department of the
bank. It deals with globally and facilitates international trade through its
various modes of services. It bridges between importers and exporters.
Bangladesh bank issues license to scheduled banks to deal with foreign
exchange. These banks are known as authorized dealers (AD). If the branch is
authorized dealer in foreign exchange market, it can remit foreign exchange
from local country to foreign country. This department mainly deals with
foreign currency. This is why this department is called foreign exchange
department. Some national and international laws regulate functions of this
department. Among these Foreign Exchange Act, 1947 is for dealing in foreign
exchange business, Import and Export control Act, 1950 is for documentary
Credits. Government’s Import and Export policy are another important factor for
import and export operation of banks.
4.2 Global Trade
Global
trade can be easily defined as a business activity, which crosses national
boundaries. These may be between parties or government ones. Trade among
nations is a common occurrence and normally benefits both the exporter and
importer. In many countries, international trade accounts for more than 20% of
their national incomes.
Global
trade also can be defined as foreign trade can usually be justified on the
principle of comparative advantage. According to this economic principle, it is
economically profitable for the country to specialize in the production of that
commodity in which the producer country has the greater comparative advantages
and allow other countries to produce that commodity in which it has the lesser
comparative advantages. It includes the spectrum of goods, services,
investment, technology transfer etc. this trade among various countries calls
for loose linkage between the parties dealing in trade. The banks, which
provide such transactions, are referred to as rendering international banking
operations. International trade demands a flow of goods from seller to buyer
and of payment from buyer to seller.
DBL
named their global trade functions as Global Trade Services (GTS). It works
mainly through Head Office. Global Trade
Services (GTS) consists of two units-
Financial Institutions
Trade
finance has been a major area of business for Dhaka Bank Ltd. since inception
in 1995. The Financial Institutions Unit is responsible for facilitating bank’s
trade finance business under prevailing local and international laws. Under the
capable leadership of the current management, trade business is growing for
both import & export.
Letter
of Credit (L/C) is a popular instrument in modern trade finance transaction and
it is the most widely used instruments for trade with Bangladesh. For secure
& fast issuance/receipt and payment of L/Cs, banks need to maintain
Relationship Management Applications (RMA), Nostro Accounts and different
correspondent banking arrangements.
Dhaka
Bank Ltd. mainly provides the following services:
Financial Institutions
• Import
Letter of credits
• Export Letter of credits, negotiation & documentary collection
• Re-issuance of Local guarantees against counter guarantees from international correspondents.
• Export Letter of credits, negotiation & documentary collection
• Re-issuance of Local guarantees against counter guarantees from international correspondents.
Centralized
Trade Operations
Dhaka
Bank Ltd. is one of the leading local commercial banks in centralizing trade
operations. It is called Central Processing Center (CPC). Using the branches as
customer touch point CPC trade operations is providing up-to-the-minute trade
solutions to the customers while fulfilling all the regulatory requirements.
The operations of trade service of Dhaka Bank Lt are accomplished by CPC Trade
Operations situated in both Dhaka and Chittagong .
Its operation started in December 31, 2014 with 15 Authorized Dealer Branches
who are authorized to transact in foreign exchange and to trade finance
business and they are now responsible for all trade related transactions. Trade
Operations handle:
• All import L/Cs
• All Export Documents
• Follow-ups for all import/export payments/receipts till respective settlements. With the best expertise in trade of the bank under a single roof working together, it has all the new age technological support like Flexcube (i-flex), SWIFT Alliance Messenger, automated IMP software, E-Mail, High Speed Scanner and SMS Portal. Centralized Trade Operations surely is a logical step forward to achieve excellence in banking.
CPC has ensured optimum utilization of human resources, time and
utility. On one hand it reduces cost and risk and on the other hand it gives
better opportunity to the customers to get more attention and time of trade
officer working in different customer touch point.
Key Features of CPC
•
Specialization: CPC
segregates its operation in six functional areas to bring specialization which
in turn ensures better quality.
•
Cutting edge technology:
Maximum utilization of its state of the art technology ensures timeliness and
reduces distance.
•
Healthy MIS: It helps
management to take the effective decision and better control by understanding
the present scenarios and forecast upcoming trade opportunities.
•
Scrutiny team: A team of
experienced, knowledgeable and prudent officers are fully involved in scrutiny
of documents.
•
Reporting team: The
statement team is dedicatedly working to ensure timely submission of different
reports required by the central bank.
4.3 Activities in Foreign Trade Department
There are three kinds of foreign exchange
transactions:
•
Export
•
Import
4.3.1 Concept of Export
Export
means flow of goods and services produced within Bangladesh but purchase by
economic agent i.e. individuals, firms, governments of other countries. The
persons/Firms sales the goods & services to another country is called
exporter. An exporter of a country having a trade relation with an importer of
another country may not have enough money to conclude the deal. He may as such
need finance from the Bank.
4.3.2 Concept of Import
Import
means the goods & services purchase by an economic agent located in
Bangladesh from the economic agent of other countries. Financing in import
business, stores the contractual obligation between buyer & the Bank.
Financing of import business is a major area of investment of a Bank. Import
licenses are not required for any imported items except those on the restricted
list. However, importers need to use Letter of Credit Authorization (LCA) forms
to import goods.
4.3.3 Import/ Export Documentation
At
present, there is no lack of foreign currency for import transactions. However,
as a safety cushion against currency fluctuation, banks prefer to source
foreign currency for L/Cs over $ 500,000 from the central bank. Typically, 1-2
days is required to obtain registration from the central bank. Unless otherwise
specified, all imports must be made by opening an Irrevocable Letter of Credit.
Import against an LCA may be made without opening an L/C in the following areas:
•
Import of books, journals, magazines, and periodicals on
sight draft of issuance bill basis;
•
Import of any permissible item for an amount not exceeding
$5,000 only during each local fiscal year against remittances made from
Bangladesh;
•
Imports under commodity aid, grant or such other loan for
which there are specified procurement procedures for import of goods without an
L/C;
•
Imports of "International Chemical References"
through bank drafts by recognized pharmaceutical (allopathic) firms on the
approval of the Director, Drug Administration, for the purpose of quality
control of their products.
Importers must submit to their nominated banks the following documents along with the
LCAF:
•
L/C application form
duly signed by the importer;
•
Indents for goods
issued by indenter or a pro-forma invoice obtained from the foreign supplier;
•
Insurance cover note.
Foreign firms are allowed to import permissible commercial
items against prior
permission from the Chief Controller of Import and Export and need to provide following
documents:
permission from the Chief Controller of Import and Export and need to provide following
documents:
•
Photocopy of the valid
Import Registration Certificate;
•
Photocopies of
invoices, bill of lading, and import permit duly certified by the bank;
•
Certified copy of the
last income tax assessment order; and
•
Name and description
of each item to be imported with quantity and approximate C&F value.
Public sector importers also need to provide the following documentation:
•
Attested photocopy of allocation letter issued by the allocating
authority in favor of the concerned public sector agency specifying the source,
amount, purpose, validity, and the terms and conditions;
•
Attested photocopy of sub-allocation letter, if any, issued in
favor of the importing agency or unit;
•
Attested photocopy of sanction letter from the administrative
ministry or authority where applicable; and
•
A declaration by the authorized officer of the importing agency
indicating the amount of utilized/unutilized government funds and that imported
raw materials will not be sold.
Private sector importers need to furnish the following additional
documents:
•
Valid membership certificate from the registered local chamber of
commerce and industry or any trade association, established on an
all-Bangladesh basis, representing any special trade or business;
•
Proof of payment of renewal fees for the Import Registration
Certificate (IRC) for the concerned fiscal year;
•
Copy of a "TIN Certificate" issued by the tax authority.
The TIN (Tax Identification No.) Certificate is a new requirement aimed at
ensuring collection of income tax, VAT and other revenues from importers.
•
A declaration, in triplicate, that the importer has paid income
tax or submitted an income tax return for the preceding year; and
•
Any such documents as may be required by import policy order or
public notice, or instruction issued by the Chief Controller of Imports and
Exports.
Prohibited Imports:
Bangladesh's Import Policy
Order 1995-97 places controls on some imports. Items banned from import
include:
•
Maps, charts and geographical globes which indicate the territory
of Bangladesh but do not do so in accordance with the maps published by the
Bangladesh Government's Department of Survey;
•
Horror comics, obscene and subversive literature;
•
Printed material, posters, video tapes, etc. containing matters
likely to outrage the religious feelings and beliefs of any class of the
citizens of Bangladesh;
•
Unless otherwise specified, old, second-hand and reconditioned
goods;
•
Goods bearing pictures or writing which is obscene or of a
religious connotation which may injure the religious feelings of any class of
Bangladesh citizens.
Exchange
Controls:
Importers must obtain a letter of credit authorization form
to be allocated foreign exchange. Repatriation of capital, profits, benefits
and assets are guaranteed. Transfers may take an extended period of time since
they must be approved by the Bangladesh Bank.
Exports of Ready-made Garments (RMG)
The term export is known as the selling product from one
country to another country. In the Export Policy of Bangladesh export is
defined as the flow of goods and services produced within Bangladesh , but
purchased by economic agents (individuals, firms, governments) of other
countries. Very few commodities are occupying a major share of our export. Only
five export items – Ready-made Garment (RMG), Knitwear, Jute and Jute goods,
Frozen food, and Leather provide more than 90% of export earnings of Bangladesh . The
periphery of our export market is very narrow. More than 80% of exports of Bangladesh made to USA and EEC countries.
RMG provides the largest portion of export earnings of
Bangladesh. So the industry is large in size and produce 100% Ready Made
Garments to various countries. The main countries that buy RMG from Bangladesh
a
•
United States
•
United Kingdom
•
EEC countries
•
Canada
The names of some buyers are:
•
The Gap Inc. - USA
•
GPS Consumer Direct
Inc. - USA
•
H & M
International Limited - USA
•
Ema Textiles Ltd. - UK
•
Ahlens Far East Ltd. -
Hong Kong
•
Jaytex of Canada Ltd. –
Canada
•
Lamda International
Limited - Germany
•
Ahlen AB – Sweden
Documents
Required for Export of RMG
For
Shipment to USA
- Original
Signed Commercial Invoice indicating the style numbers, detailed
merchandise description, quantity in units, unit price, extended and total
amount, country of origin of merchandise and sales term.
- Packing
List referencing commercial invoice number(s), showing quantity in units
and cartons, style numbers and Purchase Order numbers.
- Original
Inspection Certificate issued and signed by the authorized signatory of
the inspection firm.
- a.
Full set of clean on board ocean Bill of Lading and original Forwarder’s
Cargo Receipt issued by designated forwarder or shipping company
indicating Purchase Order number, marked ‘Freight Collect’ for FOB (Free
on Board) L/C or marked ‘Freight Prepaid’ for CFR (Cost and Freight
Receipt) L/C and consigned to the order of negotiating bank and endorsed
to the order of Issuing Bank.
4
b. Original Airway
Bill issued by the designated Forwarder indicating purchase order number,
marked ‘Freight Prepaid’ for CFR (Cost and Freight Receipt) L/C or marked
‘Freight Collect’ for FOB (Free on Board) L/C and consigned to the order of
negotiating bank and endorsed to the order of Issuing Bank.
5
Single or Multiple
Country Declaration.
For Shipment to
UK
- Basic documents
required same as point 1 to 4b for USA shipment.
- Photocopy of
Certificate of Origin indicating purchase order no., L/C no. issued by
relevant authority of the finished goods country of origin.
Those are the basic documents required by most of the
countries. Other than that some buyers seek some special type of documents such
as:
- Beneficiary’s Certificate confirming that the
garments have been passed through a metal detector or free of metal
contamination.
- Beneficiary’s Certificate confirming that they
do not employ under age labor, as stipulated by the legal laws of the
country in which the goods are manufactured.
4.4 Trade Finance department
This department deals with all processing of Export and
Import. Moreover, it also deals with the foreign remittance. Under this the
export department, deals with only the export and the back-to-back L/C. The
total export value of 2014 was 300 Crore local BD currency. And most of the
export goods were different types of garments products.
4.4.1 Letter of credit (L/C)
Letter of credit (L/C) can be defined as a “credit
contract” whereby the buyer’s bank is committed (on behalf of the buyer) to
place an agreed amount of money at the seller’s disposal under some agreed
condition.
Since the agreed conditions include, among other things,
the presentation of some specified documents, the letter of credit is called
the Documentary Letter of Credit.
The Uniform Custom & Practice for Documentary Credit
(UCPDC) published by International Chamber of Commerce (1993) Revision, Publication
No. 500 defines Documentary Credit: any agreement, however named or described,
whereby a 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 of a third party (the beneficiary), or is to accept
and pay bills of exchange (Drafts) drawn by the beneficiary, or authorizes
another bank to effect such payment, or to accept and pay such bills of
exchange (Draft), authorizes another bank to negotiate, against stipulated
documents, provided that the terms and conditions are complied with.
4.4.2 Types of LC
Documentary Credits may be either:
•
Revocable
•
Irrevocable
Revocable
When a revocable credit can be amended or cancelled without
any prior notice then it is known as revocable credit.
Irrevocable
An
irrevocable letter of credit is one, which cannot be revoked, amended or
modified by the issuing bank without the concurrence of the beneficiary or any
other interested party including the confirming bank. It is a definite
undertaking of the issuing bank and constitutes the engagement of the bank to
the beneficiary or any bona fide holders of the drafts drawn under the credit,
provided the terms and conditions of the credit are complied with.
4.4.3 Special Documentary CreditRevolving Credit
The revolving credit is credit, which provides for
restoring the credit to the original amount after it has been utilized. How
many times it will be taking place must be specifically mentioned in the
credit. The revolving credit may be either cumulative or non-cumulative.
Transferable Credit
In terms of transferable credit, the original beneficiary
can transfer the credit to one or more beneficiaries for once.
Back-to-Back Credit
It is a secondary
credit opened by a bank on behalf of the beneficiary of an original credit, in
favor of a domestic/foreign supplier. The amount of back-to-back credit must
not exceed the amount of original credit and the items/goods must be relevant
to the original credit. It facilitates the beneficiary of the original credit
to purchase raw and packing materials.
Red Clause
This type of credit authorizes the negotiating bank to make
advances to the beneficiary for purchasing goods / raw materials from the local
suppliers. In this case, a clause in the letter of credit is inserted
indicating clear instruction about such advances. The 'Red clause' or Green
clause' is called because the clause is generally printed in Red or Green to
distinguish it from the text of the credit.
Deferred payment L/C
The issuing bank undertakes to make payment against type of
L/C at a future date (e.g. 60/90/180/270/360 days after receipt of order
documents). Mainly Capital machinery and emergency medicine are imported
through this type of L/C.
4.4.4 Parties to a letter of credit
There are a number of parties involved in a L/C and the
rights & obligations of the different involved parties also differ from
each other. The involved parties can be named below:
1. Importer/Buyer
2. Opening/Issuing bank
3. Exporter/Seller/Beneficiary
4. Advising/Notifying Bank
5. Confirming Bank
6. Negotiating bank
7. Paying/Reimbursing Bank
Importer/Buyer is the
people who request/instructs the opening bank to open a L/C. He is also called
opener or applicant of the credit.
Opening/Issuing Bank is the bank which opens/issues a L/C on behalf of the importer. It is also called the importer’s/buyer’s bank.
Exporter/Seller/Beneficiary is the party in whose favor the L/C is established
Advising/Notifying Bank is that bank through which the L/C is advised to the exporter. It is a bank situated in the exporting country and it may be a branch of the opening bank or a correspondent bank. It may also assume the role of confirming and/or negotiating bank depending upon the conditions of the credit.
Confirming Bank is a bank, which adds its confirmation to the credit, and it is done at the request of the issuing bank. The confirming bank may or may not be the advising bank.
Negotiating bank is
the bank, which negotiates the bill and pays the amount to the beneficiary. It
has to carefully scrutinize the documentary credit before negotiation in order
to see whether the documents are apparently is in order or not. The advising
bank and the negotiating bank may or may not be one and the same. Sometimes it
can also be the confirming bank.
Paying/Reimbursing bank is
the bank as whom be bill will be drawn (as per conditions of the credit). It is
nominated in the credit to make payments against stipulated documents complying
with the terms of the credit. It may or may not be the issuing bank.
4.5 Summary of Procedure: Letter of Credit
•
The buyer and seller
conclude a sales contract providing for payment by a Documentary Credit.
•
The buyer instructs
his bank-the “Issuing Bank”-to issue a Documentary Credit in favor of the
seller (Beneficiary).
•
The Issuing Bank
issues the Documentary Credit and asks another bank (the Advising Bank),
usually in the country of the seller, to advise or confirm the Documentary
Credit.
•
The Advising Bank
informs the seller that the Documentary Credit has been issued.
•
As soon as the seller
receives the Documentary Credit and is satisfied that it meets the terms of the
sales contract and that he can meet the Documentary Credit terms and conditions,
he is in a position to effect shipment.
•
Seller then sends the
required documents to the bank where the Documentary Credit is made available
(the Nominated Bank).
•
The bank examines the
documents against the Documentary Credit. If they meet the requirements of the
Documentary Credit, the bank will pay, accept or negotiate; according to the
terms of the Documentary Credit.
•
The bank, which takes
up the documents, sends the documents to the Issuing Bank.
•
The issuing bank
scrutinizes the documents and if the documents meet the Documentary Credit
requirements, reimburses in the re-agreed manner the Confirming bank or any
other Nominated Bank that has paid, accepted, or negotiated under the
Documentary Credit.
•
When the documents
have been scrutinized by the Issuing Bank and are found to meet the Documentary
Credit requirements, they are released to the buyer.
•
The Issuing Bank
obtains reimbursement from the Buyer in the pre-agreed manner.
•
The buyer forwards the
transport document to the local office or agent of the carrier who will then
affect delivery of the goods to him.
4.6 L/C Advising
Advising
through a bank is a proof of apparent authenticity of the credit to the seller.
The typical process of advising a credit consists of
•
Forwarding the original
Credit to the beneficiary to whom it is addressed.
•
Before forwarding, the
advising bank has to verify the signature (s) of the officer (s) of the opening
bank and ensure that the terms and conditions of the credit are not in
violation of the existing exchange control regulations and other regulations
relating to export.
•
Entry made in the L/C
advising register.
•
L/C advised to the
beneficiary (exporter) promptly and advising charge recovered.
There are two types of L/C Advising
•
Foreign L/C Advising
•
Local L/C Advising
Foreign L/C Advising In terms of foreign L/C Advising the swift proves the authenticity of the letter of credit. Under swift code 700 (01 -08) the entire fields is required for the necessity of the foreign letter of credit. Most importantly the L/C Number (Documentary Credit No), L/C value, Date of Issue, Date of Advising is being written while advising of FLC. Normally the charge for advising is TK.1500 as bank takes the responsibility of the authenticity of the L/C.
Local L/C Advising Local L/C is needed mainly for the back to back L/C. In terms of LLC the same procedure is followed mentioned earlier only the L/C No. is given by the bank.
4.7 Foreign L/C Amendment
After
opening of L/C sometimes alteration/amendments to the original terms and
conditions become necessary. These amendments may involve changes in Unit price
•
Extension of validity
of the L/C
•
Documentary
requirements etc.
The
amendments can be effected only if all the parties concerned i.e. the
beneficiary, the importer, the issuing bank and the advising bank have agreed
to the amendments. For any amendment, the importer (applicant for the credit)
must request the opening bank in writing duly supported by revised
indent/pro-forma invoice etc. where necessary. The opening bank will then
advise the required amendment to the advising bank by mail/swift, as instructed
by the importer.
The
typical process of amendment involves:
•
All amendments should
be noted in the L/C file and L/C opening register.
•
L/C amendment commission
including postage/swift should be charged to the clients Account
•
In case of increase in
L/C value, it should be ensured that the balance available in the LCA form is
sufficient to cover the increased L/C amount. If not additional valid LCA form
should be obtained to cover the enhanced amount of L/C. Insurance cover should
also be obtained for enhanced amount.
4.8 Foreign L/C Transfer
As
mentioned earlier the only the first beneficiary can transfer the L/C to other
and only for once. The require documents for transfer are:
Ø
The original copy of L/C
Ø
The original copy of amendment
Ø
The forwarding letter provided by the bank
Now to transfer the first beneficiary brings the application form
and where bank need to verify the signature and bank check the value of
transfer. This because after all the amendment (increase or decrease) if the
present value is not sufficient than the bank will not give the permission to
transfer.
The charges of the above:
Local
L/C Advising
|
Tk.
750.00
|
Foreign
L/C Advising
|
Tk.
750.00
|
Foreign
L/C Amendment
|
Tk.
750.00
|
Foreign
L/C Transfer
|
Tk.
750.00
|
Number of L/C Transactions in a Year
Transaction Profile, 2014
|
||
Number
of Import L/C
|
13723
|
|
Number
of Export L/C
|
Foreign
Export
|
6151
|
Local
Export
|
6101
|
|
4.9 Issuing of Export Authorization
To
export form other parties the seller need to go through some procedure. To
register export the seller takes four Exp. Form these are original, Duplicate,
Qua-duplicate and Triplicate. The negotiating bank has to certify all these
four Exp. Form to register.
In the
record keeping register the following things need to register.
•
Ad’s Code
•
Export amount
•
Type of product
•
Name of the Exporter.
The
typical Exp. Form consists of the following information. These are:
Export Form
|
|
•
Ad’s Code
•
Serial No.
•
Year
•
Commodity to be
exported
•
Country of
destination
•
Port of destination
•
Quantity in terms of
Unit or volume
•
Value
•
Bill of leading/
railway receipt/ airway bill/ truck receipt/ post parcel receipt
|
•
Port of shipment/
post office of dispatch
•
Land custom post
•
Shipment date
•
Name of the exporter
with address
•
CCI and E’s
registration No. And date of the exporter
•
Sector (Public or
Private) under which the exporter falls
•
Terms of sale
•
Name and address of
importer
•
Name of carrying
vessel
|
All of
this information is being checked and signed by the dealer and authorized
official of the bank after checking the required documents that the exporter
need to submit.
Original
Exp –Before shipment the original exp. form needs to submit to the Customs. If
the customs officer finds any short of goods then they provide a short shipment
certificate to the seller. And the sellers with the other three Exp. provide
the short shipment certificate to the bank.
Duplicate
Exp- after the shipment customs send the original Exp. to the Bangladesh Bank.
As negotiating bank get all the Exp. form from the exporter, they have to
submit the duplicate to the Bangladesh Bank within 14 days of shipment.
Duplicate has to submit in every 15days on the month.
Triplicate
Exp- Triplicate is another form of Exp. that has to be submitted to the
Bangladesh Bank after all the charges and the negotiating bank is realizing
export value. Triplicate has to submit monthly to the Bangladesh Bank.
Qua-duplicate-
this is to keep the banking record for future reference. Mainly, all these four
document processing starts before the shipment of the products.
5.1 Deposit Performance
|
5.2 Profit Performance
|
5.3 Capital & Reserve
|
5.4 Loan and Advances
|
5.5 International Trade
|
5.6 Investment Banking
|
Dhaka
Bank limited is one of the most successful Private Sector Commercial Bank in
our country, though it started its operation only nine years back. It has
achieved the trust of the general people and made reasonable contribution to
the Economy of the country by helping the people investing allowing Credit
Facility.
5.1 Deposit Performance
Deposits
of DBL in Taka
Year
|
Deposit
Amount
|
2010
|
67,752,518,136
|
2011
|
85,276,888,686
|
2012
|
107,427,151,290
|
2013
|
115,981,165,413
|
2014
|
124,265,724,949
|
Interpretation: In 2010, Deposits of Dhaka bank was 67,752,518,136 Taka and in 2012, it was increased to 107,427,151,290 Taka. And In 2014, the bank deposit stood to 124,265,724,949 Taka
5.2 Profit Performance
Profit of DBL in Taka
Year
|
Profit Amount
|
2010
|
892,534,266
|
2011
|
1,095,744,121
|
2012
|
1,434,784,969
|
2013
|
3,484,893,252
|
2014
|
4,815,327,540
|
Interpretation: Dhaka Bank Limited (DBL) registered an Operating Profit
of Tk. 4,815,327,540 as on 2014. Provision for Tax for the year amounted to Tk.
738,415,500 with a Net Profit of Tk. 4,802,457,587 whereas it was Tk. 3,484,893,252
in the previous year (2013).
5.3 Capital & Reserve
Capital Reserve of DBL in Taka
Year
|
Total
Equity
|
2010
|
6,579,729,388
|
2011
|
9,216,754,808
|
2012
|
9,683,222,474
|
2013
|
9,843,544,532
|
2014
|
10,154,957,541
|
Interpretation: Dhaka Bank Limited (DBL) commenced its operation with an Authorized Capital of Tk.10000.00 Million with Paid up Capital of Tk.5685.00 Million.
5.4 Loan and AdvancesLoans and Advances of DBL in Taka
Year
|
Loans
and Advances
|
2010
|
63,591,387,406
|
2011
|
75,983,291,662
|
2012
|
90,140,284,573
|
2013
|
95,457,548,754
|
2014
|
98,609,460,476
|
Interpretation: The Bank recorded a 20% growth in Advances with a total Loans and Advances Portfolio of Tk. 98,609,460,476 at the end 2014 compared to Tk. 95,457,548,754 in 2031. Dhaka Bank is making the Loan and Advances in different areas. The Bank continues to explore and diversify its loan distribution with the objectives of efficient use of resources and taking the utmost precaution to safeguard it. Dhaka bank also participated in a Syndicated loan.
5.5 International TradeImport of DBL in Taka
Year
|
Import
|
2010
|
49,496.00
|
2011
|
65,737.38
|
2012
|
46,160.33
|
2013
|
57,271.05
|
2014
|
69,606.00
|
Export of DBL in Taka
Year
|
Export
|
2010
|
31,081.00
|
2011
|
39,038.00
|
2012
|
33.305.00
|
2013
|
34,804.00
|
2014
|
36,924.00
|
Interpretation: International Trade is an important constituent of the business portfolio of the bank. The import increased with a growth of 51% over the volume of Tk.69, 606 (in Million) in 2014. On the other hand, export increased 36,924.00 (in Million) in the year 2014. The total export volume of the bank amounted to 34,804.00 in 2013 compared Tk. 33.305.00 (in Million) in the previous year, 2012.
5.6 Investment Banking
Investment of DBL in Taka
Year
|
Investment
|
2010
|
7,239,437,583
|
2011
|
8,659,565,948
|
2012
|
8,443,201,485
|
2013
|
9,576,138,756
|
2014
|
18,403,921,383
|
Interpretation: Lease finance, Hire purchase and Capital Market Operation besides the investment in Treasury Bills and Prize Bonds constitute the investment basket of DBL. The investment portfolio made up of Government Securities and Shares and Debentures of different listed companies stood at Tk. 9,576,138,756 in 2013 and in 2014 it increases to 18,403,821,383. So, it increases 52.03% from the previous year
 |
6.1 Strength
|
6.2 Weakness
|
6.3 Opportunity
|
6.4 Threat
|
6.1 Strengths
The employees of the Dhaka Bank Limited think that Dhaka
banks Strengths are
•
Dynamic and vibrant
Board of Directors
•
Strong and resilient
team of management professionals
•
Forward looking
strategies and management policies
•
Cutting-edge tools and
technologies to support real time on-line banking
•
Well-diversified line
of business
•
A good risk management
and compliance culture
•
Deep focus on quality
control
•
And a dedicated line
of human resources. A good amount of salary is given to the employee of the
Dhaka Bank Limited. For example Management Trainee officer (MTO) of Dhaka Bank
Limited gets the highest salary (48,500 taka) from the other bank’s post of
MTO.
•
Dhaka Bank has lower
amount of Bad debts
•
To create sustainable
shareholder DBL has solid business growth
•
Employee turnover rate
is very low
6.2 Weaknesses
•
Junior employees get
the less amount of concentration though their ideas are distinctive. It creates
demoralization in them
•
Technology used by the
bank are not sufficient
•
Dhaka Bank focuses on
the small sectors like- SME loan, Microcredit. This might be the reason of
loosing sufficient profit in the future.
6.3 Opportunities
•
Now a day, SME is an
emergent sector and government is giving priority to this sector. It would be a
beneficial to DBL to be the focused in this sector.
•
Strong compliance of
the laws and regulations of the state and regularity bodies which will change
the activity of this bank.
•
Government favoring
the private banks development.
6.4 Threats
•
Private Banks are
increasing day by day so, the deposits competition is also increasing.
•
Dhaka Bank does not
have diversified products
•
Technological changes
may become the threat for the bank.
•
Dhaka bank has 71
branches all over the country but mainly in the urban areas .In rural area they
have very few branches whereas other banks have created muscular network in the
rural area like Dutch-Bangla Bank and BRAC bank
 |
7.1 Data Analysis and Interpretation
Customer
perceptions show a discrepancy as regards the Foreign exchange service of Dhaka
Bank Limited and in this analysis it has been showed. To know how is the
service of Dhaka Bank Limited to its customer according to their satisfaction
will be known by this paper. The output is based on 20 respondents as a sample.
The solution given by employee of DBL during any foreign exchange related problem
Frequency
|
Percent
|
|
Strongly Disagree
|
2
|
10
|
Disagree
|
4
|
20
|
Neutral
|
4
|
20
|
Agree
|
3
|
15
|
Strongly Agree
|
7
|
35
|
Total
|
20
|
100
|
Interpretation: Out of total appearances 35% respondents are strongly satisfied to the solution given by the employee of Dhaka Bank Limited, whether the 10 % say that they are not satisfied with the solution.
Create Future prospect for Foreign Exchange Business
Frequency
|
Percent
|
|
Strongly Disagree
|
2
|
10
|
Disagree
|
1
|
05
|
Neutral
|
5
|
25
|
Agree
|
5
|
25
|
Strongly Agree
|
7
|
35
|
Total
|
20
|
100
|
Interpretation: Out of total appearances 35% respondents are strongly agree that Dhaka bank is well capable create future prospect for foreign exchange business. There is also some negative response the customer regarding this issue.
Has significant impact on Export Growth?
Frequency
|
Percent
|
|
Strongly Disagree
|
1
|
05
|
Disagree
|
1
|
05
|
Neutral
|
3
|
15
|
Agree
|
9
|
45
|
Strongly Agree
|
6
|
30
|
Total
|
20
|
100
|
Interpretation: Out of total appearances 45% respondents are agree and 30 % are strongly agree that Dhaka Bank has significant impact on the export growth of business.
Relation
between employee and customer is supporting
Frequency
|
Percent
|
|
Strongly Disagree
|
3
|
15
|
Disagree
|
8
|
40
|
Neutral
|
5
|
25
|
Agree
|
2
|
10
|
Strongly Agree
|
2
|
10
|
Total
|
20
|
100
|
Interpretation: From the outcome it is a great concern that the relationship between customer & employee is not supporting so that delighted service can be provide. 40% respondents are disagreeing with this statement.
Well capable
to interact with foreign bank
Frequency
|
Percent
|
|
Strongly Disagree
|
2
|
10
|
Disagree
|
4
|
20
|
Neutral
|
4
|
20
|
Agree
|
7
|
35
|
Strongly Agree
|
3
|
15
|
Total
|
20
|
100
|
Interpretation: Out of total appearances 35% respondents are agree that Dhaka bank is well capable to interact with foreign bank for performing foreign exchange operations of their clients. There is also some negative response from the customer regarding this issue.
Office environment is helpful to get quality service
Frequency
|
Percent
|
|
Strongly Disagree
|
2
|
10
|
Disagree
|
6
|
30
|
Neutral
|
1
|
05
|
Agree
|
6
|
30
|
Strongly Agree
|
5
|
25
|
Total
|
20
|
100
|
Interpretation: Out of total appearances 30% respondents are agree that office environment of Dhaka bank is helpful to get quality service and 25% is strongly agree with this statement. There is a rationale for being anxious that 30% respondents are disagreed with this statement.
Satisfaction with the service charge asked by DBL regarding process of L/C
Frequency
|
Percent
|
|
Strongly Disagree
|
1
|
05
|
Disagree
|
1
|
05
|
Neutral
|
4
|
20
|
Agree
|
11
|
55
|
Strongly Agree
|
3
|
15
|
Total
|
20
|
100
|
Interpretation: 55% respondents are agreed and 15% respondents are strongly agreed that the corporate image of Dhaka bank make customers more loyal towards it.
Satisfaction with the time taken by the employees to process the L/C
Frequency
|
Percent
|
|
Strongly Disagree
|
1
|
05
|
Disagree
|
1
|
05
|
Neutral
|
3
|
15
|
Agree
|
9
|
45
|
Strongly Agree
|
6
|
30
|
Total
|
20
|
100
|
Interpretation: Out of total
appearances 45% respondents are agree and 30% are strongly agree that time
taken to process the L/C is satisfactory.
Satisfaction with the procedure of opening L/C in DBL
Frequency
|
Percent
|
|
Strongly Disagree
|
2
|
10
|
Disagree
|
3
|
15
|
Neutral
|
2
|
10
|
Agree
|
7
|
35
|
Strongly Agree
|
6
|
30
|
Total
|
20
|
100
|
Interpretation: Out of total appearances 35% respondents are agree that the procedure is reasonable or satisfactory and 30 % respondents are strongly agreed with this statement.
Satisfaction with the online resources regarding foreign trade available in the website of DBL
Frequency
|
Percent
|
|
Strongly Disagree
|
1
|
05
|
Disagree
|
1
|
05
|
Neutral
|
3
|
15
|
Agree
|
9
|
45
|
Strongly Agree
|
6
|
30
|
Total
|
20
|
100
|
Interpretation: The security of online banking transactions is a major apprehension for the customers. But the 45% respondents are agreed with this statement that they get secured online banking service from this bank.
8.1 Findings
|
8.2 Recommendation
|
8.3 Conclusion
|
8.1 Findings
In
recent years, severe competition arises among banks and that is the reason
behind the banks reformulation and revision to its current strategies not only
to become more competitive in the industry. And that is why we are seeing
entrance of considerable number of banks and financial institutions with new
technology-based products and services in the money market. To take the
opportunity of new business environment BASIC is also rethinking its strategies
not only to become more competitive but also for the future existence of the
institution. On the basis of the study, the summary of the findings are:
Ø Dhaka Bank Limited provides its customers a
full range of services to help them to grow their assets and net worth.
Ø The bank gives
importance to small and medium enterprises, which is composed of quality assets
and steady and sustainable growth. It also provides banking services including
term loan, short-term finance, working capital finance and financing and
facilitating international trade.
Ø Officers always
show respects to their customers.
Ø The officers help
businessmen in different ways to understand the procedure of L/C.
Ø The monitoring system
of the foreign exchange department of Dhaka Bank is very excellent. The chain
of command is strictly maintained here Dhaka bank do lots of promotional
activities like sponsoring Bangladesh
cricket team for Sri Lanka
tour, organizing Master Class in BRAC
University etc
Ø No major changes
are apparent in its dealing with latest and technology-based products and
services.
Ø It has growth in
the Foreign Exchange Business.
Ø Although Dhaka bank
has initiated its on-line banking many years ago, still it cannot offer its
client full pledge on-line services. Its’ growth and development in other areas
are also less significant.
Ø Though the Dhaka
Bank has only 55 branches all over the Bangladesh Compare to other bank it’s
small. So if they want to do a gigantic business then they have to increase the
number of branches
8.2 Recommendation
Ø Dhaka Bank should
focus to influence its strengths like low-cost leadership, skilled human
resource, low rate of classified loan and unique products by minimizing and addressing
its weaknesses like traditional products and services and weak IT
infrastructure
Ø
It must formulate and adopt new and revised strategy to take the
opportunity of new business environment like offering latest technology-based
products and services and expanding its balanced network in rural and urban
areas.
Ø
It also should tackle the
threats of the industry like severe competition among banks, technological
changes and changing world wide business environment.
Ø
In its short-term strategy formulation Dhaka Bank should focus to
eliminate its internal weaknesses so that it can pursue market opportunity more
effectively and in this regard it should employ a turn-around oriented
strategy.
Ø
Then it would seek the opportunity to use its strong resources and
competencies to build long-term opportunities in more opportunistic product
markets and at this stage it should focus on diversification strategy.
Ø
Dhaka Bank Limited has a well-known and well-reputed web-site.
They should develop their web-site regularly.
Ø
To maintain the growth in Foreign Trade Business Dhaka Bank should
continue current services
Ø
To convey standard level of service the relationship between
customer and employee should be improved
Ø
Adequate measures are to be taken to reduce System failure.
Ø
Officials may be motivated by the higher authorities who will help
to remove their mental pressure.
8.3 Conclusion
Banks and financial institutions play an important role in the
process of economic growth of a country. Bank s and financial institutions have
a prospective impact on the development and welfare process of the surrounding
societies. In a developing country like Bangladesh
During the practical in Dhaka Bank Ltd, Foreign Exchange Branch,it
has been appear to me that the branch comprises with various positive and
negative corners in the banking arena including management pattern, banking
operation and performance. After collecting and analyzing the required data
information, the report has come to some conclusions and recommendations, which
are completely personal views while conducting the Study.
Banking operations, online services and customer dealings of Dhaka
bank, Foreign Exchange Branch till now is very good. They have some prominent
clients. Their lending interest rate and Customer dealing is really competitive
and nice also by which they earned for their quality services. So it has a vivid
future. Finally, I wish continuous success of this bank and healthy business
portfolio of the branch and I also wish overall success of Dhaka Batik Limited.
Appendices
Questionnaire
Survey on customer satisfaction as regards of Foreign Trade
Operations
Instructions: There are different opinions about Foreign Exchange Service of Dhaka Bank Limited. How much do you agree with this statement? Point it out in the scale given below.
1. Are you
satisfied with the solution given by employee of DBL during any foreign exchange
related problem?
§ Strongly Disagree
§ Disagree
§ Neutral
§ Agree
§ Strongly Agree
II. Dhaka Bank is
able to create future prospect for Foreign Exchange Business
§ Strongly Disagree
§ Disagree
§ Neutral
§ Agree
§ Strongly Agree
§ Disagree
§ Neutral
§ Agree
§ Strongly Agree
III. Dhaka Bank
performance has significant impact on export growth of Business
§ Strongly Disagree
§ Disagree
§ Neutral
§ Agree
§ Strongly Agree
§ Disagree
§ Neutral
§ Agree
§ Strongly Agree
IV. The
relationship between customer and employee is supporting in Dhaka Bank Limited
§ Strongly Disagree
§ Disagree
§ Neutral
§ Agree
§ Strongly Agree
§ Disagree
§ Neutral
§ Agree
§ Strongly Agree
V. Dhaka Bank is
well capable to interact with the with foreign bank for performing export
transaction
§ Strongly Disagree
§ Disagree
§ Neutral
§ Agree
§ Strongly Agree
VI. Office equipment
of Dhaka Bank Limited is quite helpful to get satisfactory service
§ Strongly Disagree
§ Disagree
§ Neutral
§ Agree
§ Strongly Agree
VII. Are you satisfied with service charge asked by
Dhaka bank regarding process of L/C?
§ Strongly Disagree
§ Disagree
§ Neutral
§ Agree
§ Strongly Agree
VIII. Are you
satisfied with the time taken by the employees to the process of L/C?
§ Strongly Disagree
§ Disagree
§ Agree
§ Strongly Agree
§ Strongly Disagree
§ Disagree
§ Agree
§ Strongly Agree
IX. Are you
satisfied with the procedure for opening L/C?
§ Strongly Disagree
§ Disagree
§ Agree
§ Strongly Agree
§ Disagree
§ Agree
§ Strongly Agree
X. Are you satisfied with the online resources regarding
foreign trade available in the website of Dhaka Bank Limited?
§ Strongly Disagree
§ Disagree
§ Agree
§ Strongly Agree
§ Disagree
§ Agree
§ Strongly Agree
Reference- Annual Report of Dhaka
Bank Limited 2009,2011,2012,2013.
- www.dhakabank.com.bd
- Foreign
Exchange Policy Department, Bangladesh Bank. (2014, May 31)
- Letters of Credit and Remittances
against Imports
- Guidelines for Foreign ExchangeTransactions,
26-60.
- Investopedia. (2013).
Back-To-Back Letters Of Credit Definition. Retrieved May 19, 2013, from
Investopedia.com
- http://www.investopedia.com/terms/b/back-to-back-letters-of-credit.asp
- Raquib, A, “ Financial Sector
reform in Bangladesh – An Evaluation
- Investopedia. (2013). Letter Of
Credit Definitation. Retrieved May 15, 2013, from Investopedia: http://www.investopedia.com/terms/l/letterofcredit.asp
- Investopedia. (2013). Sight Letter Of
Credit Definitation. Retrieved May 17, 2013, from Investopedia.com: http://www.investopedia.com/terms/s/sightletterofcredit.asp
- Letter of Cerdit. (n.d.).
Retrieved May 18, 2013, from wikipedia.org: http://en.wikipedia.org/wiki/Letter_of_credi