report on foreign exchange(1)

CHAPTER ONE
1.1 Background of the Study

The prosperity of a country depends upon its economic activities. Like any other
sphere of modern socio-economic activities, Banking is powerful medium of
bringing about socio-economic changes of developing country. Agriculture,
commerce & industry provide the bulk of a countries wealth. Without adequate
Banking facility these three cannot flourish. For a rapid economic growth a fully
developed banking system can provide the necessary boost. The whole economy of
a country is linked up with its banking system.
The functions of the bank are now wide and diverse. The customers come from all
walks of life, from a small business to a multinational corporation having its
business activities all around the world. The banks have to satisfy the requirements
of the different customers belonging to different social groups.
1.2 Origin of the Report
This report is prepared as per internship requirement of my master of Business
Administration (MBA) program of the Premier University Chittagong. I worked Two
month from 6th
February-16th
April 2014 in Shahjalal Islami Bank Ltd. Agrabad
Branch, Chittagong. In two months I have through various Banking activities. This
report is a brief overview of those daily activities I have done during the internship
period.
1.3 Objectives of the report
The objective of the report is to evaluate the foreign exchange performance of
Shahjalal Islami Bank Ltd. The specific objectives are:
1. To know about the mechanism of Foreign exchange of Shahjalal Islami Bank
Ltd.
2. To know about the Import service of Shahjalal Islami Bank Ltd.
3. To know about the export service of Shahjalal Islami Bank Ltd.
4. To know about the foreign remittance service of Shahjalal Islami Bank Ltd.
5. To know about foreign exchange performance of SJIBL, Agrabad Branch.
Practices of Foreign Exchange ServicePractices of Foreign Exchange Service Page 2

6. To find out some problems of foreign exchange of Shahjalal Islami Bank.
7. To gives some suggestion for overcome these problems.
1.4 Methodology of the study
The report was largely involved in accumulation of information from the published
materials and also from the website of data mining guide. This prepared by using
both primary and secondary data.
1.5 Sources of Data
Primary sources:
 Personal observation
 Discussion with the employees
 Work in different departments
Secondary sources:
 Published Documents
 Office circular
1.6 Scope of the Study
This report provides emphasis on the performance of “Foreign Exchange” service of
Shahjalal Islami Bank Ltd. This report assist me to gain a robust and prevailing
information and Importer, Exporter & non residents satisfaction level of Shahjalal
Islami Bank Ltd. from its existing customers.

1.7 Limitation of the Study
Today’s world is an information village. All the information is being made available
within a click distance. Bangladesh is still lacking in this regard. In preparing this
report I have found that data are not available for people. As being an intern, it also
created some problems, due to the bank policy of maintaining secrecy and also
because I did not get the opportunity in all departments. The employee of different
section remains busy with their daily work, it was difficult for them to find time for
me to give briefs about banking norms. But the employees have given me practical
ideas whenever they were free. Load of work place was also barrier to collect
sufficient data and time of internship is also not enough.

CHAPTER TWO
Company profile
2.1 Introduction

Shahjalal Islami Bank is named after the name of a Saint Hazret Shah Jalal (R.) who
dedicated his life for the causes of peace in this world and hereafter and serves the
humanity. The prime objective of Shahjalal Islami Bank is to serve the people is to
attainment of their economic goal and success in life here and hereafter. Shahjalal
Islamic Bank Ltd. stands not only for material well being but also ethical
development of its customers.
2.2 Overview of the company
Shahjalal Islami Bank Ltd. is the name of a saint Hazrat Shah Jalal (r.)who dedicate
his life for the causes of peace in this world and hereafter and served the humanity.
Shahjalal Islami Bank Ltd. stands not only for materials wellbeing but also for
ethical development of the customers.
In the backdrop of economic liberation financial sector reforms, a group of highly
successful entrepreneurs conceived an idea of floating an Islamic Bank with
different outlook. For them, it was competence, excellence and consistent delivery
of reliable service with value products. Accordingly Shahjalal Islami Bank Ltd. was
created 1st
April 2001 and commencement of business started of 10th
may 2001. As
a fully licensed Islami Bank, professional and dedicated team is meaning SJIBL
with experience in Banking.
SJIBL has already made significant progress within a very short period of its
existence. The purpose of the Bank is to become “The Bank of Choice” in the
communities. SJIBL offers all kinds of commercial, corporate and professional
banking service covering all segments of society within the framework of Islamic
Shariah , rules and regulations as lay down by Bangladesh Bank.
2.3 Corporate profile

2.4 Objectives Of Shahjalal Islami Bank
From time immemorial Banks principally did the functions of moneylenderers or
“mohajans” but the functions and the scope of modern banking are now-a-days very
Company Profile in Brief
Name Shahjalal Islami Bank Limited
Chairman A.K. Azad
Managing Director Farman R. Chowdhury
Registered Office
2/B, Uday Sanz,, Gulshan South
Avenue,
Gulshan-1,Dhaka-1216
Auditors M/S. Syful Shamsul Alam & Co
Tax Advisor M/S K.M Hasan & Co.
Legal Advisor Hasan & Associates
Legal Status Public Limited Company.
Nature of Business
Commercial, Corporate, Investment &
Retail Banking
First meeting of the promoters held on 4th September, 2000.
Date of Certificate of Incorporation 1st April, 2001.
Date of Certificate of Commencement of
Business
1st April, 2001.
Banking License received on 18th April, 2001.
First Branch License received on 24th April, 2001
Inauguration held on 10th May, 2001.
Authorized Capital Tk.80.00 core.
Paid up Capital Tk.20.50 core.
Number of Branches (as on 20.06.2010) 52
Telephone No. 88-02-9570812, 7160591
Fax No. 88-02-9570809, 9553562
Website www.shahjalalbank.com.bd

wide and different. They accept deposits lend money like their ancestors,
nevertheless their role as catalectic agent of economic development encompassing
wide range of services is very important. Business Commerce and industries in
modern time cannot go without banks. There are people interested to abide by the
injunctions of religion in all sphere of life including economic activities. Human
being is value oriented Social Science is not value neutral. Shah Jalal Islami Bank
believes in moral material development simultaneously other objectives of
Shahjalal Islami Bank include:
• To established interest-free & welfare oriented Banking system.
• To help the poverty alleviation and employment generation.
• To contribute the sustainable economic growth.
• To established justice in whole economy and business.
• To established participatory banking instead of banking of debtor
creditor relationship.
2.5 Feature of Shahjalal Islami Bank Ltd.
There are many reasons behind the better performance of Shahjalal Islami Bank
Ltd. then other newly established banks:
• The inner environment of all branches is well decorated
• The Bank provide loan to customers with easy and flexible
condition then the other do
• L/C commissions and other charges are relatively low then
other banks
• The bank has established correspondent relationship with
many foreign banks.

2.6 Mission of SJIBL
TO be the premier financial institution in the country providing high quality products
and service backed by latest technology and a team of highly motivated personal to
deliver excellent service and to stand out as a pioneer Islami Banking institution in
Bangladesh and contribute significantly to the national economy. And also to
provide quality service to customer, to set high standards of integrity, to make
quality investment, to ensure sustainable growth in business.
2.7 vision of SJIBL
To be an unique modern Islamic bank in Bangladesh and to make significant
contribution to the national economy and enhance customers trust and wealth,
quality investment s, employees value and repaid growth of Shareholders equity.

CHAPTER THREE
An Overview Foreign Exchange Business

Introduction
Foreign exchange means exchange of foreign currency. H.E Evitt define “Foreign
Exchange” as the means and methods by which right to wealth expressed in terms of
currency of one country are convert into right to wealth in terms of the currency of
another country. International trade are a common occurrence and normally benefit
both the exporter and importer. In many countries, international trade account for
more than 20% of their national income.
Foreign Exchange department is international department of the bank. It deals with
globally and facilities internationally tread through its various services. It bridges
between import and export.
The trade among various countries causes for close linkage between the parties
involved. In Bangladesh, the bank that facilities such transaction is reoffered to as
authorised dealer certified by Bangladesh Bank.
International trade demands a flow of both goods from seller to buyer payment from
buyer to seller. This flow of goods and payments is done through credit instrument,
for example, letter of credit, Bills of exchange etc.
3.1 Definition of foreign trade & Exchange:
The foreign trade &business of a country involves activities of buying & selling of
or exchange of goods & services between two countries. The means it refers to
trade between the residents of between two countries.
To understands foreign exchange business, one should know the meaning of foreign
exchange; It means, it’s process or system of conversion of one national currency

into another and of transferring money from one country to another.(Dr. Paul
Einzing)
3.2 Foreign Exchange Regulation Item:
1. Local regulation for foreign exchange
Our foreign exchange transaction is being controlled by the following rules &
regulation:
Foreign exchange regulation act 1947:
To regulate foreign exchange, Bangladesh bank has published a book namely
“guideline fir foreign exchange transaction” volume -1&2. It is amended after
every five years.
Bangladesh bank issues foreign exchange circular from time to time to control
export, import & remittance business.
Ministries of commerce issues export & import policy giving basic formalities
for export & import business.
Some CCI & E issues public notice for any kinds of change in foreign
exchange transaction Bangladesh bank published two volumes in 1996. This
is compilation of the instruction to be followed by the authorised dealers in
transaction related to foreign exchange.
Regulation of foreign exchange:
There are also some international organisations influencing our foreign
exchange transaction. Few of them are discuss bellow:
International chamber of commerce (ICC) is a worldwide nongovernmental
organization of thousands of companies. It was founded in 1919. ICC has

issued some publications lime UCPDC, URC etc. Which are being followed
by all the member countries. There is also an international business disputes.
3.3 Functions of Foreign exchange department
of SJIBL:
Export:
1. Pre-shipment advances.
2. Purchases of foreign bills.
3. Negotiating of foreign bills.
4. Export guaranties.
5. Advising /Confirming letter of credit.
6. Advances for deferred payment.
7. Advance against bill for collection.
Import:
1. Opening of letter of credit.
2. Advance bills.
3. Bills for collection.
4. Import loan & guarantees.

Remittance:
1. Insurance of DD, MT, TT etc.
2. Payment of DD, MT, TT etc.
3. Insurance & enhancement of travel’s cheque.
4. Sale & enhancement of foreign currency notes.
5. Maintaining on non-resident account
3.4 Types of Exchange rates
 Direct Quotation or pence rate
 Indirect Quotation or foreign currency rate
 Cross rate
 Spot rate
 Forward rate
Causes of Exchange rate fluctuation
 Commercial transactions
 Inflation
 Capital Investment
 Short term capital movement

 Stock exchange transaction
 Speculation
Settlement of exchange rate
As we all know that in Bangladesh the dollar rate is floating- the dollar rate
determines by market that means on the basis of demand and supply. And
every day we have been seeing the dollar exchange rate in the daily
newspaper. There are two rate one is BC sell and TT buy rate. But
commercial bank does not follow the rate. Every commercial bank has own
foreign exchange division. They determine what will be the exchange rate
on day to day basis. Once they are determining the exchange rate they sent
the rate to their branch office. So it is determined by the foreign exchange
Division of head office.
3.5 Letter of credit
The uniform custom & practice for documentary credit (UCPDC) article 2,
published by international chamber of commerce (1993) revision, publication no.
500 defines documentary credit as follows:
“Any agreement, however named and described, whereby the issuing bank
acting at the request and on the instruction of a customer or its own behalf,
1. Is to make a payment to or to the order of third party or is to accept and
pay bill of exchange drawn by the beneficiary, or
2. Authorizes another bank to effect such payment, or to accept and pay
such bill of exchange,

3. Authorizes another bank to negotiate, against stipulated documents,
provided that the terms and conditions are complied with.
3.6 Reasons for opening L/C
Exporter advantage Importer advantage
 Payment certificate
 Immediate negotiation of the
bills
 Certainty regarding the
observance of FAX
restrictions
 Advance in this sector is
secured.
 Integrity and credit
worthiness exposed to the
exporter.
 Bills are assured to be paid
at the fulfillment of the L/C
terms & conditions.
 It is less expensive than
other methods of purchasing
goods from abroad.
3.7 Practice to letter of credit:
A letter of credit issued by a bank at the request of an importer in favor of an
exporter from whom he has contracted to purchases some commodities or
services. Generally the letter of credit is transmitted to the beneficiary through a
bank of beneficiary’s country. Therefore, parties of letter of credit are mainly:
Importer/ Buyer/ Applicant:
The person or body who apply to the bank for issuing the L/C is treated an
importer.
Issuing bank or opening bank:

The bank which opens / issues letter of credit on behalf of the importer is
treated as the issuing bank.
Advising or notifying bank:
The bank through which the L/C is advised to the beneficiary (Exporter) is
treated as advising bank. The advising bank acts only as an agent of the
issuing bank having no engagement on their part.
Exporter/ Seller/ Beneficiary:
Beneficiary of the L/C is the part in whose favor the letter of credit is issued.
Confirming bank:
It is the bank which adds its confirmation to the credit and it done at the request
of issuing bank.
Negotiating bank:
The bank, which is negotiates documents and pays the amount to the
beneficiary when, present complying credit terms treated as negotiating
bank. Normally negotiating bank is the banker of the beneficiary.
Reimbursing bank/Paying bank:

The bank nominate in the credit by the issuing bank to make payment
against stipulated documents, complying with the credit terms. Normally
issuing bank maintains accounts with the reimbursing bank.
3.8 operation of letter of credit
INDENTURE
IMPORTER
Send invoice to the Importer
Goods shipment
EXPORTER
A
P
P
L
I
C
A
T
I
Importer comes to the bank,
pay to the bank and collect
the documents to unloaded
the goods from port
Send documents for
shipment of goods
Send documents for
collection bill
Payment to exporter

Send document & bill of exchange.
3.9 Different types of L/C (chart):
ISSUING BANK
L/C opening, Advising & confirmation
Pay to the negotiating bank
NEGOTIATIN
G BANK
REIMBURSING
BANK
L/C
According
to forms
According to
payment

Revocable Irrevocable Sight Deferred
Revolving Transferable Straight Stand by Back to
Back
Circular Anticipation

Chapter Four
Import section

Introduction:
Bangladesh imports a large number of goods from foreign households.
Imports of goods into Bangladesh is regulated by ministry commerce and
industry in terms of the import & export (control) Act 1950, with import
policy orders issued by annually and public notices issued from time to time
by the office of the chief controller of import and export (CCI&E).
4.1 Who can do import business?
A person having import registration certificate (IRC) can do import business.
4.2 Import procedure through SJIBL:

To Import through SJIBL, a client has to obtain import registration Certificate
(IRC). It requires to the following certificate:
 Al-Wadia Current account
 IRC(Valid)
 Indent / pro-forma invoice
 Membership certificate of chamber of commerce
 TIN & VAT Registration certificate
 Other papers as required
 The certificate from associate of market.
4.3 Workings in import department:
The following things are done in this department:-
 Total supervision of import department (Cash / Back to Back L/C).
 Foreign correspondence related to above.
 Payment of Back to Back L/C and endorsement of Export L/C against
payment.
 Follow-up Back to Back overdue bills.
 Correspondence regarding Back to Back L/C and cash L/C.

 Maintenance record of related L/C documents.
 Audit compliance.
 Endorsement of Export L/C when opening.
 Batch checking.
 All corresponding related to Back to Back L/C with Head office and
Foreign.
 Correspondent.
 Supervision of checking, Lodgments & retirement of Import
documents under Back to Back L/C.
 Issuance of shipping guarantee (bank L/C).
 IMP from Fill-up (Cash L/C)
 Information Negotiating Bank about maturity date of Back to Back
L/C.

 Balancing of accepting liability.
 Statement of outstanding accepted import bills under Back to Back
L/C.
 Credit report.
 Preparation of monthly foreign exchange business, position.
 L/C lodgment.
 Differed payment (cash)
 Checking of cash L/C documents.
 L/C retirement.
 Proof sheet L/C Margin and Contingent liability (cash L/C).
IMP Form:
This form is prepared for maintaining account of the money, Which goes outside
the country for the purpose of payments. This form is required by Bangladesh

Bank. It is an application for permission under 4/5 of the foreign exchange
regulation act 1947 to purchase foreign currency for the payment of Import.
IMP form has four copies:
1. Original copy of Bangladesh Bank.
2. Duplicate copy for authorized dealers. It is issued for processing
exchange control copy of bill entry or certified invoice.
3. Triplicate copy for authorized dealer’s record.
4. Quadruplicate copy for submission to the bank in case of
import where documents are retired.
Following documents are sent with IMP form:
1. Letter of credit authorized dealer.
2. One copy of invoice.
3. Indent copy/ Performa invoice.

The following information is including in the form-IMP:
1. Name and address of the authorized dealer.
2. Amount of the foreign currency in words and figures.
3. Name and address of the beneficiary.
4. L/C authorized form number and date.
5. Registration number of L/C authorized form with Bangladesh
bank, and description of the goods.
4.4 Import mechanism:
According to Import and export control act 1950, a person should be
competent Importer to exporter. The chief controller of Import & export
office provides the registration certificate (IRC) to the Importer. After the
Importer has to secure a credit authorization (LCA) from Bangladesh Bank
and the importer will be a qualified importer. After that the importer is the
person who request or instruct s Shahjalal Islami Bank Ltd. the opening bank
is to open L/C. Therefore the importer is also called opener or applicant of
the credit.
4.5 Importer application for L/C limit:

An importer submits an application to departments of foreign exchange
Shahjalal Islami Bank Ltd. furnishing appears in the appendix of this report.
1. Full particulars of bank account.
2. Nature of business.
3. Required terms & conditions.
4. Goods to be imported.
5. Offered security.
6. Repayment schedule.
A credit officer scrutinizes this application and accordingly prepares a
proposal- called credit limit proposal (CLP) and forward it to be the Head
office credit committee (HOCC). If the committee satisfied, the limit
proposal sanctioned and returns back to the branch. Thus the importer is
entitled for the limit.
4.6 Procedure of opening L/C to import:
To open an L/C the requirements of an importer are:
1. He must have an account in SJIBL.
2. He must have Importer registration certificate (IRC).
3. Report on past performance with other bank. SJIBL
collect this report from Bangladesh bank.

4. CIB (credit information bureau) report from Bangladesh
bank.
5. A personal approved by the meaning of executive of the
bank. It is necessary only when the L/C amount is small
or there is no limit.
6. If the L/C amount is large or there is a limit, then an
approval from Bangladesh bank is needed. Usually this
approval is needed for amount more than one core.
Opening of the L/C means, at the request of the applicant (importer),
issuance of a L/C in favor of the beneficiary (Exporter) by a bank, which
opens or issue L/C called L/C opening bank or issuing bank. Throughout this
report the term “opening bank “conveys the same meaning.
4.7 Accounting treatment for opening L/C:
For opening L/C, importer will apply to the issuing bank. In that case,
importer is called applicant or opener. After opening an L/C bank will create
contingent liability. In that case, the accounting posting will be the following:
Contingent liability Dr.
Customer liability Cr.
Then the issuing bank will give another entry
Payment against document (PAD) Dr.
SJIBL General A/C Cr.
Exchange gain Cr.

SJIBL general account is a miscellaneous account. It will be created by this
entry SJIBL created a liability. He has to the money to the advising bank. And
the gain made by the transaction is shown at exchange gain account. All
these entries are made after receiving some documents from the exporter,
the above procedure is called lodging. After giving the above entry,
importers pay the money and collect the document.
Party account Dr.
PAD account Cr.
4.7 Margin & bank charges:
Party account Dr.
Margin account Cr.
Commission Cr.
Postage Cr.
L/C commission and other charges are realized from the party before as
FCC. FCC includes the foreign bank charges. Amount of FCC is kept
separately in an account and this entry may be received as when the debit
advice received from the foreign correspondent by passing voucher for
actual amount. If there is any shortfall, the same is to be realized from the
party.
4.8 Liability of issuing Bank:
As per article 9(a) of UCPDC 500, an irrevocable credit constitutes a definite
undertaking of the issuing bank, provided the stipulated comply with the
terms and conditions of the credit.

4.9 Advising of letter of credit:
Advising through a bank is a proof of evident authority of credit to the
seller. The process of advising a credit consists of forwarding the original
credit to the beneficiary to whom it is address. Before advising L/C, the
advising bank must see the following points:
Signature of issuing officials on the L/C verified with the specimen signature
book of the said bank when L/C received.
L/C test code is invariable be agreed and authenticated by two authorized
officer.
L/C is scrutinized thoroughly complying with requisites of concerned UCPDC
provisions.
Entry made in the L/C advising register.
L/C is advised to the beneficiary promptly and advising charges recovered.
4.10 Advising bank liability:

Advising bank liability is fixed up in uniform customer and practice for
documentary credit publication, 500.
Article 7(a): credit may be advised to a beneficiary through another bank
without engagement on the part of the advising bank, but that bank if
selects to advice to credit, shall take reasonable care to check the apparent
authenticity of the credit which it advises. If the bank elects not to advice
the credit, it must uniform the issuing bank without delay.
Article 7(b): If the advising bank cannot established such apparent
authenticity it must inform delay, the bank from which the instruction
appear to have been advised that it has been unable to established the
authenticity of the credit and if it elects to advised the credit it must inform
the beneficiary that it has not been able established the authenticity of the
bank.
4.11 The confirming bank
If the advising bank also adds its own undertaking to honor the credit while
advising the same to the beneficiary, He become the confirming
bank, in addition becomes liable to pay for documents in conformity with the L/C
terms and conditions.

4.12 The beneficiary varies the letter of
credit:
1. The letter of credit terms are the conformity with terms of the original
contract of the sell.
2. That no derogatory terms added to the letter of credit.
3. That he is in a position to ship consignment within the shipment date
stipulated in the letter of credit.
4. That letter of credit ensures him payment upon tending of the export
document.
5. The beneficiary sees any charge to contract of sale or if he feels any
amendment, he informed the advising bank thereof.
4.13 L/C Amendment:
After opening of L/C, the importer may feel necessary delete, add or alter some of
the clauses of the credit. All there charges are communicated to the beneficiary
through some advising bank of the credit. Such changes or modification to a credit
are termed as amendment to a letter of credit.
Parties involved in a L/C, particularly seller and buyer cannot always satisfy the
terms and conditions in full as expected due to some obvious and genuine

reasons. The credit should be amended. SJIBL transmits the amended by the
tested telex to the advising bank. In case of revocable credit it can be amended or
cancelled by the issuing bank at any movement and without prior notice to the
beneficiary. But in case of irrevocable letter of credit, it can neither be amended or
cancelled
without consent of the issuing bank, the confirming bank and the
beneficiary. If the L/C is amended, service charge and telex charge is
debited from the parties account accordingly.
4.14 Consignment:
After the power amendment of L/C, the supplier will be willing to immediately
start packing and will ship the goods when ready and obtained full set of bills of
leading etc. From the carrier company and submit the same to the negotiating
bank along with other documents that are called for in the credit. The shipping
documents ususlly obtained are:
1. Bills of leading.
2. Consignment notes.
3. Truck receipt.
4. Bill of exchange.

5. Commercial invoice.
6. Certificate of origin.
7. Packing list.
8. Weight certificate.
A copy of declaration of shipment made to the insurance company & Pre-
shipment inspection certificate from international reported surveyor.
4.15 Scrutiny of document by negotiating
bank:
Negotiating bank scrutinizes the documents carefully with letter of credit terms in
the following forms.
The credit is a force and the last date of shipment and negotiation has been
expired.
Document presented are preciously called for.

The invoice correspondents with the dealers of all other documents submitted
under the bill.
Insurance policy is properly stamp and made out and endorse it conformity with
the condition. A complete set of bills of leading is ensured.
Reimbursement clauses is clear does not violate Exchange control regulation, if
any.
4.16 Settlement of L/C:
The issuing bank also checks the documents and if the documents are found as per
credit requirement, it will also give payment under three separate arrangements.
Although three arrangements are discussed here separately for proper
understanding, it is noteworthy to say that the applicant, on the very beginning of
L/C application, mentions the mode settlement.
Settlement by payment:
Settlement by payment happened when the letter of credit contains the terms
against payments as the mode of payment. Under DP arrangement, the
beneficiary presents the documents to the negotiating bank. If satisfied, the
negotiating bank makes payment to the beneficiary and then sends the documents
to the issuing bank and claim reimbursement.

Settlement by acceptance:
Payments, from importer to seller, must be settled through acceptance
mechanism if the letter of credit L/C contains the term “Documents against
acceptance “. It means that payments will occur at some fixed future date after
submission of documents and drafts. At maturity, reimbursement is obtained in
the pre-arrange manner, subject to satisfy the credit requirements of the
documents.
Settlement by negotiation:
This settlement procedures starts with the submission of documents by the seller
to any negotiating bank in a freely negotiate the documents. If negotiation is
restricted by the issuing bank only nominate bank can negotiate the documents
.After scrutinized that the documents meet the credit requirement, the bank may
negotiate the documents and give value to the beneficiary.
4.17 lodgment of the documents:
After receiving the documents from the exporters at first SJIBL it in the PAD
register.PAD register contains date, PAD number, L/C number, and name of the
drawer , name of the drawee, amount, and the number of copies of various
documents, name of the imported items. The written procedure is called
lodgment.

Accounting application:
Whether the documents are paid or dishonored, the opening bank will reserve the
liability entries in their book as under:
Contingent liability reversal voucher:
Bank liability on L/C Dr.
Customers liability on Cr.
Voucher on lodgment on documents:
Margin A/C on L/C Dr.
Payments against documents Cr.
Margin amount transferred to PAD A/C:
Party’s account Dr.
PAD A/C Cr.
Customer account debited for the remaining amount:
PAD A/C Dr.
Head office general account Cr.
Income A/C interest on PAD Cr.
(Amount given to the head office international division and is credited)
4.18 Retirement of the documents:

The process of collecting documents from bank by the importer is called
retirement of documents. The importer gives necessary instruction to the bank for
retirement of the import bills or for disposal of the shipping documents to clear
the imported goods from the customer authority. The importer meet instruct the
bank to retire the documents by debiting his current account with the bank or by
creating Loan against the trust receipt (LTR). Following steps are taken while
retiring documents calculation of profit. Calculation of other charges, passing
vouchers, entry in the register. Endorsement in the bills of leading , other transport
and in the bills of exchange.
4.19 Import financing:
SJIBL generally follows some types of import Financing. This short of import
financing greatly facilitate the import business and thus enable importer to have
credit facilities from the bank.
4.20 Sources of finance:
Import may be allowed under the following sources of finance:
Cash
1. Cash foreign exchange (balance of foreign exchange reserve of
Bangladesh bank)
2. Foreign currency accounts maintain by Bangladesh National working /
living abroad.

 External economy Aid.
 Commodity Exchange.
4.21 Types of import financing:
There are two types of import financing
1. Pre- import financing.
2. Post import financing
 Pre-import Financing:
1. Opening of L/C under case, loan / credit etc. at below 100% margin:
While importer opens L/C at 10% margin with a commercial bank indicates
that the time of opening L/C, The importer concerned deposits
taka equivalent to 10 % of the L/C valued and the rest 90% will have the
deposits at the time of taking delivery of bills from the issuing bank.
2. Opening Back to Back L/C:

Back to Back letter of credit may be define as a credit, which is opened at
the instruction and request of the beneficiary of the original export L/C on
the basis of strength of that L/C. Ready-made garments industries and
specialized textile unit are allowed the facilities of importing fabrics and
other materials needed for manufacturing of garments/ specialized textiles
against Back to Back L/C arrangement.
These are two types:
1. Foreign back letter of credit.
2. Inland back to back letter of credit.
 Post-import Financing:
1. PAD (Payment against document):
On receipt of import bills against the L/C from the negotiating bank, the
issuing bank scrutinizes the documents with the terms and conditioned of
the L/C and if it is found completely in order, PAD loan in the name of the
importer in order to reconcile the entries so debited by the reimbursing
bank.
2. LIM (Loan against Imported merchandise):
LIM may be created at the request of the importer while he is not in a
position to take delivery of import bills by making of entire bank dues. By

creating LIM the name of the importer goods are cleared from the
custom authorities by the L/C issuing bank the same at the go down
under banks custody.
3. LTR (Loan against trust receipt):
a. Advanced against a trust receipt obtained from the customers
are allowed to only first class tested parties when the
documents covering an import shipment or other goods
pledged to the bank as security are given without payment.
However, for such advances prior permission/ sanction from
head office must be obtained.
b. The customer holds the goods or their sale-proceeds in trust
for the bank till such time, the loan allowed against the trust
receipt in fully paid off.
c. The trust receipt is a document that create the bankers lien on
goods and practically amount to hypothecation of the proceeds
of sale in discharge of the lien.
4.22 Major commodities which are imported
by SJIBL, Agrabad Branch.
(In Taka)
2007 2008 2009
Fabrics &
accessories
1255290560 1569113200 1961391500
Scrap 527601600 627259680 586224000
Rice 4398900 3799050 3999000
Dates 8106480 9007200 10008000

Clinker 72571444 80634937 89594375
Camical 45961915 48380963 53756625
Motor vehicles 153743948 139767225 215026500
Graphical presentation

CHAPTER FIVE
Export Section

5.1 Introduction:
Creation of the wealth in any country depends on the expansion of production &
increasing participation in international trade. By increasing production in the
export section we can improve the employment level of such a highly populated
country like Bangladesh. Readymade textile garments, jute, jute made products,
frozen shrimp, 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 exports. Bangladesh exports 40% of its readymade garments
product in USA. They open export L/Cs here to exports their goods, which they
open against the import L/Cs opened their foreign importers.
5.2 Export policy:
Export policy formulated by the ministry of commerce, GOB provides the overall
guidelines & incentives for promotion of imports in Bangladesh. Export policies
also set out commodities-wise annual target.
The export oriented privet sector, through their representative bodies and
chamber and consulted in the formulation of export policies and also represented
in the various export promotion bodies set up by the Government.
5.3 Export procedures:
The import and export trade in our country regulated by the import and export
(control) Act, 1950. Under the export policy of Bangladesh the exporter has to give
valid export registration Certificate from the Chief controller of import & export.
The ERC is required to renew every year. The ERC number is to incorporate on
EXP forms and other papers connect with exports.
For export exporter need to follow the following steps:
Registration of exporters:
For obtaining ERC, exporters are required to apply the respective authority in the
prescribed form with the following documents:-

 Nationality & address certificate.
 Memorandum & Articles of association, Certificate of
incorporation in case of limited company.
 Bank Certificate.
 Income tax certificate.
 Trade Licence certificate.
 Any other documents as per contract & Export policies order.
Securing the order:
After getting REC certificate the exporter may proceed to secure the
export order. He can do this by contracting buyers directly or through
agent. In this purpose the exporters may get help from:-
 Licence officers.
 Buyer’s local agent.
 Export promoting organization.
 Bangladesh Mission Abroad.
 Chamber OF Commerce (local or foreign).
Singing the contract:
Exporter has to get contracted after communicating buyer, for exporting exportable
items from Bangladeshi detailing commodity, quantity, price, shipment, insurance &
marks, inspection & arbitration etc.
Receiving L/C:

After getting the contract for sale, exporter should ask the buyer for letter of
credit clearly stating terms &condition of export & payment. The following are the
main points to be looked into receiving/ Collecting export proceeds by means of
documentary credit:
 The terms of L/C are the conformity with those of the contract.
 The L/C is an irrevocable one, preferably confirmed by the advising bank.
 The L/C allows sufficient for shipments & negotiation
Terms & conditions should be should be stated in the contract clearly in case of
other mode of payment:
• Cash in advance.
• Open account.
• Collection basis (Documentary/ Clean)
Procuring the materials:
After making the deal and on having the L/C opened in his favour, the next step of
the exporter is to set about the task of procuring or manufacturing the contracted
merchandise. If the exporter has to procure the raw materials from another supplier
he has to open Back to Back L/C.
Shipment of goods:
Then the exporter should take the preparation for the export arrangement for
delivery of goods as per L/C and Inco terms, prepare & submit shipping documents
for payment / negotiation in due time. Required documents for shipping:
 EXP form.
 ERC (Valid)
 L/C copy.
 Shipping instruction.
 Transport documents.
 Insurance documents.

 Invoice.
 Other documents.
 Bills of exchange.
 Certificate of origin.
 Inspection certificate.
 Quality Control Certificate.
 Phytosanitary Certificate.
Final steps:
Submission of these documents are mandatory to the bank for negotiation for
the shipment of goods.
5.3: Export procedure in flow chart:
Yes
Registration with
CCI & E
Securing order from buyer
or through agent
Receiving L/C from buyer’s
bank through an advising
bank in Bangladesh
Will the exporter be allowed any pre-
shipment facility? Certificate of EXP. Form by
authorised dealer (bank)

No
No
No
Yes
No
5.4 Parties to export transaction:
 L/C issuing bank.
 Importer.
 L/C advising bank.
Make bank’s lien on the face
of the original
Shipment of
goods by the
exporter
Preparation of export
documents for submission to
negotiating bank
Obtained necessary securities Dr.
Packing credit
Cr. Exporter A/C
Security export documents by
the negotiating bank
Arrange shipment of goods through
bankers approved C&F agent & instruct
them to send original B/L etc to the
bank directly
Are the documents in order?
Ask exporter to remove
discrepancies
Are all the discrepancies
remove?
Informed opening bank about
discrepancies
Negotiation documents
Dr. FDBD
Cr. Exporters A/C
Cr. P.C A/C
Do they all negotiation?
Dispatch documents with reimbursement
instruction
Send the documents for
collection with
reimbursement instruction.
Pass liability voucher and
entry into FDBC register
Check whether your’s A/C with foreign
bank created
Send reminder to paying bank
Has it been created?
Retire FDBP Dr. H.O A/C
foreign bank Cr. FDBP?
Exporters A/C Cr. Income A/C
exchange earning reverse
liability voucher

 Confirming bank.
 Negotiating bank.
 Paying bank/ Negotiating bank.
5.5 Add confirming bank:
Bank may add additional confirmation to export L/C where there is a
specific instruction from L/C issuing bank to do so. Additional
confirmation to L/C gives the seller a double assurance of payment.
Bank’s requirement of adding confirmation:-
 Issuing bank should be reputed bank.
 Credit line/ Arrangement with the L/C issuing bank.
 L/C clauses are to be acceptable to the confirming bank.
 Approval from the component authority of adding confirmation of
export L/C.
 Confirmation charges are to be recovered as per rules.
5.6 EXP forms:
All exporters must be declared on the EXP form. On EXP form statutory
declaration is furnished by exporter before shipping goods to countries
outside Bangladesh & certificate on it is given by the banker. The EXP
forms issued in quadruplicate and numbered serially.

5.7 Receipt of Export L/C & Advising thereof:
 Signature of foreign banks on the L/Cs verified when airmail export
L/C received from the correspondence specimens signature books.
 If the export L/C is intended to be & operative cable L/C test
invariable be agreed and authenticated by two authorised officers.
 L/C scrutinized thoroughly complying with the requisite of
concerned UCPDC provisions.
 Attentions drown to the opening bank to any clause which
contravenes exchange control regulations.
 Entry made in the L/C advised register.
 Credit advised to the exporter promptly and advising charges is
recovered.
 EXP form issued only account of genuine parties after verifying
their ERC when presented duly signed by exporter certified by
authorised officer of the bank.
 Entry in the EXP certificate register introduced as per specification
of ECD Bangladesh bank.
 Reminders send to the exporters if the relative documents are not
submitted in time against EXP already certified by us.
 Export bills are scrutinized meticulously with L/C terms &
conditions.
 Negotiation made on the same day or on the following day
positively under information to international division, Head office.
 Submission of duplicate copy of EXP form within 15 days from the
date of negotiation of documents as per requirement of the ECD
Bangladesh bank.

 Submission of triplicate copy of EXP form to ECD Bangladesh
bank with monthly returns.
 Follow-up a proper which is kept on the bills negotiated under L/Cs
and payments in time.
 Bills negotiated under guarantee be followed up and got realised.
 Counter guarantee from the export is obtained in case of negotiation
of discrepant documents.
 Export proceeds realization certificate be issued only against
documents negotiated without discrepancy.
5.8 Check Points:
The bank should check the bill of leading other documents.
5.9 Packing credit:
Packing credit is allowed complying with the instruction issued by ECD,
Bangladesh bank in F.E circular.
For Covering a particular shipment adjustable upon negotiation/
purchases of relative export documents. in the form of limitation for a
particular period adjustable periodically.
Broadly in the following forms:-
 Export cash credit (Hypnotisation).
 Export cash credit (Pledge).

 Export cash credit against trust receipt.
 Packing certificate
 Back to Back letter of credit (inland & foreign).
 Credit against red-clause letter of credit.
5.10 Check point for allowing packing credit:
 That the exporter is duly registered with CCI & E holding valid
ERC.
 Credit worthiness of the export be judged where applicable with
reference to the financial statement.
 Past export performance (if any).
 That the export L/C is genuine, irrevocable valid, containing
standard terms & conditions and is of first class foreign bank lien
due marked on it, where required, the status of the bank should
also be ascertained. Reimbursement clause is carefully noted to
serve the purpose.
 That the terms of credit do not violate exchange control
registration of the country.
 If needed the buyer’s credit worthiness is verified through foreign
correspondent.
 Credit requirement of the party must be within the set norms of
credit restriction.
 That charge document applicable to the type of credit allowed is
obtained prior to allowing facilities.
 ECG coverage is obtained where applicable.

 That all terms and conditions as per sanction advice or as it
applicable with regard to intention of control securities are
complied with etc
5.11 Export financing:
Export constitutes an important part of a bank’s activities. Exporter requires
financial services at four different stages of their export operation. During each of
pause 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 is given to finance activities of an exporter prior to the actual
shipment of the goods for export. Before allowing such credit to the exporters the
SJIBL takes into consideration about the credit worthiness, export performance of
the exporters, together with all necessary information required for sanctioning the
credit in accordance with the existing rules & regulations. Pre-shipment credit is
given for the following purpose:-
 To meets working capital needs
 Cash for local procurement and meeting related expenses.
 Packing & transporting of goods for export.
 Payment of insurance premium.
 Inspection fees.
 Freight charges etc.
Post-shipment of credit:
This types of credit refers to the credit facilities extended to the exporters by the
bank after shipment the goods against export documents. Necessity for such credit

arises when the exporter cannot effort to wait for long time for without paying
suppliers. Before extending such credit, it is necessary on the part of bank to look
into carefully the financial soundness exporters & buyer’s as well as other relevant
documents connected with the export in accordance with the rules &regulation in
force. SJIBL extend the post-shipment credit to the exporters through:-
 Negotiation of documents under L/C:
The documents for negotiation generally includes:-
 Bill of exchange or draft.
 Bill of leading.
 Insurance policy.
 Invoice.
 Certificate of origin.
 Inspection certificate.
 Any other documents specially called for the letter of credit.
 Export foreign documentary bill purchase:
Sometimes the client submits the bill of export to bank for collection the
payment of the BTB L/C. In that case, SJIBL purchase the bill and collect the
money from exporter. SJIBL subs tracts the amount of bill from BTB and
gives the rest amount to the client in case or by creating his account or by the
pay order. For this purpose SJIBL maintains a separate register named FDBP
register. This register contains the following information:-
 Date.
 Reference number.
 Name of the drawee.
 Name of the collecting bank.

 Conversion rate.
 Bill amount both in figure & taka.
 Export form number.
 Export L/C number.
 Advances against export bills surrendered for collection:
Bills drown under L/C, without any discrepancy in the documents, generally
negotiated by the bank & the exporter gets the money from the bank
immediately. But the bill is not eligible for negotiation, the exporter may
obtained advance from the bank against the security of export bill. In addition
to the export bill, bank may ask for collateral security like a guarantee by a
third party and registered mortgage of property.
5.12 Export incentives:
 Rate of interest in export financing.
 Export credit facility for 180 days, 270 days export for
tea, leather and frozen food.
 Bonded warehouse facilities to 100% export oriented
industry.
 No overdue interest on FBP is to be charged for
negotiation of export documents drawn strictly as per L/C.
 Duty free import of capital machinery for 100% export
oriented industry.
 Credit card facility.

 Duty draw back facility.
 Export credit guarantee scheme.
 Export development fund.
 Cash assistance/ Cash Incentives.
Voucher to be passed:
Disbursement:
Dr. Temporary advance against cash incentives
Cr. Exporter A/C
Adjustment:
Dr. Head office A/C (cash incentives)
Cr. Temporary advance against cash incentive
Dr. Exporter’s A/C
Cr. Income A/C Int. On temporary advance against cash incentives
5.13 Overdue export bills:
Full foreign exchange proceeds of export must be received by exporter in four
months. Overdue causes must be reported to Bangladesh bank by authorised dealer
in prescribed form as per rules.
5.14 Transfer export L/C:
A transferable LC can be transferred to second beneficiary at the request of original
beneficiary and transfer may be once only.
The credit can be transferred only on the terms & conditions specified in the original
credit with the exception of
I. The amount of the credit

II. Unit price expiry, period of shipment.
Accounting procedure:
When the export proceeds realize then that following vouchers are passed:-
Dr. General A/C
Cr. Exchange gain A/C
Cr. Clients A/C
To make such payment SJIBL adjust the loan payment against the acceptance
provided by the importer’s bank.
5.15 Major commodities which are Exported
SJIBL export readymade garments & Brass metal.
Table: total export of SJIBL Agrabad branch, Chittagong in 2009.
Commodities 2007 2008 2009
RMG 224.01 235.8 262
Brass Metal
Scrap
33.2 36.8 40

CHAPER –SIX
REMITTANCE SECTION
6.1 Foreign remittance:

Foreign remittance means purchase and sale of freely convertible foreign currencies
and admissible under exchange control regulation of the country. Purchase of
foreign currencies constitutes inward foreign remittance and sale of foreign
currencies constitute outward foreign remittance.
6.2 Types of foreign remittance:
There are two types of foreign remittance.
 Foreign inward remittance.
 Foreign outward remittance.
6.2.1 Inward foreign remittance:
Inward foreign remittances mean remittance received in Bangladesh from abroad
through normal banking channel in the form of F.T.T, F.M.T & F.D etc. Issued by
foreign banks on any authorised dealer in Bangladesh. Inward foreign remittance is
one of the major sources of the foreign currency reserve of the country and order to
encourage inflow of remittances through banking channel from the non-residence
Bangladeshis. Shahjalal Islami Bank Limited provides quality service for reputation
& collection of remittance with the help of its foreign correspondence and trained
personal. Remittance services provided by Shahjalal Islami Bank Limited are:
 Process / collection of cheque / Draft, TT, MT, in USD, GBP, EURO, AUD,
and JPY.
Check points for inward foreign remittance:

TT: T.T must be authenticated by banks concerned officer. The following points
must be seen in payment of T.T:-
 Name of the remitting bank.
 Amount in foreign currency.
 Test number, Date and foreign name of the branch with whom test applied.
 Name of the beneficiary and A/C number.
 Name of the beneficiaries bank/ branch with address.
 Name of the remitter.
 Name of covering bank in absence of drawing arrangement with remitting
bank.
 Value date of remittance.
 Purpose of remittance.
 Entry in the FTT paid register.
6.2.2 Outward foreign remittance:
Issuing of FDD, TT, MT in USD,GBP, EURO, AUD & JPY
 Issuance of AMEX travellers cheque in USD.
 Handling of student file of the student going abroad for educational purpose
in USD, GBP, EURO, AUD and JPY.
Checking points of outward remittance:
 Application for foreign currency draft of remittance by means of telegraphic
transfer (T.T).

 Demand note/ Invoice where Bangladesh bank permission is not required.
 T/M from duly filled in and signed by the applicant.
 Declaration of the applicant in respect of foreign currency previously
consumed by him.
 Permission from Bangladesh bank for remitting foreign currency exceeding
normal quota as per standing circular of Bangladesh bank.
 Validity of permission must be seen if approved by ECD, Bangladesh bank.
6.3 Remittance under WES
This means inward remittance earned by earners residing and earning abroad the
sending their earning through banking channel which is entitled to have the
exchange rate under WES as fixed by Bangladesh bank which is normally higher
than the official rate.
6.4 Foreign Currency Account
An account opened and maintained by authorised dealers inn currencies other than
Bangladeshi Taka. Without prior approval from Bangladesh bank FC A/C may be
opened in US dollar, great Britain Pound, Japanese Yean, and EURO. Shahjalal
Islami Bank Limited provides different A/C services as prescribed by the guidelines
of the central bank and offer competitive interest rate for those accounts.
Foreign currency account (FC) may be in the form of :-
 Non-Resident foreign currency deposit account (NFCD).
 Resident foreign currency deposit account (RFCD).
 Private foreign currency account.

 Convertible & Non-convertible Taka account.
 Private Non-Residential Taka account.
 Non-Resident Non-Convertible Taka account.
6.5 Salient feature of FC account:
The salient features of FC account are:
 Opened without initial deposit.
 Remains operative even if operation not made for a particular time.
 Bears no interest.
 Operations generally transfer in nature.
 The account opened provisionally if some particulars not finished but subject
to subsequent realization to make the F/C account workable.
 Both the account holder and nominee can operate the account.
 First transaction normally takes place when the remittance deposited.
 Entire remittance from abroad is free from income tax.
6.6 Papers/ documents required for
opening the foreign currency account:
 The following papers/ Documents are obtained for opening F.C account:-

 Account opening form dully filled in & signed.
 Photocopy of 1st
seven pages pass-port & Visa.
 Photocopy of the employment contract executing with the foreign employer.
 Letter of authority for nominee.
 Three passport size photograph of the nominee duly attested by the account
holder.
 Specimen signature card which is used both for the account holder and the
nominee holder. Any person intending to open F.C account from abroad may
send all the aforesaid papers accepting original passport duly attested by the
authorised dealer in Bangladesh.
 Any other printed information/ Documents if required.
6.7 Remittance Received Other Than WES:
Remittance from abroad may be received which will not be allowed wage earns
benefit. These are:-
 Remittance by the foreign national.
 Foreign company or firm.
 Bangladesh companies or farm operating business abroad.
 Gift etc.

CHAPTER SEVEN
Foreign exchange performance
Of SJIBL Agrabad branch, Chittagong

7.1 At a glance of Foreign Exchange Division of
SJIBL
Particulars 2008 (Amount in Taka) 2009 (Amount in Taka)
Letter of credit(Cash) 976549000 1040914000
Letter of credit (inland) 162337000 200000000
Letter of credit(other) 473397000 570000000
Back to Back L/C 176136000 190000000
Commission received 11500000 15000000
Exchange earnings 8898780 10000000

7.2 Foreign Exchange performance of SJIBL,
Agrabad Branch of last six months.
7.2.1 Foreign cash & Back to Back L/C
opened
July August September October November December
213020200 194425050 245675720 238892534 282063756 325922740

7.2.2 Local cash Back To Back L/C opened
In SJIBL, 2009, Agrabad Branch, Chittagong.
(Amount in Taka)
93345435 75689712 101645325 117351973 120113594 125640720

7.2.3 Total Export bill Of SJIBL Agrabad
Branch, Chittagong 2009 (Amount in Taka)
263062517 346512250 285014302 323047590 355583112 389590747

7.2.4 Total Export, Import &Remittanc of
SJIBL, Agrabad Branch In 2009
Amount in Taka Percentage in total
Import 292,58,00,000 47.14%

Export 322,00,00,000 48.33%
Remittance 28,10,33,000 4.53%
7.3 SWOT Analysis
SOWT Analysis:-
A SWOT analysis is a modern analytical tool that can help analyze a business to
examine the interaction between the particular characteristics of your business and
the external marketplace in which you compete. The internal portion of a SWOT
analysis looks at the individual strengths and weaknesses of SJIBL. Similarly, the

external analysis looks at the opportunities presented by the marketplace and the
threats that SJIBL face in market.
7.3.1 Strength
• Full-functioning computerized accounts maintenance.
• SWIFT is being used for foreign trade related operations like letter of credit,
fund transfer, guarantee, etc with optimum security.
• Easy and prompt cash transaction by introducing Money counting machine
• Healthy working facility
• SJIBL provide ATM debit card and nonstop banking facilities.
7.3. 2 Weakness
• Very Limited number of branch network
• Some officials dealing with retail products have not been as a professional as
a private bank does require.
• Charges of statement or certificates are very high.
• High ATM transaction cost
7.3. 3 Opportunity
• It has real time online banking.
• New Product Innovation
• Technical support to Small Industries to help them to run their business
successfully.
• Credit card in dual currency

• Establishment of new branches to enlarge the market
• provide full range of commercial banking services
7.3.4 Threats
• Increasing market competitors day by day
• Restless political condition in Bangladesh
• Market pressure for narrow down spread
• Unexpected fluctuation of currency market

CHAPTER-EIGHT
8.1 Findings
I had practical experience in SJIBL for two months; with my little
experience in banking I have observed some shortcoming regrading
operation & other aspects of the bank’s foreign exchange business.
These shortcomings are:-
1. It has been found that some times importer wants to deffered a
sight LC and forces to bank to do it which is illigel.Importer does
it only for late payment for the interest of client they do it.
2. LTR or liability trust Receipt only sanctioned by Head office.
Branch office does not have the right to open LTR A/C for a value
client which needs more time where the Head office does not deal

with client as well. Some times it has seen that the lead time is
very high.
3. At the time of LC opening, sometimes it is found that some
customers are over in limit. Then banksneeds to negotiate with the
client for available fund limit. Then a little hassle arises.
4. In case of Export LCs, sometimes the customers insists to give
their payment through their document are found discrepent. In
some cases, bank has to give payment to these customers for
different reasons like political & social. But it reeduce the
creadibility of the bank.
5. On thae basis of my observation margin & commission on LC
varies ffrom customer to customer.
6. Swift service connection of SJIBL is not available at all.
7. The of SJIBL freign exchange department is very conjusted. So the
clients is feel comford or secure at the time of passing their
documents.
8.2 Recommendations:
1. I think the requirement of importers to defered a sight LC should
not go ahead. Because it will hurts bank’s reputation as well as
goodwill.
2. I recommend transfering the right to open an LTR credit facility to
the branch office with reduces the operation time.
3. To overcome the haressment of negotiating with clients for
available funds, the bank should set some plans.
4. I think the bank should be stricter as possible about giving
payments against discripent. Otherwise it hurts bank’s reputation.

5. A costomer is allowed to open a L/C with nil margins. I think that
the bank should asses the client’s credit worthiness time to time
and according to their worthiness bank should develop a new L/C
for the client.
6. SWIFT service cunnection of SJIBL must be increased.
7. The space of SJIBL, Agrabad branch, foreign exchange
department should be increased. So that, the clients are feel free,
comford and secure at the time of their business.
8.3 Conclusion:
It was a great pleasure for me to do my internship program in an
estemmed organization like SJIBL through my practical exposure in
SJIBL, Agrabad Branch, Chittagog, for just three months. It provides
me wide range of scope to observe the function of bank through the
cordial assistance of its members.I had the scope to observe the function
of banking system specially focoused on foreign exchange business.
Banking is a dinamic business. Today is best by momentous changes in
vartuall in every facet of industrial activities. By assessing the current
possition of the bank , any hindrances must be seen as challenge and not
as treats. Any kinds problem must be taclet wisely & couragiously. The
bank should maintain a well-structured communication from upper level
to lower level. Each official should be valued and treated as a part of the
bank and they must have the privilege to devote themselves for the
betterment of services of the bank.

Overall, the bank must a positive attempt to be more outward looking in
their goals and aware of what is happening. They must also amphasize
on the domestic scenario more closely and analyze any certain trends
and strategis of their competitors. The bank must accept any failure and
think of them as an objective to pursue future goals instead of blaming
such failures on other factors. I hope, inspite of my all limitations, this
experience of sharing works with such working environment will help
me a lot in my professional life.
References
Books:
• Brigham, E. F., & Houston, J. F. (2011), Fundamentals of Financial
Management, 10th Edition, Ohio, USA: Thomson South Western.
• International Financial Management. 7th
Edition, Jeff Madura.
• Kothari, C.R. (2006), “Research Methodology, Methods and Techniques”,
New Age International (P) Ltd., 2nd Edition.
• Nwankwo G.O. (2001), Bank Management Principles and Practice, UK:
Malthouse Press Limited
• Pandey, I. M. (1979), Financial Management, Vikas Publishing House Pvt.
Ltd, New Delhi, pp.109-116.
• Redhead, K. and Hughes, S (1998), Financial Risk Management, India:
Sower Publishing Company Ltd.
• Shapiro A.C (2001), Multinational Financial Management, India: Prentice
Hall Private Ltd., 4th Edition.
WEB
• www.samren.org/Research Papers/doc ADB Remittance study, May.
• www. Investopedia.com

• www.wikipedia.org
• www.shahjalalislamibank-bd.com
• Annual Report Of Shahjalal Islami Bank 2007-2014
• "Bangladesh GDP and Economic Data". www.gfmag.com. July 5, 2015.
• "Bangladesh brightens South Asia's growth forecast for 2015". Dhaka
Tribune. Retrieved 16 July 2015.
• "Report for Selected Countries and Subjects (PPP valuation of country
GDP)". International Monetary Fund (IMF). October 2014.
• "Bangladesh". World Bank.
Other:
• The daily Star, February 27, 2007
• Bangladesh Bank (BB) Annual Report, 2009-10.
• www.bangladesh.bd.org,www.bangladesh-bank.org
• Bangladesh Research Publications Journal, Volume-4, Page 286-296,
September- October,2010.
• Journal of the Cost and Management Accountant Bangladesh, November-
December, 2014.
• ‘Banks and the foreign remittance business’ Published in The Independent,
October 16, 2010.
• “Foreign Remittance Fluctuation needs to be stabilized.” By Akter-uz-
Zaman Kazi.
• Asian Development Bank, Manila, August

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