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Part 1 of the Report:
Introduction to the Report/Study
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Introduction of the Topic/Study
a. Rationale of the Study :
The internship Program exercises a significant importance as it enables a student to be accustomed with the business activities practically. The student gets the chance to work closely with the people of an organization and learn about the functions, responsibility and corporate culture of that organization. This program enables a student to develop their analytical skills and scholastic aptitudes and to have a real- life orientation of the academic knowledge.
Bank is the important financial institution in the economy. The economic development of a country depends on the development of banking sector. Today’s modern banks are not only providing traditional banking services but also expanding many financial services.
Foreign Exchange Division occupies an important place in a nation’s economy because of its intermediary role; it ensures allocation of resources and keeps up the momentum of economic activities. A banking institution is indispensable in a modern society. It plays a pivotal role in the economic development of a country and forms the core at the money market in any country. In a developing country like Bangladesh the banking system as a whole has a vital role to play in the progress of economic development.
As a student of School of Business Studies, Southeast University, I have conducted my Internship Program in Dutch-Bangla Bank Ltd. Gazipur Branch, one of the reported second generation bank in the growing banking sector in Bangladesh.
b. Statement of the Problems :
c. Objectives of the Report:
Objective of the study acts as a bridge between the starting point and the goals of the study. To illustrate the objectives properly & presented into two parts.
General Objective:
To observe the Job rotation and employee commitments, satisfactions in the DBBL, Their services and overall banking operation.
Specific Objective:
To know the Job rotation of the DBBL. To know the employee commitments and satisfactions of this bank. To know about the previous & present financial condition of DBBL.
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To present own observation & suggestion to the bank.
d. Scope of the Study :
The internship program is an integral part of the BBA program, Southeast University. The students are sent to various organizations where they are assigned to one or more project. At the end of the program, the internship is required to place the accomplishment and findings of the project through the waiting of the Internship report covering the relevant topics. During this program, supervisor guides each student.
This report is the result of a 90 days’ (07 January 2016 to 07 April 2016) internship program in Dutch-Bangla Bank Limited (DBBL), Gazipur Branch.
As a part of internship program, I was required to learn various types of banking tasks which were assigned by the officers of different departments. In this period, I am working with all the departments but basically in a major portion of time I spend in general banking. But I have also done different types of online related tasks, which helped me to gain practical experience on Electronic banking activities of Dutch-Bangla Bank Ltd., I am also done many tasks like- Account opening, Pay Order issuing, Fund transfer, Fund clearing, Account maintaining, foreign remittance clearing, etc. This has definitely enriched my practical experience.
e. Limitation of the Study :
One of the major limitations of this study was the time limitation. For survey work it was not possible to take the sample size more then 30. With in a very short time it was not possible for me to collect data from section and work in every department. There are also some limitations those are follows-
All the officers were very much busy with their day to day work. So they could not provide me enough time.
Office secrecy was also one of the major problems. Some time they did not disclose some confidential data.
In some cases they could not able to providing me about my topics related data for preparing a more depth research study.
I carried out such a study for the first time, so inexperienced is one of the main constraints of the study.
So the study was not free of limitations. The limitations faced during the preparation of this report are given below:
Difficulty in communication and gaining accesses to financial sector.
Non-availability of the most required data.
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For the restriction to disclose various information of a bank. So for this it was a great difficulty in preparing the report.
Large scale research was not possible due to time constraints.
Non availability of data in a systematic way.
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Part 2 of the Report:
Overview of Dutch-Bangla Bank ltd.
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Concern of DBBL
The brand name ` Your Trusted Partner ` associated with DBBL’s day to day operation. Dutch-Bangla Bank Limited establish this philosophy in their dealings with their customers, and offer them product and services that assure them to the essences of a relationship of partnership based on trust and confidences, and upholding and maintaining mutuality of interest. Leaving its competitor behind, DBBL has been able to make steady progress in term of business growth, earning the confidence of its customers and above all creating a long listing image of your bank in all the spheres areas of commercial banking operations, comprising of the society. The bank is involved in all of tread finance, term finance, working capital financing and recently added lease and real estate financing in its operation. It is also participates in the syndicate finance to a large projects.
2.1 Company background
Dutch Bangla Bank Limited (DBBL) is the first joint venture commercial bank of Bangladesh. DBBL was formed under the Bank Companies’ Act, 1991 and incorporated as a public limited company under the Company Act, 1994. The bank has started its official operation from June 3, 1996. The bank was the outcome of an effort by local shareholders lead by M Sahabuddin Ahmed (founder chairman) and the Netherlands development finance company (FMO). DBBL is listed with the Dhaka stock exchange and Chittagong stock exchange from the year 2001.
DBBL has started its rapid growth from the year of 2000. DBBL always gives priority to their customers and try to provide them best banking experience. For this reason they offer one-stop counter service to clients covering: Consumer Banking, Commercial Banking (Deposit Accounts), Travelers Cheque, Foreign & local Remittances, Financial Services, Corporate Banking, Asset & liability management, Liquidity & capital resources management, information technology etc. DBBL is the one of the fastest growing online banks in private sector. The rapid emergence of DBBL is an important event in the banking history of Bangladesh.
The bank achieved its reputation through corporate-social works. DBBL is one of the highest corporate donors of Bangladesh and highest contributor in CSR activities among the banks in Bangladesh. DBBL is the first Bangladeshi bank that started to use automated banking system from the year of 2003 and to establish this system the bank has spent more than 2 billion taka.
Over the years, Dutch Bangla Bank Limited playing an important role on Bangladesh’s financial sector and built itself as one of the pillars of Bangladesh's economic zone. The bank has strong network throughout the whole country with 111 branches, 1940 ATM booths and 153 first tracks.
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Board of Directors
1. Mr. Abedur Rashid Khan Chairman
2. Mr. Abul Hasnat Md. Rashidul Islam Director
3. Mr. Zaheed Hossain Khan Director
4. Mr. Bernhard Frey Director
5. Mr. Sayem Ahmed Director
6. Mr. Md. Fakhrul Islam Director
7. Dr. Irshad Kamal Khan Independent Director
8. Dr. Syed Fakhrul Ameen Director from the Depositors
9. Mr. Chowdhury M. Ashraf Hossain Director from the Depositors
10. Mr. Md. Yeasin Ali Managing Director
Dutch-Bangla Bank Limited (DBBL) is Bangladesh’s most innovative and technologically advanced bank. DBBL stands to give the most innovative and affordable banking products to Bangladesh. Amonst banks, DBBL is the largest donor in to social causes in Bangladesh. It stands as one of the largest private donors involed in imporving the country. DBBL is proud to be associated with helping Bangladesh as well as being a leader in the country’s banking sector.
2.2 Mission
Dutch Bangla Bank engineer enterprise and creativity in business and industry with a commitment to social cause. “Profits alone” do not hold a central focus in the bank’s operation; because “man does not live by bread and butter alone”.
2.3 Vision
Dutch Bangla Bank dreams of better Bangladesh, where arts and letters, sports and athletics, music and entertainment, science and education, health and hygiene, clean and pollution free environment and above all a society based on morality and ethics make all our lives worth living. DBBL’s essence and ethos rest on a cosmos of creativity and the marvel-magic of a charmed life that abounds with spirit of life and adventures that contributes towards human development.
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2.4. Core objectives
Dutch Bangla Bank believes in its uncompromising commitment to fulfill its customer needs & satisfaction and to become their first choice in banking. Taking cue from its pool of esteemed clientele, Dutch Bangla Bank intends to pave the way for a new era in banking that upholds and epitomizes its vaunted marquees “your trusted partner”.
2.5 DBBL at a glance
Name Dutch Bangla Bank Limited (DBBL)
Year of establishment 1996
Head office Sena Kalyan Bhaban (4th floor) ,195, Motijheel C/A, Dhaka-1100
Paid up capital 2,000 Million
No. of securities 20,00,00,000
Total deposit 1,00,711 million
Total profit 2,154.9 million
Earnings per share 10.77 BDT
Reserve and surplus 6,619 million
Number of branches 111
Number of ATM booths 1,940
Number of First tracks 153
Significant Achievements Mobile money award 2011, eAsia award 2011,best private initiative 2011
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Table 1
2.6 Organizational structure of DBBL
2.7 Products and Services of DBBL
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DBBL is a customer centric bank and it is really crucial to satisfy customers demand to achieve success in business. DBBL always gives priority to their clients and offer customers wide range of services to satisfy them and make their banking experience more enjoyable.
2.7.1 Consumer banking products
Dutch Bangla bank limited offers different types of services for their clients. Such as:
SME banking
DBBL provides loans to small and medium entrepreneurs like Wholesalers, Manufacturers, Assemblers and Retailers of machinery, Handicrafts, catering, printing industry and so on. The maximum amount of loan they provide is taka 5, 00,000.
Internet banking
DBBL provides internet banking services to their customers for making their banking easy and hassle free. To login into bank account from home, customer needs a PIN number given by the DBBL. Through internet banking customers can access their account details and can view the amount of current, saving & term deposit and loan account with current balance remaining.
Western union money transfer
Western union financial services Inc. is the reliable money transfer company throughout the world. Its head office is situated at U.S.A. Western union has earned worldwide reputation for transferring money from one country to another country within shortest possible time based on electronic technology. On 14th February 2006, DBBL has set up a representative agreement with western union financial services Inc. for sending money to friends and family worldwide. With the help of western union money transfer service it become easy for Bangladeshi wage earners to receive and send money to more than 2,25,000 western union agents located in over 197 countries globally only by visiting any branch of DBBL. By this way, the Bangladeshi citizens living abroad are sending remittance through Western union agent there and within few minutes his desired nominee in Bangladesh can withdraw it from any DBBL branch.
Listed below are some agents of Western union in different countries:
Name of the Exchange Companies and Banks
Country Name of the Exchange company/Banks
USE Al Ahalia Money Exchange Bureau. UAE Exchange Centre L.L.C.
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Kuwait Kuwait Asian International Exchange Co. Al-Moosa Exchange Company Dollarco Exchange Co., Kuwait
Italy Unicredito Italiano S.P.A. Bahrain Dalil Exchange Qatar Doha Bank Canada East Bengal Exchange Inc. USA Western Union Financial Services Inc.
Janata Express Corp., NY, USA Table 2
ATM card services
DBBL is the market leader of ATM card service. They have 1,940 ATM booths and 153 first tracks throughout the country. They offer different types of ATM cards to its customers:
Debit cardi. Nexus card ii. Master card debit iii. Visa electron debit
Credit cardi. Master credit card ii. Visa credit card
Virtual card
Table 3
Bill payment service
Customers of DBBL can pay their electricity bill, gas bill, phone/mobile bills, internet bill (Qubee & Banglalion) and other utility bills through the cheque of DBBL.
Treasury
By operating SWIFT network and subscribing Reuters's terminal, DBBL is well set for treasury operation. They have also enough man power for efficient dealing.
DBBL’s treasury quotes competitive exchange rate for major currencies:
Spot Sale/Purchase Forward Sale/Purchase Money market Interbank & Corporate SWAPS
Locker services
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DBBL also offer locker service to their clients. By giving specific amount of charge for a locker, one can maintain his own locker and can keep his important things securely.
SMS service
SMS alert service of DBBL is very helpful for the customers. Through this service customers receive messages when their account is debited or credited. So they are always updated with their account balance.
Mobile Banking
In Bangladesh, mobile banking service is first introduced by DBBL on May 31, 2011. Through mobile banking service customers can do banking activities without going to bank. In all over Bangladesh there are many DBBL mobile banking agent. It is secure way to do transaction because no one can deposit or withdraw money without that particular mobile number with check digit and pin number of the account holder.
Products and services of mobile banking:
Cash-in Cash-out Foreign remittance transfer Salary disbursement Balance inquiry Statement inquiry Withdrawal from ATM
2.7.2 Types of Deposit accounts
There are different types of deposit accounts with different types of terms and conditions in DBBL to cater various customer demands. Customers can open their accounts according to their choice and requirements.
Savings account
Savings account is an account where customers can deposit their money and get interest on the deposit. To open any kind of deposit account at DBBL things those are needed:
2 copy passport size photo of the person who want to open an account Photocopy of National ID card/ driving license/ birth certificate (any one) 1 copy passport size photo of nominee
The features and benefits of savings account of DBBL are:
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To open an account only 500 taka is needed Account holder can deposit and withdraw money at any time they want DBBL pays 4% interest MICR cheque book is given Instant debit card is given to the account holder when he opens the account Any branch banking facility Minimum service charge Interest is payable on half yearly basis
Current account
Current account is an account where there is no restriction on number of transaction daily and no limit on withdrawal also. This account mainly opened by the businessmen who have regular transitions with banks. DBBL didn’t provide any interest for this account.
The features and benefits of current account of DBBL are:
Only 2,000 taka is needed to open an current account There is no restriction on deposit and withdrawal money Personalized MICR cheque is given Any branch banking facility Once in a year bank provides charge free statement to the account holder.
Salary account
This is a special package of savings account launched by DBBL only for those company’s employees with whom DBBL has a corporate agreement.
The features and benefits of salary account of DBBL are:
Account holder can withdraw full amount of money from his account Minimum service charge is taken Personalized MICR cheque is given Instant debit card is given to the account holder when he opens the account
Student account
This account is especially launched for the students whose savings opportunity is very limited for example: Taka 500-10,000 monthly.
The features and benefits of student account of DBBL are:
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To open an account only 500 taka is needed Instant debit card is given to the account holder when he/she open the account Yearly charge of debit card is not taken No cheque book is given to the account holder DBBL pays 3.50% interest on the deposit
Deposit plus scheme account (DPS)
DBBL offer DPS to those people who want to save a specific amount of money from their monthly income. Every month account holders deposit a specific amount of money which he initially chooses while opening the DPS account and after maturity of DPS, the bank will pay the principal amount along with the interest to the accountholder or the nominee.
Monthly payment and benefit table (before tax)
EMI/ Tenure 3 years 5 years 8 years 10 years 500 21,234 39,577 75,392 1,06,329 1,000 42,469 79,155 1,50,784 2,12,659 1,500 63,703 1,18,733 2,26,176 3,18,989 2,000 84,938 1,58,311 3,01,568 4,25,318 2,500 1,06,173 1,97,888 3,76,960 5,31,648 3,000 1,27,407 2,37,466 4,52,353 6,37,978 4,000 1,69,877 3,16,622 6,03,137 8,50,637 5,000 2,12,346 3,95,777 7,53,921 10,63,297 10,000 4,24,693 7,91,555 15,07,843 21,26,594 15,000 6,37,039 11,87,332 22,61,765 31,89,891 30,000 12,74,079 23,74,665 45,23,531 63,79,783 50,000 21,23,465 39,57,775 75,39,219 1,06,32,972
Table 4
The features and benefits of DPS account of DBBL are:
A customer can open maximum 5 DPS account in support of one Current/savings account.
A customer can open DPS account with minimum 500 taka and maximum 50000 taka. DBBL pays 10.50 % interest (average). No cheque book is given to the account holder. The amount initially chosen by the account holder at the time of opening account and
cannot be changed later.
DBBL Children Education Savings Scheme (CHESS account)
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DBBL offer CHESS account for the parents so that they can continue their children education cost easily.
The features and benefits of CHESS account of DBBL are:
Only individual customers having children can open this account. A person cannot open more than two CHESS account. Only the account holder’s children can be nominated. Monthly deposit starts from taka 500 to taka 50,000. The amount initially chosen by the account holder at the time of opening account cannot
be changed afterwards.
Monthly payment and benefit table (before tax)
EMI/Tenure 3 years 5 years 8 years 10 years 500 21,406 40,123 77,132 1,09,493 1,000 42,812 80,247 1,54,265 2,18,987 1,500 64,218 1,20,370 2,31,398 3,28,480 2,000 85,624 1,60,493 3,08,530 4,37,974 2,500 1,07,030 2,00,617 3,85,663 5,47,468 3,000 1,28,436 2,40,740 4,62,796 6,56,961 4,000 1,71,248 3,20,987 6,17,061 8,75,949 5,000 2,14,060 4,01,234 7,71,326 10,94,936 10,000 4,28,120 8,02,469 15,42,653 21,89,872 15,000 6,42,180 12,03,704 23,13,980 32,84,809 30,000 12,84,360 24,07,409 46,27,960 65,69,618 50,000 21,40,600 40,12,349 77,13,266 1,09,49,364
Table 5
Fixed Deposit Receipts (FDR)
DBBL offers customers to open account with a fixed amount of money for fixed period at a fixed rate of interest. Under FDR account money can be deposited for 1 month, 3 months, 6 months, 1 year or more than that. If the account holder withdraws deposited money before maturity then they don’t get the interest for the FDR.
The features and benefits of FDR account of DBBL are:
A high interest rate is given to the FDR account holder. For one month the interest rate is 11% and for 3/6/12 months and so on they give 12.50% interest.
The account holders get loan facility against FDR account. Automatic renewal facility at maturity.
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Millionaire Deposit Scheme (MDS)
Millionaire Deposit Scheme (MDS) account is a time specified monthly deposit scheme for clients where the deposited money will become millions on maturity.
The features and benefits of MDS account of are:
Individual customer can open maximum 3 MDS accounts. Customers should open a parallel saving account/current account through which
installment will be paid. The minimum monthly deposit will be 4,718 taka. Initial deposit account and tenure chosen by the account holder at the time of opening
account and it cannot be changed after wards.
Monthly payment and benefit table (before tax)
EMI/tenure
3 years
4 years
5 years
6 years
7 years
8 years
9 years
10 years
23,719 16,821 12,713 9,999 8,082 6,662 5,574 4,718
Table 6
Foreign currency deposit
DBBL offers foreign currency account to some specific categories of customers’ like- Bangladeshi nationals living abroad, foreign nationals living in Bangladesh, foreign firms registered abroad and operating in Bangladesh or abroad, and foreign missions and their expatriate employees in Bangladesh.
The features and benefits of foreign currency account of DBBL are:
DBBL pays interest on such accounts basis on the amount of money they maintain in the account.
Account holder can operate the account by himself or nominate any persons in Bangladesh for this purpose.
2.7.3 Loans and Advances
DBBL offers a wide range of loans for its clients. For example:
Loan against Trust Receipt Consumer Credit Scheme Loan against Accepted Bill Industrial Term Loan
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Agricultural Term Loan Lease Finance Loan against FDR FMO Local currency Loan for SME FMO Foreign currency Loan Small Shop Financing Scheme
Life line
To sustain in the highly competitive world DBBL has launched life line products. It is a complete series of personal loan scheme which is essential for individual and family life. DBBL consider this product line in the following way.
“A complete series of personal credit facilities to add more color in every step of your life”
DBBL has divided the life line products into two parts. They are clean credit lines and secured credit lines.
Clean credit lines:
For this type of loan no cash security or personal guarantee is needed.
Health line: health line loan is given for hospitalization and emergency medical needs or to buy body fitness equipment.
Education line: this loan is given to students for higher education purpose like tuition fees, other educational purposes etc.
Professionals’ line: provide this loan to purchase professional equipment or office renovation.
Marriage line: marriage line loan is provided to meet marriage expenses or to budget for marriage.
Travel line: travel line loan is given for family trip or honeymoon trip in abroad or in the country.
Festival line: festival line is designed for enjoying the festival period and holidays. Dreams comes true line: this credit line is provided to those people who want to purchase
TV, Fridge, Furniture, Home Theatre, Motor Cycle, AC etc or to decorate own Home/Car.
General line: any other legitimate purposes which do not fall under the above specific lines.
Secured credit lines:
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Auto line: auto loan is given to purchase new and reconditioned vehicles for personal use only.
Home line: this loan is given to those who want to buy a new flat, renovate house, refinance of an own availed flat.
Full secured line: loans for any valid purposes of individuals. DBBL foreign education line: this loan is given to help those students who want to study
abroad.
2.7.4 Activities of Foreign Exchange Department:
Foreign currency transaction. Foreign trade.
Foreign currency transaction:
Foreign currency means buying and selling foreign currency frequently and profit from the price.
Foreign trade:
Foreign trade can be easily defined as a business activity, which crosses national boundaries. This may be practice between parties or government ones. Trade among national is a common occurrence and normally benefits both the exporter and importer. In many countries, international trade accounts for more than 20% their national incomes.
Department of Foreign Exchange:
There are three departments Foreign Exchange Division.
a. Import:
Import of goods into Bangladesh is regulated by Ministry of commerce and industry interims of the Import and Export and (control) Act 1910, with import policy orders issued by annually and public notice issued from time to time by the office of the chief controller of import and export (CCI&E).
Through the process of import some vital but which are inadequate in our country products are importer. According to import and export control Act 1910, in the office of the chief controller of import and export provides the registration (IRC) to the importer.
i. Function of Import Section:
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The Function of this section is mainly to deal with various components such as:
Letter of Credit (L/C) Payment Against Document (PAD) Loan Against Trust Receipt (LTR) Loan against Imported Merchandise (LIM)
ii. Letter of Credit:
Letter of Credit is an instrument used by the bank on behalf of the importer at his request in favor of foreign supplier. LC application forms, bill of exchange are the deed for the exporter. It is the main payment method. Mainly there are 5 major components in LC. They are-
Issuing bank. Advising bank. Beneficiary / Exporter / Seller. Applicant / Importer / At the request. Negotiation bank.
The DBBL basically deals with the Irrevocable L/C, Which cannot be amended or cancelled by the issuing bank at any moment and without prior notice to the beneficiary. It also deals Back to Back L/C, which is the letter of credit provided by bank to bank exporter to importer the raw materials from abroad in order to produce the exportable commodity for the importer.
iii. Payment Against Document (PAD):
The issuing bank starts PAD procedure after getting all documents from the exporter as evidence of exporting goods. Documents required for PAD is mentioned below:
Original (Non-negotiable) bill of Lading. Commercial invoice. Certificate of Insurance. Certificate of Origin. Bill of Exchange. Pre-shipment Inspection Certificate Packing List. Clean Report of Findings (CRF).
iv. Loan against Trust Receipt (LTR):
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There may be situation where storage of collateral in an independently controlled field warehouse is impractical. An importer may require the goods for further processing or for displaying the merchandise in order to make the final sale. In such cases a financing institution that has a great degree of trust in importer may be willing to release the negotiable Bill of Lading and thereby also the goods to the importer against the signing of trust receipt. After the importer has made his final sale and received the proceeds, he can pay the financing institution that he received as advance.
v. Loan against Imported Merchandise (LIM):
If the importer does not come to negotiate the shipping documents from the issuing bank then it creates LIM through the bank clears the goods from the port and holds the goods in its go down. Beside the above as soon as the imported goods come to the port the party may fall into financial crisis and request the bank to clear the goods from the port making payment to the exporter. In this case the party later may take the goods partly or fully from the bank by making required payment (if he takes the goods time to time payment will be adjusted simultaneously).
It is the overall condition of DBBL in Import. Last Year they helped in import of taka around 53,089 million in our economy.
b. Export:
The goods and services sold by Bangladesh to foreign households, businessman and government are called export. The export trade of the country is regulated by the Import and Export Act 1950.
The goods and services sold by Bangladesh to foreign households, businessman and government are called export. The export trade of the country is regulated by the Import and Export (control) Act, 1950. There are a number of formalities, which an exporter has to fulfill before and after shipment of goods. The exports from Bangladesh are subject to export trade control exercised by the Ministry of Commerce through Chief Controller of Import and Export (CC & E). No exporter is allowed to export any commodity permissible for export from Bangladesh unless he is registered with CC & E and holds valid Export Registration Certificate (ERC). The ERC is required to be renewed every year. The ERC number is to be incorporated on EXP form and other documents concern with export.
i. Export Financing:
This section negotiates the export document and collects and purchases the export bill. The two types of credit facilities allowed by the bank to the exporter in relation to export credit.
Pre-Shipment Finance
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Post-Shipment Finance
Export finance arises from trade between two trades trading in two different countries. A brief idea of both categories is given below.
Pre-Shipment Finance:
When an exporter intends to ship the goods to an overseas buyer he needs fund for purchasing goods to be exported. He may also depend upon the bank for arranging credit for the supply of goods.
Post-Shipment Finance
Post-Shipment Finance is more concerned with banks than Pre-Shipment Finance. This type of finance starts after the goods has already been shipped.
ii. Function of Export Section:
Export section performs different types of tasks such as:
Back to Back L/C opens. Foreign Documentary Bill of Collection (FDBC). Foreign Documentary Bill of Purchase (FDBP). Local Documentary Bill of Purchase (LDBP) Packingredit (PC) Secured Overdraft (SOD) Export. Accepted Bill Payable.
Back to back L/C Open:
It is secondary letter of credit opened by the advising bank in favor of a domestic or foreign supplier on behalf of the beneficiary original foreign L/C. As the original letter of credit of bank by import letter, it is called Back to Back L/C. The second L/C is opened on the strength of the original L/C for a smaller amount i.e. maximum 75% is shipped under Lien and 10% under packing credit. There are three types of BTB L/C opened by DBBL.
Back to Back L/C (Foreign):
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When the BTB L/C is opened in a foreign country supplier it is called Foreign BTB L/C. It is generally payable with in 120 days at sight.
Back to Back L/C (EDF):
EDF stands for Export Development Fund that is provided by the ADB to Bangladesh Bank export promotion of Third-World-Country like Bangladesh. When the bank is not in a position to support the amount of Back to Back L/C then they apply for loans to the Bangladesh Bank for Back to Back (EDF).
Back to Back L/C (Local):
When the Back to Back L/C is opened for local purchase of materials it is called Back to Back L/C (Local). It is generally payable with in 90 days at sight.
Procedure for Back to Back L/C: Exporter should apply for Back to Back L/C. Export L/C or Master V under is lien. Opening of Back to Back L/C. Customer has credit line facility. On the Export L/C negotiating clause is present. There is no provision for blank endorsement of B/L. Payment clause is thereon the L/C issuing bank ensuring payment.
Foreign Documentary Bill of Collection (FDBC):
Exporter can collect the bill through negotiating bank on the basic collection, exporter in this case submit all the documents to the negotiating bank for collection of bill from inspector. The exporter will get money only when the issuing bank gives payment. In this connection bank will scrutinize all the documents as per terms and conditions mentioned in L/C.
Foreign Documentary Bill of Purchase (FDBP):
When the exporter sale all the export documents to the negotiating bank then it is known as FDBP. In this case exporter will submit all the documents to the bank. The bank gives 60%–80% amount to the exporter against total L/C value
Local Documentary Bill of Purchase (LDBP):
Incoming of L/C customer with L/C to negotiate. Documents given with L/C. Scrutinizing documents as per L/C term & condition.
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Forwarding the documents to L/C opening bank. L/C issuing bank give acceptance & forward acceptance letter. Payment gives to the party by collection basis or by purchasing.
Packing Credit (PC):
It is one kind of credit sanctioned by the department to meet the exported goods shipment timely. The bank will give the facility after deduction of Back to Back L/C value.
Secured Overdraft (SOD):
Secured Overdraft is one kind of credit facility enjoying by the exporter from export section. It is generally given to meet the back to back L/C claim. Sometime it is given to the exporter by force for meeting the back to back L/C claim due to delay of Master L/C payment.
As we can see here the total export of DBBL is at the year of 2009 Tk. 41,162.51 million. At the year of 2010 until May DBBL help in exportation of Tk. 1,098,206 million.
c. Foreign Remittance:
Remittance means sending of fund. The word remittance we understand sending/transferring of fund through a bank from one place to another place which may be within the country or between two countries, one in abroad is called Foreign Remittance.
“Foreign Remittance” means purchase and sale of freely convertible foreign currencies as admissible “Foreign Remittance Regulation Act, 1947” and “Guidelines for Foreign Exchange Transaction- VOL. 172 of the country” purchase of foreign currencies constitutes inward foreign remittance and sale of foreign currencies constitutes outward foreign remittance.
In broad sense, foreign remittance includes all sale and purchase of foreign currencies on account of import, export, travel and other purpose. However, specifically foreign remittance means sale and purchase of foreign currencies for the purpose other than export and import.
i. Types of Foreign Remittance:
Foreign Remittance takes place in two ways:
Inward remittanc Outward remittnce.
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Inward Remittance:
The remittances which are received from abroad are called inward remittance. When purchases of Foreign currencies constitute inward foreign remittance.
Mode of Inward Remittance:
Telegraphic Transfer (TT). Mail Transfer (MT). Foreign Demand Draft (FDD). Payment Order (PO). Travelers Chaque (TC). Foreign Currency Notes.
Outward Remittance:
Remittances which are made from our country to abroad are called outward remittance. Sale of foreign currencies constitutes outward foreign remittance.
Mode of Outward Remittance:
Foreign Telegraphic Transfer (FTT). Foreign Mail Transfer (FMT). Foreign Demand Draft (FDD). Travelers Cheque (TC). Foreign Currency Notes.
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ii. Performance of DBBL in handling foreign remittance:
Sl. No. Name of the Banks 2005-2006 2006-2007 2007-2008 2008-2009 Total
July-June
% share of total
Total July-June
% share of total
Total July-June
% share of total
Total July-June
% share of total
NCBs1 Sonali Bank 1220.44 25.42 1197.20 20.02 1317.82 16.67 320.08 13.702 Agrani Bank 535.66 11.16 595.87 9.96 726.11 9.18 194.60 8.333 Janata Bank 360.47 7.51 440.01 7.36 491.60 6.22 168.72 7.224 Rupali Bank 81.90 1.71 87.32 1.46 100.32 1.27 26.23 1.12
Subtotal 2198.47 45.78 2320.40 38.80 2635.85 33.34 709.63 30.37Specialized Banks
5 Bangladesh Krishi Bank 43.62 0.91 71.93 1.20 91.59 1.16 21.03 0.906 Basic Bank Ltd 0.40 0.01 0.56 0.01 0.27 0.00 0.06 0.00
Subtotal 44.02 0.92 72.49 1.21 91.86 1.16 21.09 0.90Private Commercial Banks
7 Al-Arafah Islami Bank 3.02 0.06 4.30 0.07 2.47 0.03 0.92 0.048 AB Bank Ltd. 56.94 1.19 79.17 1.32 118.77 1.50 50.83 2.189 Bangladesh Commerce
Bank0.04 0.00 0.10 0.00 0.09 0.00 0.07 0.00
10 Bank Asia Ltd. 85.24 1.78 85.87 1.44 119.89 1.52 36.30 1.5511 BRAC Bank Ltd. 70.09 1.46 207.49 3.47 400.36 5.06 132.74 5.6812 Dhaka Bank Ltd. 91.08 1.90 113.49 1.90 135.61 1.72 32.31 1.3813 Dutch-Bangla Bank
Ltd.14.57 0.30 17.84 0.30 50.03 0.63 17.68 0.76
14 Eastern Bank Ltd. 54.49 1.13 115.70 1.93 154.45 1.95 38.90 1.6615 EXIM Bank Ltd 1.67 0.03 5.58 0.09 9.84 0.12 5.05 0.2216 First Security Bank Ltd. 0.17 0.00 0.46 0.01 4.55 0.06 1.43 0.0617 IFIC Bank Ltd. 32.65 0.68 37.84 0.63 49.54 0.63 14.87 0.6418 Islami Bank Bangladesh 643.78 13.41 949.76 15.88 1636.14 20.69 542.17 23.20
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Ltd.19 Jamuna Bank Ltd. 7.12 0.15 39.06 0.65 39.86 0.50 11.36 0.4920 Mercantile Bank Ltd. 7.18 0.15 33.80 0.57 76.40 0.97 11.74 0.50
Table 7: Source: Foreign exchange policy Dept. (LDA sec-1), Bangladesh Bank
From this data it is clear that DBBL share is more or less consistent. But if we compare with other bank then it would be clear that many banks who engaged in this business capture more share than that of Dutch-Bangla Bank Ltd.
It is also mentionable that largest volume of remittance comes through the bank which have wide on network. Government commercial banks such as Sonali Bank Ltd. are doing well because they have wide network. In private banks, Islami bank is doing well due to its more branches as well as more customer base.
Another thing we have to consider that remittance comes for cash payment, account credit service. Those banks have wide network they can easily capture this business. Because beneficiary want to go that branch which is near to him.
If we compare with some 2nd generation bank, we found that the performance of DBBL is satisfactory. It is mentionable that some third generation banks recently engaged themselves in this business. The performance in terms of share of total remittance of DBBL does not improve through total volume of remittance handling increase which indicates that other bank are improving.
iii. Online Remittance System (ELDORADO):
ELDORADO is a secure web based and on-line Remittance Payment System. Presently ELDORADO has 8 (eight) member banks having 501 branches all over the country.
Facilities of ELDORADO system:
On-line transactions on real time basis
Fund transfer (inter bank and inter branch)
Direct electronic payment substitutes
Demand draft Telegraphic transfer
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Mail transfer Pay order
Fully compliant with all relevant Bangladesh Bank regulations.
Types of transactions:
Payment of foreign remittance in taka Transfer of inland remittance in taka
Mode of remittance in taka:
Payment of foreign remittance
Exchange house to bank A/C Pay Exchange houses to pay cash for non-account holders Exchange houses to “advice and pay”
Transfer of inland remittance:
Customer A/C to Customer A/C transfer Customer A/C to pay cash for non-account holders. Customer A/C to advice and pay Cash deposit by non-account holders to Customer A/C Cash deposit for cash payment ( both are non-account holder)
Process of Remit fund through ELDORADO:
Step 1: Client will deposits money to exchange housed or any of the 501 branches of member banks within Bangladesh.
Step 2: Beneficiaries get notification by sms/e-mail from ELDORADO system
Step 3: Beneficiary draws the money from his account or receive cash from the branches within Bangladesh
Member of banks of ELDORADO as on 31st December 2009:
BANK ASIA DUTCH BANGLA BANK LTD L.T.D.
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DHAKA BANK BRAC BANK MUTUAL TRUST BANK AL-ARAFAH ISLAMI BANK L.T.D. FIRST SECURITY ISLAMI BANK SOCIAL ISLAMI BANK L.T.D
iv. Problem associated with remittance handling:
Whenever remitter send the money, they want beneficiary immediately get the money. The gap between the expectation and reality creates problem. The reason for delay:
Procedural delay for sending TT/DD. Delay in cheque clearance. Sometimes exchnge house make promise which is not possible to fulfill. Some exchange house deliberately delays in sending invoice. Lack of full information. Some rural branch of different banks deliberately delays in collecting the payment.
Sometime banks simply don’t allow withdrawing cash just for pretending to maintain the minimum balance at the bank branch and so on.
In the no banking days it is not possible to withdraw the cash, which in turn causes delay in reaching money to the person concerned.
v. Impact of remittance in national economy:
Remittance plays a significant role for the economic development of Bangladesh and it is considered less volatile source of foreign currency compared with and foreign aid. Formal remittances stood at US$ 7.8 billion in 2007-08, which is equivalent to around 10% of GDP. It is extremely hard to measure the informal remittance flow, but these channels are considered to be almost as much as formal remittance. Formal remittances have been growing at over 10% annually since 2000, due to effective government policies encouraging greater efficiency and confidence in formal remittance payment channels. Formal remittances are equivalent to 56% of export values and play a critical role in providing foreign currency and financing the countries trade deficit. The foreign currency aspect of remittances especially important as Bangladesh runs a trade deficit and is currently suffering from a serious foreign exchange crisis. Growth in remittances is likely to be one of the key factors in the medium run in maintaining foreign exchange reserves and thereby maintaining economic stability. The following table shows the comparative position of Remittance, Import payment, Export receipt and Foreign Aid.
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vi. Impacts of Remittance at house hold levels:
Positive impact of remittance:
Allowing families to meet basic needs. Opportunities for investing in children’s education, health care etc. Loosening of constraints in family budget to invest in business or savings. Emergency resources. Social security for elderly. Boost of local economy.
Negative impact of remittance:
Dependency of remittance. Neglect of local productive activities by families. Inflation.
Worth mentioning here is the study of afar et al. (2002). They carried out a cost-benefit analysis among migrant workers in the UAE. On the basis of direct benefits or remittance and cost of migration the author concluded that migration had yielded a benefit- cost ratio 2.88.
Source: International Organization of Migration: Dynamics of Remittance utilization in Bangladesh.
2.8 CSR activities
Dutch Bangla Bank gives much focus on its CSR activities. This bank is the pioneer of doing CSR activities in banking sector and maintains the leading position for doing such novel works. DBBL providing support and resources for the following activities:
DBBL spend annually 102 crore taka for giving scholarship to those meritorious students who didn’t have the ability to continue their education because of poverty or suffer from any physical disability. The scholarships are available for the different level of education like: H.S.C, M.Phil, PhD, and post doctoral.
From 2003 to 2011 DBBL has spent 43.7 million taka for cleft-lip and cleft-palate operation under ‘smile brighter’ program.
DBBL also spend a huge amount of money for cataract operation of underprivileged blind people.
DBBL also donates money in different non-profitable health organizations. DBBL always stands beside those people who are affected by natural calamities like
flood, tornado, river erosion, land slide by provides money, foods, clothes, medicine etc.
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DBBL has donated Ganga-Jamuna Communication Limited 10, 50,000 taka which played an important role for constructive change of the people of our country.
In the year of 2011 DBBL donated 1, 30,000 pieces blankets for helping the distressed cold hit people.
DBBL also contribute in developing communication and road safety sectors. In the year of 2011 DBBL sponsored a Golf tournament named ‘1st DBBL-BAF Golf
Tournament-2011’. One of the most valuable CSR activities of DBBL is they contribute for creating
awareness on different social issues like: i. One good child is enough, son or daughter
ii. Acid violence iii. Drug addictioniv. Importance of tree plantation v. Stop demand for dowry
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