Internship Report on Foreign Exchange Operations at Janata Bank 2016 - Md Imran

8/18/2019 Internship Report on Foreign Exchange Operations at Janata Bank 2016 - Md Imran

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Internship Report

On

Overall Performance Evaluation of Foreign Exchange Operations : A Study On

Janata an! "td

Supervised by

#uhammad Shahidullah $asfi%

Assistant Professor& 'epartment of #anagement Studies

Jagannath (niversity& 'ha!a

Submitted By

#d) Imran

Roll : *++,-,-,./

Section : A& atch : 0th

Session : -,++*-,+-

'epartment of #anagement Studies


Date of Submission: February 22, 2016


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Letter of Transmittal

#uhammad Shahidullah $asfi%Assistant Professor



SUB!"T: Su1mission of Internship Report on Overall Performance

Evaluation of Foreign Exchange Operations

'ear Sir

2ith due respect that& I am delighted to su1mit my Internship report on Overall Performance Evaluation of

Foreign Exchange Operation of Janata an! "td) 3hich is prepared 1y me) $his report gives me a vast

experience and valua1le !no3ledge of ho3 to analy4e Foreign Exchange Operations) $his report has 1een

giving me the practical implement of a theoretical !no3ledge) I had tried my 1est to collect information on

this report)

Finally& I 3ould li!e to than! you for your valua1le guidance and supportive in preparing this report) I

3ould 1e grateful for any clarification 3hen re%uired) I 3ill 1e highly o1liged if you are !ind enough

to approve this report and provide your valua1le 5udgment on it)

Sincerely your

66666666666666

#') Imran

I': *++,-,-,./

Section : A

atch : 0th

'epartment Of #anagement Studies


Student#s De$laration


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I do hereby solemnly declare that the report entitled “Overall PerformanceEvaluation of Foreign Exchange Operations : A Study On anata !an" #td$

embodies the results of my o%n e&ort after completion of '( days %or" at anata !an" #td)* perused under the supervisor of +r) +uhammad Shahidullah ,as-.* Assistant professor* /epartment of +anagement Studies* agannath0niversity* /ha"a

I also con-rm that* this report is only prepared for my academic re.uirementnot for any other purpose) It has not been previously submitted to any otheruniversity1college1organi2ation for an academic.uali-cation1certi-cate1diploma or degree)

I further a3rm that the %or" reported in this internship is original and no parthas been previously submitted to any boo"s or in any other universities)

666666666666666666

#') Imran

I': *++,-,-,./

Section : A

atch : 0th

'epartment Of #anagement Studies


"!%T&F&"'T! (F SU)!%*&S(%


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$his is to certify that #d) Imran is student of A program& I' 7o: *++,-,-,./& has

successfully completed his 8Internship Program9 entitled 8Overall Performance Evaluation of

Foreign Exchange Operations : A Study On Janata an! "td9 under my supervision as a partial fulfillment of

the a3ard of A degree)

e has done his 5o1 according to my supervision and guidance) e has tried his 1est to do thi

s

successfully) I thin! this program 3ill help him in the future to 1uild up his finer career)

I 3ish his success and prosperity)

Signature

66666666666666666

#uhammad Shahidullah $asfi%

Internship Supervisor

Assistant Professor




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'$+noled-ement

At 1eginning I 3ill start my report 1y sho3ing respect and give praise to our almighty Allah 3ho

ta!es care a1out me to finished report successfully

I give than!s to our honora1le teacher #uhammad Shahidullah $asfi%& Assistant professor& 'epartment of

#anagement Studies of Jagannath (niversity 3ho gives me such a attractive prospect to ma!e a report on

8Foreign Exchange operations9 as 3ell as helped me in every step to accomplish my report and try to provide

me a faire practical !no3ledge as should as it possi1le)

I also 3ill not miser to respect J" that give me chance to o1tain practical !no3ledge through their

internship program) I than! the 1ranch manager #d) Anisur Rahman ;han 3ho helped me to do internship

in his

1ranch and provide me a fear idea a1out practical !no3ledge of 1an!ing activities) I 3ill sho3

appreciation to other an! employees 3hose taught me as 3ell as suggested me to do 3or!)

Finally& I 3ould li!e to than! authors of the 1oo!s that I have ta!en help from& 3hich had made my

understanding clear during the ma!ing of the report)

i


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!.e$utive Summary

#ain o15ective of this report is to analy4e the performance of foreign exchange operation of Jana

ta

an! "td) $his is descriptive in nature that has 1een administrated 1y collecting secondary

data)

Source of data 3ere collected from annual report of J" and reading material pu1lished 1y J" et

c)

for analy4ing data #)S Office and #)S Excel soft3are 3ere used)

$his report has 1een sho3n that trend of export import and remittance increases year 1y year 1ut

in

-,++ and -,+<

the gro3th rate of export and import got lo3est due to 3orld recession and inflationary

pressure respectively) Remittance flo3s

are greatly affected in -,+-) Operating profit has

str

ong

positive relation 3ith export and import 3ith significant level lo3er than ),.remittance also has stron

g

positive relation 1ut significant level higher than ),.) In total national mar!et share of export& impo

rt

and remittance& J"

contri1ute 3ith the proportion at += and 0= for export& impor

t

and

remittance respectively) uge amount of remittance come from (AE 3here most of anglad

eshi

expatriate lives and almost


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promote Remittance& In case of "B opening& an! should provide lo3 margin facility to cli

ents)

#ore Import and export item can 1e included J" can provide onsulting facility 1y an exp

ertgroup of officials for foreign exchange& In case of payment of remittance& they should introdu

ce

de1it card so that customer can 3ithdra3 money 3ithin a second at any3here

ii

Table

of

Contents

Part Particulars Page No

!.e$utive Summaryii

Part one Introduction 1/

10 &ntrodu$tion 2

11 (ri-in of te %eport 2

12 Si-nifi$an$e of te %eport 2

13 (b4e$tives of te report 3

131 Broad ob4e$tive 3

132 Spe$ifi$ (b4e$tives 3

1 5etodolo-y of Te report 3

11 %esear$ desi-n 3

12 Sour$es of Data "olle$tion 3

13 Data "olle$tion )ro$edure


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1 Data 'nalysis and %eportin-

1 Literature %evie

16 Limitations 6

Part Two (r-ani7ational )rofile 8/1020 'n (ver *ie of anata Ban+ LTD 9

21 "orporate &nformation 9

22*ission of anata Ban+ 9

23 5ission of anata Ban+ 9

2 "ore *alue of anata Ban+

2 Business )rospe$t of anata Ban+

26 Five ;ear Finan$ial )erforman$e 10

Part Three Forei-n !.$an-e (perations 11/32

31 &mport 13

32 !.port 21

33 %emittan$e 28

)art Four )erforman$e 'nalysis 33/0

0 Trend analysis 3

11 &mport Finan$e: 3

12 !.port Finan$in-: 3 13 Forei-n %emittan$e: 36

2 &n$ome From Forei-n Trade

38

21 &mport !arnin- 38

22 !.port !arnin- 39

23 %emittan$e !arnin-s 3

2 "omparison of &mport,!.port and %emittan$e !arnin-s

0

Part Five Findings,Conclusion & Recommendation

1/3

1 Findin-s 2

2 "on$losion 3

3 %e$ommendation


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List of 'bbreviation

BL anata Ban+ Limited

'D 'utori7ed DillerT&FT So$iety for orld/ide &ntra/Ban+ Finan$ial Tele$ommuni$ation!%" !.port %e-istration Form""&?! "ief "ontroller of &mport ? !.portU") Uniform "ustoms ? )ra$ti$e&%" &mport %e-istration "ertifi$ate


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10 &ntrodu$tion of Te %eport

+

10 &ntrodu$tion of Te %eport

For any 1usiness school student only curriculum activity is not enough for handling the real usiness

situation& there for it is an opportunity for the students to !no3 a1out the field of 1usiness through t

he

internship program) $his report is prepared on the purpose to 1etter understand a1out fo

reign

exchange operation in perspective of 5anata 1an!) 7o3 a day?s international 1usiness has 1ecome ver y


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5ustified as the crucial re%uirement of four years A graduation)

4

13 (b4e$tives of te %eport

O15ective is an important thing for different purpose) O15ective helps to go in a good 3ay that relat

es

3ith the Report) Primary o15ective is to learn the real 3orld experience 1ecause I have gat

hered

theoretical

!no3ledge of A program and try to match real 3orld experience 3ith the theoretic

al

!no3ledge

131 Broad (b4e$tive

$he 1road o15ective of

this report is to analy4e the Performance Foreign exchange operation

s of

Janata an! "td) CJ"D

132 Spe$ifi$ (b4e$tives

Furthermore& the specific o15ectives of this report are:*

$o !no3 the import& export financing procedure through J")

$o analy4e the trend of import and export financing through J")

$o examine the division 3ise import and export financing and remittance)

$o analy4e the earnings from foreign exchange division of J")

$o sho3 the relationship export& import and foreign remittance 3ith profita1ility of Ja

nata

an! "td)

Assessment of

the J"?s import& Export& foreign Remittance 3ith total

national Im

port&

Export& foreign Remittance


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1 5etodolo-y of te %eport

11 %esear$ desi-n:

$his report is descriptive

in nature 3hich 1riefly reveals analy4e the foreign exchange operation

of

Janata an! "imited) It has 1een administered 1y collecting secondary data)

12 Sour$es of Data "olle$tion:

#ainly this report 1ased on secondary sources of data) I also used some primary data to ma!e

the

report more rich and informative5

Primary Source:

$a!e expert opinion from higher officials of the 1an!)

O1servation 3ith during the internship program)

Secondary Sources:

$he secondary data sources are follo3ing*

Annual Report of J"C-,+,*-,+


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For analysis and interpretation of data some

statistical tools li!e #S*2ord and #S*Excel

soft3are 3ere used

<

16 Literature %evie

$rade& also called goods exchange economy& is to transfer the o3nership of goods from one

person or entity to another 1y getting something in exchange from the 1uyer) $rade issometimes loosely called commerce or financial transaction or 1arter) A net3or! that allo3s

trade is called a mar!et) $he original form of trade 3as 1arter& the direct exchange of goods

and services) "ater one side of the 1arter 3ere the metals& precious metals Cpoles coinsD& 1ill&

paper money) #odern traders instead generally negotiate through a medium of exchange&

such as money) As a result& 1uying can 1e separated from selling& or earning) $he invention

of money Cand later credit& paper money and non*physical moneyD greatly simplified and

promoted trade) $rade 1et3een t3o traders is called 1ilateral trade& 3hile trade 1et3een

more than t3o traders is called multilateral trade)

"iterature Revie3 has vital relevance 3ith any research 3or! due to literature revie3 the

possi1ility of repetition of study can 1e eliminated and another dimension can 1e selected for

the study) $he literature revie3 helps researcher have 1een conducted to analy4e the Foreign

Exchange operation of an!s in angladesh and a1road) ut there are very fe3 research and

literature availa1le on the su15ect related to Foreign Exchange operation an!s)

angladesh launched a deep and 3ide*ranging trade reform strategy in the early +,s) $his

included su1stantial reduction and rationali4ation of tariffs& removal of %uantitative

restrictions& move from multiple to a unified exchange rate system& converti1le current

account and an overall out3ard orientation of trade policy regime) As a result& the country?s

trade integration& measured 1y the trade*@'P ratio& rose from +>= in +, to )

$he ang!o! Agreement 3as esta1lished in +0.) #em1er countries are angladesh& India&Sri "an!a& hina& the Repu1lic of ;orea and "ao People?s 'emocratic Repu1lic) $he


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ang!o! Agreement has recently 1een revised and renamed as the Asia Pacific $rade

Agreement CAP$AD) $he AP$A has come into force from + July -,,/) $he AP$A contains

consolidated list of tariff concessions granted 1y mem1er countries to each other) (nder this

agreement& hina has provided +,,= tariff concessions to > items of angladesh at >*digit

level and Repu1lic of ;orea has provided +,,= tariff concessions to + items at +,*digitlevel)

$he I#S$E Frame3or! Agreement 3as signed in June +0 and Agreement on F$A

concluded in Fe1ruary -,,


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/

Part $3o

Organi4ational Profile


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0

20 'n overvie of anata Ban+ Limited ABL

Janata an! "imited is the leading sector 1an! in angladesh offering full range of Per

sonal&

orporate& International $rade& Foreign Exchange and "ease Finance) Janata an! "imited is

the

preferred choice in 1an!ing for friendly and personali4ed services& cutting edge technology& tailore

d

solutions for 1usiness needs& glo1al reach in trade and commerce and high yield on investm

ents&

assuring Excellence in an!ing Services)

-)+ orporate Information:

Came: Janata an! "imited

%e-istered 'ddress: Janata ha1an& ++,& #oti5hil commercial area'ha!a*+,,,& angladesh


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Le-al Status: Pu1lic "imited ompany

Date of &n$orporation as )L": #ay -+& -,,0

'utori7ed "apital: $!) ,&,,, million Cas on +)+-)+-)


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Of J"

'ignity Accounta1ility

Integrity

-). usiness Prospect of the an!

#aintaining re%uired capital ade%uacy

usiness expansion in capital mar!et

@radual expansion of 1ranch net3or!

Progressive automation of the 1ranches

Real online 1an!ing soft3are 3ill 1e in function soon

Expansion of A$# and credit card

4)6 Five 7ear 8omparative Financial and Operational Performance:

9, in +illions;

Particular 4


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Deposits 286567 361677 409464 478535

516010

Loans and

Advanes 44(>54 4(>?

5=@>>5

!nvest"ent (>(=' @


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+,

Part $hree

Foreign Exchange

Operations


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h

e

!

a

n

"

,

h

e

Im

p

o

r

t

e

,

h

e

E

x

p

o

r

t

e

r


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In J" A' ranch CsD there are a lot of talented officials are 3or!ing continuously 3ith great effo

rt&

s!ill and team3or! are performed in this department) $he angladesh an! and the respecte

d in

charge CsD of this section control them)

In

exercise

of

the po3er

conferred 1y

section

of

the Foreign

Exchange Regulation

Act&

++& no person can impo

rt


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goods into angladesh unless he is registered 3ith the hief ontroller of Import and Expo

rt or

exempted from the provisions of the said order) So the follo3ing documents are re%uired t

o 1e

su1mitted to the licensing authority for registration as importers:

uestionnaire form duly filled in and signed

Income tax registration certificate

$rade "icense from the #unicipal or "ocal Authority

an! certificate

7ationality certificate

Partnership 'eed 3here applica1le

ertificate of Registration 3ith the Registrar of Joint Stoc! ompanies&

ertificate from the ham1er of ommerceBRegistered $rade Association

O3nership documents or rent receipts of the place of 1usiness

Any other documents re%uired under the relevant import policy)

+

312 &mport pro$edure:

$o import through Janata an! "td a customer re%uires:

)erforma &nvoi$e is re$eived by te L=" appli$ant

L=" appli$ant submit it to te Ban+

Ban+ &ssue L=" to te appli$ant favorin benefi$iary

L=" advised by advisin- Ban+


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oods sipped by Benefi$iary ? submit te do$uments to

ne-otiate ban+

Ce-otiate ban+ forard te do$uments to te

L=" issuin- ban+

Do$uments $e$+ed by L=" issuin- ban+ ? inform it to L="

appli$ant

&f do$uments are o+, ten L=" value is paid by L="

issuin- ban+ to ne-otiate ban+

oods release from te $ustoms

Submission of Bill of !ntry to L=" issuin- Ban+ by te

appliant

%eport to Ban-lades Ban+

='

313 &mport )oli$y (rder:

(nder the import policy and export control act& +.,& the government of angladesh formulate

s the import policy through #inistry of ommerce) As pe the import policy goods and

commodities are divided into four groups

"ist of items 1anned for import

"ist of items import of 3hich is su15ect to certain condition

Foot 7ote: $his list contains further conditions 3ith regard to import of items on

1anned list

and conditional list

Freely importa1le item: All items excepting those mentioned in the 1anned

list

and conditional list are freely importa1le)


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31 Steps in an &mport Letter of "redit Transa$tion

ST!) 1: Te Sales "ontra$t

$he sales contract is the formal agreement 1et3een the 1uyer and seller specifying the terms o

f sale that 1oth parties have agreed upon) $he contract should include: a

description of the goodsH the

amountH

the unit

priceH the terms

of

deliveryH

the time allo3ed for

shipment and present

ation of documentsH the currencyH and the method of payment

2 'ppli$ation ? '-reement:

1 &mport L=" ALetter of "redit:

A letter of credit is a conditional an! underta!ing of payment) In other 3ords letters of credit is a

letter from the importer an!ers to the exporter that the 1ills if dra3n as per terms cond

itions

complied 3ith 3ill 1e honored on presentation) As per (P' .,, a credit may 1e either:

iD Revoca1le)

iiD Irrevoca1le)

$he redit& therefore& should clearly indicate 3hether it is revoca1le or irrevoca1le) In the a1sence or

such indication the credit shall 1e deemed to 1e irrevoca1le)

+.

2 )arties of Do$umentary "redit AL":

+) ApplicantB uyerBImporter

-)

IssuingBOpening an!

) Advising an!


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Figure: Parties of 'ocumentary redit

3 Types of L=":

"ommer$ial Letters of "redit

ommercial letters of credit are mainly used as a primary payment tool in international trade such as

exporting and importing transactions) #a5ority of commercial letters of credit are issued su15ect to th

e

latest version of (P C(niform ustoms and Practice for 'ocumentary reditsD) $he I pu1lishe

s

(P& 3hich are the set of rules that governs the commercial letters of credit procedures)

Standby Letters of "redit

ommercial letters of credit are a means of payment to 1e utili4ed 3hen the principal perfor

m its

duties) As an example& let us consider an exporter 3ho ships the goods according to the sales contr

act

and apply to the nominated 1an! for the payment) If the nominated 1an! decides that the presentati

on

is conforming to the terms and conditions of the credit and the (P rules then exporter 3ill 1e pa

id)$his situation is 5ust contrary in stand1y letters of credit) A payment is made to the 1eneficiary of

a

stand1y letter of credit 3hen there is a 1reach of the principalKs o1ligation)

%evo$able Letters of "redit

Revoca1le letters of credit give issuer the amendment or cancellation right of the credit any

time

3ithout prior notice to the 1eneficiary) Since revoca1le letters of credit do not provide any protectio

nto the 1eneficiary& they are not used fre%uently) In addition& (P /,, has no reference to revoca1

le

letters of credit)

All

credits issued su15ect to

(P

/,,

are irrevoca1le

unless

other3ise

a

greed

1et3een the parties)

&rrevo$able Letters of "redit

Irrevoca1le "etters of redit cannot 1e amended or cancelled 3ithout the agreement of the c

redit


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parties) (nconfirmed irrevoca1le letters of credit cannot 1e modified 3ithout the 3ritten consent

of

+/

1oth the issuing 1an! and the 1eneficiary) onfirmed irrevoca1le letters of credit need also confirmin

g

1an!Ks 3ritten consent in order any modification or cancellation to 1e effective)

Lo$al or Ba$+ to Ba$+ L=":

ac! *to *1ac! "B means one credit 1ac!s another) It is ne3 credit in favor of another 1eneficiary)

Sometimes 1eneficiary seller of a credit himself is una1le to supply goods specified in the "B a

nd

re%uired to purchase from another supplier 1y opening second credit) esides& the formalities

and

re%uirements for C"B openingD the follo3ing formalities and documents are also re%uired for openin

g

1ac!*to*1ac! "B)

For opening "B the client is

to su1mit to the 1an! an application in the printed format

of

thedesignated 1an!) $his is called "B application form 3hich is also an agreement 1et3een the import

er

and the 1an!) $he form is to 1e stamped under stamp Act) in force in angladesh) $he importer m

ust

su1mit the "A I#P and indent or contract) Purchase orderBpro*forma invoice Cduly accepted

1y

the importerD along 3ith "B application)

Application for opening of "B duly signed 1y the importer& #em1ership certificate from ham1er

of

commerce or any other recogni4ed 1usiness association& Galid IR&$I7 certificate& $hree copies o

f

declaration stating that that income tax for previous year has 1een paid or income tax return has 1e

en

su1mitted& $rade license &Gat registration certificate& Galid indentBpro forma invoice& Insurance cover

note 3ith money receipt& Any other permit if re%uired as per instruction issued 1y I E time

to


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time under present IPO)

Te L=" appli$ation must be $ompleted= filled in and si-ned by te autori7e person of te

importer -ivin- te folloin- parti$ulars:

Full name and address of the supplier of 1eneficiary and importer& 1rief description of the goods& "B

value for (SL& etc) CFR valueD 3hich must not exceed the "A value& the unit price& %uantity %ual

ity

of the goods& Origin of the goods& port of loading and port of destination must 1e mentioned& #odel

of

shipment

CSea& Air& $ruc!

or

Rail

etc)D&"ist

date of

shipment

and negotiation time Cmust

no

t

1e

1eyond , days from the shipment dateD&Insurance cover note num1er and name or the comp

any&

$enor of draft C+)e& sightB issuanceB deferred etc& #ode of advising "B Ci)e) airmailB full telex sho

rt

ca1le etc)D&Opening of "B under (P' pu1lication 7o) .,,B* I revision +& 2h

ether

shipmentB transshipment is allo3ed& Instruction to add confirmation if re%uired& "A 7um1er& An

y

other relevant information and instruction if any must 1e mentioned in the "B application form)

A

3ritten application from opener is verified a relevant licenseB "AB permit of the loanB arter mu

st

+0

remain valid up to that period the extension is sought) Increase of "B amount may 1e done provid

ed

the "A covers the increase in amount) "B amount can 1e decreased provided the relevant Indent

is

amending accordingly and 3ith the consent of 1eneficiary) Each of clauses of the "B can 1e amend

ed

provided the parties involve the "B consent to it procedure or preparation and dispatch) Amendme

nt

is to 1e typed in the an!s printed format) $he copies of the amendment

must

1e dispatched to

all


31/64


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Benefi$iary

Fi-ure: $ypes of "B form

+>

Step6: 'dvisin-:

$he advising 1an! for3ards the letter of redit to the 1eneficiary CsellerD stating that no commitme

nt

is conveyed on its part) o3ever& if the advising 1an! has 1een as!ed to confirm the letter of re

dit

and agrees to do so& it 3ill incorporate a clause underta!ing to honor the 1eneficiary?s drafts& provid

ed

the documents evidence that all terms and conditions of the letter of redit have 1een complied 3ith

)

Step 8: 'ddin- "onfirmation

$he confirming 1an! does the confirmation) onfirming 1an! is a 1an!& 3hich adds its confirmatio

n

to the credit and it is done at the re%uest of the issuing 1an!) $he confirming 1an!& #ay or #ay

not

advising usually& does not do it if there is not a prior arrangement

3ith the issuing 1an!) y 1ei

ng

involved as a confirming agent& the advising 1an! underta!es to negotiate 1eneficiary?s 1ill 3itho

ut

recourse to him)

Before $onfirmin-, it as to observe folloin-s/

"B is issued and there is a re%uest to add confirmation

Revie3 the "B terms

Provide reim1ursement

'rafts to 1e dra3n on "B opening 1an!

Availa1ility of credit facilities

"ine allocation from the 1usiness and o3nership units in the importer?s country

onfirm and advise "B

Step9: 'mendments of letter of $redit


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After issuance and advising of a "B& it may 1e felt necessary to delete& add or alter some o

f the

clauses of the clauses of

the credit) All these modification are communicated to the 1enefi

ciary

through

the

same

advising

1an!

of

the

credit)

All

these

modifications

are

communicated

t

o

the

1eneficiary through the same advising 1an! of the credit) Such modifications to a credit are termed

as

amendment to a letter of credit) $here may 1e some of the conditions in a credit are not accepta1le

1y

the 1eneficiary) In that case& 1eneficiary contact applicant and re%uest for amendment of the clauses)

Te issuin- ban+ as to be done te folloin-s E

O1tain 3ritten application from the applicant of the credit duly singed

and

verified 1y 1an!)

onfirm that& in case of increase of value& application for amendment is to

1e

supported 1y revised indentBpro*forma invoice

evidencing consent

of

the

+

1eneficiaryH

Ensure& in case of extension of shipment period& that relative "A is

validB

revalidatedB increased up to the period of proposed extension)

onfirm that amendment of insurance cover note also 1e su1mitted in case

of

1oth credit amount and shipment period extension amendment)

#aintain proper recoding and filing of amendmentsH

Recover charges for amendment Cif on account of applicantD and pass necessar

y

voucher)

Te folloin- $lause of L=" and in$rease=de$rease of uality of -oods/

IncreaseB decrease value of "B and IncreaseBdecrease of %uality of goods)

Extension of shipmentBnegotiated period)

$erms of delivery& i)e) FO& FR& IF etc)

#ode of shipment


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Inspection clause

7ame and address of the supplier

7ame of the reim1ursing

7ame of shipping etc

Step: )resentation of Do$ument

$he seller is 1eing satisfied 3ith the term and condition of the credit ma!e shipment of the goods

as

per "B) After ma!ing the shipment of the goods in favor of the importer to exporter su1mit

s the

documents to the negotiating 1an!

After receiving all document& the negotiating 1an! then chec! the documents against the credit) If th

e

documents are found in order& the 1an! 3ill pay& accept& or negotiate to J") ranch and 1an! recei

ve

seal to 1e affixed on the for3arding schedule) $he 1ill

of

exchange and transport

documents

must

immediately 1e crossed to protect loss or fraudulent J" chec!s the document the usual document ar

e

Invoice

ill of lading

7on*negotia1le copy of 1ill of lading

ertificate of origin

Pac!ing list

Shipping Advice

eneficiary certificate

ill of Exchange

Pre*shipment inspection report 4<

Shipment certificate)

Step 10: Settlement of letter of $redit

Settlement means fulfillment of issuing 1an! in regard to affecting payment su15ect to satisfying th

e

credit terms) Settlement may 1e done under three separate arrangements as stipulated I the credit)

Step 11:

Settlement by payment:


35/64

ere the seller presents the documents to the nominated 1an! and the 1an! scrutini4es the documents)

If satisfied& the nominated 1an! ma!es payment to the 1eneficiary and in case& this 1an! is other th

an

the

issuing

1an!&

it

sends

the

documents

to

the

issuing

1an!

and

claim

reim1ursement

a

s par

arrangement)

Step12: Settlement by '$$eptan$e:

Settlement

in this

arrangement& the seller

su1mits

the documents

evidencing the shipment

to

the

accepting 1an! Cnominated 1y the issuing 1an! for acceptanceD accompanied 1y draft do3n on t

he

1an! at the specified tenor)

Step 13: Settlement by ne-otiation:

$his settlement procedure stars 3ith the su1mission of documents 1y the seller to the negotia

tion

restricted 1y the issuing 1an!& only nominated 1an! can negotiate the documents) A

factor

scrutini4ing that the documents meet the credit re%uirement& the 1an! may negotiate the document

s

and give value to the 1eneficiary) $he negotiating 1an! then sends the documents to the issuing 1an

!)

As usual& reim1ursement 3ill 1e o1tained in the pre agreed manner)

3,2 #$port

#ainly Export "B is the confirming from the an! that& if the importer fails to ma!e payment to t

he

exporter& then the 1an! 3ill pay the exporter on 1ehalf of the importer) $he exporter can lien the "

B

to 1an! and can get the payment 1efore the "B expire date)

321 !.port L=":

"B 3hich is received to exportBsale of goods from one country to another country or one place

to

another place 3ithin a countryD is !no3n as export "B) it may 1e received from any 1an! of foreign


36/64

country& local 1an!& another 1ranch of the same local 1an! or received 1y the export des! from t

he

import des! of the same 1an!) Exporters are allo3ed to export the commodity under irrevoca1le lett

er

of credit) (nder this type of export& exporter 3ill ship the goods as pr terms of the credit and 3ill

get

payment as per arrangement of the credit

-+

Fi-ure: < Export "B process

322 (btainin- !.port %e-istration "ertifi$ate C!%"D:

7o exporter is allo3ed to export any commodity for export from angladesh unless he is registere

d3ith hief

ontroller of Imports and Exports CI

ED

and holds valid Export Regist

ration

ertificate CERD) After applying to the IE in the prescri1ed from along 3ith the neces

sary

papers& concerned offices of the hief ontroller of Imports and Exports issues ER) Once registere

d&

exporters are to ma!e rene3al of ER every year)

323 Se$urin- !.port (rder


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After getting the ER the exporter may proceed to secure the export

order) e can do t

his 1y

contacting the 1uyers directly or through agent) In this purpose exporter

can get

help from "iai

son

office& uyer?s local agent& Export promotion& Organi4ation& angladesh mission a1road& ham1er o

f

commerce Clocal and foreignD, $rade fair etc)

32 (btainin- !@) Form:

After having the registration& the exporter applies to Janata an! "imited 3ith the trade license& ER

and the ertificate from the concerned @overnment Organi4ation to get EMP) If the 1an! is satisfie

d&

an EMP is issued to the exporter)

32 Si-nin- of te $ontra$t:After

communicating 3ith 1uyer the

exporter

has

to get contracted

for

exporting exporta1le

ite

ms

--

from angladesh detailing commodity& %uantity& price& shipment& insurance and mar!& inspecti

on&

ar1itration etc)

326 %e$eivin- Letter of "redit

After ma!ing contact 3ith foreign 1uyers and reaching on agreed price and terms& conditions

the

exporters receive "etter of redit)

328 )ro$urin- te materials:

After ma!ing the deal and on having the "B opened in his favor& the next step for the exporter is

to

set a1out the tas! of procuring or manufacturing the contracted merchandise)

329 !ndorsement on !@):

efore the exporter 3ith the customs or postal authorities lodges the export forms& they should get

all

the copies endorsed 1y Janata an! "imited) efore shipment& exporter su1mits EMP) form

3ith


38/64

commercial invoice) $hen Janata an!?s respective officers chec! it properly& if satisfied& certifie th

e

EMP) 2ithout EMP exporter cannot ma!e shipment) $he customer must declare all export goods o

n

the EMP issued 1y the authori4ed dealers

32 Disposal of !.port pro$edure

Original:

ustoms authority

reports first copy

of EMP to angladesh an! after shipme

nt of

the goods)

Duplicate: 7egotiating 1an! reports the 'uplicate to angladesh an! in or after negotiation date 1u

tnot later than +


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Shipping instructions

Insurance policy)

3211 )resentation of e.port do$uments for ne-otiation:

After shipment& exporter su1mits the follo3ing documents to Janata 1an! "imited for negotiation)

ill of Exchange or 'raft

ill of "ading

Invoice

Insurance PolicyBertificate

ertificate of origin

Inspection ertificate

onsular Invoice

Pac!ing "ist

uality ontrol ertificate

@)S)P) certificate

Photo

3212 !.amination

of Do$ument:

an!s

deal

3ith documents

only& not

3ith commodity) As the negotiating 1an! is givin

g the

value 1efore repatriation of the export proceeds

it is

advisa1le to scrutini4e and examine

each

and every document 3ith great care 3hether any discrepancyCsD is o1served in the docum

ents)

$he 1an!ers are to ascertain that the documents are strictly as per the terms of "B efore negotiati

on

of the export 1ill) an! officers assigned for examining the export documents may use a chec!list f

or

their convenience)

3213 Ce-otiation of e.port do$uments: 7egotiation stands for payment of value to the exporter against the documents stipulated in the "N

)

If

documents

are in order& Janata an!

"imited

purchases

CnegotiatesD the same on the 1as

is

of

-<

-1an!er* customer relationship) $his is !no3n as Foreign 'ocumentary ill Purchase CF'PD)If t

he


40/64

1an! is not satisfied 3ith the documents su1mitted to Janata an! "imited and gives the exp

orter

reasona1le time to remove the discrepancies or sends the documents to "B opening 1an

! for

collection) $his is !no3n as Foreign 'ocumentary ill for ollection CF'D)

321 Settlement of Lo$al Bills:

$he settlement of local 1ills is done in the follo3ing 3ays& *

• $he customer su1mits the "B to Janata an! "imited along 3ith the documents to negotiate

• Janata an! "imited officials scrutini4e the documents to ensure the conformity 3ith

the

terms and conditions)

• $he documents are then for3arded to the "B opening 1an!)

• $he "B issuing 1an!s gives the acceptance and for3ards an acceptance letter)

• Payment is given to the customer on either 1y collection 1asis or 1y purchasing the

document)

321 5odes of )ayment

$he most common methods of payment under a "B are as follo3s:

Pa/"ent "ethods

under LC

*i&ht or Pa/"ent redit De-erred Pa/"ent Credit

Aeptane Credit +e&otiation Credit


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Fi-ure: 5odes of )ayment

4(

Si-t or )ayment $redit

2hen

the

credit

stipulates that

drafts

C1ill

of

exchangeD

should

1e

dra3n

under

it

on

'P

terms

involving

payment

to

the 1eneficiary

on

presentation

of documents& it

is !no3n

as a 8Sig

ht or

Payment redit9) In this credit the issuing 1an! nominates a 1an! in the exporter?s country as

the

paying 1an!) If the paying 1an! accepts its nomination& its position is that of an agent of the issui

ng 1an!) 2hen the documents under the credit are presenter to it& it pays the 1eneficiary provided all t

he

terms and conditions of credit have 1een complied 3ith) It gets reim1ursement from the issuing 1a

n!

for the amount paid)

Deferred )ayment "redit

$he term 8'eferred9 means postponed to a future period or date) 2hen a credit does not re%uire the

payment to the 1eneficiary immediately on presentation of the documents 1ut after a specified perio

d

has elapsed& it is !no3n as 8'eferred Payment redit9) According to this type of credit& the payme

nt

is hot made in full on the tender of documents 1ut 1y installments at pre*determined future d

ates)

'eferred payment credit may 1e used 3here the 1eneficiary 3ishes to allo3 the importer time to pay

for the document)

'$$eptan$e "redit

2hen under the terms of a letter of credit drafts are dra3n on 'A terms involving payment to

the

1eneficiary on the

maturity of

the

accepted ill of

Exchange dra3n

under it& the

letter

or

cre

dit

is


42/64

referred to as an 8Acceptance redit9 or a 8$erm redit9) In this form of credit the 1eneficiary dra

3s

a draft for particular usance Ce)g) ,& /,& , days sight or even longerD& paya1le upon eith

er the

correspondent 1an! or the issuing 1an!)

Ce-otiation "redit

In a negotiation credit the documents are accompanied 1y a sight draft C1ill of exchangeD) $he 1ill

of

exchange may 1e dra3n on the issuing 1an! or the importer or any other 1an! stipulated in the cre

dit)

$he 1an!& 3hich negotiates documents under the credit& purchases the 1ill of exchange and pays t

he

amount to the 1eneficiary 3ho tenders the documents) $he issuing 1an! reim1urses the negotiatin

g

1an!

46

33 %emittan$e

Remittance means sending or transfer money or money*3orth from one place to another $he 3ord

Remittance originates from the 3ord remit 3hich means to transmit moneyB fund) In 1a

n!ing

terminology& the 3or! remittance means transfer

of fund one place to another) 2hen

money

transferred from one country to another is called Foreign Remittance)

Forei-n remittan$e of BL may be $lassified into:

In3ard Foreign Remittance

Out3ard Foreign Remittance

%emittan$e


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In3ard Out3ard

Remittance Remittance

Fi-ure: Types of %emittan$e of BL

331 &nstruments of Forei-n %emittan$e

ash: 'ollar& Pound& France Fr) Riyal or any other currency)

$)): $ravelers he%ue)

F)')': Foreign 'emand 'raft)

F)$)$: Foreign telephonic $ransfer

$)$: $elegraphic $ransfer& a1le transfer or s3ift transfer)

#)$: #ail $ransfer)

I)#)O: International #oney Order)

he%ue: y any person institution)

P)O: Payment Order

')': 'emand 'raft

O)): Out3ard ill ollectionI)): In3ard ill ollection

4>

332 &nard %emittan$e:

In3ard Foreign Remittance #eans Remittance received from foreign countries from a1road) In othe

r

3ords remittance coming into our country from other countries 1y the remitter 1y 3ay of permissi1

le

1an!ing channel through freely converti1le Foreign urrencies is called In3ard Foreign Remittanc

e

i)e) payless point of vie3 it is in3ard foreign remittance) On the other hand remitter?s point of vie3

it

is called out3ard Foreign Remittance)

$3o forms as prescri1ed 1y angladesh an! are used for purchase of Foreign urrencies such as*


44/64


45/64

included as out3ard remittance)->

336 %emittan$e "ain:

3361 Step/1 A%emittan$e Sendin- )ro$ess:

Remittance rush to the 1an!Bexchange house nearest to their residence B3or! place)Fill in the application form Cin the case first time remittanceDBsu1mit mem1ership card)

@o to tellers& deposit form and currency)

FDD:

$eller ma!e F''

and over to the remittance for sending the same to the 1eneficiary

Send to 1eneficiary?s 1an! 1ranch through courier)

FTT:

$eller prepare F$$ massages

Send soft copy to their processing unit at head office)

'eliver one copy of the massage to the remitter for remittance)

)ro$essin- and Sendin-:

Processing unit at head office compiles messages

Sends to the dra3ee 1an!s)

3362 Step/2 A%emittan$e %e$eivin- )ro$ess:

FDDs:

'ra3ee 1ranch receive F''s from 1eneficiary or through courier)

#a!e payment of F''s dra3n on the 1ranch

Send F''S for collection that are dra3n on their 1an!sB1ranches)

redit proceeds of F''s upon collection)

Send I'As to head office)

FTTS:

Processing unit at head office processes F$$ massages

Sends $)$s to the 1ranches)

ranches ma!e payment of o3n remittances)

Issue and send payment order to the 1ranches of other 1an!s 1eneficiaries)

Spot "as payment:

ranches receive secret num1er from the 1eneficiary

'o3nload remittance masseges from 3e1 application of concerned institution)

@et an application form filled in 1y the 1eneficiary)

Ensure identity of the 1eneficiary)#a!e cash payment to the 1eneficiary)


46/64

Send I'As to head office) -

338 %emittan$e )rodu$t=Servi$e of BL:

Forei-n %emittan$e

Foreign remittance section of Janata an! "td) is an integral part of Foreign Exchange 'epartmen

t)

And this section of Foreign Exchange 'epartment deals 3ith

In3ard foreign remittance

Out3ard foreign remittance

Opening Foreign urrency Accounts)

@overning 2age Earner?s ond)

Opening Student File etc)

#edical Purpose

Ravels Purpose

&nard Forei-n %emittan$e:

7ormally& In3ard Foreign Remittance comprises all incoming foreign currencies) Remittances issued

1y the correspondent 1an!s situated in the foreign countries and there1y dra3n on Janata an!& a

re

considered to 1e its In3ard Foreign Remittances) Follo3ings are the In3ard Foreign Remittances&

F'' Paya1le

F$$ Paya1le

$ Paya1le

Purchase of foreign currencies)

(utard forei-n %emittan$es:

Remittances issued 1y Janata an! to their foreign correspondents to fulfill their customers? needs ar

e

considered to 1e the Out3ard Foreign Remittances) It comprises the follo3ings:

F'' Issued

F$$ Issued

$ Issued

Endorsement of foreign currencies in the passport)

Sale of foreign currencies)


47/64

Forei-n Demand Draft AFDD &ssued:

People used to send money a1road for various purposes) J" issues most of the F'' for the purpo

se

of payment of the application fees to the foreign universities) For the issuance of F''H $B# Fo

rm

has to 1e filled up duly) $his form is filled up under the Foreign Exchange Regulation Act& +


48/64

3 $hen the customer pays cash or 1y de1iting his account the $raveler?s he%ue is issued)

Endorsement is given on the passport and on the tic!et) ustomer fills up the $B# Form)

Purchased application form has to 1e filled up 1y the purchaser)

6 Entry has to 1e given in the Foreign urrency Register and in the $raveler?s he%ue Regist

er)

Folloin- Do$uments must be retained form te $lients:

Photocopy of passport

$B# form C$ravel #iscellaneousD

Others opy of government order Cin case of government employeeD

opy of invitation letter if issuance is against conferenceBtraining %uota

5=!ndorsement of "as:

ash foreign currency can also 1e remitted through the cash endorsement in the passport) In case

of

endorsing

cash

in

the passport&

the re%uirements are similar to

those of $raveler?s

he%ue)

ut

according

to

the foreign

exchange Regulation

Act&

+


49/64

+) ustomer has to fill up a 8 Form9 if the amount exceeds L-,,,),,) 8 Form9 descri1es

the

purpose of sending the $$)

-) $he dollar amount comes to the ead office of J" through American Express& 7e3 or!)

)

J"& 1ranch sells the dollar to ead Office and collects the money in local currency)

Student File (penin-:

Student can endorse L-,,),, at a time in his o3n name) ut if the amount exceeds L-,,),,& then t

he

student has to open a student file) For opening a student file& the follo3ing documents are re%uired:

Preliminary application and information for admission)

"etter of approval 1y the university of the student)

A filled*in application form for foreign currency in a1road)

$ranscript of Records9 given for the last degree 1y the university)

ertificate given 1y the oard for S)S)) B )S)) or e%uivalent examination)

A photocopy of I*-, form

-

Part Four


50/64

Performance

Analysis of Foreign

Exchange Operations

0 Trend analysis

11 &mport Finan$e:;ear 2010 2011 2012 2013 201

&mport

Finan$eAin

5illion

+-.-. +>0. +>>-><

rot .= ..= 0= *.=


51/64

Sour$e: Annual Report of J" C-,+,*-,+


52/64

rot +=


53/64

7ear -,+, -,++ -,+- -,+ -,+<

emittanc

e 9in

+illion t";

45924 56190 52640 72285 100089

Dro%th 25 22 6 37 38

Sour$e: Annual Report of J" C-,+,*-,+


54/64

21

&mport !arnin-

and

)ortion

of

&mport earnin-s

on

Total

Forei-n

T

rade

!arnin-s:

;ear -,+, -,++ -,+- -,+ -,+<

Total !arnin-

from Forei-n

Trade

->.-)


55/64

22 !.port !arnin- ? )ortion of !.port &n$ome on Total Forei-n Trade !arnin-s:

;ear 2010 2011 2012 26013 201

Total

!arnin-s

from Forei-nTrade

->.-)


56/64

>

23 %emittan$e !arnin-s and )ortion of %emittan$e on Total ain of Forei-nTrade in$ome :/ ear 2010 2011 2012 2013 2014

:otal

#arnin&

-ro"

%orei&n

:rade

4?(4)@ 5'=>)6@ '


57/64

E

2 "omparison of &mport, !.port and %emittan$e !arnin-s:

Proportion o- #$port

!no"e

Proportion o- !no"e Proportion o-

'e"ittane !no"e

39 '4 4 4=

38 '@ =4

39 '' =>

37 '5 4


58/64

Fi-ure: +


59/64


60/64

$he earning from import& export financing and foreign remittance has gradually increased)

As

import volume is higher than export and remittance so proportion of import earning

also

larger than export and remittance

Relationship of export and import has a strong positive relation 3ith operating profit and

has

a significant level lo3er then ),.) Remittance has also strong positive relation 3ith operatin

g

profit 1ut significant level larger than ),. 1ecause of lo3er remittance volume)

#ar!et

share of

export& Import& and Remittance

are gradually increasing year 1y ye

ar

in

compare 3ith the total national

export& import& and remittance) It

has

seen that hi

ghest

percentage of mar!et share is captured 1y export is +


61/64

I

hope Janata an! "td 3ill do more 3or! for socio*economic development 1esides their 1an!ing

1usiness) $o !eep pace 3ith ever*changing uncertain domestic 1usiness environment and face

the

challenges of revised glo1al economic scenario& the 1an! should 1e more

pro*active and responsive

to introduce ne3 mar!eting strategy to hold the strong position in home and a1road)

For the future planning and the successful operation in its prime goal in this current competitive

environment I hope this report can provide a good guideline) I 3ish continuous success and healt

hy

1usiness portfolio of Janata an! "imited)


62/64

$he export and import financing of J" has increased over the years) J" can develop

attractive

financing

pac!ages

such

as

Pre*Shipment

and Post*Shipment Finance&

Ex port

@uarantee facility etc at a la3 rate for exporters and importers to maintain and increase the

trend of its import and export 1usiness)

J" should increase strong net3or! 3ith the Overseas Exchange ompanies and an!s

in

different parts of the 3orld to ensure 1etter remittance services for its customers and online

an!ing in every 1ranch to promote Remittance

ighest portion of

export& import executed 1y client through J" is in 'ha!a division and

remittance in hittagong division) an! should concentrate more on other division also

to

increase its export& import and remittance client in this case they can increase num1e

r of

corporate 1ranches in other division)

In case of "B opening& an! should provide lo3 margin facility to clients)

#ore Import and export item can 1e included

Interest could 1e provide at concession rate on export& and import finance to customers

J"

can

provide

onsulting

facility

1y

an

expert

group

of

officials

for

f

oreign

exchange

In case of payment of remittance& they should introduce de1it card so that customer can

3ithdra3 money 3ithin a second at any3here)

I 1elieve these steps 3ill 1e helpful to improve the performance of Janata an! "imited an

d the

financial sector of angladesh)


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Documents

Internship Report on Foreign Exchange Operations at Janata Bank 2016 - Md Imran