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INTERNSHIP REPORT ON

FOREIGN EXCHANGE OPERATION AT

STANDARD BANK LIMITED

PREPARED FOR

ShamimEhsanulHaque
Senior Lecturer
BRAC Business School
BRAC University

PREPARED BY
Shatabdi Roy
Student ID: 10104100
BRAC Business School
BRAC University

DATE OF SUBMISSION

11th September. 2014

 LETTER OF TRANSMITTAL

ShamimEhsanulHaque

BRAC Business School

BRAC university

Sub: Submission of the Internship Report.

Dear Sir,

With best regard I am submitting my Internship Report on “Customer service and Foreign Ex-
change Operation at Standard Bank Limited (SBL)” that you have assigned to me as an impor-
tant requisite of BBA program. I have tried my level best to prepare an effective, informative and
creditable report. I hope my contribution will be best evaluated on your sharp scale of acceptance
and analytical remarks.

I honestly hope that my analysis will help to represent a clear idea about the corporate client pre-
ference and the foreign exchange performance at Standard bank Limited, Gulshan Branch. I hope
you will find the report worth all the labor I have put in it.I welcome all your query and take
pride to answer them.

Thanking You

With best regard

………………………….

Shatabdiroy

St. ID:10104100

BRAC Business School

2
 ACKNOELEDGEMENT
I would like to express my gratitude to all the people who have helped me to complete the long
way of journey of my internship and to accomplish the whole task of the report.

At the very outset, with all the impulse of our heart i wish to express all my devotion and reve-
rence to the Almighty God, most merciful beneficent creator who has enable us to complete the
Report on “Foreign Exchange activity of Standard Bank Limited “for the fulfillment of the re-
quirement for the report.

Then I want to thank all the officials of Standard Bank Limited, Gulshan branch those were in-
volved. Firstly, I want to thank Mr. Anwar Hossain, Executive Vice President (EVP) and Head
of the branch of Standard bank limited, Gulshan Branch for giving me time and sharing his
thoughts and insights regarding their strategies and their bank as a whole. I would like tothank
him for giving me the required information to commence this report and for providing the per-
mission to do the required research work. Secondly, I want to thank my formal supervisor Mrs,
Sultana Jahan (AVP) who helped me in all the decisive steps to acquire the key tasks at Foreign
Exchange.

I would like to thank my academic supervisor, ShamimEhsanulHaque, Senior Lecturerof BRAC

Business School of BRAC University for guiding me and for giving me the prospect to pledge
this report. More specifically, I would like to thank him for tutoring his time and wisdom.

Furthermore, I would like to thank my parents because their inspirations have enabled me to
complete the piece of work. Last but not the least I would like to show my sincere gratitude so-
lemnly to the Creator who has helped me to do the work meritoriously.

3
 EXECUTIVE SUMMARY

In the age of modern civilization bank is playing a vigorous characterby its spending role to keep
the economic development wheel moving. It’s a combination of various economic activities
those are meting out not only inside of the bank but also with some external operations. In fact
there is hardly some aspects of development activity to inspire the state where bank do not have
role to play. Standard Bank Limited is a third generation bank in Bangladesh. Standard Bank has
incorporated on May 11,1999 in head office at 122-124 Motijheel ,Chamber building, Dhaka,
Bangladesh as a public limited company with the permission of the Bangladesh Bank. The
founder of SBL committed with the goal that “setting a new standard of banking”. The Autho-
rized capital of the bank is BDT 15000(million) and its Shareholders equity is BDT
9289(million) in [Link] bank provides a broad range of financial services to its customers and
corporate clients in retail banking, corporate banking, and international trade. The whole banking
activities are divided into 3parts,General banking, Loan & Advances and Foreign Exchange. One
of the largest businesses carried out by the commercial bank is foreign trading. The trade among
variouscountries falls for close link between the parties dealing in trade. The situation calls for
expertise in thefield of foreign operation. I have worked as an Intern in the Standard Bank li-
mited, Gulshan Branch which is known as a Corporate Branch. Basically, I served in the depart-
ment of Foreign Exchange so I have instructed to prepare my report based on the “Foreign Ex-
change” operations. The foreign exchange department divides into three parts export, import and
remittance. The export department deals with export L/C, Amendment of L/C, Transfer of
L/C,EXP issue charge. When the L/C amounts have to be changed, then the amendments of L/C
are needed. The expense sectors of export are –Courier/mailing cost, Stationary cost, Parenting
cost, Salary of the employees. Salary of the employees is the administrative cost. But here to
analyze the actual earning of export, I’ve to find out the total expenses to operate export depart-
ment. Import sector is the most profitable sector in foreign exchange department of SBL.. The
import earning sectors are commission for L/C opening, Amendment of local L/C Service
charges, Collection of credit report of the beneficiary. From commission for L/C opening and
service charge, import department earns most. the expense of export, import, and remittance is
almost the same. The remittance earning consists from-Issuance of cash and endorsement of
passport, remittance by TT, Cash incentives handling charge [Link] ratio of foreign exchange

4
earnings from total earning is also pleasing and profitable. So Standard Bank Limited is one of
the best leading bank in Bangladesh and this bank have to remain its performance and have to
find out the ways how it can perform its operations in more profitably and customer oriented.

5
 TABLE OF CONTENTS

CONTENTS PAGE NUMBER

CHAPTER-01INTRODUCTION; OBJECTIVE; SCOPE; PAGE 7- 10

METHODOLOGY; LIMITATIONS.

CHAPTER-02OVERVIEW OF SBL; A BRIEF PROFILE PAGE11- 18

OF SBL;OVERVIEW OF GULSHAN BRANCH

CHAPTER-03FOREIGN EXCHANGE OPERATION AT PAGE18- 22

SBL;

CHAPTER-04FOREIGN EXCHANGE PAGE23- 42

CHAPTER-05ANALYSIS OF FOREIGN EXCHANGE PAGE43- 49

OPERATIONOF STANDARD BANK LTD.

CHAPTER-06MEJOR FIND- PAGE50- 51

INGS&RECOMMENDATION

CONCLUSION PAGE 52

REFERENCE

6
 Chapter One

Introduction

Bank is a financial institution whose main objective is the mobilization of fund from surplus unit
to deficit unit. In the process of acceptance of deposits and provision of loan, bank creates mon-
ey. This characteristic feature sets bank apart from other financial institution. A bank can influ-
ence the money supply through lending and investment. Bank collects deposit in the lowest poss-
ible cost and provide loans and advances at higher cost. The difference between these is the prof-
it for the Bank. As a service-oriented industry, bank provides various services to its customers.
So, every commercial bank has to contemplate about their customer first, because the customer-
sare the vital part of the organization.

For the students of Bachelor of Business Administration only theoretical knowledge is not
enough for handling the real life business situation. It is a great chance for the students to know
about the real business operation through the Internship Program. Internship is the perfect blend
of the both theoretical and practical life experience. It is a field to perform as a real player. Ba-
chelor of Business Administration (BBA) is a professional undergraduate course. The course is
designed with an excellent combination of practical and theoretical [Link] a student of BBA,
internship is an academic requirement. For internship every student is required to work in a se-
lected institution to enrich ones practical knowledge and experiences. After completing the in-
ternship prepared a report on the knowledge of internship. From that perspective this report is
prepared on “Performance of Foreign Exchange Operations of Standard Bank”.

To accomplish the aforesaid requirement, I am assigned as an internee in Standard Bank Limited

(SBL) for 12 weeks starting from 20th May,2014 .Over the time, Standard Bank limited is pro-
viding efficient and effective banking service in a sound manner.

OBJECTIVE

7
The main objectives of this report are to concentrated on issues related to the operation of foreign
exchange department of Standard Bank Limited. However, the details objectives can be divided
into two parts and these are:

Primary Objective

General objectives are to gain the practical knowledge on the range of activities, policies asso-
ciated with banking sector. From here we can get a clear idea about the internal operations of
Foreign Exchange division.

Secondary Objective

 To open Back to Back L/C Opening

 Issuing EXP

 Duplicate and triplicate EXP

 Data entry to the Bangladesh Bank

 Give the acceptance ID

 ABP test of the new L/C

SCOPE OF THE STUDY

The report covers the details about the operations of Standard bank limited. This report consists
the writer’s observation and job experiences during the internship period at Gulshan Branch.
This report emphasizes on the all sequential activities involved and used by Standard Bank Li-
mited for all transactions. It also impacts on the Foreign exchange activities upon clients. Finally,
it incorporates an evaluation of different aspects of the export import process and financial per-
formance of the Bank and recommends some measure which help to develop the quality of the
Bank.

METHODOLOGY

8
Methods followed to perform a job or conducting activities to complete a task is called Metho-
dology. In conducting this study the following methodology was adopted in collecting data and
information, preparation of reports etc. The methodology of report is given below.

Collection of primary data

Many of the data and information were collected from my experiences and queries from the ex-
ecutives while doing the internship at Standard Bank Limited. To collect the information it was a
great chance to know the Foreign exchange operations very closely but it is not possible to pub-
lish all the data that disclose the Bank’s secrecy.

The primary sources are-

 Practical desk work.

 Face to face conversations with the officers

Collection of Secondary data

 Annual report of SBL 2013

 Website
 Relevant books, research papers, journals etc.

All the secondary data are attached in appendix part. Different types of computer software’s are
used to analyze collected data such as- Microsoft Word, Microsoft Excel, Microsoft PowerPoint
also analyzed by the trend analysis and cross sectional analysis.

LIMITATIONS

This report might be limited with some constraints. Details of many aspects of the services of
Standard Bank Limited have been skipped in this report due to various constraints, including
time and space. Moreover, one of the main barriers in writing this report was the confidentiality
of data. Besides, for the preparation of this report I found that there are some limitation exists
though I have given my greatest effort. Such as:

 The bankers are very busy with their job which lead me little time to consult with.

9
  Category wise export, import and remittance business; amount originated from the inter-

national trade is missing in the report for their restriction.

 In many cases up to date information was not published

 All the branches of the sample Bank were not visited.

 Non-Availability of reference books is another limitation.

 Due to time limitations many of the aspects are not be discussed in this present report. To

learn all the functions within just 90 days is really tough

However omitting the limitations the report will help to understand the functions of the Foreign
Exchange performance of the bank clearly.

Chapter Two

OVERVIEW

SBL at a glance

10
Name : Standard Bank Limited
Incorporation : May 11, 1999.
Commercial Operations : June 03, 1999
Slogan of the company : “Setting a new standard in Banking”
Type of Company : Commercial Bank
Main Business : Providing Term loans to Small Scale Enterprises and
Operating Full-fledged commercial banking service.
Authorized Capital : 15000 million
Paid up capital : 5702 million
Total Assets : 74953 Million
Investments : 19168 Million
Equity : 8080 Million
No. of Employees : 1049 employee
Total No. of Branches : 91
ATM booth : 25
Ownership : Public Limited Company
Years in Business : 15 years

PROFILE OF SBL

Background

11
The banking sector of Bangladesh comprises three categories of scheduled Bank. These are na-
tionalized Commerce banks (NCBs), Private commercial Banks (PCBs) and Foreign commer-
cial Banks (FCBs). Private Commercial Banks are divided into three categories- First generation
Bank, Second generation Bank and third generation Bank. Standard Bank Limited falls into the
third generation segment and undoubtedly it leads its own generation. As an intern from business
discipline with the dual major in Marketing and HR I have got the opportunity to work with this
bank and try to put my effort to make a depth study.

History of the Organization

Standard Bank Limited (SBL) was incorporated as a Public Limited Company on May 11, 1999
under the Companies Act, 1994 and the Bank attained satisfactory progress from its commercial
operations on June 03, 1999. SBL has introduced several new products on credit and deposit
schemes. It also goes for Corporate and Retail Banking etc. The Bank also participated in fund
association with other Banks. Through all these innumerable activities Standard Bank Limited
has created a positive impact in the Market.

Vision and Mission

VisionTo be a modern Bank having the object of building a sound national economy and to con-
tribute significantly to the Public Exchequer.

MissionTo be the best private commercial bank in Bangladesh in terms of efficiency, capital
adequacy, asset quality, sound management and profitability.

Core values and Objectives of SBL

Our ShareholdersBy ensuring fair return on their investment through generating stable profit.

Our Customers To become most caring bank by providing the most courteous and efficient ser-
vice in every area of our business.

Our EmployeesBy promoting the wellbeing of the members of the staff.

Our CommunityAssuring our socially responsible corporate entity in a tangible manner through
close adherence to national policies and objective.

12
Objectives

 To provide high quality product and services to attract the potential customers.
 To outfit the need of its corporate clients and provides a comprehensive range of financial
services to national and multinational companies.
 Act as a media of exchange.
 To contribute a gross domestic products.
 Maintain a satisfactory deposit mix.
 To help to grow entrepreneurship.
 To help to boost economic growth.
 To earn profit.
 Increase loan portfolio diversification and geographical coverage.
 To help to solve unemployment problem.
 The Bank has already co-opted technological revolution in all its spheres.

Branches of SBL

From the year 1999 to year 2014 Standard Bank Limited established 91 numbers of branches in
different districts of Bangladesh. The principal Branch located in Metropolitan Chamber Build-
ing (Ground Floor), 122-124 Motijheel C/A, Dhaka 1000, and Bangladesh.

Organizational Offerings

Standard Bank Limited is always alert to the changing needs of customers and strives to develop
new and improved services for its valued customers. Ban offers ,various deposit and lending
products and services to meet all kinds of financial needs of customers. Such as-

 Maintain all types of accounts.

 Make investments
 Handle all types of Foreign Exchange business.
 Intend other banking sectors.

SBL also collect TITAS bill, WASA bill, Telephone bill and Electricity bill.

13
Communnication inten
nsity betweeen Managerss, Officers annd Work assistants

o the work team is modderately highh. Or

Communnication intensity betweeen managerss, assistant or
achievingg any kind of
o organizattion goal, most
m of the frrequently coommunicate with each other.
o
They are bound to maintain
m frequuent relationnship with eaach other.

Major divvisions of SB
BL

1)Generaal Banking

2) Loan and
a advancee Banking

3) Foreiggn Exchangee Banking

Figure: Divisions
D off SBL

[Source: Official
O Document}

Managem
ment hierarch
hy of the Staandard Bankk
Branc
ch Manager

Executive Vice-
V presid
dent

2 nd Manager
M
Vice-ppresident
14
 Investment De- Foreign Exchange
General Banking
partment Department

Assistant Assistant Assistant

Vice- Vice- Vice-
President President President

Senior-
Senior- Senior-
Executive
Executive Of- Executive
Officer
ficer Officer

Executive Executive Executive

Officer Officer Officer

Senior Of- Senior Offic- Senior Offic-

ficer er er

Officer Officer Officer

Assistant Officer Assistant Officer

Assistant Officer

Figure: Management Hierarchy

Correspondent Banking division

The main aim of Standard bank limited is to increase its foreign exchange business and in this
connection they are doing international banking with all major banks of the world. At present
they are maintaining correspondent banking relationship with 23 major banks of the world.
These are:
15
The Hong Kong and Shanghai banking corporation. Citibank N.A., Standard chartered bank,
American Express bank ltd., Mashreq bank PSC.,Wcchovia bank, The bank of Tokyo-Mitsubishi
ltd.,Union De Banques Et ArabesFrancaises, Danske bank ltd.A/S,Commerz bank ,Dresdner
bank, Bank Islam Malaysia Berhad,Nepal Bangladesh bank ltd., NIB bank ltd.,Arab Bangladesh
bank ltd., AB international finance limited, Bhutan national bank,UTI bank ltd.,The bank of No-
va Scotia and ICICI bank limited Habib bank Ag Zurich, Nordea bank and Samen bank.

Standard bank limited is maintaining drawing arrangement with 1(one) exchange house in the
UK and another 1 (one) in the USA for inward foreign currency remittance. These 2(two) ex-
change house are remitting sufficient funds through our bank. We have also establish our ex-
change house in UAE.

OVERVIEW OF GULSHAN BRANCH

Background

The banking sector of Bangladesh comprises of three categories of schedule banks. These are
nationalized commercial banks (NCBs), private commercial banks (PCBs) and foreign commer-
cial banks (FCBs). Private commercial banks are again divided into three categories- First gener-
ation, Second generation and Third generation. Standard bank falls into the third generation
segment and undoubtedly leads its own generation. As an intern from business discipline with
major in finance I have got the opportunity to work with this bank and try to put my effort to
make a depth study.

Standard Bank Limited is a scheduled Bank under private sector established under the ambit of
Bank Company Act, 1991 and incorporated as a public limited company under Companies Act,
1994. The Bank started commercial banking operations effective from June 06, 1999. During this
short span of time the Bank had been successful to position itself as a progressive and dynamic
financial institution in the country.

The positional hierarchy of Standard Bank Limited, Gulshan Branch is given below:

16
 The Positional Hierarchy of SBL, Gulshan Branch

Executive Vice-President (EVP) (1)

Vice President (VP) (1)

Assistant Vice President (AVP) (3)

FAVP (3)

Senior Executive Officer (4)

Executive Officer (3)

Senior Officer (4)

Assistant Officer (3)

Probationary Officer (2)

Trainee Assistant officer (2)

Major features of this branch:

 Fully Computerized accounts maintenance

 A fully operational computer network which is currently being implemented. The work
of Local Area Network (LAN) and Wide Area Network (WAN) installation having relia-
ble and secured communication between the branches and the Head Office is in progress
to facilitate any Branch Banking and ATM Services.
 Money counting machine for making cash transactions easy and prompt.

Chapter Three

FOREIGN EXCHANGE OPERATION AT SBL

Foreign Exchange

H.E. Evitt defined "Foreign Exchange" as the means and methods by which rights to wealth ex-
pressed in terms of the currency of one country are converted into rights to wealth in terms of the
currency of another country.
17
Some national and international laws regulate functions of this department. Among these, For-
eign Exchange Act, 1947 is for dealing in foreign exchange business, and Import and Export
Control Act, 1950 is for Documentary Credits. Governments' Import &Export policy is another
important factor for import and export operation of banks.

Letter of Credit (L/C)/ Documentary Credit Operation

The English name "Letter of credit" derives from the French word "accreditation", a power to do
something, which in turn is derivative of the Latin word "accreditivus", meaning trust. This ap-
plies to any defense relating to the underlying contract of sale. This is as long as the seller per-
forms their duties to an extent that meets the requirements contained in the letter of credit.

Letter of Credit (L/C) can be defined as a "Credit Contract" whereby the buyer's bank is commit-
ted (on behalf of the buyers) to place an agreed amount of money at the seller's disposal under
some agreed conditions. Since the agreed conditions include amongst other things, the presenta-
tion of some specified documents, the letter of credit is called Documentary letter of credit

The Uniform Customs and Practices for Documentary Credit (UCPDC) published by Interna-
tional Chamber of Commerce (1993) publication no 500 define Documentary Credit:

 Any arrangement however named or described whereby a bank (the issuing bank) acting
at the request and on the instructions of a customs (the Applicant) or on its own behalf.
 Is to make a payment to or to the order of a third party (the beneficiary) or is to accept
and pay bills of exchange (Drafts) drawn by the beneficiary.
 Authorize another bank to effect such payment or to accept and pay such bills of ex-
change (Drafts).

Types of Documentary Credit/ Letter of Credit

18
 Figure: Types of Crredit

 Revocable
R Leetter of Creddit
T type of letter
This l of creddit can be revvoked or canncelled at anny time withoout consent of,
o or
notice to the beneficiary. As per articcle 8 (a) of UCPDC-500
U 0 "A revocabble credit maay be
am
mended or cancelled
c byy the issuing bank at anyy moment annd without prior
p notice to
t the
beneficiary". In case of seller
s (benefficiary), revoocable crediit involves risk,
r as the credit
c
m be amen
may nded or canceelled while the
t goods arre in transit and
a before thhe documentts are
prresented, or although prresented befo
fore paymentts has been made. The seller
s wouldd then
faace the probllem of obtaiining payment on the othher hand revvocable crediit gives the buyer
b
m
maximum fleexibility, as it
i can be am
mended or caancelled withhout prior nootice to the seller
s
upp to the mom
ment of payyment buy thhe issuing bank at which the issuingg bank has made
m
thhe credit avaailable. In thee modern baanking the usse of revocabble credit is not widespread.

 Irrrevocable Letter
L of Creddit
A irrevocab
An ble credit iss a documeentary creditt, which caannot be revvoked, varieed or
chhanged/amen
nded or cancelled withoout the conseent of all paarties- buyer (Applicant)), sel-
leer (Beneficiaary), Issuingg Bank, and Confirming
C Bank (in case of confirm
med L/C). As
A per
A
Article 9(a) of
o UCPDC 500, an irrevoocable creditt constitutes a definite undertaking
u o the
of

19
 Issuing Bank, provided that the stipulated documents are presented to the Nominated
Bank or to the Issuing Bank and that the terms and conditions of the credit are complied
with. Irrevocable Credit gives the seller greater assurance of payments, but he/she re-
mains dependent on an undertaking of a foreign bank.

Classification of Letter of Credits

Documentary Credit or letter of credit is nothing but a letter of assurance of payment. This as-
surance of payment is made by the bank. It is an arrangement under which the bank at the re-
quest of the buyer undertakes to make payment to the seller provided specified documents are
submitted.

Documentary Credit is an arrangement whereby a bank (issuing bank) acting at the request and
on the instruction of a customer (the applicant) or on its own behalf undertakes to make payment
to or to the order of a third party (the beneficiary) or to accept and pay bills of exchange (draft)
drawn by the beneficiary, or authorize another bank to negotiate against stipulated documents
provided the terms and conditions to the credit are complied. Thus, Documentary Credits are
akin to bank guarantees. In popular language, they are known as Letters of credit (L/Cs). Bank
guarantees are, however, issued to cover situation of non-performance whereas documentary
credits are issued on behalf of the buyer to cover situation of performance, i.e., the issuing bank
agrees to make payment to the beneficiary one he surrenders the requisite complying documents.
Thus, Documentary Credit offers a unique and universally used method of achieving a commer-
cially acceptable arrangement by providing for payment to be made against complying docu-
ments that represent the goods and ma king posIFICe the transfer of those

CASH L/C

Cash L/C denotes that, the payment is paid in cash. In other words, after shipment, the applicant
makes payment to the beneficiary through L/C.

 At Sight

20
In case of At Sight, the payment is paid after checking all the documents. Mainly the payment is
made instantly. That means, when bank advice at sight L/C, bank check all the documents and
then make payment to the exporter. AT SIGHT means when the Seller sends all the shipping
documents to his bank, they in turn, send them to Buyer's bank, at this point in time, Buyer's
bank will pay the Sellers Bank But At sight does not always mean, Buyer's bank pay when they
have all the document AT (their) SIGHT, under UCP 500; Buyer's bank formally has 7 working
days to scrutinize and review the document. If there is no discrepancy found within 7 working
days, then Buyer's bank has to pay.

 Deferred L/C

A letter of credit that allows the buyer to take possession of goods by agreeing to pay the issuing
bank or the confirming bank at a fixed future date. That is paid a fixed number of days after
shipment or presentation of prescribed documents. It is used where a buyer and a seller have
close working relationship because, in effect, the seller (beneficiary of the L/C) is financing the
purchase by allowing the buyer a grace period for payment. It differs from a sight draft or time
draft in that no drafts are involved but the payment is guaranteed on the stated date. However,
there being no draft, the beneficiary party's ability to discount or sell his or her right to payment
is restricted.

BACK TO BACK L/C

Arrangement in which one irrevocable L/C serves as the collateral for another; the advising bank
of the first L/C becomes the issuing bank of the second L/C. In contrast to a 'transferable letter of
credit,' permission of the ultimate buyer (the applicant or account party of the first L/C) or that of
the issuing bank, is not required in a back-to-back L/C. It is used mainly by middlemen (inter-
mediaries) to hide the identity of the actual supplier or manufacturer. Also called counter credit
or credit. The difference between Back To Back letters of Credit and transferable letters of Credit
is such that in a Transferable Letter of Credit, the rights under the existing Letter of Credit are
transferred.

21
FORM OF L/C

MAIL L/
/C

The L/C that comes in

i mail is callled, Mail L//C.

SWIFT L/C
L

SWIFT stands
s for So
ociety for Worldwide
W Innterbank Finaancial Telecommunication, and is a bank
group whhich has set--up global sttandards for sending andd receiving authenticated
a d instructionns for
wire trannsfers and lettters of crediit. SWIFT iss increasinglly replacing the tested teelex. Some leetters
of credit are sent by tested
t telex.

Chaapter Fourr

FOREIGN
N EXCHAN
NGE

About Fooreign Exchaange

Foreign Exchange
E Department
D iss an internattional departtment of thee bank. It deeals with gloobally
and facillitates intern
national tradee through itss various moodes of servvices. It briddges betweenn im-

22
porters and exporters. Bangladesh Bank issues license to scheduled banks to deal with foreign
exchange. These banks are known as Authorized Dealers. If the branch is authorized dealer in
foreign exchange market, it can remit foreign exchange from local country to foreign country.
This department mainly deals with foreign currency. This is why this department is called for-
eign exchange department.

H.E. Evitt defined "Foreign Exchange" as the means and methods by which rights to wealth ex-
pressed in terms of the currency of one country are converted into rights to wealth in terms of the
currency of another country.

Some national and international laws regulate functions of this department. Among these, For-
eign Exchange Act, 1947 is for dealing in foreign exchange business, and Import and Export
Control Act, 1950 is for Documentary Credits. Governments' Import &Export policy is another
important factor for import and export operation of banks.

Foreign Exchange Operation of SBL

One of the largest businesses carried out by the commercial bank is foreign trading. The trade
among various countries falls for close link between the parties dealing in trade. The situation
calls for expertise in the field of foreign operations. The bank, which provides such operation, is
referred to as rending international banking operation. Mainly transactions with overseas coun-
tries are respects of import; export and foreign remittance come under the preview of foreign ex-
change transactions. International trade demands a flow of goods from seller to buyer and of
payment from buyer to seller. In this case the bank plays a vital role to bridge between the buyer
and seller.

In the SBL (Gulshan Branch) there are ten peoples working continuously with great effort and
teamwork there are quite efficient skill and talented the above jobs are performed in foreign ex-
change department. The Bangladesh Bank and the respected AVP of this section control them.
They believe in teamwork and extreme hard work.

Foreign exchange department of SBL

23
  Export
E Deparrtment
 Im
mport Deparrtment
 Remittance
R Department
D

Here is thhe hierarchy

y of foreign exchange
e deppartment:

Figuree: Foreign exxchange depaartment of SBL

S

Export Department
D t

In the Exxport L/C seession mainlyy L/C is the confirming from the Baank that, if the
t importerr fails
to make payment to the exporterr, then the bank
b will payy the exportter on behalff of the importer.
The expoorter can lien
n the L/C too bank and can get the payment befoore the L/C expire
e date. Here
the bank cuts charges for it, and that is the bank profit. The
T step thatt follows to handle
h the export
L/Cs is:

24
 Figure: Export
E L/C Process
P

EXPORT
T I NCENTIV
VE

A. Financial Incentiv
ve :

 Restructuring
R g of Export Credit
C Guaraantee Scheme;
 50% tax rebatte on export earnings Duuty draw bacck;
 Bonded
B warehouse facilitties to 100%
% export oriennted firms
 Duty
D free imp
port of capitaal equipmennt for 100% export
e orientted firms.

25
B. General Incentive

 National Export Trophy to successful exporters;

 Training course on external trade;
 Arrangement of international trade fairs, commodity-based exhibitions in the country
 and participation in foreign trade fairs;

C. Other Incentive

 Assistance in improvement of quality and packaging of exportable items;

EXPORT PROCEDURE

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

 Obtaining Export Registration Certificate (ERC):

No exporter is allowed to export any commodity permissible for export from Bangladesh
unless he is registered with Chief Controller of Imports and Exports (CCI & E) and holds
valid Export Registration Certificate (ERC). After applying to the CCI&E in the pre-
scribed from along with the necessary papers, concerned offices of the Chief Controller
of Imports and Exports issues ERC. Once registered, exporters are to make renewal of
ERC every year.

 Securing the order:

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

 Obtaining EXP: After having the registration, the exporter applies to SBL with the trade
license, ERC and the Certificate from the concerned Government Organization gets EXP.
If the bank is satisfied, an EXP is issued to the exporter.

26
  Signing of the contract:
After communicating with buyer the exporter has to get contracted for exporting exporta-
ble items from Bangladesh detailing commodity, quantity, price, shipment, insurance and
mark, inspection, arbitration etc.

 Receiving the Letter of Credit:

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

After receiving L/C, the following points are to be looked for:

 The terms of the L/C are in conformity with those of the contract.
 The L/C is an irrevocable one, preferably confirmed by the advising bank.
 The L/C allows sufficient time for shipment and a reasonable time for registration.
 If the exporter wants the L/C to be transferable, divisible and advisable, he should ensure
those stipulations are specially mentioned in the L/C.

ENDORSEMENT ON EXP

Before the exporters with the customs/postal authorities lodge the export forms, they should get
all the copies endorsed by SBL. Before shipment, exporter submits exp. form with commercial
invoice. Then SBL officer checks it properly, if satisfied, certifies the exp. without it, exporter he
cannot make shipment. The customer must declare all exports goods on the EXP issued by the
authorized dealers.

Disposal of Export Forms:

 Original: customs authority reports first copy of EXP to Bangladesh Bank after
shipment of the goods.
 Duplicate: Negotiating bank reports the Duplicate to Bangladesh Bank in or after
negotiation date but not later than 14 days from the date of shipment.
 Triplicate: on realization of export proceeds the same bank to the same authority
reports Triplicate.

27
  Quadruplicate: Finally, the negotiating bank as their office copy retains
Quadruplicate.

SHIPMENT OF GOODS

Exporter makes shipment according to the terms and condition of L/C.

PRESENTATION OF EXPORT DOCUMENTS FOR NEGOTIATION

After shipment, exporter submits the following documents to SBL for negotiation.

 Bill of exchange or Draft.

 Bill of Lading
 Invoice
 Insurance Policy/Certificate
 Certificate of origin
 Inspection Certificate
 Consular Invoice
 Packing List
 Quality Control Certificate
 G.S.P. certificate
 Photo - Sanitary Certificate.

CASH AGAINST DOCUMENT (CAD) CONTRACT

In lieu of export LC export can also be made against execution of contract of sale and purchase
between the buyer and seller. Usually a CAD contract is made in case of exporting Jute goods.

There are some Bangladesh Jute Mills Corporation (BJMC) enlisted intermediary firms. They
make CAD contract with the importer. Some intermediary firms the client of SBL. After making
contract, the intermediary firm (original exporter) purchases jute from a jute mill.

28
Then, the jute mill's bank usually an NCB sends forwarding with the following documents to
SBL

 Commercial invoice made by the jute mill

 Bill of exchange drawn on exporter payable to jute mills bank (authorized that bank as "
pay to the order of SBL ")
 Mills specification
 EXP form - triplicate and quadruplicate on which seal and signature of authorized officer
of the jute mill's bank is given.

EXAMINATION OF DOCUMENT

Banks deal with documents only, not with commodity. As the negotiating bank is giving the val-
ue before repatriation of the export proceeds it is advisable to scrutinize and examine each and
every document with great care whether any discrepancy(s) is observed in the documents. The
bankers are to ascertain that the documents are strictly as per the terms of L/C Before negotiation
of the export bill. Bank officers assigned for examining the export documents may use a check-
list for their convenience.

Import Department

Import L/C is handled by Mr. SanjoyDutta (Senior Executive. officer). When L/C conies from
the applicant, he checks all the terms& condition of the L/C & also check the validity of the L/C.
L/C may come from SWIFT/ TELEX. Each of them creates different charges for the clients. L/C
can be deferred or at sight. In brief the Import process..

29
 Proformaa Invoice is received
r by the
t L/C appllicant

L//C applicantt submit it too the Bank

Bank Issue L/C to the applicant feevoring benifficiary

L/C advised by advisinng Bank

Goods shiped
s by beeneficiary & submit the document
d too negotiate B
Bank

Nego
otiate Bank foroward
f thee documentss to the L/C iissuing Bankk

Documeent checked by L/C Issuuing Bank & inform to thhe L/C appliccant

If docu
ument is ok, L/C
L value iss by L/C issuuing bank to negotiate Baank

Goods releaase from the customs

Subm
mission of Bill
B of Entry to
t L/C issuinng Bank by tthe applicannt

Report to Bangladeshh Bank

Figure: Import Proccess.

STEPS IN AN IMPO
ORT L ETTER
R OF CREDI
IT TRANSAC
CTION

 The
T Sales Contract

The saless contract is the formal agreement between

b the buyer and seller
s specifyying the term
ms of
sale that both partiess have agreed upon. Thee contract shhould includee: a description of the gooods;

30
the amount; the unit price; the terms of delivery; the time allowed for shipment and presentation
of documents; the currency; and the method of payment.

 Application & Agreement

The bank's letter of Credit application and agreement forms, when executed, constitute a pay-
ment and reimbursement contract between the issuing bank and its customer. It is also the cus-
tomer's instruction to the issuing bank. The letter of Credit must be issued exactly in accordance
with the customer's instructions; therefore, it is important that the application be completed fully
and accurately, so as to avoid the inconvenience of having to have the letter of Credit amended.
The agreement constitutes an undertaking by the customer to reimburse the issuing bank for
drawings paid in accordance with the terms of the letter of Credit and normally takes the form of
an authorization to debit the customer's account

An importer will request banker to open L/C along with the following documents

 An application
 Indent or Pro forma Invoice
 Import Registration Certificate (IRC)
 Taxpayer's Identification Number (TIN)
 Insurance cover note with money receipt
 A bank account in SBL.
 Membership of chamber of commerce

L/C APPLICATION FORM (LCAF):

L/C Application Form is a sort of an agreement between customer and bank on the basis of
which letter of credit is opened SBL; Main Branch provides a printed form for opening of L/C to
the importer. Special paste stamp of value Tk. 300.00 is affixed on the form in accordance with

31
Stamp Act. While opening, the stamp is cancelled. Usually the importer expresses his decision to
open the L/C quoting the amount of margin in percentage.

Usually the importer gives the following information

 Full name and address of the importer

 Full name and address of the beneficiary
 Draft amount
 Availability of the credit by sight payment/acceptance/negotiation/deferred payment
 Time bar within which the documents should be presented
 Sales type (CIF/FOB/C&F)
 Brief specification of commodities, price, quantity, indent no. etc.
 Country of origin
 Bangladesh Bank registration number
 Import License/LCAF number
 IRC number
 Account number
 Documents number
 Insurance Cover Note / Policy number, date, amount
 Name and address of Insurance Company
 Whether the partial shipment is allowed or not
 Whether the transshipment is allowed or not
 Last date of shipment
 Last date of negotiation
 Other terms and conditions (if any)
 Whether the confirmation of the credit is requested by the beneficiary or not.
 The L/C application must be completed/filled in properly and signed by the authorized
person of the importer before it is submitted to the issuing bank.

ISSUANCE OF THE LETTER OF CREDIT

32
The issuiing bank preepares the leetter of Creddit as specifi
fied in the appplication annd forwards it by
tele-transsmission or airmail
a to the advising bank,
b (a brannch or correspondent of the
t issuing bank).
b
The issuiing bank insstructs the addvising bankk as to whethher or not too add its connfirmation, as
a per
their custtomer's direcctions.

ADVISIN
NG

The adviising bank forwards

f thee letter of Crredit to the beneficiary (seller) statiing that no com-
d on its partt. If the advvising bank has been assked to conffirm the L/C
mitment is conveyed C and
agrees too do so, it will incorporatte a clause undertaking
u t honor the beneficiary's drafts.
to

Figure: Advising
A Proocess

LOCAL OR
O BACK TO
O B ACK L/C
C:

Local or Back to bacck L/C is hanndled by ShhahanaAkhteer. At first we

w have to unnderstand whhat is
Back to Back
B or Loccal L/C. If thhe Exporter Exports the garments prroducts as shhirt, then he have
to also purchase the bottom, loggo, tag, yearnn etc for thee shirt. And in this casee, if the expoorters
have not enough mon
ney to purchhase that, theen the Bankk help the exxporter to puurchase the acces-
a

33
sories byy lien the L/C. 75% of master
m L/C can
c be a lienn as Back too Back L/C. 100% of master
m
L/C cannnot be the Back
B to Backk L/C becauuse, there wiill be no proofit if 100% value is ussed in
purchasinng raw mateerial. So heree 25% is thee profit of thhe exporter or
o to perform
m the other main-
m
tenance costs,
c Labor costs etc. Thhere are 4 paarties in Bacck to B
Back L/C.

F
Figure:4 Partties Back to back L/C

The Diaggram says that,

t the appplicant givee order to purchase
p acccessories to the Benefiiciary
through Standard
S Baank, SBL opeen the L/C and
a send it too the Benefiiciary's negootiating bankk. Af-
ter receivving the raw
w materials, applicant
a maakes paymennt to the Neggotiate bank through opeening
bank. Thhe beneficiarry receives the
t paymentt from the Negotiate
N baank. Anotherr term in caase of
Local/Baack to Back L/C is "Purcchase". Purcchasing of L/C
L means thhat, the local L/C can bee lien
to bank & take the payment
p beffore expire date
d of the L/C.
L The Exxporter whenn open an L/C
L to
purchasee the raw maaterials, thenn the Exporteer becomes the applicannt in that casse & the suppplier
of the raw
w materials becomes
b thee beneficiaryy. The L/C has an expire date with inn which the bene-
b
ficiary haave to supplly the produucts to the appplicant. And after receiiving the prooducts, the appli-
a
cant makkes payment to the benefficiary. The beneficiary can get the L/C
L value beefore the L/C
C ex-
pire date through purrchasing the back to backk L/C. Here Bank purchhases the 75%
% to 95% off total
L/C valuue. Here Ban
nk cuts som
me charges liike, advisingg charge, poostage chargge etc. When the
purchasee amount is below $10,0000 then thee total chargge is BDT 675,
6 and whhen the purcchase
amount is above $10,000 then the total chargge is BDT 12200.

The totall process of Back

B to Back L/C from opening to purchasing
p iss given below
w

34
 Purchase
L/C coomes the L/C
Advice thhe Forwwarding Ensure the
t
from
m the with
L/C thee L/C acceptannce
Benefiiciary relevant
d
document

Figu
ure: Total Baack to Back L/C processs.

Remittan
nce Departm
ment:

On Marcch 24, 1994 Bangladesh Taka was declared

d convvertible for Current
C accoount Internattional
Transactiion. As a prrelude to thiis wide-rangging reformss were madee in the counntry's foreignn ex-
change reegime to lay
y the ground for a markeet friendly ennvironment to
t induce invvestment, grrowth
and prodductivity. Fo
ollowing liberalization under
u conveertibility, moost remittannces are now
w ap-
proved by
b the Autho
orized Dealeers themselvees on behalff of the Centtral Bank. Only
O a few remit-
r
tances off special natu
ure require Bangladesh
B B
Bank's prior approval.

Standardd Bank Limited maintainns a strong network

n witth the Oversseas Exchangge Companiies &
Banks inn different parts of the world
w ensuriing better reemittance serrvices for itss customers. The
followingg are the listt of Overseass Exchange companies/B
Banks havinng arrangemeent with Stanndard
Bank Banngladesh Lim
mited.

Remittannce sector iss also controolled by Mdd. IqbalHosssain. In Stanndard Bank (Mirpur Braanch)
there is several exchaange compannies used forr remittance. The list is given
g below:

SL NAME OF
O E XCHAN
NGE COMPA
ANY LOCATION
O

01 Wall Street Exchhange Centre UAE

02 Rupalii Exchange (Europe
( ) LT
TD UK
03 National Wxchange Company,
C S
S.L.R Italy
04 Al Ahliia Money Exxchange Bereeau UAE

35
 05 SN money Exchange LTD UK
06 Economic Exchange Centre UAE
07 Maniflo Money Exchange Ltd USA
08 Bangladesh Money Exchange Canada
09 Global Exchange Italia Sri, Italy Italy
10 Al-Zaman Exchange Qatar
11 Asia Pacific Foreign Exchange Canada
12 Trust Exchange UK Ltd UK
13 Xepress Money Services Global
14 Western Union Money Transfer Global

Table:List of Exchange Companies.

Western Union Money transfer & Xpress Money Services are popularly used. In case of Western
Union, there is used 10 digit code, & in Xpress Money Services, 16 digit codes are used. In case
of other services, there is used 8 digit code. In case of Western Union Money Transfer, The
client should have to show the following documents:

 Valid Passport. Or
 National ID Card. Or
 Driving License. Or
 Certificate from the commissioner

After checking all the documents, authority gives Western Union form to the client. After filling
the form by the client, He transfers the information in the Western Union Software. Then receive
the 10 digit code number from the client & then give money to the client. Then he keeps the
records in a Remittance Register.

36
 Cheeck the Fiill up the After
Innsert the 10
0
docuuments W
Western confirmatiion,
ddigit code in
n
froom the Unnion form give mon ney
thhe Softwarre
cllient by the
t Client to the clieent

Figure: Remittance
R Prrocess.

OUTWAR
RD REMITT
TANCE

The term
m "Outward remittances"
r " include nott only remitttance i.e. salle of foreignn currency byy TT.
MT, Draafts, Travelerr'scheque buut also includdes paymentt against impports into Bangladesh & Lo-
cal currency credited
d to Non-resident Taka Accounts
A off Foreign Baanks or Convvertible Takaa Ac-
[Link]
wo forms aree used for Outward
O Rem
mittance of foreign Currrency such as: IMP Forrm &
TM Form
m.

INWARD
D R EMITTANCE

The term"" Inward Rem

mittance" inclludes not onlly purchase of
o Foreign Cuurrency by TT
T, MT, Draftts etc.
but also purchases
p of bills,
b purchasees of Travelerr's cheques. Two
T forms as prescribed
p byy Bangladesh Bank
are used for
f purchase of
o Foreign Cuurrencies suchh as.

EXP Form
m: Remittancees received aggainst exportss of goods froom Bangladessh are done byy form EXP.

Form C: Inward
I remitttances equivaalent to US$2000/- and aboove are done by Form" C". However, decla-
d
ration in Form
F C is nott required in case
c of remittances by Banngladesh Natioonals workingg abroad.

Utmost caare should bee taken while purchasing Currency

C Notees, Travelers cheque, Dem
mand Draft & simi-
lar Instrum
ment for protecting the bank
b from proobable loss as
a well as saffety of the Bank
B officialss con-
cerned.

Differen
nt Accounts in L/C Opeeration

I just wannt to discusss this very brriefly. Theree are four typpes of accounnt. Those aree,

37
Nostro Account:Nostro account means "our account with you". A Nostro account is a foreign
currency account of a bank maintained its foreign correspondents abroad.

Vostro Account: Vostro account means "your account with us". The account maintained with
foreign correspondent in a bank of a particular country is known as Vostro account.

Loro Account: Loro account means "their account with you". Account maintained by third party
is known as loro account.

Loan against Imported Merchandise (LIM):SBL create Advance against the security of mer-
chandise imported through the Bank may be allowed either on pledge or hypothecation of goods,
retaining margin prescribed on their Landed Cost, depending on their categories and Credit Re-
striction imposed by the Bangladesh Bank. Bank shall also obtain a letter of undertaking and in-
demnity from the parties, before getting the goods cleared through LIM Account.

Parties involved in L/C Operation

The documentary credit is an essential implement for conducting world trade today. With the
third party assurance the whole process is covered. Documentary credit substantially reduces
payment related risks for both exporter and importer. So in the whole L/C operation there are
many parties involved. They are-

 Importer/Applicant
 Issuing Bank/Opening Bank
 Advising Bank
 Beneficiary/Exporter/Seller
 Negotiating Bank
 Reimbursing Bank
 Confirming Bank

IMPORTER/APPLICANT

An importer is one who wants to import goods from other country. In terms of the Importers
(Registration) Order-1981 no person can import goods into Bangladesh unless he is with the

38
Chief Controller of Import and Export (CCI &E). He is also called applicant. The bank opened
L/C on the importer's application.

ISSUING BANK/OPENING BANK

The bank which opens L/C on behalf of the importer is called issuing bank. Issuing bank's obli-
gation is to make payment against presentation of documents drawn strictly as per terms of L/C.

ADVISING BANK

The bank through which the L/C is advice / forwarded to the beneficiary. It is situated in the be-
neficiary's country. The most important function of this bank is to make sure the beneficiary
about the authenticity of the documents.

BENEFICIARY/EXPORTER/SELLER

Beneficiary is the party in whose favor the L/C is issued. Usually he is the seller or exporter.

NEGOTIATING BANK

The bank that negotiates the bill of exporter drawn under the credit is known as negotiating bank.
If the advising bank is also authorized to negotiate the bill drawn by the exporter, he becomes the
negotiating bank.

REIMBURSING BANK

The bank nominated in the credit by the issuing bank to make payment stipulated in the docu-
ment, complying with the reimbursement bank. In reimbursing bank the issuing bank maintains
its nostro account

CONFIRMING BANK

Confirming bank is a bank that adds its confirmation to the credit and it is done at the request of
the issuing bank. It provides the credit report of the exporter of his country. If the advising bank
also adds its own undertaking to honor the credit while advising the same to the beneficiary, he
39
becomes the confirming bank, in addition, becomes liable to pay for documents in conformity
with the L/C's terms and condition.

Documents required under a Letter of Credit:

There is no limit to the number and variety of documents which letters of credit may stipulate.
The following is a list of documents most commonly seen in a letter of credit transaction. Each
document is described in brief with a check-list for preparing the document.

DRAFT:

A draft is a bill of exchange and a legally enforceable instrument which may be regarded as the
formal evidence of debt under a letter of credit. Drafts drawn at sight are payable by the drawee
on presentation. Term (usance) drafts, after acceptance by the drawee, are payable on their indi-
cated due date.

COMMERCIAL INVOICE

The commercial invoice is an itemized account issued by the beneficiary and addressed to the
applicant, and must be supplied in the number of copies specified in the letter of credit.

BILL OF LADING

A bill of lading is a receipt issued by a carrier for goods to be transported to a named destination,
which details the terms and conditions of transit. In the case of goods shipped by sea, it is the
document of title which controls the physical custody of the goods

AIR WAYBILL

40
An air waybill is a receipt issued by an air carrier indicating receipt of goods to be transported by
air and showing goods consigned to a named party. Being a non-negotiable receipt it is not a
document of title.

INSURANCE POLICY OR CERTIFICATE

Under the terms of a GIF contract, the beneficiary is obliged to arrange insurance and furnish the
buyer with the appropriate insurance policy or certificate. The extent of coverage and risks
should be agreed upon between the buyer and seller in their initial negotiations and be set out in
the sales contract

PACKING LIST

A packing list is usually requested by the buyer to assist in identifying the contents of each pack-
age or container. It must show the shipping marks and number of each package. It is not usually
required to be signed.

MODE OF PAYMENT OF EXPORT BILL UNDER L/C

As per UCP 500, 1993 revision there are four types of credit. These are as follows:

 Sight Payment Credit

In a Sight Payment Credit, the bank pays the stipulated sum immediately against the expor-
ter's presentation of the documents.

 Deferred payment Credit

41
 In deferred payment, the bank agrees to pay on a specified future date or event, after presen-
tation of the export documents. No bill of exchange is involved. In SBL, payment is given to
the party at the rate of D.A 60-90-120-180 as the case may be. But the Head office is paid at
T.T clean rate. The difference between the two rates us the exchange trading for the branch.

Trend Analysis

Trend analysis is an important tool, which can be used to evaluate the performance of a Bank. The trend
can represent the growth or turn down of a bank over a period of time. Here analyzed the different term
which is related to the foreign exchange business of SBL.

Chapter Five

ANALYSIS OF FOREIGN EXCHANGE OPERATION OF STANDARD

BANK LTD.

Foreign exchange department of SBL is consisting of three sections. The sections are:

42
Import Department
D t

EARNING FROM IMPORT

M BUSINESS

YEAR AMOUNT IN
N USD (MIL
LLION)

2007 214.63
2008 375.34
2009 354.22
2010 562.09

2011 745.39

Taable:Earningg from Imporrt Business of

o SBL
[
[Source: Foreig
ign Exchange Department
D off SBL]

Graphicaal Representaation

AMOUNT L IMPORT IN SBL

T OF TOTAL

YEAR
Y AMOUNT IN
I BDT ( MILLION
M )

2007 26155

2008 35689
2009 40411

43
 2010 56167

2011 50497
2012 48500
2013 51056

Table: Total Import am

mount in SBL
L
[Sourcee: Annual Repoort]

Graphiccal presentattion

Series 2
56167
7
00 51056
50497 4850
40411
35689
261
155

Series 2

The grapph shows thaat the Importt business off SBL increaased from yeear2007 to 2010.
2 Becauuse of
economicc recession import
i businness slightly increased inn 2009 than 2008
2 the bannk earned highest
amount (Tk56167
( miillion) in 2010. But in 20012 it falls down
d and 2013 it increassed little bit.

Export Department
D t:

Earning from
f Exportt Business

YEAR
E AMO
OUNT IN BD
DT (MILLIO
ON)

20
007 118.83

20
008 217.87

44
 20
009 247.59

20
010 444.87

20
011 614.96

Table:Tootal earnings from Exporrt Business at

a SBL
[Sourrce: Foreign Exchange
E Depaartment at SBL]]

Graphiccal Represen
ntation

Figure:Earning frrom Export Business

B SB
BL.

Interpretaation: From the graph, it

i is interpreeted that the income from
m the exporrt of SBL haas in-
creased from
f the yeaar of 2007 too 2011 becauuse of the inncreasing of export businness. The inccome
of exportt is highest in
n 2011(Tk.6614.96 millioon) where thhe income waas only Tk. 118.83 milliion in
2007.

AMOUNT
T OF TOTAL
L E XPORT BUSINESS

YEAR
Y AMOUNT IN
I BDT( MILLION
M )
2007 17788
2008 25072
2009 29177
2010 41919
2011 45356

45
 2012 33967
2013 43288

T
Table:Export
t Amount of Standard
S Bankk Ltd
[Source: Annnual Report of SBL
S (2007-20113)]

Graphiccal Represen
ntation

50000
0
40000
0
30000
0
20000
0
10000
0
0.7 1.8 2.6 3.2 4
4.3
2.9
3.3

F
Figure: Expport Amount of SBL.

Interprettation:

The graphh shows that the Export business

b of SB
BL graduallyy increased frrom year20077 to 20111 annd the
highest buusiness of exp
port of the bannk was in thee year of 20100 because the bank has inccreased their export
e
client yeaar by year. Bu
ut 2012 and 20013 It was not so good.

PORTION OF EXPO
ORT INCOME
E ON TOTAL I NCOME

YEAR EXPORT EARNINGS TOTAL INCOME EARNING

G PER-
(T
( K. IN MIL
LLIONS ) (TK. IN MIL- O EX-
CENTAGE OF
LIO NS ) PORT
T

20077 118.883 27798 4.24%

%
20088 217.887 41165 5.23%
%

46
 20099 247.559 55546 4.46%
%
20100 444.887 77795 5.70%
%

20111 614.996 91196 6.69%

%

Table: Portion
P Of Exxport Income on total inccome

Graphiccal Represen
ntation

Interpretaation: Above graph shows that the portion of export

e earninng has increeased but in 2009
slightly decreased
d or the economic recessioon. In 2011 export earnning contribuute the maxiimum
fo
amount during
d the laast four yearss.

Foreign Remittancee:

EARNING FROM FOREIGN

O REM
MITTANCE

YEAR AMOUNT
M IN BDT
B (MILLIION)

2007
2 366.15
2008
2 7
78.6
2009
2 899.77

47
 2010
2 588.61
2011
2 733.49

Table:Earniing from Foreeign Remittannce.

Graphiccal Represen
ntation:

Interpretaation: The im
mpact of thee fluctuation of foreign remittance
r buusiness affeccts the earning of
foreign remittance
r in
ncome. The income from
m foreign reemittance alsso fluctuatedd like the fooreign
remittancce business. The incomee has fallen in
i 2010. It was
w the impaacts of great economic fall
f in
[Link] bit
b by bit reccover in 2011.

AMOUNT
T OF FOREI
IGN R EMITT
TANCE OF SBL
S

YEAR
Y AMO
OUNT IN BD
DT

2007 411
2008 830

2009 697

2010 1044

48
 2011 2815

2012 4676

2013 4464

Table:Amoount of Foreign Remittancce.

[Source: Annnual Report of SBL
S (2007-20113)]

Graphiccal Represen
ntation:

5000
5
4
4500
4
4000
3
3500
3
3000
2
2500
2
2000
1500
1000
500
0

Interpretaation: The foreign

f remitttance performance of SBL
S was nott satisfactoryy in 2009&22007.
The remiittance was increased
i in 2008&20100. But remarkable improovement wass shown in during
d
the last six years of 2013.
2

Ch
hapter- 06

Major Fin
ndings andd Recommeendation

Major Findings
F

 Standard Ban
nk is in a bettter position in respect off import busiiness becausse the importt
buusiness increeased graduaally every yeear. As a result the incom
me from impport businesss also
inncreased eveery year exceept 2009.

49
  The export business has increased every year during last seven years. As a result the in-
come from export also increased during the year of 2007-2013.

 The remittance business didn’t show the same scenario like import and export. It fluc-
tuates in last five years. Standard Bank made huge business in 2008 but reduced in 2009.
It has an impact on foreign exchange earnings.

 The growth rate of import earning fluctuates during the last five years. In 2009 Standard
Bank had lost income than 2008. but in 2010 its earn more than 2011 and again lost its
earning in2011.

 The growth rate of export earning fluctuates during the last five years. In 2009 Standard
Bank had lower growth rate than other years.

 The growth rate of remittance earning show a disappointment result during the last five
years. In 2008 Standard Bank had made a good earning but faced a huge fall in 2009 and
its turning point is 2010 to 2013,within this time its recover its losses and bit by bit it in-
creases.

 Import business is the main source of income of foreign exchange business of Standard
Bank. Above 50% foreign exchange earned from import in every year.

Recommendation

From the practical exposure of StandardBank Limited at Gulshan Branch for just three months. It
is not so easy to recommend some suggestions to enhance the performance level of the organiza-
tion. On the basis of observation following recommendations are made-

 The Bank should give more concentration of foreign remittance to increase profit from the
remittance. Though the remittance performance of SBL for the last year was very bad so
the performance and profit should be increase year by year.

50
  The export business of the bank is on an increasing inclination. So the bank should try to
keep the pace of growth.

 The export earnings growth rate take downturn for the last year was not in the same pace
of growth of export business.

 In over all foreign exchange earnings, remittance contributes a small portion only 10-13%.
More than 50% comes from import business. Bank should try to increase earning from ex-
port. It should concentrate more effort to improve export earnings and remittance earnings
for our economy.

 The export earnings growth rate and import earning growth rate were very much fluc-
tuated during the last five years. so bank should try to keep a constant growth rate.

 Finally recommend to SBL is to improve the remittance performance as this sector per-
formanceis not very well.

CONCLUSION

Standard Bank limited is a leading Private bank in Bangladesh with superior customer bases that
are loyal, faithful, worthy towards the bank. The service provided by the young energetic offi-
cials of the Standard Bank Limited is very satisfactory.

During my internship in Gulshan branch I have found its Foreign Exchange department to be
very efficient; therefore this department plays a major role in the overall profitability of the
branch and to the Bank as a whole. . It has a large portfolio with huge assets to meet up its liabil-
ities and the management of this bank is equipped with the expert bankers and managers in all

51
level of management. I would rather feel like producing my personal opinion about the ongoing
practices in Gulshan Branch.

Standard bank limited is a new generation bank. It is committed to provide high quality financial
service to contribute to the growth of G.D.P. of the country through simulation trade & com-
merce, accelerating the pace of industrialization, boosting up export, creating employment op-
portunity for the educated youth, poverty alleviation, raising standard of living of limited income
group and overall sustainable socio-economic development of the country.

References

 [Link]
Access date: 02.08.2014
 [Link]
Access date: 25.08.2014
 Annual Report 2013 of SBL
 Foreign Exchange Department.

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