1.

INTRODUCTION:
1.1. Background of the study:
In order to provide a student with job exposure and an opportunity of the transition of
theoretical knowledge in to real life experience, an internship is a must .A better
balance between theory and practice can be gained through this program. Internship
program is a perfect blend of the theoretical and practical knowledge. This report is
originated to fulfill the requirement of the assign project internship report on
“Banking law and practice thereof in NCC bank ltd.: Special focus on foreign
remittance” and this report is result of three months internship program with NCC
Bank Ltd. Comilla Branch.

1.2. Rationale of the study:

This report is a part of academic program. The period of internship program has set
for three months. This study will be helpful at future, especially at the time of
working at banks or other financial institutions. This program is also helpful to
understand the working environment and behavior.

1.3. Objective of the study:

Though the main objective of this report is to gather knowledge about practical field
as well as to know the different aspect of the Banking sector and to evaluate how a
bank is performing. In addition, the study seeks to achieve the following objectives:

 To know the organizational framework of the bank.

 To know the work environment and organizational behaviors of the bank.

 To get through all the departments of the bank and observe the actual work
done.

 To find out how the general banking system works.

 To see how the loans and advances are provided to the borrowers.

 To acquire knowledge about the foreign exchange system of the bank.

1
  To understand the activities of Foreign Remittance department of the bank.

 To know about all the products offered by the Foreign Remittance department
of the bank.

 To know the terms and conditions of Foreign Remittance department of the

bank.

 To identify the process Foreign Remittance.

 To identify the problems related to Foreign Remittance department.

 To make some recommendations to solve the problems.

1.4. Scope of the study:

This internship program gives a great scope or opportunity for gather experience and
knowledge in several areas of banking. For BBA student only curriculum activities
are not enough for handling the real business situation. Internship is a part the
bachelor of business administration (BBA) degree that provides job experience to
students, Internship program is a perfect blend of the theoretical and practical
knowledge.

1.5. Limitation of the study:

The Limitations of this study are given below:

 It should be certainly mentioned that time constraint is the first limitation of

the study.

 Only three months is not sufficient for gathering perfect knowledge on the vast
area of Bank.

 In some cases, they could not be able to supply my topic related data. Office
secrecy was one of the most important problems. Disclosing of some
information was restricted.

2
 In case of secondary data collection, there was very little secondary
information. There were few support books, reports, journals, etc.

 Foreign Remittance department of the bank is highly confidential for the

employee.

 Sufficient records, publications or website regarding customer services are not

available for foreign remittance department of the bank.

 The information of Foreign Remittance department of NCC Bank not found in

a structured way.

3
2. RESEARCH METHODOLOGY:

2.1. Methodology:

The study requires a systematic procedure from selection of the topic to final report
preparation. To perform the study, data sources are to be identified and collected, they
are to be classified, analyzed, interpreted and presented in a systematic manner and
key points are to be found out. This overall process of methodology is given below:

 Selection of the topic

 Identifying data

 Collection of data

 Classification, analysis, interpretation and presentation of data

2.2. Selection of the topic:

The topic selected for the study was assigned by Human Resource Division (HRD) of
NCC Bank, Head Office, Dhaka. After having selected the topic,different information
was collected from supervisor and officials of NCC Bank Ltd Comilla branch,about
various aspects of the topic to prepare a well-organized Internship Report.

2.3. Identifying data sources:

Primary and Secondary data were used for making the report.

2.4. Collection of data:

Information collected to furnish this report is both from primary and secondary
sources.

4
 I. Primary sources

 Face-to-face conversation with the respective officer and staff of the

Branch.

 Conversation with the customers.

 Practical work exposures form the different desks of the department of the

Branch covered especially foreign remittance desk.

 Relevant file study as provided by the officers concerned.

II. Secondary sources

The secondary data are collected from different conceptual matters & the sources that
are used in the study include:

Internal Sources:

 Annual report of NCC Bank Limited.

 Desk report of related department

 Prospectus and other documents of NCC bank Limited.

 Brochures of National Credit and Commerce Bank limited

 Prior research report

 Website

External Sources:

 Different books and periodicals related to the banking sector

 Bangladesh Bank Report

 Newspaper

5
2.5. Classification, analysis, interpretation and presentation of data:

To classify, analyze, interpret and presentation of data I have used some tables to
understand them clearly by using Microsoft Word.

6
3. PROFILE OF THE ORGANIZATION:

3.1. An Overview of NCC Bank Ltd:

NCC Bank Limited started its business in Bangladesh in 1985 as a financial institution.
The company operated up to 1992 with 16 branches and thereafter with the permission
of the Central Bank converted in to a full-fledged private commercial Bank in 1993. In
2008 Bank entered into a joint venture with TMMS– an NGO working for
empowerment of women folks of the country under DFID funded projects. Now NCC
bank can reach remote area of Bangladesh by using 250 branches of TMSS. NCC bank
has managed impressive growth in loan portfolio, total assets and fee income while
maintaining capital adequacy, asset quality, sound management and profitability. NCC
bank has diversified its business over the years and offers different types of
commercial banking, retail, and treasury and capital market services. The bank has
significant non- funded income (40% of total operating income). NCC bank has
achieved five years Cumulative Annual Growth Rate (CAGR) of 29.24% in loans &
advances. The bank achieved average ROE and ROA of 25.53% and 1.63%
respectively in the last five years, which is quite impressive in the industry. We expect
the bank to continue these levels in future years.

3.2. Historical background of NCC Bank Ltd:

National Credit and Commerce Bank limited came to reality through the ―National
Credit limited‖. Prior to conversion into a scheduled commercial bank, National Credit
Limited (NCL) was incorporated as an investment company on 18th November 1985.
It made its January on 25th November 1985 at its registered office and first branch at
7-8 Motijheel Commercial Area, Dhaka- 1000 with initial authorized capital of Tk. 30
crores. It was mostly involved in collecting suitable resources and making profitable
investments. But within a very short period of time this investment company turned
into a scheduled commercial bank. It was turned into a bank because it faced many
restrictions both collection and disbursement of funds while it was operating as an
investment company. While this turnover was going on all types of transactions were

7
closed for about fourteen months from April 22, 1992. After that, with the permission
from the government and Bangladesh Bank NCL was converted in a developed
commercial bank and started its banking operation on 11th May 1993, in the name of
National Credit and Commerce Bank Limited. It has been registered under the
company act- 1913, as a private commercial bank with paid up capital of Tk. 39 crores
to serve the nation along with 16 branches. However, NCCBL runs as per company
rule, free from government intervention. Year 1994 & 1995 were the full operation year
of the bank. During this period gave emphasis on considering the affairs of the
institution as well as expansion of business work. During last 13 years if its operation
NCCBL has acquired commendable reputation by providing sincere personalized
service to its customers through a technology based environment

3.3. Objectives of the Bank:

The main objective is to maximize profit through customer satisfaction which
very much reflects the idea of marketing concept. NCCBL has been ensuring
maximum profit and improved customer service along with other corporate
objectives mentioned below
 To value and respect the customers and maintain harmonious
banker- customer relationship.
 To strive for good profit and sound growth
 To contribute towards the formation of national capital.
 To achieve and sustain in the domestic leading market position in
both customer and corporate banking sector.
 To be the most efficient bank in terms of technology application.

3.4. Values of the Bank:

 To have a strong customer focus relationship based on integrity, superior
service and mutual benefit.
 To work as a team to serve the best interests of the group.
 To work for business innovation and improvements.
 To value and respect the people and make decision based on the merit.
 To provide recognition and reward on performance.

8
  To be responsible, trustworthy and law-abiding in every sphere.
 To become the base bank in respect of service, profitability and strength.
 Provide the greatest return to the shareholders by achieving sound
profitable growth.
 Being perceived by customer and staff as the best whenever it operates.

3.5. Mission & Vision of NCC Bank ltd:

 Mission:

To mobilize financial resources from within and abroad to contribute to

Agricultures, Industry & Socio-economic development of the country and
to pay a catalytic role in the formation of capital market .
 Vision:
To become the Bank of choice in serving the Nation as a progressive and Socially
Responsible financial institution by bringing credit & commerce together for profit and
sustainable growth.

3.6. Information about the Administration of NCC bank ltd:

 Office Automation:

Technology, computer, internet these thins brings a new generation of

banking service to the customer. Eight to ten years ago customers cannot
think about that they can withdraw or deposit money from their account at
least within one hour. But now it takes only at best five minutes for
withdraw their money. This is the simple example what technology brings
to banking sector. In before bankers has to maintain huge ledger book for
their daily or any sorts of banking record. But now they can do it by on
click and by strike of few buttons. They have web page www.NCCbank-
bd.org. Customer can get detail information from the web page. NCCBL
also has credit card and ATM machine.

9
  Audit Inspection Recovery Division:

Although the loan Administration Division is not at per with the Credit
Division of the bank in terms of human resource, the performance of the
bank relies heavily on this division. It is responsible for credit monitoring,
documentation, distribution L.D.O’s (Loans, Discounts and Overdrafts),
preparing MSOCF (Monthly statement of outstanding credit facilities)
and dealing with TR (Trust Receipt) etc.

 Human Resource Division:

National Credit and Commerce Bank Limited unlike other commercial

banks has a proficient Human Resource Division that deals with
recruitment and manpower planning, performance evaluation, disciplinary
actions, promotion, cadre charge, employee service rules and benefits,
training and development. An Executive Vice President leads this division
with the assistance of a Vice President.

 Information Technology Division:

It is very significant to adapt with the ongoing information technology

revolution to provide faster services to the clients. The Information
Technology Division supervises the overall computerization of the
banking operations and networking, provides system support, deals with
data processing and data entry, procures and maintain hardware, maintain
and develop software required by the bank to facilitate and support the
day to day operations.

 Training Division:

The main objective of this division is to make the employees efficient.

Usually this division offers training to their employee time to time. This is
helpful to the employee to do their job efficiently and effectively.

10
3.7. Company profile of NCC bank ltd:

Name National Credit & Commerce Bank Ltd.

Year Of Establishment Started as an investment company in 1985 and

converted to a full fledged private commercial bank in
1993
Corporate Office 7-8, Motijheel C/A , Dhaka-1000

Authorize Capital 10,000 million

Paid –Up Capital 5941.65 million
Type of Company Public limited
Scope of Business Banking, capital market operations
No. of Branches 87

Source: Annual Report(2011)NCC Bank Ltd.

11
3.8. Management hierarchy of NCC Bank Ltd:

Managing Director

Additional Managing Director

Deputy Managing Director

Senior Executive Vice President

Executive Vice President

Senior Vice President

Vice President

Senior Assistant Vice President

Assistant Vice President

Senior Principal Officer

Principal Offider

Senior Officer

Officer Gr -1

Officer

Junior Officer

Assistant Officer

12
 3.9. Management Hierarchy of Comilla branch:

Comilla Branch

SI NO NAME DESIGNATION
1 Mr.Farhad Akhter Md.Shahriyar Vice President and Manager
2 Mr.Ruhul Amin PO and Deputy Manager
3 Mr.Gazi Mohammad Al Amin Senior Officer
4 Mr.Md Saifuzzaman Officer Grade 1
5 Mr.Md Ataur rahman Junior Officer(Cash)
6 Mr.Abdul Based Junior Officer(Gen)
7 Mr.Md Ali Kanchan Meah Junior Officer(Gen)
8 Mr.Md Asif Iqbal Chowdhury Junior Officer(Cash)
9 Mr.Md Rahmat Ullah Assistant Officer(Cash)
10 Mr.Md Yeahhia Assistant Officer(Trader)
11 Mr.Md Nayeem Hassan Assistant Officer(Cash)
12 Mr.Md Seed Ahmed Assistant Officer(Cash)
13 Mr.Sayed Masudul Haque Computer Operator
14 Mr.Md Azahar Haque Junior Officer(Trader)
15 Mr.Md Fakrul Alam Assistant Officer(Trader)
16 Rafia Ali Assistant Product Marketing
Officer(Retail banking)
17 Mr.Karim Security Guard
18 Mr.Gias Uddin Security Guard
19 Mr.Aynul Haque Tea Boy

3.10. Products of NCC Bank Ltd:

Deposit products:

13
  Current A/C

 Savings Bank Deposit A/C

 Short Term Deposit A/C

 Term Deposit A/C

 Premium Term Deposit A/C

 Instant Earnings Term Deposit A/C

 Special Savings Scheme

 Special Fixed Deposit Scheme

 Young Ster A/C

 Young star money plant scheme

 Young star maximus account

Loans and Advance Products:

 Working Capital Financing

 Commercial and Trade Financing

 Long Term (Capital) Financing

 House Building Financing

 Retail and Consumer Financing

 SME Financing

 Agricultural Financing

 Import and Export Financing

14
Remittance Products:

 Special Interest rate on Savings and Term Deposits

 Wage Earners Welfare Deposit Pension Scheme

 Loans for Real Estate (Land purchase and House construction/renovation)

 Advance against Regular Remittance

Cards:

 ATM Card

 Credit Card (Local, International and Dual)

3.11. Services of NCC Bank Ltd:

 Brokerage House

 Treasury Service

 Remittance Service

3.12. Banking Activities of NCC Bank Ltd:

– General Banking

– Advance Banking

– Foreign Exchange

3.13. Location of Comilla branch:

15
Branch Address Phone Fax/Email
Comilla Samabaya bank Bhaban 081-64787, 081-64789
(1st floor), Kandirpar, 081-64788 Comilla@NCCbank.com.bd
Comilla.

3.14. Present Programs of the Organization:

The present programs run by NCCBL Comilla Branch are shown below in a chart:

3.15. Marketing of bank services:

Basic ingredient to improve marketing of bank’s products/services are :
1. Identification of customers’ financial needs and forecasting and research for
future financial market needs and information about competitors activities.

2. Development of appropriate products to meet customers’ financial needs.

16
 3. Prices of the products/services and distribution channels to satisfy customers.
4. Development of market orientation and customers’ consciousness by imparting
training to employees of the bank at all levels.

Bank marketing strategy has six P’s, which are as under:

1st P = Product, 2nd P = Price, 3rd P = Place,

4th P = Promotion, 5th P = Process and
6th P = Physical Evidence

17
4. BANKING LAW AND PRACTICE THEREOF IN NCC BANK
LTD:

4.1. Banking law:

Banking law is not a discrete area of law like contract. It conveniently describes,
however, the collection of legal principles which impact on banking transactions and
on the banker-customer relationship. In that sense, the activity of banking is the
location at which a diverse range of legal principles intersect which we call banking
law. Those legal principles are drawn from a range of sources, including common law,
the Law Merchant, 1 equity and statute. In addition, for banks that subscribe to it, the
Code of Banking Practice is a legally enforceable set of principles and rules.

4.2. Objectives of Bank Regulation:

The objectives of bank regulation, and the emphasis, vary between jurisdictions. The
most common objectives are:
1. Prudential—to reduce the level of risk to which bank creditors are exposed.
2. Systemic risk reduction—to reduce the risk of disruption resulting from adverse
trading conditions for banks causing multiple or major bank failures
3. Avoid misuse of banks—to reduce the risk of banks being used for criminal
purposes.
4. To protect banking confidentiality
5. Credit allocation—to direct credit to favored sectors.

4.3. Instruments Requirements of Bank Regulation:

 Capital Requirement:

The capital requirement sets a framework on how banks must handle their capital in
relation to their assets. Internationally, the Bank for International Settlements’ Basel
Committee on Banking Supervision influences each country’s capital requirements. In
1988, the Committee decided to introduce a capital measurement system commonly

18
referred to as the Basel Capital Accords. The latest capital adequacy framework is
commonly known as Base! III. This updated framework is intended to be more risk
sensitive than the original one, but is also a lot more complex.

 Reserve Requirement:

The reserve requirement sets the minimum reserves each bank must hold to demand
deposits and banknotes. This type of regulation has lost the role it once had, as the
emphasis has moved toward capital adequacy, and in many countries there is no
minimum reserve ratio. The purpose of minimum reserve ratios is liquidity rather than
safety. An example of a country with a contemporary minimum reserve ratio is Hong
Kong, where banks are required to maintain 25% of their liabilities that are due on
demand or within 1 month as qualifying liquefiable assets.
Reserve requirements have also been used in the past to control the stock of banknotes
and/or bank deposits. Required reserves have at times been gold coin, central bank
banknotes or deposits, and foreign currency

 Corporate Governance:

Corporate governance requirements are intended to encourage the bank to be well

managed, and is an indirect way of achieving other objectives. Requirements may
include:
To be incorporated locally, and/or to be incorporated under as a particular type of
body corporate, rather than being incorporated in a foreign jurisdiction.
To have a minimum number of directors.
To have an organizational structure that includes various offices and officers, e.g.
corporate secretary, treasurer/CFO, auditor, Asset Liability Management Committee,
Privacy Officer and so on. Also the officers for those offices may need to be approved
persons, or from an approved class of persons.
To have a constitution or articles of association that is approved, or contains or does
not contain particular clauses, clauses that enable directors to act other than in the best
interests of the company may not be allowed.

19
4.4. Banking law in Bangladesh:

Laws that directly regulates the banking systems Year

of Bangladesh:
1.Bangladesh Bank Order 1972
2.Bank Company Act, 1991
3.Bangladesh Bank (Nationalization) Order 1972
4.Companies Act 1913 and 1994
5.Deposit Insurance Order 1984
6.Bankruptcy Act 1997
7.Insolvency Act 1920
8.Financial Court Act 1990
9.Foreign Exchange (Regulation) Act 1986
10.Financial Institutions Act 1993
12.Financial Institutions Rules 1994
13.Co-operative Societies Ordinance 1984

20
Laws that indirectly influence the banking Year
systems:
1. Code of Civil Procedure 1898

2. Code of Criminal Procedure 1898

3. Evidence Act 1872

4. General Clauses Act 1897

5. Limitations Act 1908

6. Negotiable Instruments Act 1881

7. Penal Code 1860

8. Trust Act 1882

9. Bangladesh Chartered Accountant Order 1973

4.5. Banking Laws followed by NCC Bank Ltd.:

NCC Bank complied with the requirements of following regulatory and legal
authorities given by Bangladesh Bank:

A. The Bank Companies Act, 1991;

CONTENTS

PART-I Preliminary (Sec 1-6)

PART-II Business of Banking Companies (Sec 7-50)
PART-III Illegal Banking Transactions by Companies, Etc. (Sec 51-56)
PART-IV Prohibition of Certain Activities in relation to Banking Companies (Sec
57)
PART-V Acquisition of the Undertaking of Banking Companies (Sec 58-63)
PART-VI Suspension of Business and Winding up of Banking Companies (Sec
64-77)
PART-VII Speedy Disposal of Winding up Proceedings (Sec 78-108)
21
 PART-VIII Miscellaneous (Sec 109-123)

B. The Companies Act, 1994;

C. Rules and Regulations issued by Bangladesh Bank;

D. The Securities and Exchange Rules 1987, The Securities and Exchange
Ordinance 1969, The Securities and Exchange Commission Act, 1993, The
Securities and Commission (Public Issue) Rules 2006;

E. The Income Tax Ordinance, 1984;

F. The VAT Act, 1991;

G. The Foreign Exchange Regulations (FER) 1947

H. Other Laws & Regulations as applicable.

4.6. Banking Law Practice by NCC Bank Ltd.:

 General Banking:

General banking department is the heart of all banking activities, especially to

mobilize the deposits. All other departments are linked with this department. It plays a
vital role in deposit mobilization of the branch. National Credit & Commerce Bank
Limited (NCCBL) provides different types of Accounts, locker facilities, special types
of saving scheme and flexibilities of remittance under general banking. This
department performs the general function of banking. In National Credit & Commerce
Bank Limited (NCCBL), for performing the operation of this department skilled
people are allotted for the purpose of Deposit Mobilization. The general banking
department National Credit & Commerce Bank Limited (NCCBL) consists of the
following section:

 Dispatch section

 Accounts opening section

22
  Cash Management section

 Remittance section

 Deposit section

 Clearing section

 Credit Card section

 Dispatch section

 Advance Section:

As a private commercial bank, NCCBL has some inherit commitments to its society.
By utilization the fund from the mobilized deposit NCCBL is fulfilling its
commitment which can gear up the economic activity. NCCBL has been extending
credit facilities to the potential, productive and priority sectors as per instruction from
Bangladesh bank. For a bank, good loans and advances are most profitable asset. A
big portion of operating income is derived from lending. This activity is done by the
loans and advance department.

 Classification of loans and advances:

Bank is an institution where clients keep their surplus deposits and these deposits are
invested in trade, commerce and industries in the form of Loans & Advances to earn
profit. Apart from earning profit, by lending to priority sector, Bank also helps
country’s economic development Lending activities of the Commercial Banks are of
two natures:

 Continuous Credit

 Term Loan

Continuous Credit:

23
Continuous credit the client is given a credit limit for a specified period mostly for 1
(one) year. The borrower is allowed to make transaction up to that limit. In other
word, he can deposit and withdraw up to the fixed limit in revolving manner.
Term Loan:
Term Loan, Loan is first disbursed at a time or in phases. Then it is borrower’s turn to
repay the Loan after a certain fixed period at a time or in installments fixed for within
a certain period.
 Foreign Exchange Department:

In NCC Bank Ltd, the Foreign Exchange Department has two sections. In comilla
branch there is no foreign exchange department. Some detail about foreign exchange
department and its two sections are given below:
1. Import Section
Import of merchandise involves two things Bringing of goods physically into the
country and remittance of foreign exchange towards the cost of the merchandise
Services connected with its dispatch to the importer.
 Import Procedure:

 Procedure for obtaining IRC (Import Registration Certificate)

 Submission of LCA (Letter of Credit Authorization) Form

 LCA forms distribution

 Opening L/C

 Examination of import documents

 Documents sent to the foreign exporter

 Payments against documents of release order from the bank.

2 Export Section:

The import and export trade of Bangladesh is controlled under the Import and Export
Control Act, 1950. No person who has been granted registration by the Chief

24
Controller of Imports and Exports shall indent, import or export any goods into or out
of Bangladesh except in cases of exemption issued by the government. The
registration number should be quoted on the relative export forms.
There are a number of formalities, which an exporter has to fulfill before and after
shipments of goods. These formalities or procedures are enumerated as follows:

– The Registration of Exporters

– Preparations of the Export Documents

– Dispatch of Goods

– Send Shipping Advice

– Negotiation of Documents

– Realization of Export Proceeds

– Get the name of the Importer/Buyer

– Price/Quotations

– Communicate the Acceptance

– Obtain Export Code Number

– Keep the goods ready for dispatch

– Inspection of Goods

– Getting Shipping Space

Get in touch with the Port Authorities Are required to be forwarded to the opening
banker along with the bill, the credit is called a documentary credit.

25
Function of Foreign Exchange:
The Bank actions are as a media for the system of foreign exchange policy. For this
reason, the employee who is related of the bank to foreign exchange, especially
foreign business, should have knowledge of these following functions:
– Rate of exchange

– How the rate of exchange works

– Forward and spot rate

– Methods of quoting exchange rate

– Premium and discount

– Risk of exchange rate

– Causes of exchange rate

– Exchange control

– Convertibility

– Intervention money

– Foreign exchange transaction

– Foreign exchange trading

– Export and import letter of credit

– Non-commercial letter of trade

– Financing of foreign trade

– Nature and function of foreign exchange market

26
– Rules and Regulation used in foreign trade

– Exchange Airtime

27
5. FOREIGN REMITTANCE:

5.1. Banking Law Practice by Foreign Remittance Department:

 Remittance: Remittance represents transfer of fund from one place to another

through official channel.

NCC Bank Ltd. is the members of Money Gram and SWIFT networks. Using the
services of this global network, non resident Bangladesh nationals can send money
from abroad to their home country within a few minutes without any risk. Besides
Money Gram, they have also arrangement with foreign money exchange companies
like U.S.E exchange Co.Redha-al-Ansari Co. etc. through which Bangladeshi
expatriates can remit this money to their relatives in home country very easily and
safely using SWIFT network.
Money Gram and SWIFT mechanism ensure 100% secured and quickest possible
mode of money transfers from abroad tour country and Bangladeshi money
receivers are enjoying these facilities through them. NCC Bank Ltd. is rendering
exceptional services to its clients by arranging such private remittance of money
from foreign countries to Bangladesh.
Bank remit funds one place to another through the network of their branches. The
main instruments for remittance of funds are payment order, demand drafts, mail
transfer, telegraphic transfer and traveler’s cheques and money gram (special
instrument of remittance for NCCBL). There are two kinds of remittances.

28
Types of Remittance:

Remittance
Local Remittance Foreign Remittance

i. Local Remittance

For money transfers within a country, the mode of local remittance is used. Local
remittances are DD, TT, MT & PO. Bank receives commission by providing these services.

1. Demand Draft: A bank draft is an unconditional order issued by one branch

of a bank to it’s another branch or to another bank to pay a certain sum of
money to the named person or 3rder on demand.

2. Telegraphic/Telephonic Transfer: A client can transfer their money

through TT. It is the faster way to transferring money.

3. Pay order: Pay order is a document of money. It would be released from

that bank where it is issued a P.O. request may come for different purpose
such as from any department, normal cash remittance etc.

ii. Foreign Remittance

Foreign Remittance is the Transfer of Fund from the economy of one

nation to another nation through exchange mechanism against the payment
settlement of goods & services (visible/ invisible).

Foreign remittances are Money Gram, UAE Exchange, Habib Qatar International
Exchange, Al-Fardan Exchange, Dhaka Janata Exchange, Federal Exchange UAE, IME,
and so on.

NCC bank ltd. select the best mode of Remittance Service to cater banking needs which is
fast, efficient and safe.

29
Importance of Foreign Remittance:

a) Nationwide importance:
 Helps payment of Import Bills
 Helps increase Foreign Exchange reserve
 Positive impact on country's balance of payment position

b) Banks perspective:
 Bank earns exchange gain
 Positive impact on the profitability of the Banks.
 Sharing of charges
 Sharing of Income
 Help to increase the Export business of the Bank
 Social responsibility
 Positive impact on Bank Deposit

Parties involved in Foreign Remittance: In the whole remittance process

following parties are involved
– Remitter – who send the money
– Remitting Bank- Bank which remit fund
– Covering Bank – which bank maintains the NOSTRO
of drawee bank.
– Paying / Drawee Bank- on whom FTT/ FDD is drawn
– Beneficiary / payee – Who get the ultimate payment
from drawee / paying bank,

• Types of Foreign Remittance:

- Commercial Remittance and

-Private Remittance

• Instrument used in Foreign Remittance :

NCCBL use following Instruments for Foreign remittance :

30
 - Demand Draft ( DD),
- Telegraphic Transfer (TT),
- Mail Transfer (MT),
- Bill of Exchange,
- Travelers Cheque (TC),
- International Credit Card,
-Cheque, Cash (notes & Coins) etc.

• Remittance means:
Printed Instruments for FDD & TC, Telex, Fax (old means) Electronic Fund
Transfer-EFT, EFT-POS, SWIFT -Society for Worldwide Interbank Financial
Telecommunication and any other secured electronic media.

• Forms used in Remittance as per GFET- Vol-II:

• IMP Form for Import & TM form for Private outward

remittance
• EXP Form for Export, C form & FMJ form for inward
remittance

• Prescribed Forms (Chapter 2, GFET-Vol. II) original certified copy by AD

must be forwarded with Returns to BB).

• Payment settlement – Except cash all the remittances are settled through
Correspondent Bank Account (NOSTRO) placing ‘Cover Fund’.

Modes of Foreign Remittances:

a) Foreign Inward Remittance

b) Foreign Outward Remittance

31
  FOREIGN INWARD REMITTANCE:

Remittances of foreign currency being received in the country from abroad is

called inward foreign remittance.

 Modes of Foreign Inward Remittance:

Telegraphic Transfer (T.T),

Demand Draft (D.D),
Mail Transfer (M.T) and
Travellers Cheque (T.C)

Above all are the common modes of Foreign Inward Remittances.

Besides, foreign Inward Remittance also includes remittances on account of
export, purchased of bills, purchase of Drafts, purchase of T.C., Foreign
currency notes and coins, cheques issued on foreign banks in favour of
beneficiaries in Bangladesh etc.

Purposes of Inward Remittances:

• Family maintenance
• Indenting Commission
• Recruiting Agents Commission
• Realization of export proceeds
• Donation
• Gift etc
• Exporter broker commission

Description about Inward remittances are given below:

Introduction to TT, DD, MT and TC:

T T: Cable or telex instructions of payment along with a test number are called
as Telegraphic Transfer. Where a foreign bank issue a T.T in favor of some one
32
in Bangladesh, it credits the amount, received from the remitter to the NOSTRO
A/C of NCC bank. On receipt of the TT the NCC bank in Bangladesh will make
payment of the proceeds of the T.T in foreign currency or in equivalent
Bangladeshi Taka to the beneficiary.

MT: MT is an instrument issued by a remitting bank to the paying bank

advising in writing to make payment of certain amount to the specific
beneficiary.

TC: It is an instrument issued by a Bank company payable to the purchaser on

presentation after verifying purchasers signature

Payment Procedures: DD/MT/TT:

The paying bank that means NCCbank must observe the following procedure
while making payment:
– Verifies the instrument to see that it is in order (Amount, name of
beneficiary and remitter's particular)
– Verifies the signatures of the authorized officers of the issuing Bank.
– Verifies the test number (if any).
– Convert the foreign currency in Taka (where payment has to be made
in BDT) at the prevailing rate. (TT at TT clean rate, DD (FBP)-OD
transfer rate, DD (collection) - TT Clean Rate].
– To obtain "C" Form if the remittance is equivalent to US$ 2,000 or
above. (Form "C" will not be required for Bangladeshi nationals
working abroad.
– In case of big amount, the paying branch before effecting payment may
take confirmation from the issuing Bank.
– Value date to be observed (value date- The particular date of crediting
Nostro A/C).
– Purpose of the remittance to be executed.

33
Payment of TC:
Travelers Cheques may be paid at the counter of the bank on presentation,
obtaining signature of the purchaser on the T.C. After verifying the signature of
the holder with the signature already on the T.C., the payment will be effected in
local currency at the prevailing conversion rate. The T.C may also can be
deposited in foreign currency account..

T.C's are being issued by some reputed bank's & Co's of the world such as:-
The American Express Bank
Citi Bank
The National West Minister Bank
The Barclay's Bank
The Bank of Oman
The Saudi Travellers Cheque Co

– T.C is bought and sold by the bank with whom arrangements have
been made by the issuing banks. T.C's are being paid at the TT clean
buying rate. The Travellers Cheques bought by the bank have to be
sent to their foreign correspondents with the instruction to credit the
proceeds on collection to their NOSTRO account with them.

The commercial banks in Bangladesh established Taka Drawing arrangements

different Exchange Companies having prior approval of Bangladesh Bank. The
exchange companies draw Taka drafts on the nominated branches of the banks.
The exchange companies remit cover of their drawings in US
Dollar/GBP/EURO. The bank purchase the same and credits the Taka proceeds
to the Tk. A/c of the Exchange companies. Drafts are being paid by debit to
NRT A/c of the Exchange companies provided the instruments are found
otherwise in order.

 FOREIGN OUTWARD REMITTANCE:

All remittances from Bangladesh to a foreign country i.e, foreign currency

being made out abroad may be termed as foreign outward remittance.
34
Common Modes of Foreign Outward Remittance:

Like Foreign Inward Remittance, TT, DD, MT and TC are the common modes
of Foreign Outward Remittance.

TT, DD, MT and TC may be issued by Authorized Dealers (A.D) in Bangladesh

drawn on their foreign correspondents. Outward remittances may also be
affected by selling foreign currency notes by A.D to travelers.

Purposes of Outward Remittance:

 Import bills
 Travels
 Treatment purposes
 Membership fees
 Fees for Application
 Examination fees (TOFEL, GRE, GMAT etc.) Registration fees
 Admission fees, Tution fees & Hajj fees.
 Profit and dividend of Foreign Investment, Insurance claim etc.

Checking Points for Outward Remittances:

 Application for foreign currency draft or remittance by means of

Telegraphic Transfer to be obtained.
 "IMP" form for Import and for other purposes "TM" form is to be duly
filled in and signed by the applicant.
 Permission from Bangladesh Bank for remitting foreign currency
exceeding normal quota as per standing circular of Bangladesh Bank.
 Validity of Permission must be seen if approved by foreign Exchange
Policy Department of Bangladesh Bank.
 Obtaining Govt. Order (GO) for Govt. employees.

35
 Issuance of TT:

 A Test number is to be provided

 Beneficiary's name A/C No. to be mentioned clearly.
 Amount in words and figures to be clearly written
 TT confirmation must be issued in the same day.
 Purpose to be executed.

Issuance of DD:

 DD is to be crossed Account Payee

 Date of issuance must be mentioned.
 Amount in words and figures to be clearly mentioned.
 Name of the Drawn on bank along with branch must appear on the
faced of the instrument.
 Putting authorized signature of 2 (two) issuing bank officials on the
Draft.
 Protect-Graph machine is to be used for protection against fraud and
forgery.
 Insertion of test number as per agency arrangement is a must.

Modes of Foreign Remittances under Agency Arrangement with different

Banks/MTOs:

At present the modes of foreign remittance is of two types:

 DD- Demand draft
 TT/EFT(Electronic Fund Transfer)
a) Online-Instant Cash/Cash over the counter
b) E-mail-A/C Transfer & Cash Payment under Test arrangement
c) Web-based remittance

36
DD- Demand Draft:
 Sender goes to Sending Agent

 Sending Agent receives Money and issues a DD in favour of beneficiary.

 Sender sends the DD to the Receiver. Some Exchange Companies sends the
draft directly to the beneficiary's Bank.
 Receiver deposit the DD to his account and the fund credited to his account
after collection

EFT-Electronic Fund Transfer:

Operation of EFT (On-line Remittance)

(Receive remittance instantly cash over the counter)
 Sender goes to Sending Agent
 Sending Agent receives Money and enter information into their
Server/System and give sender a Reference Number.
 Sender provides the Reference Number to the Receiver
 Receiver comes to Receiving Agent (bank) with that Reference
Number and fill up a form (supplied by the bank) with reference
number, name, amount, phone number, sender's name & country.
 Receive Agent gets connected with the Remitting Company's System
vis Internet (Software/ Website) with the Reference Number, if finds
the information are OK then pay cash to the beneficiary.
 Receive Agent (Bank Branch) keep copy of valid ID (Valid passport,
bank certificate etc.) from the receiver.

Operation of A/C Transfer & Cash:

 Bank receive list of invoices via e-mail or download from the website
of the remitting company in the morning with tested message.
 Each invoice contains information about the beneficiary such as his
name, bank & branch name, account number, phone/address etc.
 Then invoices are sorted according to the location of beneficiary's
bank branch and distributed to nearest branch.

37
  If beneficiary maintains account with the bank, fund credited to his
account instantly.
 In case of Cash Payment instruction bank call the beneficiary and pay
cash.
 If beneficiary maintains account with other bank then bank P/O in
favour of the beneficiary and sent it by hand/courier service to his
bank. Beneficiaries bank collect the fund through clearing-house and
credit to the beneficiary' account.
5.2. Foreign Remittance Products:

There are some products of foreign remittance. These are -----

National Credit and Commerce

Bank Ltd.
Remittance Department
Comilla Branch

Foreign Remittance PRODUCTS------

SL No Exchange Name Products Digit No Country List

Money Gram
More than 200
01 International Ltd. Ins. Cash 8 digit
Countries
USA
XpressMoney 16 digits
130 Countries
(Ins.cash) (Any type)
UAE Exchange Center. 16 digit
02 UAE EFT (TT) 130 Countries
LLC.UAE (any type)
16 digit
UAE Draft (DD) 130 Countries
(any type)
12 digit PLC Canada, USA, UK,
Placid Spot Cash
Placid NK Corporation, and Pin must Malayasia, Australia
03
USA 12 digit PLC Canada, USA, UK,
Placid (TT)
and pin must Malaysia, Australia
First Solution First FSC/FTT with
04 UK
MoneyTransfer ltd.Uk Solution(TT) 10 Digit
05 IME- Malaysia 11 digit Malaysia, Ksa, UK,
USA, Aus, Dhubai,

38
 Brunai, Bahrain
Federal Exchange,
06 Federal (TT) 8 digit Arab Emirates
UAE
Habib Express
Habib Qatar Int. 13 digit Qatar
07 (Ins. Cash)
Exchange
Habib Qatar (TT) 13 digit Qatar
16 digits (start
Al-Fardan(TT) Qatar
Al-Fardan Exchange 40075…)
08
Co. LLC, Qatar Al-Fardan 16 digits (start
Qatar
(Ins.Cash) 40075…)

Telemoney (Arab Reff No 12 &

09 Telemoney(TT) KSA(Soudia Arabia)
National Bank, KSA) Secret Code

Kaymaks finantial 4 or 5 digit pin

10 Kaymaks(TT) UK
services.UK number

Dhaka Janata Exchange Dhaka Janata

11 9 digit Italy
Milan, Italy (TT)

Wall Street cash Ex,

12 Wall Street (TT) 9 digit pin 56 Countries
UAE
13 Three star money
Ins cash 14 digit Malayasia
transfer.Malaysia

14 Zenj ex co WLL(tarbo) Ins cash 8 digit Bahrain,Qatar,kuait

15 Blue star A/C Libia

A/C 7 digit Oman

16 Majan exchange
Ins. cash Oman
Nationla exchange A/C Italy
17
company Ins cash 9 digit Italy
A/C credit or
18 Itau Unibanko Japan
instant
Texas money transfer
19 Not proceed now
Uk
Malaysia,KSA,UK,
11 digit(start
20 JR money transfer Uk USA,BAhrian,
with 9)
Dubai,Brunai,Aus

39
 21 Al jaman ex,Qatar 14 digit Qatar
TI/TIB(total 8
23 Transmit international USA
digit)
24 Kushira 9-12 digit UK
Almost 200
25 Western union Ins. cash 10 digit
countries

Above these products Money Gram, IME, UAE Exchange, Habib Qatar Int.
Exchange, Al-Fardan are mostly used in NCCBL, Comilla Branch & this Branch is
used to provide quick service at this division.

Detail about some of those products are given below:

Money Gram: Money Gram is represented in over 115 countries and is available at
more than 25,000 locations worldwide. In the USA alone Money Gram is available
at more than 15,000 locations.
•Sender completes a “send” form and gets a receipt. Money Gram Agent gives a
Ref: No. Which has to be passed to the receiver?
NCC Bank makes an enquiry on the Money Gram computer network to obtain
authorization to pay recipient and recipient receives the fund.
Money Gram is one of the fastest ways to transfer money. Customers using Money
uGram can send or receive money usually within 10 minutes from any world.
•To get the money the recipient need not to have a bank account with NCC Bank
Ltd. NCCBL does not levy extra charge. It gives better exchange rate to the
recipient.

IME: IME (M) Sdn. Bhd., formerly known as IME Impex Sdn.Bhd. was established
in March 2002 under the Malaysian Companies Act 1965. It is the first remittance
company licensed by Bank Negara Malaysia, ( Central Bank of Malaysia) to offer
outbound remittance services for the migrant workers other than banks as stated in
Bank Negara Malaysia’s November 2004 Monthly Statistical Bulletin .
IME operates in compliance with Bank Negara’s rules and regulations and all
international rules and codes on money remittance operators.

Placid Express: Placid Express In March 2002, the bank has entered a Taka

40
drawing arrangement with Placid Express, for home remittances of Bangladeshi
expatriates in the United States.

X-press money: The X press Money Services would like to welcome NCCBL to
their network. X press Money (XM) is a web-based person-to-person money transfer
system that allows an individual to send/receive money through any of our network
agents instantly. All transactions are done through secure servers using 128-bit
encryption technology so as to provide maximum security

Al Fardan: Al Fardan Exchange, the pioneer in money exchange and worldwide

remittance services in the U.A.E., established in 1971, is a trusted name for millions
of residents and expatriates. A modern exchange house with advanced infrastructure
and Courteous staff has an extensive network of correspondent banks all over the
world to facilitate faster, completely reliable transactions.

Habib express: Habib express is another important medium through which wage
earner remittance is accepted by NCC Bank. Here head office at first enter in system
server and received necessary information about the amount of remittance,
beneficiary who will receive the amount and any reference number which work as
security for Bank as well as beneficiary. Head office gives information through fax
to it respective branch from ~where receiver will receive money.

Dhaka Janata: Dhaka Janata are introduces to provide remittance fucilities to

emigrant and other people of Bangladeshi who work as contractual basis in the Italy.
Here Dhaka Janata also maintain same procedure of getting information from
system server including the name, referance number, amount, Phone number etc.
Here head office sends information through fax to all respective branch. All
receivers when come to bank, respective branch check his information with
information received from head office.
to deal with different kinds of persons with different legal status, National Bank
Limited officials remain very much careful about the competency of the customers.

Remittance procedure of two products are given below:

Remittance procedure Money Gram:

41
Money Sending Steps:
There five steps. These are ---
5 simple steps:
Step 1

Finding a MoneyGram agent

Step 2

Visiting MoneyGram agent, taking some personal

identification* with the agent.

Step 3

Complete a simple ‘send’ form and hand this to the

MoneyGram agent along with the money one want to
send and the transfer fee. They may also include a free 10-
word message on the form.

Step 4

Sender will be given a reference number.

Step 5

Contact the person to whom sender is sending the money,

and give him or her reference number. In just 10
minutes** the money will be ready to collect.

* Sender may be required to provide personal identification, usually one or more of the
following: passport, driving license, national identity card or a government issued
identification. Sender may also be required to provide proof of address (bank statement or
utility bill). Requirements vary by country so sender need to ask local MoneyGram agent
for acceptable identification formats.

In addition to the transfer fees applicable to a transaction, a currency exchange rate set by
MoneyGram or its agents may be applied. Prices subject to change.

42
Money Receiving Steps:
There are three steps. These are ------

3 simple steps:

Step 1

Agent will ask “who is sending you money to give you

your reference number?” – This will help speed up our
collection.
Step 2

Visit a MoneyGram agent, taking some identification* and

reference number with the agent.

Step 3

Complete our simple ‘receive’ form and show

identification – bank will then be given our money, usually
in local currency.

* beneficiary may be required to provide personal identification, usually one or more of the
following: passport, driving license, national identity card or a government issued
identification. Customer may also be required to provide proof of address (bank statement
or utility bill). Requirements vary by country so we need to ask local MoneyGram agent for
acceptable identification formats.

At NCC Bank, Comilla Branch provide the Recipients immediate attention and due care.
This Branch has made it a point to pay the Recipient within minutes.

Remittance procedure IME:

IME has developed a online remittance system-IMEremit and simple remittance procedures
to ensure fast, reliable and secure remittance service for customers. IME’s remittance
procedures can be summarized as follow:

Step 1:

43
The sender may either go to the nearest IME office in Malaysia with the transfer amount
and proof of identification or he/she (sender) may even deposit the transfer amount to IME’s
account in any of the six Malaysian banks – May Bank, RHB Bank, Bhumiputra Commerce
Bank, AM Bank Berhard, Hong Leong Bank Berhard, Public Bank and Eon Bank – and
approach the IME office with the proof of the bank deposit (bank deposit slip) and
identification documents.

Step 2:
Upon sender’s arrival at the IME office, he/she is asked to fill in a Sender Form with
following details:

A. Sender's Detail

1. Name of the Sender

2. Telephone No
3. Employment details of the Sender: (the name and address of the company where
the sender works in the host country)
4. Monthly Salary: (an average monthly income of the sender)
5. Passport Number: valid passport number.
6. Visa Valid Date: (IME does not provide its services to anyone not having a valid
work permit)

B. Receiver's Detail

1. Receiver’s Details: (Name, address, telephone number etc)

2. ID Type and ID No: (appropriate ID card number -- Citizenship certificate,
Passport, Driving License or any other ID card issued by Nepalese Government
Agencies – to be produced by the receiver at the time of remittance collection.
3. Relationship with Sender: (remitter needs to provide his/her relationship with the
receiver.
4. Bank Details: (If the remitter desires to deposit his remittance to be deposited to a
bank account in Nepal, he/she should provide bank information -- bank name,
branch name, account holder’s name and type of account).

44
Step 3:

The information provided by the sender is verified and put into the IMEremit system — an
online remittance product developed by IME to facilitate remittance services. The system
automatically generates a unique eleven digit code number – IME Control Number (ICN) –
which is provided to the sender. The sender needs to transmit the ICN to the beneficiary.
(The beneficiary shall require ICN to collect the remittance.)

The sender may either go to the nearest IME office in Malaysia with the remittance amount
and proof of identification (passport/ identification card/work permit) or he/she (sender)
may deposit the remittance amount to IME’s account in any of the branches and Cash
Deposit Machines (CDM) of the seven Malaysian banks-Maybank, RHB Bank, CIMB
Bank, AmBank, Public Bank, Hong Leong Bank and EON Bank and approach the IME
office with proof of the bank deposit (bank deposit slip or CDM slip) and identification
documents. At the IME office, sender is required to complete a Remittance Form with
details on sender and receiver. The information provided by the sender is verified and put
into the IMEremit system. The system automatically generates a unique eleven digit code
number-IME Control Number (ICN) – which is provided to the sender. The sender needs to
transmit the ICN to the beneficiary.( The beneficiary shall require the ICN and identification
document to collect the remittance.
At NCC Bank, Comilla Branch provide the Recipients immediate attention and due care.
This Branch has made it a point to pay the Recipient within minutes.

The amount of foreign remittance and position of Comilla branch for the year of (2008 to
2010) given below:
2008 2009 2010
amount position amount position amount position
224,767.37 11 388,147.41 19 376,333.36 11
(assumed data)

Foreign Remittance(in dollar) of NCC Bank Limited for last three years (2008-
2010)-

2008 2009 2010

$174.15 $199.76 $190.22
(assumed data)

45
5.3. Corruption & Malpractice in Foreign Remittance:
Some corruption and malpractice can be occur at foreign remittance department
which are given below:
• Unscrupulous customer present/deposit forged FDD for encashment in the
fictitious account which is opened in earlier.
• Sale purchase of counterfeit Notes. He intentionally didn’t utilize the
techniques of forge notes detection ‘tools’.
• Purchase FC from seller without verifying Passport or FMJ Form, some time
doesn’t enter the amount in Passport or FMJ Form.
• At the time of purchase foreign draft beneficiaries’ identity (CDD) is not
obtained.
• Personal Sale purchase of FC at unofficial rate at the counter without entering
in the banks books. ( Pocket Banking)
• It might be possible by Money Changer can that unofficially Sale / purchase
that is not entered his books and not reflect in the Returns
• Encashment of counterfeit TC. Failures to detect forged TC. At the time of
encashment TC travelers’ signature verification, copy of Passport page up to
VISA is not obtained properly,
• Once it was found that some telex operator would pass Forge Telex of FTT
from other telex office situated in the BD and some unscrupulous without
verifying it made the payment
• Sometimes dishonest officer of bank would credited the proceed against un
recon ciliated entries of NOSTRO Account to their personal account.
• FMJ form tempering – Incoming passengers while entering in BD they declare
Foreign Cash money & jewelries in the FMJ form and accordingly customs
authorities certify the FMJ Form.
• ** NGO Remittance release without NGO Bureau and non obtaining Form C-
Inward Remittance other than by Bangladesh Non Residence at abroad
maximum $3000 is allowed. But in case of above $ 3000 favoring NGOs is
required Form C is not obtained . (CFT)
• No local Currency is allowed to credit in the ‘Convertible Account’ beyond the
rules laid down in the “Convertibility of Taka” deregulations 1994.
• Using several Passports by one person to avoiding yearly upper limit
restrictions to use Foreign Currency at abroad.
• Using several international Credit Cards by same person (Dual Currency) from
46
 different bank and spending the FC at abroad.
• Abuse of ERQ Account balance- Exporter Retention Quota is the privilege for
the exporter in which they can retain foreign currency at certain level rate of
retention depends on value addition.
• Sometime it is observed that travelers or resident (recently returned to home)
don’t encashment FC with the Bank or authorized Money Changer.
• Excess outward remittance by the foreign individual serving in Bangladesh &
deliver the back excess amount to another Bangladeshi at abroad.
• * Remittance of Excess amount Profit by foreign Company/ Bank earned in
Bangladesh. If it is detected by BB than excess amount is adjusted from next
year profit.
• From Student Account outward remittance might be happened beyond the
education expenses or even after completion of study.
• Credit Card in FC Issued fvg exporter from ERQ for travel purpose or meet up
education expenses of children or for other than business.
• *Several Credit Card in FC possessed by single individual against ERQ
Account of different Bank
• Un-reconciled balance of NOSTRO A/C fraudulently driven away into
personal Account.
• Exporter Bank is liable for Certifying EXP form & Repatriation of Export
Proceeds but didn't take any action.
• Non remittance of Export proceeds in collaboration with buyer.
• * Repatriations of Export less than export Bill in the name of discrepancy
discount.
• BB L/C is opened for raw material excess than required amount in master L/C
but actually delivered exact amount excess payment is made.
• Payment is made against import bill but goods not delivered or shipped at all.
Non-matching of Bill of Entry
• Drawing accommodation Bill for the purpose of FC drawn off, there is strict
prohibition in GFET Chapter XV that Seller, Buyer & Agent/indenter cannot
be the same person.

ALERTNATIVE REMITTANCE SYSTEM – ARS (Hundi/ Hawala)

• Alternative remittance system - ARS is the subject matter of Money
Laundering & it is anticipated that ARS already been discussed in earlier)
47
 – Alternative remittance means remittance of money from one country to
another beyond banking channel or legalized way. Transfer of currency
by means of non complied rules & Exchange Control Regulations.
Where one banned item trade payment is settled by means of another
illegal trade proceeds. Passing illicit money, extortion money,
backhander Money, bribes, and drugs/ woman trafficking money out of
banking channel.
– In some cases placement of money may take place through direct sale
proceeds import goods or wage earner money in the account of
principal from where he remit money to the agent of beneficiary
country by exporting banned item.
– Income cases agent collect FC from the worker at abroad and
beneficiaries of wage earners are paid from local illicit money. They
retain the foreign currency in their personal account.
– Purchase FC from local prohibited market carry physically to abroad
purchase restricted or banned item & carry them in the local market
• Alternative remittance is the widest range corrupt way now using by the
corrupt people around the world.

NCC bank Comilla branch have skilled employes to avoid this type of Corruption &
Malpractice in Foreign Remittance.

5.4. Regulations for Foreign Remittance :

Laws, Regulations, Guide lines which govern the Foreign Remittance:-

The rules ang regulation which are followed by NCC bank for roreign remittance are
discussed below
• The Foreign Exchange Regulations (FER) 1947
• Guide Line on Foreign Exchange Transactions (GFET)- Vol-I
– Chapter- 7: Outward Remittance
– Chapter-8 : Inward Remittance
– Chapter -9: Dealing in Foreign Currency Notes & Coins etc.
– Chapter- 10 to 12:Private foreign Currency, accounts, Convertible &
Non Convertible TAKA Account, Private Non-resident Taka Account,

48
 • Deregulations – Convertibility of Taka.
• Time to time published Circulars from FEPD of Bangladesh Bank.

Related Sections of the Foreign Exchange Regulation Act- 1947

– Restrictions in dealing Foreign Currency: Sections- 4.

– Restrictions on payment of Foreign Currency: Sections- 5.
– Duty of a person’s entitles to receive Foreign Exchange etc. Section-
– Duty of Person who possess Foreign Currency/ securities: Sections-
13
– Custody of Foreign Securities: Section -14
– Restriction of Settlement Section- 17
- Restrictions on Foreign Companies: Section-18

Remittance from & in Convertible Taka Accounts

• Convertibility of Taka Account Deregulations

• On March 24, 1994 the Bangladesh Taka was declared convertible for current
account transactions in terms of Article VIII of the IMF Articles of Agreement
The declaration symbolized a turning point in the country’s exchange
management and exchange rate systems.
1. FOREIGN INVESTMENT
a. Investment in Bangladesh: Almost Free Permission (BOI) for Certain
Cases
b. Investment in shares/securities by non-residents: 5% shares of Initial
Public Offering (IPO) of a company
c. Remittance of profits: Branches of foreign firms/companies including
foreign banks, insurance companies and financial institutions are free to
remit their post-tax profits.
d. Remittance of dividend/capital gain: to effected prior to actual payment
of taxes.
e. Remittance of salaries and savings by expatriates: 50% of salary and
100% of leave salary
I. Remittance of royalty/technical fees: not exceed (a) 6% of
the previous year’
49
 II. Remittance on account of training and consultancy: 1% of their
sales

2. Remittance by shipping lines, airlines, courier service companies: Only after

adjustment of local costs and taxes, if any.
3. FOREIGN AND LOCAL BORROWINGS
4. CONVERTIBILITY ON TRADE ACCOUNT: Bangladesh Taka is
fully convertible for settlements of trade related transactions. Import license is
not required for import of items not in the control list.
5. EXCHANGE FACILITIES FOR EXPORTERS
a. New Exporters: Annual quota for business travel for new exporters US $
6000. beyond US $ 6000 is accommodated by BB upon written request .

b. Retention Quota for merchandise exporters:

o May retain up to 50% of realized FOB value high value

added item
o ( Jute goods) & low value added item like readymade
garments the retention quota is 10%.
o The computer software and data entry/processing service
exporters may also retain up to 50% of realized export proceeds
o Funds from these accounts may be used to meet bonafide
business expenses, such as business visits abroad, participation in export
fairs and seminars, import of raw materials, machineries and spares etc.
o Funds from these accounts may also be used to set up
offices abroad without prior permission of Bangladesh Bank.
o Exporters may, at their option, retain the foreign currency in
interest bearing renewable term deposit accounts in Bangladesh with a
minimum amount of USD 2,000 or Pound Sterling 1,500 equivalent.

c. Retention quota for service exporters: Service exporters may retain 5% of their
repatriated income in foreign currency accounts.

Incoming Passenger facility

50
6. DECLARATION OF FOREIGN EXCHANGE ON FORM ‘FMJ’ Incoming
passengers may bring in amount of foreign exchange with declaration on form
FMJ at the time of arrival.
– No declaration is necessary for amounts up to US$ 5000 For non-
residents, the entire amount brought in with declaration, or up to US$
5000 brought in without declaration may be freely taken out at the at
the time of departure.
– Unlimited amount to be brought by BD nationals. Up to US$ 5,000
brought in without declaration, above $ 5000 to be declared in FMJ
Form.
– He can retain up to $ 5000 with him for unlimited period & excess
balance to be sold with AD or, may be deposited in RFCD Account
within 30 days.
– Up to US$ 5,000 brought in without declaration may also be retained
and taken out freely by a person ordinarily resident in Bangladesh

7. FOREIGN CURRENCY ACCOUNTS GFET Section-9

a. NFCD Accounts:
b. F.C Accounts of non-resident Bangladeshis:
c. Resident Foreign Currency Deposit (RFCD) Accounts
d. F.C Accounts of other entities:
e. Maintaining of bank accounts abroad: Bank accounts outside
Bangladesh opened by Bangladesh nationals while working abroad
may now are maintained even after their return to Bangladesh.

8. VISITS ABROAD

• Booking of Passage: No Bangladesh Bank approval is needed for booking of

passage for BD in Taka.
• Private Travel: Annual travel quota BD is US$ 1000 per person for visits to
SAARC member countries and Myanmar (US$ 500 for overland visits), and
US$ 3000 per person for visits to other countries.
51
• Business travel quota for importers and manufacturers producing for domestic
markets:
• i) Subject to an annual upper limit of US $ 5000, importers are entitled to
business travel quotas @ 1% of their imports
• ii) Subject to an annual upper limit of US $ 5000, non-exporting producers are
entitled to business travel quotas @ 1% of their turnover

VISITS ABROAD…..
• Education: Prior permission of Bangladesh Bank is not required for releasing
foreign exchange in favour/on behalf of BD students studying abroad.
• Seminars and workshops: ADS may release allowance not exceeding US$ 200
per day for countries in the SAARC region and Myanmar and not exceeding
US$ 250 per day
• Medical treatment: ADs may release foreign exchange up to US$ 10000 for
medical treatment abroad on the basis of recommendation of Medical Board
constituted by the Health Directorate, in excess of US$ 10000 are
accommodated by BB on written request along with documentation
• Taking out/bringing in of Bangladesh Taka: Incoming/outgoing passengers
may bring in/take out up to Taka 500 per person in Bangladesh currency.
• Taking out/bringing in of personal jewellery: Incoming/outgoing adult female
passengers may take out/bring in any quantity of personal jewellery worn on
their person or as part of their personal baggage ( Baggage Rule).

9. MISCELLANEOUS REMITTANCES

– Remittance of membership fees: ADs may remit membership fees of

foreign professional, scientific institutions and fees for application,
registration, admission, examination (TOEFL, SAT etc.).
– Evaluation and Visa Processing Fee: ADs may remit evaluation and
visa processing fee on behalf of Bangladeshis desiring immigration to
foreign countries, as per demand note of the foreign immigration
authorities.
– Visa fee: Intending travelers may send visa fees through ADs to the
embassies of countries that do not have consular offices in Bangladesh.
– Family maintenance: Remittance of moderate amounts of foreign
52
 exchange for maintenance abroad of family members (spouse,
children, parents) of Bangladesh nationals are allowed by Bangladesh
Bank, on written request supported by certificates from the Bangladesh
mission in the concerned country.

9. COMMERCIAL REMITTANCES

• Opening back-to-back import LCs on account of manufacture-exporters for

their input imports as per prescribed input-output coefficients;
• Issue of bank guarantee/performance bond on account of the merchandise
exporters of Bangladesh in favour of foreign buyers;
• Remittance on account of short weight, quality claim, and partial shipment etc.
up to 10% of realized export proceeds.
• Payment of discount not exceeding 10% of the invoice value at the request of
the exporter.
• Remittance of premia on foreign currency policies taken by Bangladesh
nationals while residing abroad,
• Remittance of premia on account of re-insurance,
• Remittance of “General Average” collected from consignees in Bangladesh,
• Remittance of pre-shipment inspection fees,
• Remittance of bonafide expenses incurred by Bangladesh Biman and
Bangladesh Shipping Corporation in foreign ports/stations,
• Remittance on account of charter hire of foreign ships,
• Remittance of purchase price of ships acquired by private firms/companies,
• Remittance of royalty/honoraria/fees to non-residents including foreign news
agencies for features, articles etc. subscribed by local newspapers/magazines,
• Advertising of Bangladeshi commodities in mass media abroad.

Others Remittances
11. HOTEL BILLS Payment of hotel bills of foreign guests may be accepted in
local currency.
12. OTHERS Funds from non-resident Taka accounts can be freely withdrawn
regardless of the amounts involved.
– Declaration in Form C is not required in case of remittances sent by
Bangladesh nationals working abroad.
53
 – However, persons other than Bangladesh nationals are required to
declare in Form C if the inward remittance is US $ 3000 or above.
13. ACTIVATION OF FOREIGN EXCHANGE MARKET by ADs Bangladesh
Bank has stopped sales and purchases with ADs of any currency other than the
US Dollar, to encourage interbank cross currency transactions.
14. Bangladesh Foreign Exchange Dealers Association (BAFEDA) : has been
formed and a “Code of Conduct” for treasury operations and interbank foreign
exchange market has been formulated.
15. PRIVATE NON-RESIDENT TAKA ACCOUNTS
- Debits- When to be done.
- Credits When to be done.
Taka Drawing Remittance Schemes
16. Remittance by Money Transfer Company/ Agent :(Specially for Inward
Remittance): At present there are so many worldwide Money Transfer
company day by day many new companies
 Western Union Money Transfer Company
 Moneygram
 Placid International
 Express Money
 Al- Raji Money Exchange Co.
 Zenz Exchange
 Thomas Cook etc.
17. Taka Drawing Arrangement with Bank & Correspondent Bank, Money
Transfer Company:
 Sonali Exchange (USA/UK)
 Janata Exchange (ITALI)
 Overseas branches of BD Banks
 Agencies of Middle East countries / Wage earners home remittance
schemes etc.
18. Authorized Money Changers.

54
6. THE SWOT ANALYSIS:

SWOT analysis is an important matter to know the present condition of

strengths, weakness, opportunities and threats of NCCBL Bank Ltd. This
analysis also helps the company management to take relevant measure to make
up its weakness and to face the external threats of the competitors. The term
SWOT includes the following
 S-strengths

 W-weakness

 O-opportunities

 T-Threats

6.1. Strengths
 Well reputed in the Market.
 Not engaged in unfair business practice
 Well experienced professionals
 Efficient management practices in the bank
 Good Inter-personal relation among the officers & executives

6.2. Weakness
 Small market shortage
 High interest rate of loan
 Don’t have enough ATM service for attracting more customers
 Social responsibilities issues are neglected
 Insufficient number of deposit Scheme and loan
 Most of the employees of NCC Bank limited are not satisfied with the
job appraisal system.

6.3. Opportunities
 The customer of the bank can diversify their portfolio by introducing new
sectors.
 The Banking sector of Bangladesh is growing very fast
55
 The bank can also start micro credit business for individuals and small
business.
 The Bank can increase their profit by introducing new sectors like leasing,
one point services, Tele-Banking, Credit Card, Money gram, SWIFT etc.

6.4. Threats
 The competitors may come with innovate ideas which is difficult to
adapt.
 Many local and foreign aggressive Banks are in the market Competitors
have more deposits
 Different aggressive offers and services of foreign and other local banks
 Govt. imposes high rate of taxes and VAT
 Govt. pressures to reduce interest rate.

56
 7. Findings, Recommendation and Conclusion:

7.1. Findings:
During this internship period the main focus was in Foreign Remittance Section as well as
in other Sections of NCC Bank, Comilla Branch. Throughout these three months the major
findings of the study are:

I. There is no customer relationship officer in this branch.

II. The customers do not have any option to put their complaint in a specific complain
Box.

III. The bank does not put much emphasis as well as they are not very concern on
marketing of their products.

IV. From the clients view introducer is one of the problems to open an account. It is a
general problem in all commercial banks.

V. The bank has only one ATM booth at Comilla Thus, customers have to use others
bank’s ATM booth due to the unavailability which in turns incur service charge for
each transaction.

VI. Space of Comilla branch is not sufficient according to customer.

VII. In most of the cases Foreign Remittance, most of the products are centrally
maintained from the Head Office, sometimes which creates problem.

VIII. Foreign Exchange related loan or LC loans are not transacted in this branch.

IX. Monitoring of foreign remittance is not sufficient

X. The website does not contain adequate information about foreign remittance and
other sections.

XI. There are not enough customers in this field because of short listed products are
used here to provide foreign remittance services.

XII. It is needed to increase foreign remittance products at Comilla branch.

57
 7.2. Recommendation:
On the basis of the finding of the study it was evident that NCC bank Comilla Branch is
operating profitably and generating employment opportunity to the people of Bangladesh.
But the bank still has scope to improve its operating efficiency to generate more income.
The policy makers should, therefore, take necessary measures according to the fading’s of
the study; some policy recommendations may be advanced which are likely to be useful for
policy formulation:
I. Customer’s Convenience: For customer’s convenience, NCC Bank should provide
more personnel in cash section to deliver faster services to their honorable customer.

II. Human Development: Development of human resources should be ensured to

increase efficiency in work. More employment training and development program
should be taken by controlling authority to ensure employee competence in order to
cope with the changing financial markets.

III. Communication System: Ensure proper communication system and maintenance of

file & machineries like phone, computer, fax, and photocopier. Loan sanctioning
process should be more quickly. Office should be fully decorated to attract people to
come into it. ATM network and any branch clearing facility should be introduce.

IV. Managerial Function: NCC Bank must have to follow the management functions
(from planning & controlling) strictly in all of their business activities.

V. The branch should give adequate space for the customers to manage them in rush
hour and it should be well decorated so that it gives the customers a positive image
and comfort.

VI. The website of NCC bank should be more users friendly and informative. Moreover,
it should be updated regularly that customers get the all information about the
different activities and facilities of the bank.

VII. To compete with other private banks it must have to introduce new products
regularly and exercise those products to capture a large number of clients in the
market.

VIII. More ATM booths should be established in different crucial locations.

58
IX. NCC bank Comilla branch should increase their remittance products to compete in
the market.

X. The remittance policy and procedure should be made flexible and easy so that
general people can perform the remittance functions.

XI. NCC Bank could give more attention to advertisement and promotion of products,
which is helpful to collect more deposits and increase investments scope. Bank
could use various media for advertisement like TV, News Paper, Internet and
Billboard..

XII. Every job should be performed by the help of technology. So performing jobs in
manual way should be avoid to provide quick, responsive, easy customer services.

59
7.3. Conclusion

There are many banks in Bangladesh. Every bank has the same target to earn profit. To earn
profit bank needs to accept several policies so that it can provide more satisfaction to its
customers than the competitors and also vise versa. As a result, all banks are not
tantamount, and accordingly Bangladesh Bank as the watchdog of the money market
grading the banks. However the discipline of the banking sector is now outstanding. This is
the only sector, where the technologies cope very fast. The officials are trying hard to
provide their best for the betterment of the bank and also for the society. The NCC bank has
successfully made a positive contribution to the economy of Bangladesh with in very short
period. NCC Bank Ltd. attaches great priority on homebound foreign remittances from
Bangladeshi expatriates and has entered into agency arrangements with a number of foreign
banks and exchange companies where expatriates go to send money home. To attract the
expatriates to send their remittance through NCC Bank Ltd., the bank has launched a range
of useful banking products, including a special saving scheme, pension scheme, income
generating investment schemes and rehabilitation schemes for the repatriates. NCC Bank
Ltd. is constantly striving to ensure the quality of its expatriate products to attract the flow
of remittances through the formal financial sector. A key aspect is creating a greater
outreach of remittance delivery into rural areas, where from many expatriates migrated and
where their families still live. It can be easily said that NCC Bank is a progressive
Commercial Bank in private sector. It creates new opportunities for its clients as well as
gives customized services and maintains harmonious banker-client relationship. It
contributes towards formation of national capital, growth of savings and investment in
trade, commerce & industrial sectors. If they follow recommendation and take necessary
action accordingly, to this report the bank will develop quickly and will come in top
position in banking sector.

60
Bibliography

Annual report (2011), National Credit and Commerce Bank Limited.

Annual report (2010), National Credit and Commerce Bank Limited.

Foundation Training Course Book-2011, NCC Bank Ltd.

Office circular and other published papers, documents and reports.

Brochures of NCC Bank Ltd.

Manual banking Operations, NCC bank Ltd.
Md Ali Kanchan Meah, Officer NCC Bank Ltd. personal communication.

Websites:
www.NCCbank-bd.com
www.bangladesh-bank.org.bd
http://www.google.com/

ncc/nccbservices_remittance.htm

nccbservices_remittancepartners.htm

61
 Appendix

NCC BANK PERFORMANCE AT A GLANCE

Five Year Financial highlights

Taka in Million (where applicable)

2006 2007 2008 2009 2010
Authorized
2,500.00 2,500.00 2,500.00 5,000.00 10,000.00
Capital
Paid up Capital 1,201.79 1,352.01 1,757.62 2,284.90 4,501.25
Reserve fund and
1,215.58 1,995.36 2,863.63 4,371.62 5,771.09
other Reserve
Equity fund 2,417.37 3,326.52 4,621.25 6,656.52 10,272.34
Deposits 28,147.34 34,901.77 46,904.66 53,900.15 67,961.24
Import Business 17,646.80 28,779.21 38,796.88 33,078.44 41,245.21
Investment 3,552.08 6,266.62 6,526.82 9,671.53 10,980.81
Loans and 24,678.36 32,687.75 46,332.69 50,387.68 63,230.14
Advances
Retained Profit 7.83 8.13 5.34 46.47 388.11
Operating 3,913.19 5,269.03 7,417.64 9,333.03 10,157.99
Income
Operating 2,645.62 3,488.78 5,054.15 6,195.33 6,057.79
Expenses
Operating Profit 1,267.57 1,780.25 2,363.49 3,137.70 4,100.20
Profit before Tax 1,056.51 1,356.32 1,788.96 2,686.49 3,248.23
Profit after Tax 479.22 677.18 882.28 1,719.50 2,371.68
Export Business 8,557.00 9,577.92 12,522.04 11,903.72 16,125.52
Total Assets 32,615.01 42,522.85 57,365.52 65,937.49 83,554.18
(excluding
contra)
Fixed Assets 353.71 522.00 775.31 849.10 1,191.49
Number of 48 53 57 65 79
Branches
Number of 1,118 1,230 1,400 1,496 1,622
Employees
Earning per 39.88 50.09 50.20 75.26 53.30
Share
Dividend : Cash 10.00 - - - -
(%)
Bonus (%) 12.50 30.00 30.00 47.00 32.00

Source: Annual report(2010)NCC Bank Ltd.

62