Escolar Documentos
Profissional Documentos
Cultura Documentos
Of
Trust Bank Limited”
A study on
Dilkusha Corporate Branch
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TABLE OF CONTENTS
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Chapter Three: Learning Part
References 67
Appendix 68
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Table of Charts and Diagrams
Name & SL no Table Pag Name & SL no Charts & Diagrams Page
e No
No
Table 1: Installment of Chart 1: Values of the Bank 11
TSS 22 Chart 2: Corporate Information of TBL 13
Chart 3: Organizational hierarchy 14
Table 2: Installment of Chart 4: Different Wings of TBL 15
LSS 22 Chart 5: Different types of depository
products 20
Table 3: Total Assets 29 Chart 6: Different types of Loan 23
Chart 7: Total Capital and Capital 29
Table 4: Share Holders Adequacy Ratio
Equity 30 Chart8: Shareholders Equity 30
Chart 9: Growth of Reserve 30
Table 5: Reserve 30 Chart 10: Deposit Growth 31
Chart 11: Deposit Mix 2009 32
Table 6: Total Deposits 31 Chart 12: Growth of Loans and Advances 33
Chart 13: Growth of Profit 34
Table 7: Deposit Portfolio 32 Chart 14: Different Wings of Foreign
Exchange Operation 37
Table 8: Total Assets 33 Chart 15: Advising of L/C 45
Chart 16: Flowchart of Letter of Credit
Table 9: Operating Profit, 34 Operation 51
Profit before Tax and, Chart 17: Modes of Payment 58
Profit after Tax Chart 18: Import earnings growth 62
Chart 19: Growth of Export Earnings 62
Table 10: At a glance of Remittance
TBL financial Chart 20: Growth of Foreign Remittance 63
Performance of last 5 years 35
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1.1 Introduction:
This internship is a part of the Bachelor of Business Administration (BBA) program that
provides an on-the-job experience to students. I was placed at Trust Bank Limited,
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Dilkusha Corporate Branch as an internee student for three months. This internship
program was my very first on-the-job exposure and provided me with learning experience
and knowledge in several areas. During the first few weeks of my internship period, I was
able to get accustomed to the working environment of Trust Bank Limited. As the
internship continued, I not only learned about the activities and operations of
correspondent Bank, but I also gathered some knowledge about the basic business
activities of banking in first one-month of my internship period.
Generally by the word “Bank” we can easily understand that the financial institution
deals with money. But there are different types of banks such as; Central Banks,
Commercial Banks, Savings Banks, Investment Banks, Industrial Banks, Co-operative
Banks etc. But when we use the term “Bank” without any prefix, or qualification, it refers
to the ‘Commercial banks’. Commercial banks are the primary contributors to the
economy of a country. So we can say Commercial banks are a profit-making institution
that holds the deposits of individuals & business in checking & savings accounts and then
uses these funds to make loans.
A company can increase efficiency through a number of steps. These include exploiting
economies of scale and learning effects, adopting flexible manufacturing technologies,
reducing customer defection rates, getting R&D function to design products that are easy
to manufacture, upgrading the skills of employees through training, introducing self-
managing teams, linking pay to performance building a companywide commitment to
efficiency through strong leadership, and designing structures that facilitate cooperation
among different functions in pursuit of efficiency goals.
Trust Bank Limited pursues decentralized management policies and gives adequate work
freedom to the employees. This results in less pressure for the workers and acts as a
motivational tool for them, which gives them, increased encouragement and inspiration to
move up the ladder of success. Overall, I have experienced a very friendly and supporting
environment at Trust Bank Limited, which gave me the pleasure and satisfaction to be a
part of them for a while. While working in different departments of this branch I have
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found each and every employee too friendly to us to cooperate. They have discussed in
details about their respective tasks. I have also participated with their works.
Education system will be more rich and helpful when there is a combination of theoretical and
practical relationship with a student. From education the theoretical knowledge is obtained from
courses of study, which is only the half way of the subject matter. Practical knowledge has no
alternative. The perfect coordination between theory and practice is of paramount importance in
the context of the modern business world in order to resolve the dichotomy between these two
areas. Therefore, an opportunity is offered by Daffodil International University, for its potential
business graduates to get three months practical experience, which is known as “Internship
Program”. To complete of the internship program, I was placed in a bank namely, “Trust Bank
Limited”, Dilkusha corporate branch for the period of three months starting from June 01, 2010 to
August 31, 2010. Internship Program brings a student closer to the real life situation and thereby
helps to launch a career with some prior experience.
Trust Bank Limited is one of the leading private commercial bank having a spread
network of 45 branches across Bangladesh and plans to open few more branches to cover
the important commercial areas in Dhaka, Chittagong, Sylhet and other areas in
2010. The bank, sponsored by the Army Welfare Trust (AWT), is first of its kind in the
country. It performs all the modern banking activities to satisfy its clients. This study
attempts to analyze the performance evaluation and foreign exchange activities of TBL.
Through the internship program, close observation was made on different banking
activities of TBL. It performance was reviewed and analyzed through the annual report
and internal record of the bank.
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The main reason of this study is to become familiar with the realistic business world to
attain practical knowledge about the banking and corporate world. We all know that there
is no alternative of practical knowledge which is more beneficial than theoretical aspects.
The study focuses on the foreign exchange operations of Trust Bank Limited, Dilkusha
Corporate Branch. The study was wide spread and has greater scope to focus on different
aspect of foreign exchange on banking sector but my study probably will not reflect the
practices in the overall banking sector. Moreover, it does not include the foreign
exchange practices done by the non-banking financial organizations. It focuses on:
An overview of TBL
An overview of foreign exchange activities of TBL
Import and Export procedure of TBL
Foreign Exchange performance of TBL
1.6 Objectives of the Study:
However, the broad and specific objectives of the study are as follows:
Major Objectives:
The major objective of the study is to observe & evaluate Foreign Exchange activities &
performance evaluation of that department of the Trust Bank Ltd
Specific Objectives:
Every report has an objective. The objective of the internship program is to
familiarize students with the real business situation, to compare them with the business
theories & at the last stage make a report on assigned task. Specific objectives are as
follow:
1.7 Methodology:
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Research Design:
The study requires a systematic procedure from selection of the topic to final report
preparation. In this study, descriptive method was undertaken to gain insights and
understanding of the foreign exchange operation of TBL. To perform the study data
sources were identified and collected, they were classified, analyzed, interpreted and
presented in a systematic manner and key points are found out. This overall process of
methodology is given in below that has been followed in the study.
Selection of the topic: The topic selected for the study was chosen by me and approved
by Mr. Mahbub Parvez, Assistant Professor, Department of Business
Administration, Faculty of Business & Economics, Daffodil International University
Identifying data sources: Essential data sources both primary and secondary had been
identified which were needed to complete and workout the study. To meet up the need of
data
Primary data are used and the study also required interviewing the officials and
staffs, clients where necessary.
Secondary data sources were files, documents, website of the bank, relevant
books, etc.
Target Population:
All officers and clients of Trust Bank Ltd, Dilkusha Corporate Branch.
Population Size:
No. of employees of this branch: 49
No. of clients of this branch: 6000(approximately)
Sample Size:
No. of employees: - 20
No. of clients: - 75
Sources of Data: Sources of data are given below:
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Primary Source
Secondary Source
Annual reports & documents of TBL
Web site of TBL.
Newspaper, journal, articles etc.
Credit Policy Manual
Different books and periodicals related to the banking sector
Bangladesh Bank Report
Method of Data Collection: For preparing this paper, I used both Secondary and
Primary data
Primary Data:
Practical experience and queries from the executives while doing my internship at
The Trust Bank Ltd.
Some data are collected from Informal discussion with the executives of the bank.
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To analyze the gathered data of foreign exchange department, I used different types of
charts, tables and graphs. To do that analysis I used different types of computer software
like Microsoft Word and Microsoft Excel.
Findings of the study: After finding out the data problems of the study were pointed out
and they were shown under concerned heads. Recommendations were suggested
thereafter to overcome the problems.
I have tried my best to provide with all necessary information about Trust Bank Limited
but the main problem faced in preparing the paper was the inadequacy and lack of
availability of required data. This report is an overall view of Foreign Exchange
Operations and performance evaluation of The Trust Bank Ltd. But there is some
limitation for preparing this report. These barriers, which hinder my work, are as follows:
Difficulty in accessing latest data of internal operations for data security.
Non-availability of some preceding and latest data.
Some information was withheld to retain the confidentiality of the bank.
Since the bank personnel are very busy with their activities, as a result they were
unable to provide much information about the report.
I was placed to this department for only 3 months of time and working like a
regular employee hindered the opportunity to put the better effort for the study.
With all of this limitation I tried my best to make this report as best as possible. So
readers are requested to consider these limitations while reading and justifying any part
of my study.
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2.1 An overview of Trust Bank Limited
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Trust Bank Limited is one of the leading private commercial bank having a spread
network of 45 branches and 5 SME center across Bangladesh and plans to open few more
branches to cover the important commercial areas in Dhaka, Chittagong, Sylhet and other
areas in 2010. The bank, sponsored by the Army Welfare Trust (AWT), is first of its
kind in the country. With a wide range of modern corporate and consumer financial
products Trust Bank has been operating in Bangladesh since 1999 and has achieved
public confidence as a sound and stable bank.
In 2001, the bank introduced automated branch banking system to increase efficiency and
improve customer service. In the year 2005, the bank moved one step further and
introduced ATM services for its customers.
Since bank’s business volume increased over the years and the demands of the customers
enlarged in manifold, our technology has been upgraded to manage the growth of the
bank and meet the demands of our customers.
In January 2007, Trust Bank successfully launched Online Banking Services which
facilitate Any Branch Banking, ATM Banking, Phone Banking, SMS Banking, &
Internet Banking to all customers. Customers can now deposit or withdraw money from
any Branch of Trust Bank nationwide without needing to open multiple accounts in
multiple Branches.
Via Online Services and Visa Electron (Debit Card), ATMs now allow customers to
retrieve 24x7 hours Account information such as account balance checkup through mini-
statements and cash withdrawals.
Trust Bank has successfully introduced Visa Credit Cards to serve it’s existing and
potential valued customers. Credits cards can now be used at shops & restaurants all
around Bangladesh and even internationally.
At present the bank has as many as 45 branches and 5 SME centre across the country.
It is committed to become equal service providers compatible with the norms of
commercial schedule bank.
It renders all types of personal, commercial and corporate banking services to its
customers within the purview of the Bank Companies Act, 1991 and in line with the
directives and policy guidelines lay down by Bangladesh bank.
2.3 Vision
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Its aim to provide financial services to meet customer expectations so that customer’s feel
they are always there when customer need them, and can refer them to their friends with
confidence.
Trust Bank wants to be a preferred bank of choice with a distinctive identity.
2.4 Mission
The mission of TBL is to make banking easy for their customers
Implementing one-stop service concept and provide innovative and attractive products &
services through technology and qualified human resources.
They always look out to benefit the local community through supporting
entrepreneurship, social responsibility and economic development of the country.
2.5 Objective of the Bank
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Chart 1: Values of the Bank
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2.7. Corporate Information of TBL
Legal Form
The company was incorporated on 17 June 1999 under the Companies Act 1994 as a
public company limited by shares for carrying out all kinds of banking activities.
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Chart 2: Corporate Information of TBL
Company Secretary
Mr. Farhad Uddin
Auditors
Howlader Yunus & Co., Chartered Accountants
67 Dilkusha C/A, Dhaka-1000
Tax Consultant
M/S ADN Associates
Kaizuddin Tower (8th fl oor), 47 Bijoy Nagar, Dhaka-1000
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2.8 Organizational Hierarchy of the Trust Bank Ltd.
The Organizational hierarchy of the Trust Bank Ltd. can be shown by the following
diagram:
Board of directors
Officer
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2.9 Different Wings of TBL: There are several types of department in TBL. These are
mentioned below:
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2.9.1 Retail Banking:
Accounts opening
Cash Department
Credit Department
Remittance Department
Foreign Exchange Department
Accounts opening:
The name of the department informs that different types of account are opening here. All types of
formalities related to account opening are done in this department. The activities and services of
account opening are mentioned in ‘product and services’ portion of the report.
Cash Department:
All sorts of transaction considering the cash are taken into the care in the cash department. Cash
is deposit in the name of concern bank and disbursed to the client by his/her department.
Credit Department:
“Credit” it is a very similar word for the bank. It contents a huge meaning. A bank’s main earning
source is credit. If bank’s credit management is not good then the bank will never ever achieve its
proper goals. Question may arise what are the proper goals for the bank? The proper goals for the
banks are profit maximization and shareholder’s wealth maximization. The fundamental nature of
credit is that an element of trust exists between buyer and seller whether of good or money. The
main use of bank fund is to collect money from surplus unit and lend it to deficit economic unit.
Remittance Department:
Remittance is another significant part of the general banking. The bank provides
services and various types of bills through the remittance within the country.
Obviously, the bank charges commission on the basics of bills account. Types of
remittance are as follow:
Pay Order:
A Pay-Order is issued only with in the members of Bangladesh Bank clearing house.
It can be issued in favor of a customer holding account by debiting his/her account
and crediting bills payable account. In case of non-customer, cash equivalent of
payment plus pay order charges is received in cash and held in daily expanses
account until the payment is made through clearing.
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Pay Slip:
Pay Slip is issued when bank created expanses for his own purpose.
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2.9.2 Islamic Banking
Islam is a complete code of life. The prime objective of Islamic life style is to conquer success in
life here and hereafter. Trust Islamic Banking is solely committed to conduct and manage the
banking system abiding the Islamic law. Islam has given right to attain and own assets. Trade is
mainly of two kinds- buy/sell and investment and both segment avoid the Interest completely.
According to Islamic Shariah, buy/sell is process of purchasing of goods in a certain price with
the buyer and seller’s consent. Shariah has the explanations for different kinds of purchasing
contracts. On the other hand, investment is a business based on profit-loss sharing. There are
Shariah compliant explanations for it and Islamic banking is managed complying all the Shariah
commandments.
Success of Islamic Banking mostly depends on the commitment and knowledge of all the
participators (bank and customer). Trust Bank is committed to offer the finest and modernized
Islamic Banking system by means of its administrative professionalism and dedication.
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2.9.4 Automated Banking
All the branches of the TBL are fully computerized. New software is now in use to provide faster,
accurate and efficient service to the clients. The bank is continuously striving for better services
through extensive automation of its branches. Trust bank has launched “One Branch Banking”
through on-line connectivity. The bank has set up a full-fledged IT division to keep abreast of the
latest development of IT for better service in the days to come.
Internet Banking
It is time of Internet and one can access his/her account from any where in the world by using
his/her unique user id and password. Here a User can see his/her account balance as well as take
print out of transactions with specific date range and can preserve it as a document.
Phone Banking
Trust Bank has easy way to serve customers banking needs using any phone, whether they are at
home, office, or on the road. Trust Bank’s phone banking is absolutely free. This service
performs balance query and mini statement of a customer via phone. This service will soon
include utility bill and fund transfer facilities. Phone Banking is available 24 hours a day, seven
days a weak.
SMS Banking
Trust Bank offers yet another great, timesaving banking service: SMS banking. This
automated SMS banking can be reached 24 hours a day, 7 days a weak. This service
performs balance query and mini statement through SMS via a fixed mobile number
given by you. Mini statement contains last five debit and credit transactions including
balances. This service will soon include utility bill and fund transfer facilities.
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2.10 Product and Services:
Several types of product and services are provided by TBL. These are:
2.10.1 Depositary products: TBL is providing six types of depository product. these are
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Savings Deposit Account
A Saving Bank account (SB account) is meant to promote the habit of saving among the people.
It also facilitates safekeeping of money. In this scheme fund is allowed to be withdrawn
whenever required, without any condition. Hence a savings account is a safe, convenient and
affordable way to save your money. Bank also pays a minimal interest for keeping money with
them.
Choose the savings account to suit you from our wide range of options. Enjoy convenient, instant
access to your savings account at your branch, over the phone or via the internet. These accounts
have attractive interest rates.
Types of Savings Deposit Account:
Individual
Joint
Club
Society ,Others
Current Deposit (CD) Account is the net flow of current transactions with no restriction,
including services and interest payments. It is an easy-to-use, convenient current account
with instant access and withdrawals to your money anywhere in Bangladesh. Customer
can get credit facilities against CD account.
Fixed Deposit Account
A fixed deposit is meant for those investors who want to deposit a lump sum of money for a fixed
period; say for a minimum period of 30 days to one year and above, thereby earning a higher rate
of interest in return. Investor gets a lump sum (principal + interest) at the maturity of the deposit.
Bank fixed deposits are one of the most common savings scheme open to an average investor.
Short Term Deposit Account is the net flow of current transactions including services and
interest payments. It is an easy-to-use, convenient current account with instant access and
withdrawals to your money anywhere in Bangladesh.
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Trust Smart Savers Scheme (TSS)
The name of the scheme is 'Trust Smart Savers Scheme (TSS)' and an Account holder
subscribing to this scheme will be called TSS Account holder.
At the maturity the depositor will get TK. 1.00 Lac by the depositing monthly
installment as per following arrangement:
Terms & Conditions:
1. Monthly installment size, tenor and terminal benefit of the scheme will be as follows:
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Car Loan:
Chart 6: Different types of Loan
Now a car is no longer luxury but necessity. Moreover, a car is more than a symbol of prestige.
TBL offers to materialize customer’s dream of owning a car through TBL car loan facility.
Doctor’s Loan:
Medical is a noble profession which is evolving fast. In a country like ours it is important to be a
part of those changes as we cannot afford to be lag behind. Keeping that in mind and with a
vision to support and promote health services, TBL is at your side with our Doctors' Loan.
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Life is continuously facing unforeseen events. For which sudden financial support is essential.
We are at your side to meet up your urgency at any moment through our "Advance against
salary" scheme.
Travel Loan:
When you plan to travel local or global exotic location, financing is the key issue. Don't be
worried; TBL Travel loan is ready to provide instant financial support.
2.10.3 Card Facilities: There are two types of card facilities; these are debit card& credit card.
Debit Card:
Look into your pocket. Is there a Trust Debit Card? If yes then you are free to move anywhere
round the clock all over Bangladesh without carrying cash. Even the card can be used without a
secret code (PIN) in departmental stores, shopping centers or restaurants, petrol pump or even for
paying phone bills, just like a credit card. Additionally client can enjoy overdraft facility prior to
subsequent approval. To make the life hassle-free client can take Trust Debit Card without giving
a second thought.
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Credit Card:
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dedicated to full-fl edged SME business. The Bank has launched different products, and
is marketing these products matching with the customer needs. Its especial emphasis is
on:
Loan for shopkeepers,
Loan for light engineering,
Loan for power loom and handloom industries,
Agri-business loan
Loan for Women Entrepreneurship
Peak seasons loan
Bio –gas and alternative energy
2.11 Others:
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Web Page:
The introduction of Internet has change the traditional concept of world trade and commerce. As
the time is progressing its necessity is being felt more in the prevailing competitive since no
organization can afford to remain in isolation with the rest of the world for its survival. In order to
provide up-to-date information on the bank at fingertips to the trade and business communities of
the world, their own IT team has developed a web page for the bank. It can be accessed to under
the domain:
http://www.trustbank.com.bd/
SWIFT:
The bank is a member of SWIFT Alliance Access, a sophisticated; fraud proof secured financial
messaging system provided by the Society for Worldwide Inter-bank Financial
Telecommunication (SWIFT), Belgium. With the installation of the SWIFT system the bank
would ensure and reliable transmission of L/C, funds transfers, outgoing and incoming massages
and other financial services.
Branch Expansion:
The TBL has taken up a program to expand its branches. The bank has already 45 branches and 5
SME center in many different places in Bangladesh; most of them are inside the different
cantonments. The management is filling that they need more branches all over the Bangladesh.
As per Bangladesh Bank circular that if any bank opens a branch in Dhaka then they have to be
open a branch in out side Dhaka.
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The TBL believe that their revenue that leads to earning profit and increasing wealth of
the stakeholders comes from our society. They acknowledge their responsibility to all of
stakeholders including our society. Their commitment to socially responsible business is
reflected in their business policy, pricing products, rewarding employees, discharging
duties to government, and direct participation in CSR activities. As part of CSR through
direct participation program, we have established a special reserve fund named Trust
Bank Limited Special Reserve Fund, with 5 percent contribution from Bank’s total
income every year, which is run by a Board of Trustees that includes a Chairman and six
members from Board of Directors and management. Moreover, they also transferred
Taka 64.20 million from the profit of 2009 to the fund for discharging CSR activities in
2010.
Notable Donation
Some of their notable contributions for social causes include: (i) Tk.25 million for
construction of School Building of Sena Sahayak School, (ii)Tk.21 million to Trust
Technical Training Institute, (iii) Tk.2.5 million to Prime Minister’s Relief fund for
Cyclone “Aila” stricken people, and (iv) Tk.5 million to Bangladesh Olympic
Association for organizing the South Asian Games. Apart from above, as part of CSR
activity, they have been contributing Tk.1 million lac to promote Taekwondo game every
year since 2008.
Medical Treatment
The Bank extended its helping hand to many unwell people and assisted in bearing their
medical expenses. The donation in this regard stood Tk.13.50 lac in 2009.
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2.13 Financial Performance of TBL
TBL a blend of expertise and technological excellence is in place to meet varied needs of modern
customers. The bank aims at mobilizing untapped money of the country and prudent deployment
for productive activities in the form of lending at a competitive interest rates/loan pricing.
Towards attainment of its goals and objectives, the bank pursues diversified credit policies and
strategic planning in credit management. To name a few, the bank has extended micro credit,
consumers durable scheme loans, house building loans etc. to cater to the needs of the
individuals, which in turn has helped thousands of families. The bank also extends loan in the
form of trade finance, industrial finance, and project finance, export & import finance etc. The
bank’s credit polices aimed at balanced growth and harmonious development of all the sectors of
the country’s economy with top most priority to ensure quality of lending by averting growth of
non-performing assets.
2.13.1Capital:
At the end of 2009, total capital stood at Tk.4215.98 million against Tk.3,504.44 in 2008
registering a growth of 20.30 percent over preceding year. And capital adequacy ratios
were 12.66% and 12.81% of total risk weighted assets in 2009 and 2008 respectively
against the regulatory requirement of 10%.
Year 2005 2006 2007 2008 2009
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2.13.2 Share Holders Equity:
Total shareholders’ equity increased by 20.36% and stood at Tk.3,754.87 million at the
end of 2009 as against Tk.3,119.65 million in 2008. The increase was mainly attributed to
the issue of bonus shares of Tk.308 million, increase of Tk.609.80 million in statutory
reserve and other reserve also increased by Tk.48.28 million in 2009. However, share
premium and retained earnings dropped by Tk.308 million and Tk.22.85 million
respectively due to issuing bonus shares out of premium in the year 2009.
Year Share
Holders
Equity
2005 991.97
2006 1,155.00
2007 2,154.29
2008 3,119.65
2009 3,754.87
400 Satutory
2007 330.63 300 Reserve
2008 528.53 200
0
2005 2006 2007 2008 2009
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2.13.4 Deposit and Deposits Portfolio
In spite of sharp decline in market interest rates resulting from fixation of ceiling of
interest rate of bank deposits by the Association of Bankers Bangladesh (ABB), in the
year 2009, the deposits of the Bank shot up by 47% to Tk.48,464.64 million from
Tk.32,919.76 million as recorded in the year 2008. The combination of competitive
interest rates, depositors’ trust in the Bank and mobilization efforts of the Bank
Management resulted in this rapid growth of deposits. Mix of deposits showed that fixed
deposits and short-term deposits contributed 57% and 16% respectively, i.e. 73% of total
deposits of 2009 resulted in higher cost of fund. The share of cost free or low cost
deposits decreased slightly by 2% , i.e. from 29% to 27% of the total deposits at the end
of year 2009. We have plan to increase low cost deposits, especially scheme deposits
because the effective cost of scheme deposits is lower than that of fixed deposits. The
Bank’s deposits include the deposits from both conventional and Islamic banking deposit
vehicles.
Yea Deposits
r
2005 12,704.90
2006 18,985.95
2007 27,101.59
2008 32,919.76
2009 48,464.64
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Table 7: Deposit Portfolio
Source: Annual Report of TBL, 2009
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2.13.5 Loans & Advances
Total loans & advances of the Bank as on 31 December 2009 was Tk.32, 663.11 million
as against Tk.27, 528.08 million in the year 2008, showing an increase by 18.65% over
the preceding year. The Loans and advances cover up the areas of corporate (based on
both conventional and Islamic Shariah mode), SME, retail and credit Card. The credit
portfolio of the Bank also included mix of scheme loans, namely- Renovation and
Reconstruction of Dwelling House Loan (RRDH), Consumers Durable Scheme Loan
(CDS), Marriage Loan, Car Loan, HBF Loan and Commercial Loan. Corporate lending is
still the core business of the Bank and continues to remain the major segment of the
business. While providing loans to our customers the policy of Bangladesh Bank is
strictly followed. The portfolio has been further diversified to avoid risk of single
industry concentration and remains in line with the Bank’s credit norms relating to risk
quality. The Customer Relationship has been strengthened and frequent visits to the
clients have been ensured for further cementing existing relationship.
2006 13,188.09
2007 18,682.16
2008 27,528.08
2009 32,663.11
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2.13.6 Profit and operating results
The Bank earned operating profit of Tk.1,358.35 million during 2009 as compared to
1,252.44 million in the immediate preceding year, registering a growth of 8.46%. After
keeping Tk.207.78 million as provision against classified and unclassified loans &
advances, diminution in value of investment, off-balance sheet exposure and other assets,
pre-tax profit stood at Tk.1, 150.57 million. After keeping Tk.539.67 million as provision
for income tax, net profit stood at Tk.610.90 million as against Tk.463.05 million in
2008, posting a growth of 32%.
Year Operating profit Profit Before Tax Net profit (Profit after
tax)
2005 264.27 226.29 114
Table 9: Operating Profit, Profit before Tax and, Profit after Tax
Source: Annual Report of TBL, 2009
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2.14 At a glance of TBL financial Performance of last 5 years:
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3.1 Foreign Exchange- its meaning and definition:
Foreign exchange refers to the process or mechanism by which the currency of one country is
converted into the currency of another country. Foreign exchange is the means and methods by
which rights to wealth in a country’s currency are converted into rights to wealth in another
country’s currency. In banks when we talk of foreign exchange, we refer to the general
mechanism by which a bank converts currency of one country into that of another. Foreign trade
gives rise to foreign exchange. Modern banks facilitate trade and commerce by rendering
valuable services to the business community. Apart from providing appropriate mechanism for
making payments arising out of trade transactions, the banks gear the machinery of commerce,
specially in case of international commerce, by acting as a useful link between the buyer and the
seller, who are often too far away from and too unfamiliar with each other. According to foreign
exchange regulation act 1947, “Any thing that conveys the right to wealth in another country is
foreign exchange”. Foreign exchange department plays significant roles through providing
different services for the customers. Opening or issuing letters of credit is one or the important
services provided by the banks.
3.2 Different Types of foreign exchange operation:
There are three kind of foreign exchange transaction:
Import
Export
Foreign Remittance. The following chart is showing different types of activities
of foreign exchange operation:
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3.3 Import:
Import trade in Bangladesh is controlled under the Import and Export control Act 1950.
Authorized Dealer Banks will import the goods into Bangladesh following the import policy,
public notice, F.E. circular and other instructions from competent authorities from time to time.
The whole import functions of the branch as far I have understood are discussed bellow:
42
Controller of Import and Export or exempted from the provisions of the said order. So the
following documents are required to be submitted to the licensing authority for registration as
importers:
43
o Importer applies to the bank to open L/C in favor of foreign supplier. The bank has its
printed application form and the importer should carefully fill in this form. On receiving
this application, the bank scrutinizes it to ensure that:
o Whether the customer fulfils all the required conditions/criteria to be eligible as an
importer as per provisions of the Import Policy Order and Guidelines for Foreign
exchange Transactions in force and the supporting documents/papers required are
submitted.
o Whether the items for import of which the documentary credit need to be opened is
permissible i.e. not included in the negative/restrictive list as per Import Policy order in
force.
o Whether we are holding satisfactory credit report on the beneficiary to satisfy the relevant
provisions of the guidelines for Foreign Exchange transactions
o On receipt of the L/C application over the counter or through dispatch/mail section, the
receiving date and time to be recorded on the L/C application.
o Signature of the customer on the L/C application to be verified by authorized/ designated
officer.
L/C application with all supporting papers to be checked to ensure that the required papers are as
per requirement of Guidelines for Foreign Exchange Transactions and are consistent to each other
44
o Details of the documents required and how those are to be dispatched to the issuing bank
i.e. by ordinary mail/courier.
- Whether the credit is to be a transferable one.
- How the credit is to be advised i.e. by mail/telex.
Check whether the opening of the Letter of Credit is approved by the competent
authority.
Review all documents including the Letter of Credit and vouchers.
If found in order, sign the letter of credit including the accounting vouchers.
The original L/C must be signed jointly by two authorized signatories.
On receipt of the shipping documents from the negotiating bank, the L/C Opening Bank should
carefully examine these to ensure that they confirm to the term of the credit:
45
The amount drawn does not exceed the amount authorized in to credit.
The merchandise is properly invoiced.
The bill of Lading is clean, shipped on board, showing freight prepared and endorsed
to the order of the issuing bank shows the port of shipment, the port of destination,
the name of the consignee and the date of shipment are in keeping with the term of
the credit.
It is properly signed by the shipping company
The Certificate of Origin
Other documents like weight list, packing list, pre-shipment Inspection Certificate
etc.
After the lodgment, the bank asks the importer to retire the bill. After retirement the amount of
remittance towards cost of the merchandise is reported to Bangladesh Bank on Form “IMP”.
46
Before Issuing the Shipping Guarantee:
Head Office approval is essential in cash where the customer has not adjusted the
related import liabilities or do not have approved LIM/LTR facility limit.
The Branch shall obtain counter indemnity from the customer in favor of the Bank.
The customer shall submit an unconditional undertaking to accept the related
shipping documents even with any discrepancies.
The Shipping Guarantee/Letter of indemnity must be signed jointly by two
authorized signatories.
L/C number: The branch will put a number for each L/C., which is the serial number of the L/C
for a particular year. First L/C of TBL SKB branch in 2009 may be numbered like TBL / SKB
/1742010401.
Place and date of issue: L/C must indicate the place and date of issue.
Date and place of expiry: L/C must have an expiry date. This is the last date of presentation of
document under the L/C. Place of expiry of the L/C also to be mentioned in the L/C. Normally it
should be the counter of the Negotiating Bank.
Shipment date: There should be a last shipment date after which shipment is not allowed. Bank
may also fix-up a first shipment date before which shipment will not be allowed.
Presentation period: Issuing bank will allow a period within which exporter must present the
export documents to the negotiating bank or to any other nominated bank. This may be 15 days
from the date of shipment. Maximum may be allowed one month, but within the expiry date of
the credit.
Applicant: Name of the applicant with business address to be put in the L/C.
47
Beneficiary: Name of the beneficiary with address also to the indicated in the L/C.
Advising Bank: Name of the advising bank with address to be mentioned in the L/C.
Amount: Every L/C must show the amount of the L/C. The word “About” may be used
with amount, which means 10% more or less of the said amount.
Part-shipment and Trans shipment: Issuing bank also clearly indicate in the L/C
whether part-shipment and trans shipment are allowed or not.
Port of shipment and port of destination: L/C will also indicate from where shipment
to be made and where goods to be delivered.
Tenure of the draft: Whether the draft to be drawn at sight or usance, also to be cleared
in the L/C.
Documents required: Bank will give the list of required documents and data content
therein. Each and every term must be supported by the documents, because any term
without asking document is valueless.
Payment: When, where and by whom payment is to be made, also to be indicated in the
L/C.
Bill of lading: B/L must be issued or endorsed to the order of the Issuing Bank. It should
be ‘clean’ and “freight prepaid” if L/C is on CFR basis short form and charter party B/L
to be avoided. All these terms must be incorporated in the B/L clause of the L/C.
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Pre-shipment Inspection: Pre-shipment inspection certificate is compulsory for both
government and private import except in few cases.
Data content: Invoice and other documents if required should indicate the H.S. code
number. LCAF No with description of the item and country of origin.
The L/C duly signed by two authorized officers, whose specimen signatures are already recorded
with the correspondent banks, must be addressed to the beneficiary. Bank generally does not
enter into direct contact with the beneficiary. Instead they utilize the services of its own branch
office (if any) or correspondent bank at seller’s country for the purpose of advising it to the seller
(beneficiary). Thus the correspondent bank becomes the “Advising Bank”.
The process of advising a credit consists of forwarding the original credit to the beneficiary to
whom it is addressed. Before forwarding/advising the credit to the seller under appropriate
forwarding coverage, the advising bank has to verify the signatures of the officers of the opening
bank and ensure that the terms and conditions of the credit are not in violation of regulations
relating to export. While advising, the advising bank does not undertake any liability.
Advising a letter of credit
1) L/C 49
OPENING
IMPORTER (L/C
APPLICANT)
ISSUE L/C
APPLICATI ADVICE
50
3.4 Export:
Export means outflow of goods and services produced in one country, which purchase by
Government, Firms and individuals of other countries. Development of a country depends on its
participation in the international trade by increasing production and export of commodities and
service sector. By way of this a country can improve Employment Generation-Income level-
Savings-Growth-Economic Development.
The imports and exports trade in Bangladesh is regulated by the Import & Exports Control Act
1950. There are number of formalities an exporter has to fulfill before and after execution of
export, some of are as under:
51
After making contact with foreign buyers and reaching on agreed price and terms, conditions the
exporters receive Letter of Credit.
3.4.5. Procurement and Shipment of Goods:
After receipt of LC the exporter has to procure or manufacture the contracted goods and ship the
same.
Pre-Shipment Credit: Pre-shipment credit is given to the exporters, for the activities
prior to shipment of goods for export. Some example of Pre-shipment credit: Cash for
local procurement of raw materials and its related expenses, Procuring & Processing of
goods for export, Packing and transportation of goods for export, Payment of insurance
premium, Inspection fees, Freight charges etc.
Post-Shipment Finance: Usually the exporter can not afford to wait for a long time for
payment to local manufacturer/supplier and other financial obligations. Resulting which
the exporters need post-shipment credit facility. Considering the genuine need, and
worthiness of export and other security measures bank allow credit facility to exporters.
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Normally the following parties are involved to a documentary credit:
Importer:
The buyer or the importer is he who initiates the credit. He applies to bank for issue foreign a
documentary credit. The obligations between the importer and the issuing bank are governed by
the application-cum-agreement submitted by the importer to the bank. He is bound to reimburse
the bank, which effects payment or incurred a deferred payment undertaking or has accepted or
negotiated under the credit as per terms, and to take up the documents.
Opening Bank:
The issuing or opening bank is the importer’s bank and it issues a letter of credit normally
pursuant to the terms of sales contract as set out in the application for the credit by the importer.
The issuing bank should nominate the bank, which is authorized to pay or to accept drafts or to
negotiate, unless the credit allows negotiation by any bank.
Exporter:
The seller or exporter is the beneficiary of the credit. The letter of credit is opened in his favor
and addressed to him. The beneficiary has the obligation to make export as per the contract and
produce the documents as required by the credit.
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The Accepting Bank:
Accepting bank is the bank nominated in the letter of credit to accept bills drawn under the credit.
If the bank so nominated accepts the nomination, its responsibility to the beneficiary is not only
to accept the drafts drawn but also to make payment on their due dates.
Reimbursing Bank:
The issuing bank may indicate in the credit the name of a bank. From whom the
paying/negotiating bank can obtain reimbursement. The documents are sent to the issuing bank.
The negotiating/paying bank simultaneously makes a claim with the reimbursing bank for the
payment effected. Normally the reimbursing bank would be the bank with which the issuing bank
maintains an account.
The Transferring Bank:
If the L/C is transferable, then the 1st beneficiary of the L/C may transfer the L/C to the 2 nd
beneficiary, through a bank nominated by the Issuing Bank. This bank is called the Transferring
Bank.
3.7 Document required for Foreign Exchange Transactions:
Transport Documents
Letter of Credit
Insurance Documents
Commercial Invoice
Other Documents
Transport Documents:
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Transport documents comprises of Bill of Lading, Airway Bills, Truck Receipts, Railway
Receipts and Inland Waterway Receipts.
Letter of credit:
A letter of credit is a letter issued by a bank (know as the opening or the issuing bank) at the
instance of its customer (known as the opener) addressed to a person (beneficiary) undertaking
that the bills drawn by the beneficiary will be duly honored by it (opening bank) provided certain
conditions mentioned in the letter gave been complied with.
The following diagram brings out clearly the operation of letter of credit:
Contract of Sale
(1)
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Presents Docts. and Recovers
Forwards Amount From Applies For
L/C to obtains payment from (8)
(4) opening of L/C
Commercial Invoice:
It include all types of information such as description of goods, Port of destination, Port of
loading, LC no, Importer name, name of issuing Bank etc.
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The policy covers Transshipment [if allowed in LC] clause.
Policy covers 10% above the value of consignment.
Policy indicates where and in which currency the claim [if any] will be settled.
Other Documents:
As per UCP 600, other documents comprises of all other documents other
than Transport Documents, Insurance Documents and Commercial Invoice.
The certificate issued by the beneficiary stating the particulars as stated in the
LC.
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On March 24, 1994 Bangladesh Taka was declared convertible for current international
transaction. As a result remittances become more liberalized. Outward remittance include sale of
Foreign Currency by TT, MT, Draft, TC or in cash for private, official and commercial purpose.
Cash in Advance: Under this arrangement, buyer pays the value to exporter against the goods to
be shipped and services to be provided in some future date. After receipt of payment exporter
ship the goods and provides services to buyers. But the system is disadvantageous for buyer
because buyer blocking his fund in advances having no assurance of receipt of goods and service
in time as per contract. So such type of payment is considered as risky and expensive for buyers
but favorable for seller.
Open Account: Under this method, the sellers are in risky situation because he has to deliver the
goods and service to buyer before receiving payment. Buyer makes payment only after receipt of
goods and services as per contract terms. So before going such transaction sellers should check
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the past record, worthiness and business history of the buyer and if it is found satisfactory only
seller can proceed further.
Collection against Payment [D/P]: Under this method, exporter ship the goods and draw bill of
exchange on the buyer and submit the documents to a bank with instruction to collect the
proceeds through its correspondent bank located in the buyers country. In this case documents
delivered only against payment.
Collection against Acceptance [D/A]: Under this method, exporter ship the goods and draw bill
of exchange on the buyer and submit the documents to a bank with instruction to collect the
proceeds through its correspondent bank located in the buyers country. In this case documents
delivered against acceptance of Drafts by the buyer.
Documentary Credit: Documentary credit is the classic method. This method reduced payment
related risks for both exporter and importer substantially. Because documentary credit is
conditional payment undertaking of issuing bank to the exporter against compliance of certain
terms and conditions and submission of required documents as per credit terms. So under this
payment method both exporter and importers feel safe to deal.
There are many instances where exporters involve themselves in committing fraud so while
exporters tendered export documents for negotiation, special care should be taken in checking the
said documents to avoid fraud forgery and protect the interest of the bank. Following are some
important checking points:
1. Know your exporter: You should know your customer considering his relationship with the
bank, previous track record and worthiness.
2. Proper checking of Export LC: Export LC is authenticated, irrevocable, valid, Free
Negotiable in Bangladesh, Payment instruction is clear, issued under UCPDC.
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3. Proper checking of Export Documents: Bill of exchange, Commercial invoice, Transport
documents and other documents are prepared and presented as per LC terms.
Shipment:
After the contract the exporter takes all necessary steps to ship the goods. He may procure or
manufacture the goods. Failure to maintain the delivery schedule will expose the exporter to
claim from the buyers for damages on account of non-shipment or late shipment, and in addition
the exporter may also loose the patronage of the buyer for future export orders. While shipment
and after shipment the exporter should obtain or prepare the following documents:
EXP Form
Photocopy of registration certificate
Photocopy of the contract
Photocopy of the L/C
Customs copy of ERF Form for shipment of jute goods and EPC Form for raw jute
Freight certificate from the bank in case of payment of the freight at the port of lading is
involved
Bill of Lading, Railway receipt, Postal receipt, Air way bill or Truck receipt
Packing list
Certificate of origin
Shipping instructions
Insurance policy.
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ADs Code Register Serial No Year
2 3 5 9 0 0 2 5 3 1 0
Submission of documents:
After the shipment, the exporter submits all these documents to bank for negotiation. The
exporter remains in constant touch with the negotiating bank for early negotiation of export bills.
If any minor mistake is detected or any document is found missing the same should immediately
be corrected or supplied for early settlement of the matter.
Bill of exchange
Amount of bill differs with invoice
Not drawn on L/C issuing branch
Not signed
Tenor of C/E not identical with L/C
Full set not submitted
Invoice:
Not issued by the beneficiary
Not signed by the beneficiary
Not made out in the name of the applicant
Description, price, quantity, sales terms of the goods not correspond to the credit
Not marked one fold as original
Shipping marks differs with B/L and packing list
Packing List:
Gross weight, net weight and measurement, number of cartoons/ packages differs with
B/L.
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Not marked one fold as original
Not signed by the beneficiary
Shipping marks differs with B/L
Payment methods
under L/C
Deferred Payment
Sight or Payment credit
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Negotiation Credit
Acceptance Credit
Sight or Payment credit: When the credit stipulates that drafts (bill of exchange) should be
drawn under it on DP terms involving payment to the beneficiary on presentation of documents, it
is known as a “Sight or Payment Credit”. In this credit the issuing bank nominates a bank in the
exporter’s country as the paying bank. If the paying bank accepts its nomination, its position is
that of an agent of the issuing bank. When the documents under the credit are presenter to it, it
pays the beneficiary provided all the terms and conditions of credit have been complied with. It
gets reimbursement from the issuing bank for the amount paid.
Deferred Payment Credit: The term “Deferred” means postponed to a future period or date.
When a credit does not require the payment to the beneficiary immediately on presentation of the
documents but after a specified period has elapsed, it is known as “Deferred Payment Credit”.
According to this type of credit, the payment is hot made in full on the tender of documents but
by installments at pre-determined future dates. Deferred payment credit may be used where the
beneficiary wishes to allow the importer time to pay for the document.
Acceptance Credit: When under the terms of a letter of credit drafts are drawn on DA terms
involving payment to the beneficiary on the maturity of the accepted Bill of Exchange drawn
under it, the letter or credit is referred to as an “Acceptance Credit” or a “Term Credit”. In this
form of credit the beneficiary draws a draft for particular usance (e.g. 30, 60, 90 days sight or
even longer), payable upon either the correspondent bank or the issuing bank.
Negotiation Credit: In a negotiation credit the documents are accompanied by a sight draft (bill
of exchange). The bill of exchange may be drawn on the issuing bank or the importer or any other
bank stipulated in the credit. The bank, which negotiates documents under the credit, purchases
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the bill of exchange and pays the amount to the beneficiary who tenders the documents. The
issuing bank reimburses the negotiating bank.
Settlements of claim:
Exporter very often claims of various natures from the foreign buyers against their exports. It
should be ensured that genuine claims of the foreign buyers are settled expeditiously by the
exporters concerned so that the reputation of the country is not jeopardized in the international
market.
Under the Exchange Control instructions in force, Bangladesh bank’s prior approval in individual
case is necessary for making remittances against export claims.
General permission has, however, been accorded to the ADs to make remittances in foreign
exchange towards claims against exports of non-traditional items, provided the exporters are
willing to make such remittance from the exchange market. Settlement of claims against cash
foreign exchange resources of the country will, however, require Bangladesh Bank’s prior
approval.
The Trust Bank Ltd opens the following accounts for dealing remittances
NFCD Accounts:
Non-resident Foreign Currency Deposit (NFCD) accounts may now be maintained as long as the
account holders desire. Amounts brought in by non-resident Bangladeshis can be deposited in
foreign currency account any time after return to Bangladesh
F.C Accounts of non-resident Bangladeshis:
Foreign currency accounts opened in Bangladesh in the names of Bangladesh nationals or persons
of Bangladesh origin working or self employed abroad can now be maintained as long as the
account holders' desire.
RFCD Accounts:
Persons ordinarily resident in Bangladesh may maintain foreign currency accounts with foreign
exchange brought in at the time of their return to Bangladesh from visits abroad. These accounts
are termed as Resident Foreign Currency Deposit (RFCD) accounts. The amount brought in with
64
declaration to customs authorities on form FMJ and up to US $ 5000 brought in without
declaration may be credited to this account. RFCD accounts may be opened in US Dollar, Euro,
Pound Sterling, Deutsche Mark or Japanese. Interest may be paid on these deposits if these are
for a term of not less than one month and the balance is not less than US $ 1000 or Pound Sterling
500 equivalent.
ADs do not require prior permission of Bangladesh Bank for opening of foreign currency
accounts of:
o Non-resident foreign persons/firms;
o Diplomatic missions in Bangladesh and their expatriates;
o Diplomatic bonded warehouses (duty free shops);
o Local and joint venture contracting firms employed to execute projects financed
by foreign donors/international donor agencies;
Visit Abroad:
Booking of Passage
Private Travel
Business travel quota for importers and manufacturers producing for domestic markets
Education
Medical treatment
Taking out/bringing in of Bangladesh Taka
Taking out/bringing in of personal jewelry
65
Miscellaneous Remittances:
Remittance of membership fees
Evaluation and Visa Processing Fee
Visa fee:
Family maintenance
3.13 Other services: There are some other activities performed by foreign exchange
department. These are mentioned in below:
NRB( Non-resident of Bangladesh) Share
Different types of security for NRB, Wage earner
Passport services
NRB Share:
Now Non-Resident of Bangladesh can invest in capital market. Every company provides some
benefit to attract NRB investors. They give quota on a portion of their authorized capital for
NRB. TBL also provide these services to their NRB clients.
It is also most profitable for the bank. The contribution of NRB share on total earnings of foreign
exchange will discuss in next part of the report.
TBL also issues different types of government securities for wage earners, these are:
Wage Earners Bond
Wage Dollar Bond etc.
3.14 Financial Performance of Foreign Exchange operation of TBL
3.14.1 Import Earnings:
The import earning of the TBL from the import related services has increased to Tk 23,680.00
million in 2009 from Tk 9,746.00 million in 2005.
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Year Import
Earnings
(Taka in
Million)
2005 9,746.00
2006 11,483.00
2007 13,816.16
2008 16,660.98
2009 23,680.00
Import Earnings
25,000.00
20,000.00
15,000.00
Import Earnings
10,000.00
5,000.00
0.00
2005 2006 2007 2008 2009
Interpretation: In the year 2009, import earning is in the highest level, it was increasing from
the year 2005. The line is upward slopping. So it indicates a positive sign on import earnings of
TBL.
3.14.2 Export:
The export earning of the TBL from the export related services has increased to 6078.79 million
in 2008 from Tk 2636 million in 2004.
Export Earnings
Year Export
Earnings 14,000.00
(Taka in 12,000.00
10,000.00
Million) 8,000.00
2005 2,911.00 6,000.00 Export Earnings
2009 12,770.00
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Table 12: Export Earnings Chart 19: Growth of Export Earnings
Source: Annual Report of TBL, 2005-2009
Interpretation: The table and graph show the same result that the export earnings are increased
year by year. In the year of 2009 it was in the highest point as the same time upward slopping. It
is also positive sign for TBL.
3.14.3 Foreign Remittance:
The foreign remittance of the TBL is increased to TK. 5789 million in 2008 from Tk 2612
million in 2007. This indicates a 121% increase in remittance performance from the previous
year. The following graph shows the growth in the foreign remittance:
Year Foreign
Foreign Remittance
Remittance
(Taka in
Million) 9000
2005 535.20 8000
7000
2006 765.00 6000
5000
Foreign
2007 2,532.98 4000 Remittance
3000
2008 5,788.87 2000
1000
2009 8,669.00 0
2005 2006 2007 2008 2009
Interpretation: In the year 2005, TBL earn only 535.20 million taka from foreign remittance.
After 2005 it was increased dramatically. In the year of 2009, it was earned 8669.00 million taka
which was nearly 16 times greater than the year 2005.
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3.14.4. Income from Commissions:
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Total commission: 355,614,342 306,162,733 307,901,831
Foreign exchange is one of the most important departments of TBL, as the same
time it plays important role in making profitable of this bank.
Foreign exchange department maintain the entire legal requirement in
processing all the transaction.
Foreign exchange department of TBL is much respectable to the foreign exchange
act and laws.
Though TBL has qualified employee in foreign exchange department, but bank
should recruit some new employee to run this department smoothly.
In case of foreign remittance, they have no any debit card facility to their
customer.
Import earnings, export earning and, earnings from remittance quite satisfactory
levels.
Most of the time they try to provide quality services to the known person, it may
loses general customer.
During three month practical experience in TBL, it is not easy to recommend some
suggestion to enhance the performance level of the organization. I have observed some
shortcoming regarding operational and other aspects of their banking system. On the
basis of my observation I would like to present the following recommendations:
In case of L/C opening, Bank provides NIL margin facility to only some big
client, but they should also provide this facility to some small but efficient client.
In opening L/C, bank sometimes bank reject the small business enterprise; bank
should come forward to help this small business enterprise.
Bank should increase incentives facilities to their employees, so that they can
perform more effectively. There are lots of department under foreign exchange
operation.
Bank needs to provide more incentives to their exporter to attract such as credit
facilities.
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Bank should increase the interest rate on FC account so that they can attract more
NRB clients.
In case of payment of remittance, they should introduce debit card so that
customer can withdraw money within a second.
Bank should increase their advertisement so that general people can be attracted.
The software (Flora Banking Software) which is used by TBL; it must be more
options, quick response time, more secured.
The server which is used by TBL, it should be more error free; otherwise it may
be the sign of huge loss of this bank one day!
To minimize the risk Bank follows all the prudential guidelines of foreign
exchange risk management set by Bangladesh Bank.
3.17 Conclusion:
As an internee of Trust Bank Limited I have truly enjoyed my internship from the learning and
experience viewpoint. I am confident that this three months internship program at TBL will
definitely help me to realize further career in the job or personal life.
TBL offers full range of banking services that include deposit banking, loans & advances, export,
import and financing national and international remittance facilities etc. A country cannot long
continue to have a deficit on foreign current account but a favorable balance of payments on
current account may conceal a heavy adverse balance of payments with one individual country or
group of countries.
As developing country, Bangladesh is striving to reduce its trade gap. Government is taking
necessary steps to enhance its Export sector through the help of market mechanism as well as
different financial and institutional incentives to the exporters. At the same time it is taking
necessary steps to attract foreign investments and creating efficient human resource to fight the
edge of competition. In the line of liberalization of our economic sector, our current account has
already been made convertible along with floating exchange rate. With the help of continuous
increase in wage earners remittance and inclusion of non-traditional items in export list
Bangladesh emerging towards a more stable economy. The Bank already has shown impressive
performance in different financial sector. The bank now should start new services and take
different types of marketing strategy to get more customers in this competitive market of banking
business.
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I do believe that all these will assist me in my career build-up.
References
Bangladesh Bank (1997), Guideline for Foreign Exchange Transactions, Vol-1, Dhaka
Ali, Syed Ashraf (1995), Foreign Exchange and Finance of Foreign Trade, First Edition,
Lita Academics, Dhaka
Madura, Jeff International Financial Management 9th Edition
Annual Report of TBL - 2009 http://www.trustbank.com.bd/financial_statement/2009/
Trust%20Bank%20Annual%20Report%202009.pdf
http://www.trustbank.com.bd/corporate_info/about.php
http://www.trustbank.com.bd/deposit/deposit.php
http://www.trustbank.com.bd/retail/retail.php
http://www.trustbank.com.bd/islamic_banking
http://www.trustbank.com.bd/contact/contact_us.php
72
Appendix
To doing Internship in TBL, I have also get opportunity to know about their Foreign
Exchange Department and their Remittance Department. Both of this section is described
below:
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2. ERC (Export Registration Certificate) issued by CCI & E (Chief Controller of
Import & Export).
3. Permission from sponsoring Authority such as Board of Investment for industries,
epartment of Textile for garments etc.
4. Traders Association’s certificate
5. VAT (99Value Added Tax) & TIN (TAX Identification Number) certificates.
6. Common documents involved in the transportation of goods:
Airway bill:
Bill of Lading (B/L).
Commercial invoice:
Certificate of Origin:
Export packing list:
Inspection certificate:
Insurance Certificate:
Consular invoice:
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American Express Bank (AMEX) in New York. Then, TBL’s A/C maintaining in AMEX
is LORO to IFIC Bank. IFOC’s A/C maintaining in AMEX is LORO to TBL.
Acronyms
A/C : Account
AD : Authorized Dealer
ATM : Automated Tailor Machine
BB : Bangladesh Bank
BIBM : Bangladesh Institute of Bank Management
BL : Bill of Lading
BM : Branch Manager
BOE : Bill of Exchange
C&F : Clearing and Forwarding
CC : Cash Credit
CCI & E : Chief Controller of Import & Export
CDS : Consumer Durable Scheme
CFR : Cost & Freight
CIB : Credit Information Bureau
CIF : Cost Insurance & Freight
CRF : Clean Reporting Findings
CRIS : Credit Rating Information & Services Ltd.
DD : Demand Draft
DP Note : Demand Promissory Note
DP : Deposit Promissory
ECC : Export Cash Credit
EDF : Export Development Fund
EPB : Export Promotion Bureau
EPZ : Export Processing Zone
ERC : Export Registration Certificate
EXP : Export Form
FC : Foreign Currency
FCB : Foreign Commercial Bank
FDBP : Foreign Document Bill Purchase
FDD : Foreign Demand Draft
FDR : Fixed Deposit Receipt
FI : Financial Instrument
FOB : Free on Board
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HBL : House Building Loan
IBC : Inward Bills for Collection
IBCA : Inter Branch Credit Advice
IBDA : Inter Branch Debit Advice
IBETCA : Inter Brach Exchange Transaction Credit Advice
IBETDA : Inter Branch Exchange Transaction Debit Advice
IBP : Inland Bill Purchase
IMP : Import Form
IPO : Initial Public Offering
IRC : Import Registration Form
IRR : Internal Rate of Return
KYC : Know Your Customer
L/C : Letter of Credit
LCAF : Letter of Credit Authorization Form
LDBP : Local Document Bill Purchase
LIBOR : London Inter Bank Offered Rate
LIM : Loan against Imported Merchandise
LRA : Lending Risk Analysis
LSS : Lakhpati Savings Scheme
LTR : Letter of Trust Receipts
NCB : Nationalized Commercial Bank
OBC : Outward Bills for Collection
OD : Overdraft
PAD : Payment against Document
PBL : Prime Bank Ltd.
PCB : Private Commercial Bank
PCC : Packing Cash Credit
PO : Payment Order
PSI : Pre-Shipment Inspection
RM : Relationship Manager
RMG : Ready Made Garments
ROO : Rules of Origin
SEDF : South Asia Enterprise Development Facilities
SOD : Secured Over Draft
STD : Short Term Deposit
SWIFT : Society for Worldwide Interbank Financial Telecommunication
TBL : Trust Bank Ltd.
TC : Traveler Cheque
TIN : Tax Payers Identification Number
TR : Truck Receipt
TSSS : Three Stage Savings Scheme
TT : Telegraphic Transfer
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