Académique Documents
Professionnel Documents
Culture Documents
On
Overall Performance Evaluation of Foreign Exchange Operations : A Study On
Janata Bank Ltd
Supervised by
Muhammad Shahidullah Tasfiq
Assistant Professor, Department of Management Studies
Jagannath University, Dhaka
Submitted By
Md. Imran
Roll : B-110202056
Section : A, Batch : 7th
Session : 2011-2012
Department of Management Studies
Jagannath University, Dhaka
Letter of Transmittal
Muhammad Shahidullah Tasfiq
Assistant Professor
Department of Management Studies
Jagannath University, Dhaka
SUBJECT: Submission of Internship Report on Overall Performance
Evaluation of Foreign Exchange Operations
Dear Sir
With due respect that, I am delighted to submit my Internship report on Overall Performance Evaluation of
Foreign Exchange Operation of Janata Bank Ltd. which is prepared by me. This report gives me a vast
experience and valuable knowledge of how to analyze Foreign Exchange Operations. This report has been
giving me the practical implement of a theoretical knowledge. I had tried my best to collect information on
this report.
Finally, I would like to thank you for your valuable guidance and supportive in preparing this report. I
would be grateful for any clarification when required. I will be highly obliged if you are kind enough
to approve this report and provide your valuable judgment on it.
Sincerely your
______________
MD. Imran
ID: B-110202056
Section : A
Batch : 7th
Department Of Management Studies
Jagannath University, Dhaka
Students Declaration
I also confirm that, this report is only prepared for my academic requirement
not for any other purpose. It has not been previously submitted to any other
university/college/organization for an academic
qualification/certificate/diploma or degree.
I further affirm that the work reported in this internship is original and no part
has been previously submitted to any books or in any other universities.
__________________
MD. Imran
ID: B-110202056
Section : A
Batch : 7th
Department Of Management Studies
Jagannath University, Dhaka
CERTIFICATE OF SUPERVISOR
He has done his job according to my supervision and guidance. He has tried his best to do thi
s
successfully. I think this program will help him in the future to build up his finer career.
Signature
_________________
Acknowledgement
At beginning I will start my report by showing respect and give praise to our almighty Allah who
takes care about me to finished report successfully
I give thanks to our honorable teacher Muhammad Shahidullah Tasfiq, Assistant professor, Department of
Management Studies of Jagannath University who gives me such a attractive prospect to make a report on
Foreign Exchange operations as well as helped me in every step to accomplish my report and try to provide
me a faire practical knowledge as should as it possible.
I also will not miser to respect JBL that give me chance to obtain practical knowledge through their
internship program. I thank the branch manager Md. Anisur Rahman Khan who helped me to do internship
in his
branch and provide me a fear idea about practical knowledge of banking activities.
I will show
Executive Summary
Main objective of this report is to analyze the performance of foreign exchange operation of Jana
ta
Bank Ltd. This is descriptive in nature that has been administrated by collecting secondary
data.
Source of data were collected from annual report of JBL and reading material published by JBL et
c.
for analyzing data M.S Office and M.S Excel software were used.
This report has been shown that trend of export import and remittance increases year by year but
in
2011 and 2014
the growth rate of export and import got lowest due to world recession and inflationary
pressure respectively. Remittance flows are greatly affected in 2012. Operating profit has str
ong
positive relation with export and import with significant level lower than .05remittance also has stron
g
positive relation but significant level higher than .05. In total national market share of export, impo
rt
and remittance, JBL contribute with the proportion at 14%, 8% and 7% for export, impor
t and
remittance respectively. Huge amount of remittance come from UAE where most of Banglad
eshi
expatriate lives and almost 4 overseas branches are situated.
Although export, import, remittance increase gradually and their relationship with profitability h
as
strong positive relation JBL should concern that their export, import and remittance will not be fa
ll
down thats why they can develop attractive financing packages such as Pre-Shipment and
PostShipment Finance, Export Guarantee facility etc at a law rate for exporters and importers, JBL shou
ld
increase strong network with the Overseas Exchange Companies and Banks in different parts of t
he
world to ensure better remittance services for its customers and online Banking in every branc
h to
promote Remittance, In case of L/C opening, Bank should provide low margin facility to cli
ents.
More Import and export item can be included JBL can provide Consulting facility by an exp
ert
group of officials for foreign exchange, In case of payment of remittance, they should introdu
ce
debit card so that customer can withdraw money within a second at anywhere
ii
Table of Contents
Part
Particulars
Executive Summary
Part one
Introduction
Page No
ii
1-4
1.0 Introduction
Part Two
Part Three
Part Four
1.6 Limitations
Organizational Profile
2.0 An Over View of Janata Bank LTD
10
11-32
3.1 Import
13
3.2 Export
21
3.3 Remittance
27
Performance Analysis
4.0 Trend analysis
33-40
34
34
35
36
Part Five
7-10
37
37
38
39
40
41-43
42
5.2 Conclosion
43
5.3 Recommendation
44
List of Abbreviation
JBL
AD
TK.
L/C
SWIFT
ERC
CCI&E
UCP
IRC
KSA
UAE
USA
T.M
IMP For
Authorized Diller
Taka
Letter of Credit
Society for world-wide Intra-Bank Financial Telecommunication
Export Registration Form
Chief Controller of Import & Export
Uniform Customs & Practice
Import Registration Certificate
Kingdom Saudi Arabia
United Arab Emirates
United States of America
Travel & Miscellaneous
Import Form
m
EXP For
Export Form
m
Remt.
Remittance
Part One
Introduction
common activities in business and day by day it got an integrated part for doing business. In
this
globalization era a business organization faces worldwide competition so they have to compete f
or
their existence and profitability that require them to engage in export and import activities
and
remittance for their financial transaction worldwide. Banks are the batter financial intermediaries t
o
complete those activities.
Objective is an important thing for different purpose. Objective helps to go in a good way that relat
es
with the Report. Primary objective is to learn the real world experience because I have gat
hered
theoretical knowledge of BBA program and try to match real world experience with the theoretic
al
knowledge
1.3.1
Broad Objective
The broad objective of this report is to analyze the Performance Foreign exchange operation
s of
Janata Bank Ltd. (JBL)
1.3.2
Specific Objectives
To examine the division wise import and export financing and remittance.
To show the relationship export, import and foreign remittance with profitability of Ja
nata
Bank Ltd.
Assessment of the JBLs import, Export, foreign Remittance with total national Im
port,
Export, foreign Remittance
Primary Source:
Take expert opinion from higher officials of the bank.
Observation with during the internship program.
Secondary Sources:
The secondary data sources are followingAnnual Report of JBL(2010-2014)
Website of JBL
Brochures of JBL
Manuals and Publications of JBL
For analysis and interpretation of data some statistical tools like MS-Word and MS-Excel
software were used
4
1.5 Literature Review
Trade, also called goods exchange economy, is to transfer the ownership of goods from one
person or entity to another by getting something in exchange from the buyer. Trade is
sometimes loosely called commerce or financial transaction or barter. A network that allows
trade is called a market. The original form of trade was barter, the direct exchange of goods
and services. Later one side of the barter were the metals, precious metals (poles coins), bill,
paper money. Modern traders instead generally negotiate through a medium of exchange,
such as money. As a result, buying can be separated from selling, or earning. The invention
of money (and later credit, paper money and non-physical money) greatly simplified and
promoted trade. Trade between two traders is called bilateral trade, while trade between
more than two traders is called multilateral trade.
Literature Review has vital relevance with any research work due to literature review the
possibility of repetition of study can be eliminated and another dimension can be selected for
the study. The literature review helps researcher have been conducted to analyze the Foreign
Exchange operation of Banks in Bangladesh and abroad. But there are very few research and
literature available on the subject related to Foreign Exchange operation Banks.
Bangladesh launched a deep and wide-ranging trade reform strategy in the early 1990s. This
included substantial reduction and rationalization of tariffs, removal of quantitative
restrictions, move from multiple to a unified exchange rate system, convertible current
account and an overall outward orientation of trade policy regime. As a result, the countrys
trade integration, measured by the trade-GDP ratio, rose from 18% in 1990 to 43% in 2008.
The Bangkok Agreement was established in 1975. Member countries are Bangladesh, India,
Sri Lanka, China, the Republic of Korea and Lao Peoples Democratic Republic. The
Bangkok Agreement has recently been revised and renamed as the Asia Pacific Trade
Agreement (APTA). The APTA has come into force from 1 July 2006. The APTA contains
consolidated list of tariff concessions granted by member countries to each other. Under this
agreement, China has provided 100% tariff concessions to 83 items of Bangladesh at 8-digit
level and Republic of Korea has provided 100% tariff concessions to 139 items at 10-digit
level.
The BIMSTEC Framework Agreement was signed in June 1997 and Agreement on FTA
concluded in February 2004. Member countries are Bangladesh, India, Myanmar, Sri Lanka,
Thailand, Nepal and Bhutan. Under the Agreement, in case of First Track products, nonLDCs will open up their markets for the products of LDCs in 1 year and LDCs will do the
same for non-LDCs in 5 years. On the other hand, for Normal Track products, non-LDCs
will open up their market for the products of LDCs in 3 years and the LDCs will follow 10
year schedule in order to open up their markets for the products of non-LDCs. Least
Developed Member Countries of BIMSTEC FTA will enjoy special and differential
treatment.
5
1.6 Limitation of The Study
Some limitations are faced to prepare this report. The limitations in preparing the report
are described below.
The main barrier of the study was insufficiency of information. Bank employee cant provid
e
the information due to security and other corporate obligations.
Due to time limitation many of the aspects could not be discussed in the present report.
Learning all the functions within just 60 days is really tough.
In many cases, up to date information was not published.
Lack of experiences has acted as constraints in the way of meticulous exploration on
the
topic
However, omitting the limitations, the report will help to understand the Foreign Exchange Operatio
n
of the Bank.
Part Two
Organizational Profile
Registered Address:
Legal Status:
Authorized Capital:
Paid up Capital:
No. of Branches:
Almost 904
Professionalism
Growth
Diversity
Core Value
Of JBL
Dignity
Accountability
Integrity
Particular
2014
Authorized Capital
30000
Paid up Capital
19140
2010
2011
20000
5000
19140
2012
20000
8125
2013
20000 20000
11000
Deposits
516010
286567
361677
409464 478535
183744
Export
118515
305340
285747
90906 108342
197285
176671
188283
144556
153758
153252
154079
Foreign Remittance 72285
52640 100089
103982
106677
Operating Profit
12037
12127
10683
15722
Revenue
316505
49515.63
30614 40635
14534
240711
74.52%
61.97%
7.72%
8.04%
8.47%
Current Ratio
1.3
Income per Share
63.36
Net Profit
9608
71.21%
156525
1.10
98.16
1.06
60.45
55.82
4907 4445
1.03
1.2
148.00
16280
3831
No. of Branches
861
904
873
884
900
10
Part Three
Foreign Exchange
Operations
11
As per foreign exchange regulation act 1947 (Article 2 ) Foreign Exchange means Foreign Currenc
y
i.e. currencies other than Local Currency. It includes any instrument drawn, accepted, made or issue
d
all deposits, credits and balances payable in any foreign currency and any draft, travelers che
que,
letter of credit and bill of exchange expressed or drawn in Bangladesh currency but payable in a
ny
foreign currency.
Many transactions with overseas countries are respects of import; export and foreign remittance com
e
under the preview of foreign exchange transactions. International trade demands a flow of goods fro
m
seller to buyer and payment from buyer to seller. In this case the bank plays a vital role to b
ridge
between the buyer and seller.
T
h
e
T
T
h
h
e
e
E
x
p
o
r
t
e
r
B
I
a
nm
p
k
o
r
t
e
r
In JBL AD Branch (s) there are a lot of talented officials are working continuously with great effo
rt,
skill and teamwork are performed in this department. The Bangladesh Bank and the respecte
d in
charge (s) of this section control them.
In exercise of the power conferred by section 3 of the Foreign Exchange Regulation Act,
1947
Bangladesh Bank issues license to schedule Bank to deal with exchange. These banks are known
as
Authorized Dealers. Licenses are also issued by Bangladesh Bank to person or firms to exch
ange
foreign currency instruments such as T.C. Currency notes and coins. They are known as Authorize
d
Money changers.
12
Import
2.
Export &
3.
Remittance.
3.1 Import
Import trade in Bangladesh is controlled under the Import and Export control Act 1950. Authorize
d
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 i
mport
functions of the branch as far I have understood are discussed below:
goods into Bangladesh unless he is registered with the Chief Controller of Import and Expo
rt or
exempted from the provisions of the said order. So the following documents are required t
o be
submitted to the licensing authority for registration as importers:
14
Foot Note: This list contains further conditions with regard to import of items on
banned list
and conditional list
Freely importable item: All items excepting those mentioned in the banned
Revocable.
ii)
Irrevocable.
The Credit, therefore, should clearly indicate whether it is revocable or irrevocable. In the absence
or
such indication the credit shall be deemed to be irrevocable.
15
3 Types of L/C:
Commercial letters of credit are mainly used as a primary payment tool in international trade such
as
exporting and importing transactions. Majority of commercial letters of credit are issued subject to th
e
latest version of UCP (Uniform Customs and Practice for Documentary Credits). The ICC publishe
s
UCP, which are the set of rules that governs the commercial letters of credit procedures.
Commercial letters of credit are a means of payment to be utilized when the principal perfor
m its
duties. As an example, let us consider an exporter who ships the goods according to the sales contr
act
and apply to the nominated bank for the payment. If the nominated bank decides that the presentati
on
is conforming to the terms and conditions of the credit and the UCP rules then exporter will be pa
id.
This situation is just contrary in standby letters of credit. A payment is made to the beneficiary of
a
standby letter of credit when there is a breach of the principal's obligation.
Revocable letters of credit give issuer the amendment or cancellation right of the credit any
time
without prior notice to the beneficiary. Since revocable letters of credit do not provide any protectio
n
to the beneficiary, they are not used frequently. In addition, UCP 600 has no reference to revocab
le
letters of credit. All credits issued subject to UCP 600 are irrevocable unless otherwise a
greed
between the parties.
Irrevocable Letters of Credit cannot be amended or cancelled without the agreement of the c
redit
parties. Unconfirmed irrevocable letters of credit cannot be modified without the written consent
of
16
both the issuing bank and the beneficiary. Confirmed irrevocable letters of credit need also confirmin
g
bank's written consent in order any modification or cancellation to be effective.
Back -to -back L/C means one credit backs another. It is new credit in favor of another
beneficiary.
Sometimes beneficiary seller of a credit himself is unable to supply goods specified in the L/C a
nd
required to purchase from another supplier by opening second credit. Besides, the formalities
and
requirements for (L/C opening) the following formalities and documents are also required for openin
g
back-to-back L/C.
For opening L/C the client is to submit to the bank an application in the printed format
of the
designated bank. This is called L/C application form which is also an agreement between the import
er
and the bank. The form is to be stamped under stamp Act. in force in Bangladesh. The importer m
ust
submit the LCA & IMP and indent or contract. Purchase order/pro-forma invoice (duly accepted
by
the importer) along with L/C application.
Application for opening of L/C duly signed by the importer, Membership certificate from Chamber
of
commerce or any other recognized business association, Valid IRC,TIN certificate, Three copies o
f
declaration stating that that income tax for previous year has been paid or income tax return has be
en
submitted, Trade license ,Vat registration certificate, Valid indent/pro forma invoice, Insurance cover
note with money receipt, Any other permit if required as per instruction issued by CCI & E time
to
concerned as done in dispatching the L/C. Amendment be kept in the L/C file chronologically da
te
wise.
Beneficiary
Figure: Types of L/C form
18
Step6: Advising:
The advising bank forwards the letter of Credit to the beneficiary (seller) stating that no commitme
nt
is conveyed on its part. However, if the advising bank has been asked to confirm the letter of Cre
dit
and agrees to do so, it will incorporate a clause undertaking to honor the beneficiarys drafts, provid
ed
the documents evidence that all terms and conditions of the letter of Credit have been complied with
.
After issuance and advising of a L/C, it may be felt necessary to delete, add or alter some o
f the
clauses of the clauses of the credit. All these modification are communicated to the benefi
ciary
through the same advising bank of the credit. All these modifications are communicated t
o the
beneficiary through the same advising bank of the credit. Such modifications to a credit are termed
as
amendment to a letter of credit. There may be some of the conditions in a credit are not acceptable
by
the beneficiary. In that case, beneficiary contact applicant and request for amendment of the clauses.
The issuing bank has to be done the followings
Obtain written application from the applicant of the credit duly singed
and
verified by bank.
Confirm that, in case of increase of value, application for amendment is to
be
supported by revised indent/pro-forma invoice evidencing consent of
the
19
beneficiary;
Ensure, in case of extension of shipment period, that relative LCA is
valid/
revalidated/ increased up to the period of proposed extension.
Confirm that amendment of insurance cover note also be submitted in case
of
both credit amount and shipment period extension amendment.
Maintain proper recoding and filing of amendments;
Recover charges for amendment (if on account of applicant) and pass necessar
y
voucher.
The following clause of L/C and increase/decrease of quality of goodsIncrease/ decrease value of L/C and Increase/decrease of quality of goods.
Extension of shipment/negotiated period.
Terms of delivery, i.e. FOB, CFR, CIF etc.
Mode of shipment
Inspection clause
Name and address of the supplier
Name of the reimbursing
Name of shipping etc
Step9: Presentation of Document.
The seller is being satisfied with the term and condition of the credit make shipment of the goods
as
per L/C. After making the shipment of the goods in favor of the importer to exporter submit
s the
documents to the negotiating bank
After receiving all document, the negotiating bank then check the documents against the credit. If th
e
documents are found in order, the bank will pay, accept, or negotiate to JBL. Branch and bank recei
ve
seal to be affixed on the forwarding schedule. The bill of exchange and transport documents
must
immediately be crossed to protect loss or fraudulent JBL checks the document the usual document ar
e
Invoice
Bill of lading
Certificate of origin
Packing list
Shipping Advice
Beneficiary certificate
Bill of Exchange
Shipment certificate.
Here the seller presents the documents to the nominated bank and the bank scrutinizes the document
s.
If satisfied, the nominated bank makes payment to the beneficiary and in case, this bank is other th
an
the issuing bank, it sends the documents to the issuing bank and claim reimbursement a
s par
arrangement.
Step12: Settlement by Acceptance:
Settlement in this arrangement, the seller submits the documents evidencing the shipment to
the
accepting bank (nominated by the issuing bank for acceptance) accompanied by draft down on t
he
bank at the specified tenor.
Step 13: Settlement by negotiation:
This settlement procedure stars with the submission of documents by the seller to the negotia
tion
restricted by the issuing bank, only nominated bank can negotiate the documents. A
factor
scrutinizing that the documents meet the credit requirement, the bank may negotiate the document
s
and give value to the beneficiary. The negotiating bank then sends the documents to the issuing ban
k.
As usual, reimbursement will be obtained in the pre agreed manner.
3.2 Export
Mainly Export L/C is the confirming from the Bank that, if the importer fails to make payment to t
he
exporter, then the bank will pay the exporter on behalf of the importer. The exporter can lien the L
/C
to bank and can get the payment before the L/C expire date.
F
x
lu
G
&
k
T
p
I
f
s
m
y
P
C
/
L
c
v
A
e
h
t
g
in
d
a
w
r
o
b
country, local bank, another branch of the same local bank or received by the export desk from t
he
import desk of the same bank. Exporters are allowed to export the commodity under irrevocable lett
er
of credit. Under this type of export, exporter will ship the goods as pr terms of the credit and will
get
payment as per arrangement of the credit
21
3.2.2
No exporter is allowed to export any commodity for export from Bangladesh unless he is registere
d
with Chief Controller of Imports and Exports (CCI & E) and holds valid Export Regist
ration
Certificate (ERC). After applying to the CCI&E in the prescribed from along with the neces
sary
papers, concerned offices of the Chief Controller of Imports and Exports issues ERC. Once registere
d,
3.2.3
After getting the ERC the exporter may proceed to secure the export order. He can do t
his by
contacting the buyers directly or through agent. In this purpose exporter can get help from Liai
son
office, Buyers local agent, Export promotion, Organization, Bangladesh mission abroad, Chamber o
f
commerce (local and foreign), Trade fair etc.
commercial invoice. Then Janata Banks respective officers check it properly, if satisfied, certifie th
e
EXP. Without EXP exporter cannot make shipment. The customer must declare all export goods o
n
the EXP issued by the authorized dealers
Customs
authority
reports
first
copy
of EXP
nt of
the goods.
Duplicate: Negotiating bank reports the Duplicate to Bangladesh Bank in or after negotiation date bu
t
not later than 14 days from the date of shipment.
Triplicate: On realization of export proceeds the same bank to the same authority reports Triplicate.
Quadruplicate: Finally, the negotiating bank as their office copy retains Quadruplicate.
EXP Form
23
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 la
ding is
involved
Bill of Lading, Railway receipt, Postal receipt, Air way bill or Truck receipt
Packing list
Certificate of origin
Shipping instructions
Insurance policy.
3.2.12 Examination
Banks
g the
deal
with
of Document:
documents
only,
not
and examine
each
and
every document with great care whether any discrepancy(s) is observed in the docum
ents.
The bankers are to ascertain that the documents are strictly as per the terms of L/C Before negotiati
on
of the export bill. Bank officers assigned for examining the export documents may use a checklist f
or
their convenience.
bank is not satisfied with the documents submitted to Janata Bank Limited and gives the exp
orter
reasonable time to remove the discrepancies or sends the documents to L/C opening ban
k for
collection. This is known as Foreign Documentary Bill for Collection (FDBC).
The customer submits the L/C to Janata Bank Limited along with the documents to negotiate
Janata Bank Limited officials scrutinize the documents to ensure the conformity with
the
terms and conditions.
The L/C issuing banks gives the acceptance and forwards an acceptance letter.
document.
Payment methods
under L/C
Acceptance Credit
Negotiation Credit
referred to as an Acceptance Credit or a Term Credit. In this form of credit the beneficiary dra
ws
a draft for particular usance (e.g. 30, 60, 90 days sight or even longer), payable upon eith
er 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 cre
dit.
The bank, which negotiates documents under the credit, purchases the bill of exchange and pays t
he
amount to the beneficiary who tenders the documents. The issuing bank reimburses the negotiatin
g
bank
26
3.3 Remittance
Remittance means sending or transfer money or money-worth from one place to another The
word
Remittance originates from the word remit which means to transmit money/ fund. In ba
nking
terminology, the work remittance means transfer of fund one place to another. When
money
transferred from one country to another is called Foreign Remittance.
Foreign remittance of JBL may be classified into:
Inward Foreign Remittance
Outward Foreign Remittance
Remittance
Inward
Remittance
Outward
Remittance
EXP Form: Remittances received against exports of goods from Bangladesh are don
e
by form EXP.
Form C: Inward remittances equivalent to US$2000/- and above are done by For
m
C. However, declaration in Form C is not required in case of remittanc
es by
Bangladesh Nationals working abroad.
Utmost care should be taken while purchasing Currency Notes, Travelers cheque, Demand Draft
&
similar Instrument for protecting the bank from probable loss as well as safety of the Bank officia
ls
concerned.
28
29
Medical Purpose
Ravels Purpose
FDD Payable
FTT Payable
TC Payable
FDD Issued
FTT Issued
TC Issued
rm
has to be filled up duly. This form is filled up under the Foreign Exchange Regulation Act, 1947. T
his
30
form contains
Passport number,
The client must be an account holder or proper reference from the bank is required
2.
3.
4.
After verifying all these documents the customer is asked to fill up prescribed applic
ation
form.
2.
In the application the customer states the amount he is willing to endorse and it is
to be
verified that his required amount is within the stipulated.
3.
Then the customer pays cash or by debiting his account the Travelers Cheque is issued.
4.
Endorsement is given on the passport and on the ticket. Customer fills up the T/M Form.
5.
6.
Entry has to be given in the Foreign Currency Register and in the Travelers Cheque Regist
er.
Photocopy of passport
Endorsement of Cash:
Cash foreign currency can also be remitted through the cash endorsement in the passport. In case
of
endorsing cash in the passport, the requirements are similar to those of Travelers Cheque.
But
according to the foreign exchange Regulation Act, 1947 an individual cannot take more
than
$1500.00 in cash in a year. Thats why; the concerned officer checks the last voyage of the purchas
er.
If he/she made any voyage and if he/she purchased dollar at that time, then the officer will deduct t
he
amount and will give the rest to the purchaser.
JBL cannot endorse more than $1500.00 as cash at a time. For more than $1500.00, the customer h
as
to purchase TC. For cash endorsement SEBL maintains a separate register. For giving cash forei
gn
currency, JBL charges Tk. 200.00 as service charge per passport.
Foreign TT Payable:
Foreign remittance section also pays the claim of the foreign TT. After receiving TT payable, SEB
L
performs the following functions:
1.
Customer has to fill up a C Form if the amount exceeds $2000.00. C Form describes
the
purpose of sending the TT.
2.
The dollar amount comes to the Head office of JBL through American Express, New York.
3.
JBL, branch sells the dollar to Head Office and collects the money in local currency.
32
Part Four
Performance
Analysis of Foreign
Exchange Operations
33
2010
129413
2011
118525
2012
183744
2013
197285
2014
188284
54%
-8%
55%
7%
-5%
2011
2012
2013
2014
Column2
2011
2012
2013
2014
2010
85418
2011
88653
2012
118515
2013
153758
2014
156525
Growth
19%
4%
34%
30%
2%
2011
2012
2013
2014
Column2
10%
0%
2010
2011
2012
2013
2014
Interpretation: From the trend analysis it has seen that there is an increasing trend in amount of
export financing of JBL over the years of analysis. The export financing has increased from TK
85418 (million) in 2010 to Tk 156525 (million) in 2014.But the export financing growth rate was
fluctuating over the year.
35
Year
Remittanc
e (in
Million tk)
Growth
2010
45924
2011
56190
2012
52640
2013
72285
2014
100089
25%
22%
-6%
37%
38%
2011
2012
2013
2014
Column2
10%
0%
2010
-10%
2011
2012
2013
2014
Interpretation: From the trend analysis it has seen that the Foreign Remittance of JBL was increasing
year to year. Highest Remittance was found during the year in 2014 that was Tk 100089 million which
was higher than previous years. The foreign remittance growth rate was high in 2014.
36
4.2 Income from Foreign Trade
2010
2011
2852.9
3417.69
1235.47
43%
2012
2013
2014
4035.1
5149.21
5835.13
1590.6
1995.77
2287.35
2515.49
47%
49%
44%
43%
Table 5: Import Earning & Portion of Import Income on Total Foreign Trade
Graphical Presentation:
Import Earnings
3000
2500
2000
1500
1000
500
0
2010
2011
2012
2013
2014
Interpretation: From the trend analysis it has seen that the earning from import was gradually increasing
while the highest earning from import of JBL obtained in the year 2014. Every year performs better than
previous year.
37
4.2.2. Export Earning & Portion of Export Income on Total Foreign Trade Earnings:
Year
Total
Earnings
from Foreign
Trade
Export
Earning
Portion of
Export
Earning
2010
2852.9
2011
3417.69
2012
4035.1
25013
5149.21
2014
5835.13
1050.6
1125.64
1543.36
1991.86
2139.3
38%
39%
37%
37%
33%
Export Earnings
2500
2000
1500
1000
500
0
2010
2011
2012
2013
2014
Interpretation: From the trend analysis it has seen that the earning from export is in rising trend from
2010 to 2014. In 2014, export earnings were the highest. Export earnings performance is not awful.
38
2010
2852.9
2011
3417.69
566.83
701.45
20%
21%
2012
4035.1
2013
5149.21
2014
5835.13
495.97
870.00
1180.34
12%
17%
20%
Remittance Earings
1400
1200
1000
800
600
400
200
0
2010
2011
2012
2013
2014
39
Proportion of Income
42%
Proportion of
Remittance Income
20%
37%
43%
20%
33%
47%
21%
38%
49%
12%
39%
44%
17%
37%
43%
20%
Source: Annul report of JBL
60%
50%
40%
PropotionofExportIncome
Propotion of Import Income
30%
Propotion of Remittance
Income
20%
10%
0%
1
Part Five
Findings, Conclusion
& Recommendation
41
5.1 Findings
The major objective of the report is to analyze the foreign exchange operation of JBL. The analysi
s of
foreign exchange operation of JBL reveals the following major findings.
From the analysis It has seen that both import and export financing growth was low
est in
2011 because of global rescission and in 2014 the growth rate also shrink becaus
e the
inflationary pressure in FY 2014 started rising from previous year, and the remittance flo
w
greatly affected in 2012
Dhaka
Highest percentage of export and import executed by the client though JBL is in
division as there have almost 43 corporate branches out of 68. The largest porti
on of
remittance of JBL is executed in Chittagong because huge number of Bangladeshi expatria
te
from Chittagong division
The largest share of remittance of JBL has been coming from UAE over the years as mos
t of
the Bangladeshi immigrant lives in UAE as well as almost 4 overseas branches of JBL
are
situated in UAE. Other major remittance source countries are KSA, USA & Kuwait
with
contribution of 22.04%, 13.52% & 10.54% respectively.
The earning from import, export financing and foreign remittance has gradually increased.
As
import volume is higher than export and remittance so proportion of import earning
also
larger than export and remittance
Relationship of export and import has a strong positive relation with operating profit and
has
a significant level lower then .05. Remittance has also strong positive relation with operatin
g
profit but significant level larger than .05 because of lower remittance volume.
ar in
Market share of export, Import, and Remittance are gradually increasing year by ye
compare with the total national export, import, and remittance. It has seen that hi
ghest
percentage of market share is captured by export is 14% compare to national export. Impo
rt
and remittance also have satisfactory market share to national import and remittance
42
5.2 Conclusion
There are a number of nationalized and foreign banks operating their activities in Bangladesh. Amon
g
them Janata Bank Limited is one of the leading commercial bank.
Janata Bank Ltd has introduced a new dimension in the field of innovative and benevolent banking
in
our country. The bank has successfully made a positive contribution to the economy of Banglades
h.
Its profit is gradually increasing. It plays a great role in International Trade etc.
The Bank ensures quality services to the customers. For better growth and healthy economic positio
n,
it should introduce new and Import, Export finance especially for new investors.
I hope Janata Bank Ltd will do more work for socio-economic development besides their ban
king
business. To keep pace with ever-changing uncertain domestic business environment and face
the
challenges of revised global economic scenario, the bank should be more
pro-active and
responsive
to introduce new marketing strategy to hold the strong position in home and abroad.
For the future planning and the successful operation in its prime goal in this current compet
itive
environment I hope this report can provide a good guideline. I wish continuous success and healt
hy
business portfolio of Janata Bank Limited.
43
5.3 Recommendations:
The export and import financing of JBL has increased over the years.
JBL can de
velop
attractive financing packages such as
port
Guarantee facility etc at a law rate for exporters and importers to maintain and increase t
he
trend of its import and export business.
JBL should increase strong network with the Overseas Exchange Companies and Banks
in
different parts of the world to ensure better remittance services for its customers and onli
ne
Banking in every branch to promote Remittance
Highest portion of export, import executed by client through JBL is in Dhaka division
and
remittance in Chittagong division. Bank should concentrate more on other division also
to
increase its export, import and remittance client in this case they can increase numbe
r of
corporate branches in other division.
In case of L/C opening, Bank should provide low margin facility to clients.
More Import and export item can be included
Interest could be provide at concession rate on export, and import finance to customers
44
Bibliography
Books:
Annual Reports:
Articles:
Web Sites:
http://janatabank-bd.com/
www.bangladesh-bank.org
http://data.worldbank.org/indicator/NY.GDP.DEFL.KD.ZG
TradeMap.Org (For Import-Export Data)
45