CHAPTER-1

INTRODUCTION
1
1.1 Origin of the Report:
Internship program is a prerequisite for acquiring BBA degree. Before completion of the
degree, a student must undergo the internship program. Internship program is a perfect
blend of the theoretical and practical knowledge. As the classroom discussion alone
cannot make a student perfect in handling the real business situation, therefore it is an
opportunity for the students to know about real life situation through this program. This
program consists of three phases:
• Organization orientation to acquaint at the intern's as with structure,
function and performance of the organization.
• The project work pertaining to a particular problem or problems matching
with the intern's area of specification and organization's requirement and
• The report writing to summarize the intern’s analysis, findings and
achievements in proceeding two phases.

1.2 Objectives:
The basic objective of the report is to see how Prime Bank Ltd. is handling the General
banking and credit operation.
Part A: Organization Part
 Exploring various features of Prime Bank Limited (PBL)
 Analysing the performance of PBL
Part B: Project Part
 Finding out the general banking and credit operation, practiced by PBL
 Review and analyze the classified loan /NPL of Bangladesh and PBL with that of
standard

1.3 Scope:
The study would focus on the following areas:

2
 General banking and credit operation of PBL &
 Portfolio (of loans or advances) management of PBL

Each of the above areas would be critically analyzed in order to determine the efficiency
of PBL’s general banking and credit operation system.

1.4 Sources of Information:

Information collected to furnish this report is both from primary and secondary sources.
The primary sources are:
 Practical desk work
 Face to face conversation with the officers
 Face to face conversation with the clients
 Relevant file study as provided by the concerned officer

The secondary sources are:

 Different Circulars issued by the Head Office, Prime Bank Limited and
Bangladesh Bank
 ‘Credit Manual’, published by PBL
 Annual Reports of PBL

1.5 Methodology:
Selection of the Topic
The study requires a systematic procedure from selection of the topic to final report
preparation. To perform the study data sources are to be identified and collected, they are
Identifying
to be classified, analyzed, interpreted Data Sources
and presented in a systematic manner and key
points are to be found out. This overall process of methodology is given in the form of
flowchart that has been followed in the study.
Collection of Data

Classification, Analysis, Interpretation and

Presentation of Data

Findings of the Study

3

Final Report Preparation

 Figure 1: Flow chart of methodology

A. Selection of the topic: The topic selected for the study was assigned by the Prime
Bank official. Before assigning the job it was discussed with me so that I can
prepare a well-organized internship report.
B. Identifying data sources: Essential data sources both primary and secondary are
identified which will be needed to complete and workout the study. To meet up
the need of data primary data are used and the study also requires interviewing the
officials and staffs where necessary.
C. Collection of data: Primary data are collected through 100% physical inspection
as there is no provision and scope for using sampling technique.
D. Classification, analysis, interpretation and presentation of data: To classify,
analyze, interpret and presentation of data I used some graphical tools to
understand them clearly.

4
 E. Findings of the study: After scrutinizing the data problems of the study are
pointed out and they are shown under concerned heads. Recommendations are
suggested thereafter to overcome the problems.
F. Final report preparation: On the basis of the suggestions of our honourable
course teacher some deductions and additions are made and final report is
prepared thereafter.

1.6 Limitations:
Though I tried my level best to produce a comprehensive and well-organized report on
the general banking and credit operation system of Prime Bank Ltd., some limitations
were yet present there:
i. A period of twelve week was not sufficient to collect and understand the
insights of whole Credit Operation.
ii. Banks policy did not permit to disclose various data and information related to
Credit Portfolio.
iii. Recent data and information on different activities of Prime Bank Limited was
unavailable.

5
CHAPTER-2

6
 Why Choose Prime Bank Ltd.
2.1 Prime Bank in a Sketch:
In this background of liberalization of economic policies in Bangladesh, Prime Bank
emerged as a new commercial bank to provide efficient banking services with a view to
accelerating socio-economic development of the country. Prime Bank Ltd. was
incorporated on 12th February 1995 as a consequence of relent less and dedicated efforts
of a group of entrepreneurs having excellence of experience and exposure in the different
field of industry, trade and commerce of the country. It started operation as a commercial
bank in the private sector on the 17th April 1995 with its registered office at 5, Rajuk
Avenue, Motijheel Commercial Area, Dhaka-1000, and Bangladesh. Later, the office had
been shifted to Adamjee Court (annex building), Motijheel Commercial Area. Its slogan
is “Prime Bank Ltd. – a bank with a difference". From the very beginning, the bank has
adopted the policy of diversifying its business. It renders all types of commercial banking
services to the customers of all status in the society with in the stipulations laid down in
the Bank Company Act-1991 and rules and regulations formed by Bangladesh Bank from
time to time. Under the dynamic leadership of the Chief Executive Officer, the bank
earned profit within December 1995 and raised its reserve. The bank started operation its
business through four branches. Now in ten years of its operation, its branches stood at
thirty-seven and a new branch start its operation two months ago on April 15, 2005?

Prime Bank has an authorized capital of Taka 1,000 million and paid up capital of Taka
400 million. It is a full licensed scheduled commercial bank set up in the private sector by
a group of highly successful entrepreneurs in pursuance of the government to liberalize
banking and financial services. The Chairman of the Bank is highly professional people
having wide experience in domestic and international banking are managing the bank.
The bank has made a significant progress within a very short time due to its very
competent board of directors, dynamic management and introduction of various

7
customers friendly deposit and loan products. At present bank has 13 Directors, including
the Chairman. The bank holds the first position in the CAMEL rating, published by
Bangladesh Bank for the last consecutive five years.

2.2 Vision of the Bank:

“A Bank with a difference” is the motto of Prime Bank Limited. So the motto itself is
self-explanatory to deliver the vision of the bank. Prime Bank limited is prepared to meet
the challenge of the 21st century well ahead of time. To cope with the challenge of the
new millennium it hired experienced and well-reputed banker of the country from the
inception. The bank has efficient and dedicated professional and equipped with modern
technology to provide the best service in the need of the people and thus to realize its
vision. So the Bank defined:

Vision:
“To be the most efficient Bank in terms of customer service profitability and technology
application.”

Mission:
“Continuous improvement in our business policies and procedures, cost reductions
through integration of technology at all levels.”
Focus of Efforts: “on delivery of quality service in all areas of banking activities with the
aim to add increased value to shareholders’ investment and offer highest possible benefits
to our customers”

8
Strategic Priorities:
“To have sustained growth, broaden and improve range of products and services”

2.3 Goals and Objectives of the Bank:

The objectives of the Prime Bank Limited are specific and targeted to its vision and to
position itself in the mindset of the people as a bank with difference. The objectives of
the Prime Bank Limited are as follows:
 To be market leader in high quality banking products and services.
 To develop saving attitude and making acquaintance with modern banking
Facilities.
 To establish, maintain, carry on, transact and undertake all kinds of investment and
financial business including underwriting, managing and distributing the issue of
stocks, debentures, and other securities
 To finance the international trade both in Import and Export
 To develop the standard of living of the limited income group by providing Consumer
Credit
 To finance the industry, trade and commerce in both the conventional way and by
offering customer friendly credit service
 Active excellence in customer service through providing the most modern and
advance technology in the different spheres of banking.
 To participate in the industrial development of the country to encourage the new and
educated young entrepreneurs to under take productive venture and
demonstrate their creativity and there by participate in the economic development.

9
Management hierarchy of Prime Bank Limited:

Managing Director (MD)

Deputy Managing Director (DMD)

Senior Executive Vice President

(SEVP)

Executive Vice President (EVP)

Senior Vice President (SVP)

Vice President (VP)

Senior Assistant Vice President

(SAVP)

Assistant Vice President (AVP)

First Assistant Vice President (FAVP)

Senior Executive Officer (SEO)

Executive Officer (EO)

Principal Officer (PO)

Senior Officer (SO)

Management Trainee Officer (MTO)

Junior Officer (JO)

10
 Organogram of Prime Bank Limited:

Board of
Directors

Executive Policy Board Board

Committee Committee Secretaria Audit Cell
of the of the t
Board Board

Managing
Director

Senior D.M.D Corpora Research

Executive te &
Vice Affairs Developm
President Division ent
H.R.D

Marketing Credit
Division Commit
F.A.D tee

Investment
Division General
Service
Division
Internationa
l Division

Public Monitoring
Relation
Treasury &
Division
Unit Inspection
Division

Computer
Division

11
2.4 Depository Products:

Prime Bank Limited is now offering 14 depository products for mobilizing the savings of
the general people, which have achieved wide acceptance among the people. There are
also accounts for force saving from the exporter that is called Reserve Margin from the
export bill. These deposit products are:
1. Contributory Saving Scheme (CSS)
2. Monthly Benefit Deposit Scheme(MBDS)
3. Educational Saving Scheme
4. Hajj Savings Scheme (HSS)
5. Senior Citizens’ Scheme (SCS)
6. Fixed Deposit
7. Saving deposit Account
8. Current deposit Account
9. STD Account
10. Multi Currency Account
11. Foreign Currency Deposit Account
12. Non Resident Taka Account
13. Non Resident Foreign Currency Account (NFCD)
14. Non Residents Investors Account

2.5 Loan Products:

The prime bank is offering the following loan and advance product to the client for
financing different purpose that fulfil the requirements of the bank and have good return
to the investment as well as satisfy the client. The loan and advance products are as the
following:
1. Consumer Credit Scheme
2. Lease Finance
3. Hire-Purchase
4. Small & Medium Enterprise

12
 5. House Building Finance Scheme (Corporate Client)
6. Prime Bank Master Card Credit Card
7. Prime Bank Visa Credit Card
8. Working Capital Financing
9. Import Financing
10. Export Financing
11. Industrial Financing

2.6 Other Products

The Bank has its concentration for new product and developed service for satisfying its
customer and increasing its customer base. They prefer now faster service with least cost.
For delivering faster service the bank has introduced online banking service. There are
other new products and services that PBL has lately introduced. They are:
 Online Banking Services
 SWIFT services
 L/C Delivery Services
 Locker Services

13
Chapter-3

14
 Prime Bank at a Glance

3.1 Performance:
The Prime Bank Limited is probably the most successful private sector Commercial Bank
in our country. Though it started its operation few years back, it has achieved the trust of
the general people and made reasonable contribution to the economy of the country by
helping the people investing allowing credit facility. During this small period of time it
has become able to secure and hold the first position in the CAMEL rating for the last
several years including this year too.

3.2 Capital & Reserve:

The bank started with authorized capital of Tk.1000.00 million in 1995. Paid-up capital
was then Tk.100.00 million only. Over the last nine years, the paid-up capital has
increased substantially. The paid-up capital stood at Tk.1000.00 million as on December
31, 2004. This paid up capital is one of the strongest in the Banking industry. PBL
increased it’s authorized capital to Tk.4000.00 million by passing a special resolution in
the bank’s 5th extra ordinary General Meeting held on 07th February, 2005.
The Bank has built up a strong reserve base over the nine years. Against Tk.1.45 million
only in 1995, reserves fund increased to Tk.986.51 million in 2004. This consistent
policy of building up reserves has enabled the bank to maintain better capital adequacy
ratio as compared to others.
With the active support and guidance from the Government, PBL has been showing a
steady and improved performance. In its ten years operations, the bank has earned the
status of a leading bank in terms of both business and goodwill.

15
3.3 Deposits:
The customer base of the PBL is large in its kind in any other commercial bank. It has
targeted both the lower income group and higher income groups as well. For mobilizing
saving, PBL has introduced different saving schemes, which gained popularity among the
public. The Bank’s deposit grew by 37.04 percent in 2004. Customer deposits of the bank
grew by 33 percent. PBL’s mobilized total deposits of Tk. 28069.24 million as of
December 31, 2004 as compared to Tk. 20483.23 million in 2003. The growth was
supported by branch network and high standard of services provided to customer. Fixed
Deposits are the main component of deposits contributing about 45.73 percent of the total
deposits. PBL introduced an attractive senior citizen scheme to encourage investment of
pension and gratuity fund for a reasonable return

*Deposit mix on December 31, 2004 was as follows:

Serial Tk. in Percentage of total

Items
No. Million deposits
1. Current and other deposits
4911.37 17.50

2. Savings bank deposits

3578.93 12.75

3. Fixed deposits
12835.86 45.73

4. Short term deposits

1966.04 7.00

5. Deposit schemes
4323.40 15.40

6. Bills payable
453.60 1.62

Table 2: Deposit mix of PBL

16
3.4 Loans and Advances:
The Prime Bank Limited is making loans and advances in different areas. The bank
continues to explore and diversify its loan distribution with the objective of efficient use
of resources and take utmost precaution to safeguard it. PBL starts participating in
syndicated loan and achieves huge success in this area. The Bank has formulated its
policy to give priority to small and medium businessmen while financing large-scale
enterprises through consortium of banks. The total loans and advances of the Bank stood
at Tk. 23219.67 million as of December 31,2004 as compared to Tk16492.22 million in
2003.The loan and advance distributed by PBL has shown an increasing trend but the
classified loan is satisfactory.

3.5 Foreign Exchange Business:

The Bank has done a significant amount of Foreign Exchange business and that played a
vital role in the overall performance of the bank. The bank increased its number of
foreign correspondents to 441 in the year 2003, which was 422 previous year. Total
import and export business transacted was Tk. 36747 million and 19502 million during
2004. The growth rate of the import business was 44% and the main items of industrial
machineries, raw materials, commodities and other consumer products. The growth rate
of export business was 18% percent and the items of export were RMG, Shrimp, Jute,
Leather, Tobacco, Bone Crust, Betel-Nut etc. The remittance department is the efficient
one in the banking industry. Moreover, PBL participates in foreign exchange market
through the help of Reuters. The bank has performed total Tk.56248.80 million of
foreign exchange business in 2004. (Ref: Fig-6, Appendix)

3.6 Sources of Fund:

The sources of fund of the Prime Bank Limited, like other bank the sources of fund
comes from deposit, paid up capital, Reserve fund and other liabilities. Deposit is the

17
main sources of fund followed by paid up capital. The equity capital was Tk 2239.80
million at the end of 2004. (Ref: Fig-3, Appendix)

3.7 Uses of Fund:

PBL has used its fund in Loans and advances, Investments, Fixed Assets and Liquid
Assets. Investments, loans and advances at the end of 2003 and 2004 stood at Tk.
19241.93 million and 26303.48 million respectively. Investments, loans and advances
increase by 31% and 37% respectively in 2003 and 2004. (Ref: Fig-4, Appendix)

3.8 Interest Income:

The bank is earning a satisfactory interest income and non-interest income as well. The
net interest income was grown by 31.30% during year 2004. The growth was mainly
driven by increase in loans and advances. Net investment income from Islamic Branches
increased during the year by 42.16 percent.

3.9 Profitability and Shareholder Satisfaction:

The bank had been one of the most profitable in the banking sector. The bank's return on
assets (ROA) crossed 3.75 percent in the year 2004. Even though the capital market of
the country has been suffering over the last few years, the good performance of Prime
Bank made sure that the banks share price remained in a respectable position. (Ref: Fig-
5, Appendix)

18
CHAPTER-04

19
 Analysis of the Deposit Schemes
Bank is the largest mobilize of surplus domestic savings. For poverty alleviation, we need
self employment, for self-employment we need investment and for investment we need
savings. In the other words, savings help capital formations and the capital formations
help investments in the country. The investment in its turn helps industrialization leading
towards creation of wealth of the country. And the wealth finally takes the country on
road to progress and prosperity. As such, savings is considered the very basis of
prosperity of the country. The more the growth of savings, the more will be the prosperity
of the nation.

The savings rate in Bangladesh is one of the lowest in the world. In order to improve
the savings rate, Financial Institutions responsible for mobilization of savings should
offer attractive Savings Schemes so that the marginal propensity to save increases. The
savings do not, of course, depend only on the quantum of income but largely depend on
the habit of savings of the people. Interest rate of Savings Deposit Account is 6.00% for
the year 2008.

We have formulated the following Savings Schemes:

Contributory Savings Scheme Monthly Benefit Deposit Scheme

Education Savings Scheme Fixed Deposit Scheme

Short Term Deposit Lakhopati Deposit Scheme

Double Benefit Deposit Scheme Foreign Currency Account

20
 Resident Foreign Currency Deposit
Account
Non-resident Taka Account
House Building Deposit Scheme
Non-resident Foreign Currency
Deposit Account
Non-resident Investors Taka
Account
Prime Millionaire Scheme

4.1 Contributory Savings Schemes (CSS):

This is a Savings Scheme in which a person gets the opportunity to build up savings by
contributing monthly instalments and receives an attractive fixed amount at the end of a
specified term. The Scheme is designed to help the fixed income group to save money
and build up a sizable fund with which they can go for some income generating venture
to improve the quality of their life and/or meet any future financial obligations.

The salient features of the Scheme are given below:

01. Minimum size of monthly installment shall be Tk. 500/- and multiplies of Tk.
1000/-. Maximum installment size shall be Tk. 25,000/-
02. The Deposit shall be for a period of 5 years.
03. Lump sum amount shall be paid after maturity or monthly Pension shall be paid

for the next 5 years according to the size of deposit. A brief chart of lump sum
amount and monthly pension installments payable are shown below:

04. At present Income Tax on interest will not be applicable but in future for any
change in Govt. rule of taxation, the Bank reserve the right to deduct Income Tax.

05. The depositor will have the option to choose any installment size at the time of

21
 opening of an Account and will not be allowed to change the size of installment
afterwards.
06. Account in the name of minors can be opened too under the Scheme.

07. A person can open more than one account for different size of installments at any
branch of the Bank.
08. The specified amount on maturity at any slab shall be paid after one month from
the date of deposit of the final installment.
09. Normally no withdrawal shall be allowed before maturity. But, if any depositor
intends to withdraw his/her savings due to certain unavoidable reasons before 5
years, he/she will be allowed to do so, in the following manner:
No benefit or interest shall be allowed for pre-mature encashment within
a.
one year.
b. If the account is closed after one year of its opening, interest shall be
allowed on the deposit at prevailing Savings Deposit rate.

10. The monthly installment shall be payable by the 8th day (in case of holiday the next
working day) of every month. Advance payment of any number of installments is
acceptable.
11. When a depositor fails to deposit any installment, he/she will have to pay a fine
@5% of the overdue amount payable at the time of depositing the next installment
or maximum Tk. 500/-.
12. When a depositor fails to pay 3 (three) consecutive installments at any point before
five years term, the customer will cease to remain within the purview of the scheme
and scheme will be treated as a Savings Bank deposit and interest will be paid on
the deposited amount at prevailing SB account rate subject to completion of 1 (One)
year of its opening.
13. Loan may be allowed up to 80% of the deposited amount against lien on the same
after at least 2 (Two) years of regular payment of installments and minimum limit of
the loan shall be Tk. 50,000/-.
14. In case of death of a depositor, the account will cease to be operative and the
amount deposited so far shall be paid to the nominee, and in absence of nominee, to
the legal heirs of the deceased as per rules in force.

22
15. The Bank at its discretion may allow inter branch transfer of the A/C under the
Scheme.
16. The clients are encouraged to give standing instructions to the Bank to deposit the
monthly installments, debiting their CD/SB accounts maintained with the concerned
Branch. In that case, no charge will be realized for such service.
17. Normally no statement of the account will be served to the depositor, in case of need
of any depositor, charge @ Tk. 10/- per year / per statement shall be realized as cost
of paper.
18. At the time of opening account under CSS customer shall refer his/her SB account
number for transferring his/her pension amount or may open SB A/C at the time of
maturity for getting monthly pension amount.

4.2 Education Savings Scheme:

The educational expenses particularly the expenses for higher education are sharply
increasing day by day in our country. Sometimes, the children are deprived of getting the
desired level of education because of the inability of the parents to meet their educational
expenses. But the parents would not feel any difficulty to defray such expenses if a
proper financial planning is made much ahead of time. Moreover, we are receiving
demands from the Islamic minded people of our country for an attractive Savings Scheme
on the basis of Islamic Sariah so as to encourage them to save in Islamic way for
education of their children.

With this end in view, Prime Bank Limited has introduced a Savings Scheme entitled
“Education Savings Scheme” in accordance with the principles of Islamic Sariah i.e., on
the basis of profit and loss sharing. The scheme provides a unique opportunity to the
parents to make a future provision for the educational expenses of their children when
they enter into Schools, Colleges and Universities out of the benefit of a small amount of
savings with the Bank at an opportune moment.

The salient features of the Scheme are given below:

23
01. The Scheme shall be implemented through all our branches, though it is specially
designed for Islamic Banking branches.
02. Deposit of Tk. 50,000/- and multiples thereof but maximum limit of Tk. 5,00,000/-
at a time will be acceptable under the Scheme.
03. A specially designed Receipt shall be issued for the deposit under the Scheme in the
same manner as issued in case of FDR. Branches shall use the ESS receipts that
used for existing scheme.
04. The instrument shall be issued for a period of 5 years term.
05. On maturity a lump sum amount of Tk. 85,382/- shall be payable or education
allowance @ Tk. 1,854/- per month per Tk. 50,000/- shall be payable on the basis of
deposit amount for next 5 years starting from the completion of the term as per
following table. Income Tax @10% on interest may be deducted at source at the
time of payment of lump sum amount which is given bellow:

06. To avail the monthly allowances the depositor is required to surrender the savings
instrument to the Bank duly discharged with a written instruction to the Bank to pay
the instalments to his ward on monthly instalment basis as stipulated in the scheme.
07. Separate Application form specially designed for the purpose shall be obtained duly
filled in and signed by the depositor.

08. Photograph of the Nominee and Ultimate Beneficiary, if any, duly attested by the
depositor, shall be obtained at the time of opening the account.
Normally no withdrawal will be allowed before maturity. But if any depositor
09. intends to withdraw his/her deposit before maturity, the following rules will be
applicable:
a. No benefit including interest shall be allowed for pre-mature encashment
within one year.
b. If the accounts/deposits are closed/encashed after one year of its opening,
benefit shall be allowed on the deposit at normal Savings Deposit rate.
10. The instrument will be acceptable as collateral security against any investment
subject to registering lien with the issuing Branch.
11. In case of death of the depositor, the amount of instrument will be paid to the
nominee or, in the absence of a nominee, to the legal heirs of the depositor on

24
 production of succession certificate.
12. But if the nominee after the demise of the depositor intends to continue the deposit
to enjoy the monthly educational allowance for five years, as admissible under the
rules of the scheme, the receipt should be surrendered to the Bank on maturity duly
discharged by the nominee and duly authenticated by the legal guardian.
13. In case of instrument is lost the procedure for issuance of the duplicate will be the
same as applicable in case of loss of FDR.

4.3 Foreign Currency Account:

Bangladesh nationals residing abroad, foreign nationals residing abroad or in Bangladesh,

foreign firms registered abroad and operating in Bangladesh or abroad, and foreign
missions and their expatriate employees in Bangladesh can open Foreign Currency (FC)
accounts.

• Foreign exchange earned through business done or services rendered in

Bangladesh can not put into this account.
• Credits to a foreign currency account may be made against inward remittances of
foreign exchange in any form or by transfer from another FC account.
• Local as well as foreign payments may be made freely from foreign currency
accounts.
• No payment in foreign exchange can be made to or on behalf of any resident in
Bangladesh. Payments from these accounts received by residents, unless generally
or specifically authorized by Bangladesh, must be converted into Taka.
• Banks may pay interest on such accounts at rates determined from time to time.

25
FC Accounts of Overseas Bangladesh Nationals:
• Bangladesh nationals working abroad or proceeding abroad to take up
employment may open foreign currency accounts.
• No initial deposit is required to open this account.
• Account holder may operate the account himself or nominate other persons in
Bangladesh for this purpose.
• The account may be opened in pound sterling, US dollar, Euro or Japanese yen.
• The account may be maintained as long as the account holder desires.
• These accounts should ordinarily be fed by remittances by account holder himself
but funds sent by other wage earners may also be placed to the credit of such
accounts.
• Sale proceeds of currency notes, traveller’s cheques, drafts etc. brought into
Bangladesh by the account holder while on temporary visit to Bangladesh
provided foreign exchange in excess of US$ 5000 (or its equivalent) is duly
declared to the Customs on Form FMJ at the time of their arrival.
• Funds lying to the credit of FC accounts of Bangladesh nationals can be utilized
for import of goods and commodities as per Import Policy announced by the
Government from time to time.

FC Accounts of Duty Free Shops:

Foreign Currency Account in the names of the Diplomatic Bonded Warehouse (duty free
shops) licensed by the custom authorities may be opened on the following conditions:
• Foreign exchange received only on account of sale of merchandise may be
credited to this Account.
• Foreign exchange may be sent abroad only for the purpose of import of
merchandise by the bonded warehouse.
• For the same purpose foreign exchange may also be transferred from these
account to foreign currency account maintained with other banks.

26
 • Foreign exchange from these accounts may be freely converted into Taka at
current exchange rates.

FC Accounts of Joint Venture Contracting Firms:

• Local and joint venture contracting firms employed by foreign

donors/international donor agencies to execute projects in Bangladesh may open
foreign currency accounts as per terms of the approved contracts.

• Only foreign exchange received from the donors/donor agencies to meet expenses
of the project can be credited to these accounts.

• All expenses in foreign exchange as per relevant contract may be met from these
accounts.

FC Accounts of Bangladeshis Working in Foreign

organizations:

• Foreign currency accounts may be opened in the names of resident Bangladesh

nationals working in foreign/ international organizations operating in Bangladesh
provided their salary is paid in foreign currency.

• Such accounts may be credited only with the foreign currency portion of the
salary and debited for all approved current transactions like cost of travel,
education for children, medical treatment etc.

• Foreign currency accounts may also be credited with consultancy fees/honoraria

received in foreign currency by the above mentioned category of residents, debits
to such accounts being subject to same conditions as mentioned above.

27
4.4 Fixed Deposit Scheme:

This type of deposit should be kept for a fixed term or period. Prime Bank Limited deals
with the following terms deposit.

Monthly Benefit Deposit Scheme:

This is a Deposit Scheme where the depositor gets monthly benefit out of his deposit.
• The scheme is designed for the benefit of the persons who intend to meet the
monthly budget of their families from the income out of their deposit.
• Investment of fund of Trusts and Foundations, which award monthly
scholarships/ stipends to students, etc.
The salient features of the Scheme are given below:

01 Deposit of Tk. 25,000.00 (Taka twenty five thousand) and multiples thereof, but
. maximum Tk. 25,00,000/- (Taka twenty-five lac) shall be acceptable under the
Scheme.
02 The Deposit shall be for a period of 5 (Five) years. The Principal amount is
. refundable on maturity.
03 Profit shall be paid on monthly basis @ Tk. 1,000.00 per Tk. 1,00,000.00.
.
04 Payment of monthly profit shall start from the subsequent month after a clear
. minimum gap of 30 days from date of deposit.
05 In case of death of a depositor, the account shall cease to be operative and the
. amount deposited so far shall be paid to the nominee, and in the absence of
nominee, to the legal heirs of deceased as per rules in force.
06 Normally, the deposit will not be encashable before 5 (Five) years. But if any
. depositor intends to withdraw his deposit before maturity due to certain
unavoidable reasons, he would be allowed to do so in the following manner:
a. No benefit including interest shall be allowed for pre-mature encashment
within one year.
b. If the accounts / deposits are closed/ encashed after one year of its opening,
benefit shall be allowed on the deposit at existing normal Savings Deposit
rate.

28
 c. If the amount of monthly profit already paid exceeds the amount payable at
normal Savings rate, the difference shall be realized from the principal deposit
amount, if and when necessary.
07 Separate Application Form specially designed for the purpose shall be obtained
. duly filled in and signed by the depositor. In addition to this, the depositor must
have a separate Savings Bank Account with the branch wherein the benefit on the
amount so deposited shall be credited every month.

08 A specially designed Receipt shall be issued for the deposit under the Scheme in
. the same manner as issued in case of FDR.
09 The Receipt will not be transferable.
.
10 Advance against lien on such Receipt can be allowed up to 80% of the deposit
. bearing normal rate of interest prevalent at the time on Overdraft/ Loan.
11 During the period of such Overdraft/ Loan, the monthly benefit shall be credited
. to the concerned Overdraft/Loan.
12 Payment will be made after deduction of taxes as fixed by the Govt. from time to
. time.
13 In case the instrument is lost, the procedure for issuance of a duplicate will be the
. same as applicable in case of loss of FDR.
N.B. Senior Citizens will get 0.50% higher rate of interest as permissible for all other
deposits of our Bank. Monthly benefit shall be Tk. 1042/- per Tk. 1, 00,000/- per
month for Senior Citizens.

4.5 Non-resident Foreign Currency Deposit Account:

• All non-resident Bangladesh nationals and persons of Bangladesh origin including

those having dual nationality and ordinarily residing abroad are entitled to
maintain interest bearing time deposit account named "Non-Resident Foreign
Currency Deposit (NFCD) Account" with the Authorized Dealers (ADs).

29
• These accounts may be maintained in US dollar, pound sterling, Euro or Japanese
yen; initially with minimum amount of US$ 1000 or pound sterling 500 or
equivalent.
• Accounts may be opened against remittances in other convertible currencies after
conversion of those into US Dollar, pound sterling, Euro or Japanese yen.
• Foreign nationals and companies / firms registered and/or incorporated abroad,
banks, other financial institutions including institutional investors and 100%
foreign owned (A -Type) industrial units in the Export Processing Zones in
Bangladesh, are also allowed to open and maintain NFCD account. The minimum
amount of time deposits in such cases should be US$ 25,000 or its equivalent in
pound sterling, Euro or Japanese yen.
• Bangladesh nationals serving with Embassies/High Commissions of Bangladesh
in foreign countries as also the officers/staff of the Government/semi-Government
departments/nationalized banks and employees of body corporate posted abroad
or deputed with International and Regional agencies like IMF, World Bank, IDB,
and ADB etc. during their assignments abroad may open such accounts.
• Crewmembers of the Bangladeshi shipping companies are not entitled to open
such accounts, but shore staff posted abroad may open such accounts.
• The account is in the nature of term deposits maturing after one month, three
months, six months and one year.
• Accounts may also be opened with funds transferred from existing foreign
currency accounts maintained by the wage earners with the ADs in Bangladesh.
• The branch may pay interest on deposits into account at euro-currency deposit
rates advised by the Head Office.
• In case of premature repayments, the amount of interest may be forfeited to the
branch.
• The interest of deposits into this account is exempt from the Tax payable under
Income Tax Act.

• The account holder may be allowed to freely repatriate the balance and the
interest accrued thereon in foreign exchange to the country of his residence or

30
 anywhere he chooses and may, at his option, convert the balance into Taka at the
prevailing exchange rate.

4.6 Non-resident Investors Taka Account:

1. The non-resident investor shall open a Non-resident Investor's Taka Account

(NITA) with any AD branches of Prime Bank Limited, with freely convertible
foreign currency remitted from abroad through normal banking channel or by
transfer of funds from the non-resident investor's foreign currency account, if any,
in Bangladesh.
2. Balances in the NITA may freely be used to buy Bangladeshi shares/securities.
These balances are also freely remittable abroad in equivalent foreign exchange.

3. The NITA can be operated by the account-holder himself or by a nominee,

including the AD itself.

4. Dividends/interest earnings on the shares/securities bought through the NITA, net

of taxes payable on such earnings of the non-resident holder, received from the
issuing company/institution may be credited to the NITA.

5. Sale proceeds of the shares/securities purchased through the NITA may also be
credited to the NITA.

6. No local funds from any sources other than those mentioned at (1), (4) and (5)
above can be credited to NITA.

7. No loan facilities shall be allowed by the AD in the Non-resident Investor's Taka

Accounts.

4.7 Non-resident Taka Account:

31
 • The Taka accounts maintained with banks in Bangladesh by private individuals,
firms and companies resident outside Bangladesh are known as Non-resident
Taka Accounts.
• The accounts of foreign nationals residing in Bangladesh and foreign firms and
companies located and operating in Bangladesh and accounts of U.N. and its
organizations are, however, treated as resident accounts and kept outside the
scope of Exchange Control.
• The accounts of Bangladesh nationals who leave the country except those who
hold office in the service of Bangladesh Government are required to be treated as
non-resident Taka account so long they remain outside Bangladesh.

• Prior permission of Bangladesh Bank is necessary for opening non-resident Taka

accounts.

• Non-resident Taka account may, however, be opened without prior permission of

Bangladesh Bank for crediting the proceeds of remittances received from abroad
through normal banking channel.

4.8 Prime Millionaire Scheme:

The salient features of the Scheme are given below:

01. Monthly installment shall be Tk.12,465.00 /Tk.7,890.00 /Tk.4,570.00 for the

tenor of 5/7/10 years respectively
02. Terminal amount on maturity shall be Tk. 10.00 lac.

Ref: Table-6, Appendix

03 Income Tax on interest amount shall be as per Government rule on taxation and
. the Bank reserves the right to deduct Income Tax.
04. The depositor will have the option to choose any instalment size at the time of
opening of the A/C. and will not be allowed to change the size of installment
afterwards.
05. A person can open more than one account.

32
 06. The installment shall be payable by the 8th day (in case of holiday the next
working day) of every month. Advance payment of any number of installments
is acceptable.
07. Normally no withdrawal shall be allowed before maturity, If any depositor
intends to withdraw his/her deposit due to certain unavoidable reasons before
maturity (Min after one year) interest on the prevailing Savings Deposit rate may
be allowed.
08. When a depositor fails to deposit any installment, he/she will have to pay a fine
@5% of the overdue amount payable at the time of depositing the next
installment or maximum Tk. 500/- .
09. When a depositor fails to pay 3 (Three) consecutive installment at any point of
time before 2 years term, the customer will cease to remain within the purview
of the scheme and scheme will be treated as a Savings Bank deposit and interest
will be paid on the deposited amount at prevailing SB A/C rate subject to
completion of 1 (One) year of its opening.
10. In case of death of a depositor, the A/C. will cease to be operative and the
amount deposited so far shall be paid to the nominee, and in the absence of
nominee, to the legal heirs of deceased as per rules in force.
11. The Bank at its discretion may allow inter branch transfer of the A/C under the
Scheme.
12. The clients are encouraged to give standing instructions to the Bank to deposit
the monthly installments, debiting their CD/SB accounts maintained with the
concerned Branch. In that case, no charge will be realized for such service.
13. Normally no statement of the account will be served to the depositor. Incase of
need of any depositor, charge @Tk.10/- per year / per statement shall be realized
as cost of paper.

4.9 Resident Foreign Currency Deposit Account:

• Persons ordinarily resident in Bangladesh may open and maintain Resident
Foreign Currency Deposit (RFCD) accounts with foreign exchange brought in

33
 at the time of their return from travel abroad.
• Any amount brought in with declaration to Customs Authorities in form FMJ
and up to US$ 5000 brought in without any declaration can be credited to such
accounts.
• Proceeds of export of goods or services from Bangladesh or commission
arising from business deals in Bangladesh shall not be credited to such
accounts.
• Balances in these accounts shall be freely transferable abroad.
• Fund from these accounts may also be issued to account-holders for the
purpose of their foreign travels in the usual manner (i.e. with endorsement in
passport and ticket, upto US $ 1500 in the from of cash currency notes and the
remainder in the form of TC)..
• These accounts may be opened in US Dollar, pound sterling, Euro or Japanese
yen and may be maintained as long as the account holders desire.
• Interest in foreign exchange shall be payable on balances in such accounts if
the deposits are for a term of not less than one month and the balance is not
less than US$ 1000 or £ 500 or its equivalent.
• The rate of interest shall be one quarter percent (0.25%) less than the rate at
which interest is paid on balances of bank in their foreign currency clearing
accounts maintained with Bangladesh Bank.

4.10 Short Term Deposit

• A short term deposit (STD) account is a running account with amounts being paid
into and drawn out of the account continuously.

• These accounts are called Demand Deposits or Demand Liabilities since the
banker is under obligation to pay the money in such deposits on demand.

34
• These accounts are generally opened by Business Organization, Public Institution,
and Corporate Bodies.

• An STD account may be opened by an individual person.

• It is an interest bearing deposit. Interest is calculated on daily basis as per Banks

Prescribed Rate and is credited to account on half yearly basis.

35
 Chapter-05

Foreign Exchange Division

WHY CHOSEN FOREIGN EXCHANGE

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

36
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 Exchange Division (FED) is the
international department Bangladesh Bank issues license to scheduled banks to deal with
foreign exchange. These banks are known as Authorized Dealers. If the branch is
authorized dealer in foreign exchange market, it can remit foreign exchange from local
country to foreign countries. So Prime Bank, Principal branch is an authorized dealer.

Foreign Exchange is the means and methods by which rights to wealth in 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 Exchange Division (FED) is the
international department/divisions. Bangladesh Bank issues license to scheduled banks to
deal with foreign exchange. Those banks are known as Authorized Dealers. If the branch
is the authorized dealer in foreign market, it can remit foreign exchange from local
country to foreign countries.

5.1 Understanding of FED:

The goods and services sold by Bangladesh to foreign households, businessmen and
Government are called export. The export trade of the country is regulated by the Imports
and Exports (control) Act, 1950. There are a number of formalities, which an exporter
has to fulfill before and after shipment of goods. The exports from Bangladesh are
subject to export trade control exercised by the Ministry Of Commerce through Chief
Controller of Imports and Exports (CCI & E). No exporter is allowed to export any
commodity permissible for export from Bangladesh unless he is registered with CCI & E
and holds valid Export Registration Certificate (ERC). The ERC is required to be
renewed every year. The ERC number is to be incorporated on EXP forms and other
documents connected with exports.

5.2 OBJECTIVE OF THE EXPORT

37
By now you should have analyzed your readiness to export and have done some market
research. Now it’s time to explore your competitive advantages and set your export
objectives.

Increasing export market advantage comes down to the five Cs: company, country,
customer, contact and competitor, according to the government’s Winning Exports: A
Planning Guide. By working through each of these areas, we’ll work step-by-step to help
develop and refine your export objectives, so you can be better prepared to compete for
export markets.

Market Position

Your export readiness and potential export success will build from your domestic
operations and position in the market. As a starting point, develop a corporate profile of
your business. This document will outline your business functions, products or services,
capabilities, and will be useful when introducing the business to potential customers,
distributors, finance providers, and employees during your export development. It will
also become a valuable part of your export plan.

The corporate profile should include:

• Company particulars, credentials, history, contact information;

• a description of your product or service, its features and benefits, users, price stability
(all emphasizing your competitive advantages);
• marketing and growth strategies—target markets, current market position, the
marketing variables for your product or service and how you compare with the
competition, packaging and promotional methods, and how you intend to use these in
selected overseas markets;
• your current export objectives—export potential, product availability, preferred
distribution, any product adaptations, and freight specifications

5.3 Market Research

38
Choosing your export markets will involve extensive market research in order to assess
the best options and reduce risk. As well as your own market research, Austrade, state
government trade departments, industry associations and market research companies can
help with this. And actually visiting your chosen markets is also a likely option (see Step
4, Visiting Your Market in our upcoming May issue).

Ultimately you will want to identify one or two suitable overseas markets that have the
potential to be developed quickly, and select initial markets with low risk and relative
ease of entry.

Determining ease of entry will depend on a company’s individual situation, but there are
some general characteristics, which deem a country more ‘easy’ or ‘difficult’ to enter.
Easier markets tend to be similar to your domestic market in terms of language, culture or
business practices; are geographically close; have a familiar banking system; and similar
rules, regulations and laws. More difficult markets tend to be further away, are large or
complex, have a high level of regulation and complex import requirements or may be a
relatively undeveloped market.

An important consideration when selecting your target market is the advantage offered by
any particular export market for your product or service. You will need to consider
whether your local competitive advantages will be sustained in your proposed export
market, whether, through exporting, you can extend the life of a product that has already
reached saturation point domestically, and if you can achieve economies of scale or
improve return on investment by extending sales in a larger market.

When choosing your export markets you will need to balance ease of entry with these
market opportunities and establish which countries best match your business based on
your research. You can determine the best match by considering the fit between your
company and the market in terms of contacts, comfort levels, riskiness, development
costs and your interest in the market.

39
5.4 Product and Research
When choosing the products or services to offer in a new export market, it’s important to
have a clear idea of what drives customers to buy your products or services.

Your customers may have varying reasons for purchasing your product so it’s worth
breaking down your customers into subgroups, based on their different requirements, in
order to understand their needs, expectations and buying patterns.

The key to your success will be to identify and meet the needs of these subgroups whose
needs aren’t met by others in the marketplace—this is your competitive advantage. Your
competitive advantages can be based on cost, the quality or value to customers of your
product or service, your ability to respond quickly to customers, and your relationship
with them and others in the industry.

You will need to determine whether your existing competitive advantage(s) can be
transferred to your chosen export market. Generally speaking, entering the export market
will require some modifications to be made to your business to compete successfully
overseas.

5.5 Distribution Channel

Choosing the best distribution channel for your exports will depend on your
product/service, the local conditions in the overseas market and the long-term cost-
effectiveness and returns from each option.

There are several different distribution options:

• Indirect exporting involves relying on a third party within Australia, and isn’t
necessarily the result of a planned export approach. Examples of this type of arrangement
include overseas buyers visiting Australia, selling to Australian-based trading houses or

40
intermediaries, subcontracting products/services for an offshore project and appointing an
Australian-based consultant or commission agent.

• A distributor is a company or other entity, usually based in your export market, that
buys your goods and sells them to the local market. Distributors are also responsible for
marketing products, which can have a significant impact on your export sales.

• A representative agent is a sales agent, based in the export market, to sell one or more
related products. They are paid by commission and usually organize the warranty and
product service. Agents may work exclusively for your company, or on a non-exclusive
basis.

• Manufacturing under license (MUL) is an agreement in which an exporter licenses its

intellectual property to an overseas company, who then manufactures the goods or
delivers the services as if they were their own, for a set fee or royalty.

• Franchising involves an Australian franchiser entering an agreement with a franchisee

overseas to use a developed business package.

• Joint venture is a joint ownership arrangement between you and an entity overseas in
which the partners’ shares can vary from 50-50 to a combination in which one partner is
virtually a silent participant.

• Direct exporting involves selling your products/services directly into the export market
and dealing directly with your customers from an Australian base.

• One hundred percent offshore ownership can involve either establishing an overseas
branch office or making a greenfield investment. A greenfield investment implies setting
up a business from scratch and requires the exporter to establish all the infrastructure
necessary to operate the business.

Bear in mind that you can use a combination of distribution options, even within one
country. A strong distribution strategy will encompass several alternatives in the one

41
market. This will ensure short-term, low-risk cash flow is available for longer-term
growth.

5.6 Market Channel

Prime’ export success will be largely determined by the market strength of your
competitors, as well as your point of difference.

In assessing the market strength of your competition, ask yourself how many direct
competitors there are for your product or service; who are these competitors, how big are
they and what is their market share; are there alternative products or services competing
with yours; and are there barriers to entry, which will impact on your success?

Then, to determine point of difference, ask yourself what are the benefits offered to
customers by your competitors; how well do your competitors meet the needs of
customers and to what extent are customers currently satisfied; and do you currently
understand customer buying patterns which may impact on your success?

Once you’ve answered these questions, you can deal with the outcomes by undertaking a
competitive SWOT analysis. Through brainstorming with management and key staff,
analyse your business’s strengths, weaknesses, opportunities and threats, and compare
them with those of your competitors. While doing this, also think of how your company
appears in the eyes of your export customers, compared with your competitors.

5.7 Export Statement

After identifying the five Cs and establishing your export objectives, you will be able to
incorporate these into an export statement. This will explain why you intend to export,
how you will go about it, and what you hope to achieve.

Your statement should be between one and three pages long and briefly cover the
company’s export objectives, the key reasons for exporting, what you are planning to
export, target country and future target countries, target customers, competitors and your
competitive advantages, and your initial distribution intentions.

42
As you continue through the export process you will continually refine both your export
objectives and your corporate profile, and amend your export statement accordingly.
Your export statement will become a critical part of your export plan.

5.8 Importance of Foreign Exchange Business in our Economy:

• International trade gives exchange opportunity of goods.
• Consumers get privilege through international trade.
• International trade helps to produce domestic production.
• Natural assets of a country are to be utilized property.

5.9 Authorized Dealership:

The bank, which is authorized by Bangladesh bank for dealing foreign exchange business
on transaction under the FER Act, 1947 is called Authorized Dealership.

5.10 Import Procedure:

Definition of Import:
Import means goods and services purchased from foreign sources. These imports may be
used for consumption, investment or government. Whatever their use, imports represents
purchase of goods and services that not even produced or purchased but insufficient in a
country.

Procedure for obtaining IRC:

As per Import & Export control Act, 1950 no person can indent, import or export any
goods in to Bangladesh except incase of exemption issued by the government of the
Peoples Republic of Bangladesh. So for doing import business at first every importer
should obtain Import Registration Certificate. Through public notice or import policy the
chief controller of import and exports invites application usually for registration of
importers. The following papers / documents are required for submission to CCI & E for
Import Registration Certificate.

43
 • Application form.
• Nationality Certificate.
• Income tax registration certificate with GM.
• Trade license.
• Membership Certificate.
• Partnership Deed (For partnership firm)
• Certificate of Registration with the Register of Joint Co. & Articles and
memorandum of Association in case of Limited Company.
• Bank Certificate.

The nominated of the applicant will examine the papers/documents and verify the
signature of the applicant and forward the same to the concerned office of the CCI & E
with a ford wing schedule in duplicate though bank representative. The duplicate copy of
the same bearing the acknowledgement of CCI & E office of the receipt of the document
is received by the bank and is preserved.

Import: Basis of
• Performa invoice
• Indent.
• Special trade agreement,
• Sales Contract,
• Barter system.

5.11 Letter of Credit

Definition of L/C:
Letter of credit is an undertaking giving by the issuing Bank on behalf of its customers to
pay a certain some of money to a certain person (beneficiary) on the fulfilment of certain
terms of conditions as laid down in the letter.

44
Classification of L/C:

1. Revocable L/C,
2. Red clause L/C
3. Irrevocable L/C,
4. Confirmed L/C,
5. Transferable L/C,
6. Devisable L/C,
7. Revolving L/C
8. Restricted L/C,
9. Green clause L/C,
10. Back-to-Back L/C,
11. Stand by L/C,
12. Circular L/C,
13. Straight L/C.

The Clauses Contained In a L/C:

• A clause authorizes the beneficiary to draw bills of exchange up to certain on the

opener.
• List of shipping document, which are to accompany the bills.
• Description of the goods to be shipped
• An undertaking by the issuing bank that bills drawn in accordance with the
conditions will be duly honoured.
• Instructions to the negotiating bank for obtaining reimbursement of payments
under the credit.

45
Parties involved in a Letter of Credit:

Importer/Buyer

Opening Bank

Exporter/Beneficiary

Advising Bank

46
 Negotiating Bank

Confirming/Reimbursing Bank

47
 Position of Import L/Cs

In Million US$
Particula July 2005- 7 th
June
July 2006- 7th June 2007
rs 2006

No. of
L/C 13,958.18 15,938.07
Opened

48
Importer/Buyer:
Importer/Buyer is the party who opens L/C on behalf of exporter by issuing bank.

Opening/Issuing Bank:
The opening/issuing bank is the bank which opens/issues a L/C on behalf of the importer.
It is also called the importer's /buyer's bank.

Exporter/Beneficiary:
Exporter/Beneficiary is the party in whose favor the L/C is established. Advising
/Notifying Bank The advising/Notifying bank is the bank through which the L/C is
advised to the exporting country & it may be a branch of the opening bank or a
correspondent bank. It may also assume the role of confirming and /or negotiating bank
depending upon the conditions of the credit.

Negotiating Bank:

49
Negotiating bank is the bank that negotiates the bill & pays the amount to the beneficiary.
It has to carefully scrutinize the documentary credit before negotiation in order to see
whether the documents apparently are in order or not. The advising bank & the
negotiating bank may or may not be one & the same.

Reimbursing:
Bank reimbursing bank is the bank, which would reimburse the negotiating bank. It is to
be nominated by the issuing bank.

L/C Application:
Prime Bank Limited provides a painted form for opening of L/C to the importer. A
special stamp is attached on the form. While opening, the stamp is cancelled. The
importer gives the following information is that form:
• Full name & address of importer.
• Date & place of expiry of the credit.
• The mode of transmission of document (courier/mail/telex)
• Whether the confirmation of the credit is requested by the beneficiary or not.
• Whether the partial shipment is allowed or not.
• The type of loading (loading on boarding).
• Brief description of the goods to be imported.
• Availability of the credit by sight payment acceptance/deferred payment.
• The time bar within which the document should be presented.
• Sales terms (FOB/CIF/C & F).
• Account number.
• L/C amount.
• Shipping mark.
• H.S. code number of the goods to be imported.
• IRC number.
• LCA number

50
 • Insurance cover note.
• Country of origin.
• The above information is given along with the following documents.
• Proforma Invoice, which gives description of the goods including quantity, Unit
price etc.
• Four set of IMP form.
• The insurance cover note, Issuing Company &the insurance number.

Transmission of L/C:
The ways of transmission of L/C are as follows
i) Through SWIFT
ii) Through Telex
iii) Through DHL or FEDEX
iv) Through Emergency Mail Service (EMS)

Amendment of Letter of Credit:

Parties involved in a L/C cannot always satisfy the terms & conditions in full as expected
due to some unexpected reason. In such a situation, the credit should be amended. PBL
transmits the amendment by tested telex to the advising bank. In case of revocable credit,
it can be amended or cancelled by the issuing bank at any moment & without prior notice
to the beneficiary. But in case of irrevocable L/C, it can neither be amended nor cancelled
without the agreement of the issuing bank, the advising bank & the beneficiary. If the
L/C is amended, service & telex charge is debited from the party account.

51
Presentation of the Documents:
After the exporter /seller is being satisfied with the terms & conditions of the credit,
he/she then proceeds to dispatch the required goods to the importer. Then he/she has to
present the documents evidencing dispatching of goods to the negotiating bank within the
stipulated expiry date of the credit. After receiving the documents, the negotiating bank
checks them against the credit. If the documents are found in order, the bank will
negotiate to the issuing bank, in our case with PBL. PBL also checks the documents.

The usual documents in a Letter of Credit are the following:

• Bill of exchange.
• Commercial Invoice.
• Packing List.
• Bill of Lading.
• Certificate of Origin.
• Pre-shipment Inspection report.
• Insurance Cover Note.
• Shipment Certificate.

Common Discrepancies of the Import Documents:

Most common discrepancies that are found 'in import documents are giving below:
• Wrong tenor shown in the bill of exchange.
• Partial shipment is beyond L/C limited /terms.
• Insufficient number of Commercial Invoice.
• Unsigned document.
• Description of the goods is not consistent with that of L/C.
• Submission of documents after expiry of Letter of Credit.
• Some important documents are not presented.

52
If any major discrepancy found in the document it is immediately informed the Importer
for his opinion.
After repairing the necessary vouchers, endorsement is made on the bank of the B/F- as
Received Payment & the B/L is endorsed as Please delivery to the order of M/S--------"
under two authorized signatures of PBL's officers (P.A. holders). Then the documents are
given to the Importer.

Back-to-Back Letter of Credit:

A back-to-back letter of credit is a new credit. It is different from die original credit
based on which the bank undertakes the risk under the back-to-back credit. In this case,
the bank's main security is the original credit (selling credit) and the back to back credit
(buying credit) is separate instruments independent of each other, although both are part
of the same business operation. The supplier (beneficiary of the back to back credit) ships
goods to the importer or supplies goods to the exporter and presents documents to the
bank as if specified in the credit. It is intended that the exporter would substitute his own
documents and ships the goods to the importer, if necessary, and present documents for
negotiation under the original credit, his liability under the back-to-back credit would be
adjusted out of these proceeds. Export L/C is marked lien and no margin is taken.
Documents that are required to submit for opening a back-to-back L/C are given below:
• Master L/C.
• Valid Import Registration Certificate (IRC) & Export Registration Certificate
(ERC).
• L/C application & LCA form duly filled up & signed.
• Proforma Invoice or Indent.
• Insurance cover note with money receipt.
• Duly singed IMP form.

53
Various Steps involved in the Operation of Letter of Credit:

1. The importer and exporter have made a contract before a L/C is issued.
2. Importer applies for a letter of credit from his banker known as the issuing batik.
He may have to use his credit lines. If lie is a new customer, margin deposit may
be required: e.g. 20% deposit on credit amount.
3. Issuing bank opens the L/C, which is channelled through its overseas
corresponding bank, known as advising bank.
4. Advising bank informs the exporter (the beneficiary) of the arrival of the L/C.
5. Exporter ships the goods to the importer or other designated place as stipulated in
the L/C.
6. Meanwhile, he prepares his own documents and collects transport documents or
other documents (e.g. insurance policy) from relevant parties. All these
documents will be sent to his banker, which is acting as the negotiating bank.
7. Negotiation of export bills happens when the banker agrees to provide him with
finance. In such case, he obtains payment immediately upon presentation of
documents. If not, the documents will be sent to the issuing bank for payment or
on an approval basis as in the next step.
8. Documents are sent to issuing bank (or reimbursement bank which is a bank
nominated by the issuing bank to honor reimbursement from negotiation bank) for
reimbursement or payment.
9. Issuing bank honors it's undertaking to pay the negotiating bank condition that the
documents comply with L/C terms and conditions.
10. Issuing bank releases documents to importer when the letter makes payment to the
former or against the latter's trust receipt facility.

54
5.12 Export Procedure of PBL

Export is one of the most important activities that can increase economic and social well
being through transaction of goods and services from domestic economic agent to foreign
economic agent for which domestic economic agents receive payments, preferably in
valuable foreign currency. The import and export trade in our country is regulated by the
Imports & Exports (Control) Act, 1950. There are some formalities, which an exporter
has to fulfil before & after shipment of goods. The export procedure follows the
following steps:

Registration of Exporters:

Under the export policy of Bangladesh, the exporters have to get valid export registration
certificate (ERC). For obtaining Export Registration Certificate Bangladeshi exporters are
required to apply to die controller of Import & Export in the prescribed from along with
the following documents:
• Nationality and assets Certificates,
• Memorandum and Articles of Associates and Certificate of incorporation in case
of Limited company;
• Bank Certificate;
• Income Tax Clearance Certificate;
• Trade License issued by the Municipal Authority.
• Payment of Registration fees and renewal fees in a Treasury Bill.

Obtaining EXP:
After getting ERC the export applies to PBL (or any other commercial Bank) with trade
license & if the bank is satisfied, an EXP issued to the exporter.

55
Securing of Order:

After getting the ERC the exporter may proceed to secure the export order. He can do this
by contacting the buyers directly through correspondence. In this purpose exporter can
get help from:
• Liaison Offices;
• Buyer's Local Agent;
• Export Promoting Organization'
• Bangladesh Mission Abroad;
• Chamber of Commerce (Local & Foreign);
• Trade Fair etc.

Signing the Contract:

While making a contract, the following points are to be motioned:

• Price of the goods
• Describe of the goods
• Quantity of the goods

Export Letter of Credit:

After getting the contract for sale, exporter should ask the buyer for letter of credit (L/C)
clearly stating terms and conditions of export and payment. The following are die main
points to be looked into for receiving/ collecting export proceeds by means of
Documentary Credit:
• The L/C is an irrevocable one, preferably confirmed by the bank,
• The L/C allows sufficient time for shipment and negotiation,

56
Procuring the materials:

After making the deal and on having the L/C opened in his favor, the next s for the
exporters is to set about the task of procuring or manufacturing contracted merchandise.

Shipment of goods:

The following are the documents normally involved at the stage of shipment.
• EXP Form
• ERC (valid)
• L/C copy
• Customs duty certificate
• Shipping instruction
• Transport Documents
• Insurance Documents
• Invoice
• Bill of Exchange (if required)
• Certificate of origin
• Inspection Certificate
• Quality Control Certificate

Now exporter submits all these documents along with a Letter of Indemnity PBL for
negotiation. An officer scrutinizes all the documents. If documents are clean, PBL
purchase the documents on the basis of bad customer relationship. This is known as
Foreign Documentary Bill Purchase (FDBP).

57
Forwarding Foreign Bills for Collection:
• If the documents have discrepancies.
• If the banker is in doubt.
• If the exporter is a new customer.
• Foreign Documentary Bills of collection signifies that the exporter will receive
payment only when the issuing bank gives payment.

Common Discrepancies:

PBL officials usually find the following discrepancies while checking the above-
mentioned documents:
• On board nation of in Bill of lading undated/ unauthenticated.
• Shipment effected from port other than that stipulated in the credit.
• Full set of bill of lading not presented.
• Certificate of country of origin not provided.
• Wightman certificate not presented,
• Cuttings/alternations in documents not authenticated.
• Documents inconsistent with each other.
• Description of goods on invoice differs from that in the credit.
• Credit (L/C) amount exceeded.
• Credit (L/C) expired.
• Documents not presented 'in timed / stale bill if lading.
• Late shipment.
• Absence of signature, where required, on documents presented.
• Bill of Lading does not evidence whether freight is paid or not.
• Packing list not submitted.
• Notify party differs /not as per L/C stipulation.

58
 • Inspection certificates not submitted.
• Unit price not mentioned in invoice.
• Health certificate (fit for human consumption) not submitted.

Export(2004-2008)
Figure(in Million)
10,000.00
8,557.00
7,776.30
8,000.00
5,771.65
6,000.00
4,559.00 4,967.33
4,000.00

2,000.00

0.00
2004 2005 2006 2007 2008

The volume of import business handled by the bank during 2006 was TK. 17,646.84
million which was TK. 16,296.30 million in 2005. Total export business was TK.8,
557.00 million compared to Tk. 7,776.30 million of the preceding year. Total amount
received by PBL in 2006 was more than US $ 52.56 million.

59
5.13 Local Remittance
Carrying cash money is troublesome and risky. That’s why money can be transferred
from one place to another through banking channel. This is called remittance.
Remittances of funds are one of the most important aspects of the Commercial Banks in
rendering services to its customers.

Types of Remittance:

• Between banks and non banks customer

• Between banks in the same country
• Between banks in the different centers.
• Between banks and central bank in the same country
• Between central bank of different customers.

The main instruments used by the Prime Bank of remittance of funds are:
1. Payment order ( PO)
2. Demand Draft ( DD)
3. Telegraphic Transfer (TT)

So the basic three types of local remittances are discussed below:

Points Pay Order Demand Draft TT

Explanation Pay Order gives Demand Draft is an Issuing branch requests
the payee the order of issuing bank another branch to pay
right to claim on another branch of specified money to the
payment from the same bank to pay specific payee on
the issuing bank specified sum of demand by

60
 money to payee on Telegraph /Telephone
demand.
Payment from Payment from ordered Payment from ordered
Payment
issuing branch branch branch
from
only
Within the Outside the Anywhere in the
Generally clearinghouse clearinghouse area of
used to Remit area of issuing issuing branch. Payee country
fund branch. can also be the
purchaser.
Payment is 1. Confirm that the DD 1. Confirm issuing
made through is not forged one. branch
Payment
clearing 2. Confirm with sent 2. Confirm Payee A/C
Process of
advice 3. Confirm amount
the paying
3. Check the ‘Test 4. Make payment
bank
Code’ 5. Receive advice
4. Make payment
Only Commission + telex Commission +
Charge
commission charge Telephone

Cheque may be dishonoured for any one of the following reasons:

• Insufficient fund.
• Amount in figure and word differs.
• Cheque out of date/ post- dated.
• Payment stopped by the drawer.
• Payee’s endorsement irregular / illegible / required.
• Drawer’s signature differs / required.
• Crossed cheque to be presented through a bank.
• Other specific reasons not mentioned above.

61
The dishonor cheque entry in the Return Register & the party is informed about it. Party‘s
signature required in the return register to deliver the dishonor cheque. After duration, the
return cheque is sent to the party’s mailing address with Return Memo.

5.14 Foreign Remittance

This bank is authorized dealer to deal in foreign exchange business. As an authorized

dealer, a bank must provide some services to the clients regarding foreign exchange and
this department provides these services.

The basic function of this department are outward and inward remittance of foreign
exchange from one country to another country. In the process of providing this remittance
service, it sells and buys foreign currency. The conversion of one currency takes place
into another at an agreed rate of exchange which the banker quotes one for buying and
another for selling. In such transactions the foreign currencies are like any other
commodities offered for sales and purchase, the cost (convention value) being paid by the
buyer in home currency, the legal tender.

Remittance Procedures of Foreign Currency:

There are two types of remittance:
1. Inward remittance
2. Outward remittance.

62
1. Inward Foreign Remittance:
Inward remittance covers purchase of foreign currency in the form of foreign T.T., D.D,
and bills, T.C. etc. sent from abroad favouring a beneficiary in Bangladesh. Purchase of
foreign exchange is to be reported to Exchange control Department of Bangladesh bank
on Form-C.

2. Outward Foreign Remittance:

Outward remittance covers sales of foreign currency through issuing foreign T.T. Drafts,
Travelers Check etc. as well as sell of foreign exchange under L/C and against import
bills retired.

Modes of Remittance:
The remittance process involves the following four modes:

Bank sells Dollar / Pound for using in abroad by the

purchaser. The maximum amount of such sell is
Sell mentioned in the Bangladesh Bank publication of
Cash
‘Convertibility of Taka for Currency Transactions in
Remittance
Bangladesh’.
Dollar/
Bank can purchase dollar from resident and non –
Pound
resident Bangladeshi and Foreigner. Most dollars
Purchase
purchased comes from realization of Export Bill of
Exchange.
TC is useful to traveller abroad. Customers can encase
Issue of the TC in abroad from the drawer bank. TC is
TC alternative to holding cash and it provides better
Traveler’s
security than holding cash in hand.
Cheque
(TC)
Buying If any unused leaf of TC is surrendered bank buys it
Of TC from the customer. All payments are made in local
currency. Banks generally buy only those TC.

63
 It remits fund by tested TT via its foreign
Outward
correspondence bank in which it is maintaining its
TT
Telex NOSTRO Account.
Transfer It also makes payment according to telegraphic
Incoming
message of its foreign correspondence bank from the
TT
corresponding VOSTRO Account.
Bank issue Demand Draft in favor of purchaser or any other
according to instruction of purchaser. The payee can collect it for the
Foreign
drawer bank in which the Issuing bank of Demand Draft holds its
Demand
NOSTRO Account. Bank also makes payment on DD drawn on this
Draft
bank by its foreign correspondence bank through the VOSTRO
Account.

64
 CHAPTER: 6

PERFORMANCE EVALUATION
OF
PRIME BANK

65
SWOT Analysis

Ratio Analysis

Competitive Performance

What is SWOT?

1. SWOT is an important tool for evaluating the company's Strengths, Weaknesses,

Opportunities, and Threats. It helps the organization to identify how to evaluate
its performance and scan the macro environment, which helps the organization to
navigate in the turbulent ocean of competition.

66
 SWOT ANALYSIS
Of PRIME BANK

Internal Environment External Environment

Strengths Weakness Opportunity Threats

2.

3. SWOT analysis is a tool for auditing an organization and its environment. It is the
first stage of planning and helps marketers to focus on key issues. SWOT stands
for strengths, weaknesses, opportunities, and threats. Strengths and
weaknesses are internal factors. Opportunities and threats are external factors.

In SWOT, strengths and weaknesses are internal factors. For example: strength could
be:

• Your specialist marketing expertise.

• A new, innovative product or service.
• Location of your business.

67
 • Quality processes and procedures.
• Any other aspect of your business that adds value to your product or service.

A weakness could be:

• Lack of marketing expertise.

• Undifferentiated products or services (i.e. in relation to your competitors).
• Location of your business.
• Poor quality goods or services.
• Damaged reputation.

In SWOT, opportunities and threats are external factors. For example: An opportunity
could be:

• A developing market such as the Internet.

• Mergers, joint ventures or strategic alliances.
• Moving into new market segments that offer improved profits.
• A new international market.
• A market vacated by an ineffective competitor.

A threat could be:

• A new competitor in your home market.

• Price wars with competitors.
• A competitor has a new, innovative product or service.
• Competitors have superior access to channels of distribution.
• Taxation is introduced on your product or service.

A word of caution, SWOT analysis can be very subjective. Do not rely on SWOT too
much. Two people rarely come-up with the same final version of SWOT. TOWS analysis
is extremely similar. It simply looks at the negative factors first in order to turn them into
positive factors. So use SWOT as guide and not a prescription.

68
Simple rules for successful SWOT analysis.

• Be realistic about the strengths and weaknesses of your organization when

conducting SWOT analysis.
• SWOT analysis should distinguish between where your organization is today, and
where it could be in the future.
• SWOT should always be specific. Avoid grey areas.
• Always apply SWOT in relation to your competition i.e. better than or worse than
your competition.
• Keep your SWOT short and simple. Avoid complexity and over analysis
• SWOT is subjective.

PRIME’S SWQT ANALYSIS

SWOT analysis is the detailed study of an organization’s exposure and potential in
perspective of its strength, weakness, opportunity and threat. This facilitates the
organization to make their existing line of performance and also foresee the future to
improve their performance in comparison to their competitors. As though this tool, an
organization can also study its current position, it can also be considered as an important
tool for making changes in the strategic management of the organization.

STRENGTHS:
 Prime Bank Limited has already established a favorable reputation in the
banking industry of the country. It is one of the leading private sector

69
 commercial banks in Bangladesh. The bank has already shown a tremendous
growth in the profits and deposits sector.

Prime Bank has provided its banking service with a top leadership and
management position. The top management officials have all worked in reputed
banks and their years of banking experience, skill, and expertise will continue to
contribute towards further expansion of the bank.

 Prime Bank Limited has already achieved a high growth rate accompanied by an
impressive profit growth rate in 2001. The number of deposits and the loans and
advances are also increasing rapidly.
 Prime Bank has the reputation of being the provider of good quality services
for its, potential customers.

WEAKNESS:
 The main important thing is that the bank has no clear mission statement and
strategic plan. The banks not have any long-term strategies of whether it wants to
focus on retail banking or become a corporate bank. The path of the future should
be determined now with a strong feasible strategic plan.
 The bank failed to provide a strong quality-recruitment policy in the lower and
some mid level position. As a result the services of the bank seem to be Deus in
the present days.

 The poor service quality has become a major problem for the bank. The quality of
the service at Prime Bank is higher than the Dhaka Bank, Prime Bank or Dutch
Bangle Bank etc. But the bank has to compete with the Multinational Bank
located here.

OPPORTUNITY:
 In order to reduce the business risk, Prime Bank has to expand their business
portfolio. The management can consider options of starting merchant banking or
diversify into leasing and insurance sector.

70
  The activity in the secondary financial market has direct impact on the primary
financial market. Banks operate in the primary financial market. Investment in the
secondary market governs the national economic activity. Activity in the national
economy controls the business of the bank.

 Opportunity in retail banking lies in the fact that the country’s increased
population is gradually learning to adopt consumer finance. The bulk of our
population is middle class. Different types of retail lending products have great
appeal to this class. So a wide variety of retail lending products has a very large
and easily pregnable market.

 A large number of private banks coming into the market in the recent time. In this
competitive environment Prime Bank must expand its product line to enhance its
sustainable competitive advantage. In that product line, they can introduce the
ATM to compete with the local and the foreign bank. They can introduce credit
card and debit card system for their potential customer.
THREATS:
1. All sustain multinational banks and upcoming foreign, private banks posse’s
enormous threats to Prime Bank Limited. If that happens the intensity of competition
will rise further and banks will have to develop strategies to compete against an on
slough of foreign the banks.

2. The default risks of all terms of loan have to be minimizing in order to sustain in
the financial market. Because default risk leads the organization towards to bankrupt.
Prime Bank has to remain vigilant about this problem so that proactive strategies are
taken to minimize this problem if not elimination.

Calculation of Ratio Analysis

71
 Theoretical Aspect

An asset that can be converted to cash quickly without having to reduce the asset
prices very much

NAME 2008 2007 2006 2005 2004 INDUSTRY COM-

of the PARTICULAR FORMU- AVERAGE PANY
Bank LA AVER
-AGE

Prime Profit Margin 9.26 6.05 10.93 10.81% 8.75% 10.98

NI÷SALES 6.69
BANK Ratio(PMR) % % %
Limited %

Return on NI÷TA 3.66 8.70 17.75 14.03 28.73% 14.57% 12.82

Assets(ROA) % % % %

Return on
Equity (ROE) NI÷SE 90.93 22.76 42.40 26.88 51.28 46.69% 23.46
(%)

Competitive Performance

Table- 8: Competitive Performance: Fiscal Year-2008

72
 Amount of Import in
Banks Name 2005
(Tk. In Million)

1. Prime Bank 40,303.00

2. EXIM Bank 41,432.10
3. The City Bank 21,363.21
4. Bank Asia 26,352.30
5. Al-Arafah Islami Bank 12,631.60
Ltd.
6. NCC Bank 16,296.30

73
74
Table- 9: Competitive Performance: Fiscal Year-2008

Amount of Import in
Banks Name 2006
(Tk. In Million)

1. Prime Bank 52,639.00

2. EXIM Bank 49,596.73
3. The City Bank 32,096.39
4. Bank Asia 31,625.60
5. Al-Arafah Islami Bank 18,821.40
Ltd.
6. NCC Bank 17,646.80

75
76
 Figure – 12: Comparison of Growth rate

Al-Arafah
Banks Prime EXIM The City
Bank Asia Islami NCC Bank
Name Bank Bank Bank
Bank Ltd.

Growth
Rate (%) 30.61 19.71 50.24 20.01 49.00 8.29
2007-2008

Analysis

77
From all the data analyzed here, we can come to this point that Prime
Bank has satisfactorily maintained its growth rate of the past few years
and has kept its import business in a stable position.

Some Banks in contrast with Prime Bank has rapidly improved their
market growth and position, whereas some other Banks has moved
ahead just a littlie more. For example, during the year 2007-2008 The
City Bank has achieved a growth rate of about 50.24%, whereas Prime
Bank has increased their growth rate only 8.29%.

In this challenging situation to compete with other banks and to face

the ever changing dynamic word of Import business Prime Bank should
try to more concentrate on retaining their present growth rate and
maintaining stability in the upcoming years.

78
Chapter: 7

79
‡ Recommendation of the Study

‡ Findings of the Study

‡ Conclusion

80
 RECOMMENDATION
1) People have no way but to come to the NCBs for high financing, so the operation
and way of getting loans and advance need to be much sharpened.

The ways can be recommended as:

o Skilled human resource
o Proper training and technology savvy
o Minimize risk at the root level
o Smooth service and less time consumption regarding advance
o Avoid force loan as minimum as it can.

2) It can be recommendation that if all the branch of Prime Bank maintains a vivid
account manual for the account holder, it will be better for the bank.

3) A company book regarding service offered by the bank and accountability and
proper monitoring strengthen the services.

4) A complain book for the employs, because each and every complaint form the
customer has been received and complaints from the employees overlooked.

5) Interpersonal relationship needs to be built among the employees and superiors.

6) It has been seen mat the orders and message does not convey to the designated
person, so proper monitoring is necessary.

7) Absenteeism, Low salary divert employees to think other things, if the authority
does not tale care of it the percentage of switching other banks will become acute.

81
 8) Improved customer service and consequently satisfactory operational results of
NCBs are also evident following competition from banks in the private sector.

Findings of the Study:

Prime Bank’s General Banking & Credit/Investment Departments missions are to
actively participate in the growth and expansion of our national economy by
providing credit & foreign exchange facility to viable borrowers, efficiently
delivered and competitively priced. The following general policy guidelines
govern the implementation of the business strategy of Prime Bank with respect
to credit & foreign exchange risk.

 Prime Bank Ltd. has a well established HR department, consisting lots of talented
personnel.

 HR department of Prime Bank Ltd. Provides a better planning and compensation

package to their employees which well enough compare to its peer group.

 Personnel Research and Information system is created and updated based on

branch information.

 How tasks, authority and systems will be organized and integrated across
organization units and in individual jobs. All of these are well designed in this
organization.

 This Bank helps that customer who is engage in export & import business.

 Credit facilities of Prime Bank are more dynamic and less time consuming than
other banks.

82
 It is does not extend any credit facility against cheque or pledge of goods.

 General banking side provides different types of deposit & credit department
extended loan facilities to the general customer.

 It is follows the Islamic rules in every part of general banking.

 Most of the Loan products of Prime Bank of similar types. This Bank makes loan
only to reputable clients who are involved in legitimate business activities and
whose income and wealth are derived from legitimate sources.

 This Bank does not extend credit where it does not have the industry knowledge
or highly specialized skills needed to properly evaluate the proposal.

 Bank requires that borrowers have a source of repayment established at the

inception of the credit, and that any exception must be specifically addressed in
the approval of credit.

 It is engages primarily in the extension of credit in Bangladesh Taka or in the

same currency as the collateral.

 This Bank unsecured lending practices favour extensions of credit for short term,
self-liquidating transactions.

 This Bank extends venture capital to start up business or to businesses, which are
entirely dependent on new technologies, but is considered with extreme caution
and also secured by first class or other acceptable collateral.

83
Conclusion

Lot of new commercial bank has established in last few years and the bank has made this
banking sector very competitive. So, banks have to organize their operations and do their
operations according to their need of market. Banking sector is no more depends on
traditional system o banking.

We moved a long way from the time when the banks were deposit taking and money
lending institution. The old concepts, attitude and methods in banking have undergone a
marked change all over the world. Modern banking is an outcome development driven by
changing financial activities and lifestyle. Bangladesh has not lagged behind. Banks are
required to participate in the nation building activities and act as agent for bringing about
socioeconomic changes.

As an internee of Prime Bank Bangladesh, Elephant Road branch I have truly enjoyed
my internship from the viewpoint of learning and experience. I am confident that three
months internship program in Prime Bank Bangladesh will definitely help me to realize
career in the job market.

During the course of my practical orientation I have try to learn the practical banking to
realize my theoretical knowledge what I have gathered and going to acquired from my
various courses. It is great pleasure for me to have practical exposure it couldn’t be
possible for to compare the theory with practice.

Through the department s and sections are covered in the internship program, it is not
possible to go to the depth of each activities of branch because of time limitation. So
objective of the internship program have not been fulfilled with complete satisfaction.
However, highest effort has been given to achieve the objectives f the internship
program.

84
So in conclusion it can be said that every organization has its positive as well as negatives
and Prime Bank Bangladesh limited existence of the later one is les then the earlier one
and as the management is determined to reach the pick of success it seems that in near
future the negatives will be eliminated. Eight is a short span of time and the organization,
which can be established itself as one of the most reputed private commercial bank in the
country within a short period deserves special credits and with their able leaders Prime
Bank will the highest level of success very shortly. I wish the banks all success prosperity
in their field.

At last it can be said that, Prime Bank Bangladesh limited is the first growing bank and
its contribution in our economy is also considerable. We hope that Prime Bank will
expand its services by expanding its branch all over the country.

So in conclusion it can be said that every organization has its positive as well as negatives
and Prime Bank Bangladesh limited existence of the later one is les then the earlier one
and as the management is determined to reach the pick of success it seems that in near
future the negatives will be eliminated. Eight is a short span of time and the organization,
which can be established itself as one of the most reputed private commercial bank in the
country within a short period deserves special credits and with their able leaders Prime
Bank will the highest level of success very shortly. I wish the banks all success prosperity
in their field.

At last it can be said that, Prime Bank Bangladesh limited is the first growing bank and
its contribution in our economy is also considerable. We hope that Prime Bank will
expand its services by expanding its branch all over the country.

85
 References

 ACRONYMS/Abbreviation

86
 REFERENCES’ BOOKS
Books:

 Brigham F. Eugene (2007), Fundamental of Financial Management

Singapore, Harcourt Asia Pte Ltd Ninth Edition.
 Essential of Managerial Finance, 13th edition Besley and Brigham

 Murphy, Herta A (2006), Effective Business Communication.

Singapore, McGraw Hill Book Co. International Edition.

 Madura jeff (2006), International Financial Management United States of

America, Thomson, South Western, Seven Editions.
 Reilly k. Frank & Brown C. Keith (2004), Investment analysis & Portfolio
Management Harcourt College pvt ltd. sixth Editions.

Magazines & Reports:

 Prime Bank, Annual Report 2007

 Prime Bank, Annual Report 2006

 Prime Bank, Annual Report 2005

 Internet: www.prime-bank.com

 www .bangladeshbank.com

87
 Abbreviation in this Report

CIB: Credit Information System

LRA: Lending Risk Analysis

CRR: Cash Reserve Requirement SLR: Statutory Liquidity Reserve

MIS: Management Information System

ATM: Automated Teller Machine

SB: Saving Bank Deposit

RCD: Rural Credit Division

ICC: Industrial Credit Division

NCB: Nationalized Commercial Bank

T.T: Telegraphic Transfer

D.D: Demand Draft

C.C: Credit Card

P.O: Pay Order

Units:

10 Million: 1 Core

1 Million: 10 Lac

A/C Account
AD Authorized Dealer

88
B/L Bill of Lading
BB Bangladesh Bank
BOE Bill of exchange
CCI & E Chief Controller of Import & Export
CFR Cost & Freight
CIB Credit Information Bureau
CIF Cost Insurance & Freight
DD Demand Draft
DP Note Demand Promissory Note
EPB Export Promotion Bureau
EXP Export Form
FC Foreign Currency
FDD Foreign Demand Draft
FOB Free On Board
HS Code Harmonized system of coding
IBC Inward Bills for Collection
IBCA Inter Branch Credit Advice
IBDA Inter Branch Debit Advice
IMP Import Form
IRC Import Registration Certificate
L/C Letter of Credit
LCAF Letter of Credit Authorization Form
OBC Outward Bills for Collection
PO Payment Order
PSI Pre Shipment Inspection
SWIFT Society for Worldwide Inter bank Financial
TC Travellers Cheque
TIN Tax Identification Number
TR Truck Receipt
TT Telegraphic Transfer

89
STD Short Term Deposit
FDR Fixed deposit receipt
CC Cash Credit
C&F Clearing & Forwarding
CRF Clean Report Findings
ERC Export Registration Certificate
IBCT Inter branch Credit Transaction
LIM Loan Against Imported Merchandise
LTR Loan Against Trust Receipt
PAD Payment Against Document
SOD Secured Overdraft
UCPDC Uniform Custom & Practice for Documentary Credit

90