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1.1 BACKGROUNDOFTHE STUDY:

It is very important to have a practical application of the knowledge acquired from

any academic course of the study. Only a lot of theoretical knowledge will become

fruitless if it is not applied in the practical life. So we need proper application of our

knowledge to get some benefit from our theoretical knowledge to make it more

fruitful. Such an application can be possible through internship.

The internship program exercise a significant importance as it enables a student tofamiliar with the practical business activities. The student work closing with the

people of an organization and learn about the function of that organization. This

program enables a student to develop his analytical skill and scholastic aptitude.

As part of the Internship Program of Bachelor of Business Administration course

requirement, I was assigned for doing my internship in EXIM Bank Limited for the

period of 60 days starting from April 01, 2009 to May 31, 2009. During my intern

period in the EXIM Bank Limited, Satmasjid Branch, I worked under differentdepartments of the bank. I worked under the supervision of Senior Executive Officer

(SEO), Sub-Manager, and under my immediate supervisor in the branch. Their

assistance and guidance help me a lot to completing this report.

1.2 SCOPEOFTHE STUDY:

As I was sent to EXIM Bank Ltd., Satmasjid Branch, the scope of the study is only

limited to this branch. This report covers all areas of banking activities of EXIM Bank

Limited. In the Satmasjid Branch that include Customer Service, Remittance, Cash,

Accounts, Investment and Foreign Exchange department. The report limits itself to

understanding the activities of various departments rather than aiming for an

extensive analysis of the entire banking activities handled by EXIM Bank Limited. It

was beyond the scope of this report to study the entire process of each and every

department because of feasibility and time considerations.

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Introduction

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1.3 PROBLEM STATEMENT:

Export Import Bank of Bangladesh Limited is an Islamic Bank having 45 branches

and two new branches is going to open soon all over the country with different types

of banking service and products. It is developing and expanding its branches in thecountry to gain greater acceptance as an effective and efficient means of

intermediation and to contribute to the overall wealth creation. To gain greater

acceptance, to contribute to the overall wealth creation and compete with commercial

banks, the factors that earn extend foreign exchange business and earn more foreign

currency.

1.4 OBJECTIVESOFTHE STUDY:This study is aimed at providing me invaluable practical knowledge with the

consideration of my theoretical knowledge I had gain from BBA program at the

Stamford University Bangladesh. It will also help me to develop my concept of

Islamic banking system and it operations. The objectives are:

To determine the overall customer satisfaction.

To understand which variables is the causes of customer satisfaction.

To get first hand information about the entire branch banking procedures.

To analyze the performance of the branch as well as EXIM Bank Limited as a

whole.

To present my observation and suggestions to the bank and to increase

knowledge.

1.5 METHODOLOGY:

This report has been prepared on the basis of experience gathered during the period of

internship from April 01, 2009 to May 31, 2009. For preparing this report, I have

undergone group discussion, collected data and face to face interviewed with the

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selected Officers, customers, and a survey was conducted by using a questionnaire. I

also studied different circulars and files of the bank.

Research Design:

Nature of the research was Exploratory Research because of small sample size.

Method of administering the questionnaire was Face to face interviews of the

customers who visited the branch. Likert scale (value from 1 to 5) was used as a

Scaling technique. The questionnaire is the based on customer expectation and

customer satisfaction. All clients of EXIM Bank Ltd. are the Population. Sample Size

was 50 for the survey. Data collected from the customers of EXIM Bank during my

internship period. All data collected from the customers who visited the Satmasjid

Road branch on the basis of non probability. Data collected by face to face interviews.

Frequency distribution, Mean, Regression analysis was conducted to analyze the

survey.

During my study I followed some methodology to find out the fact and feature of the

bank which are given as follows.

Sources of Data/Information

I have collected my information/data from the following sources, which helped me to

make this report. The source has divided by two parts. Such as

Primary Sources

Interview from the customers by using questionnaire.

Oral interview of the responsible officers.

Personal experience gained by visiting different desks during

internship period.

Secondary Sources

Official Records of EXIM Bank ltd.

Annual Reports of EXIM Bank ltd

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Relevant papers and different books.

Manual of different departments.

Periodical publications. EXIM Bank ltd.

Prior research reports.

Bangladesh Bank Report.

1.6 LIMITATIONS:

Despite the diligent efforts given in preparing the report, it succeeded only to skim

through the surface of the ocean on this subject. Therefore the views expressed in this

report are likely to be restricted by limitations. After completing the institutional

experience, practical performance in real life becomes difficult. So, my lack of

experience greatly influenced in preparing this report. On the other hand it was not

possible for me to work in the Human Resource Department, like other all I was

assigned in to the Satmasjid branch and I was learned general banking, foreign

exchange, and some of investment activities of the bank instead of Human Resource

Management. But I was tried to collect data on EXIM Bank Ltd. Human Resource

Management from personal oral interview and observation.

Lack of knowledge about banking and financial related terminologies.

The survey was conducted only on the customers of Satmasjid road branch

which is one of the most important limitations.

Sample size was small so it is difficult to find out the actual result on the

basis of this survey.

It is difficult to judge whole bank or their operation by collecting data

from a specific branch.

Sometime the respondents gave answer by biased because data collected in

the branch in front of bank employees.

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Within such a short period of time (two months), it was not possible for

me to study everything about EXIM Bank, Satmasjid Road Branch. So

time limitation is an important limitation.

It is too much difficult to comment and suggest based on only the annual

report and information supplied by the organization.

The officers are so much busy that they cannot properly co-operate with

me, which was a problem.

In many case the relevant authorities are not aware about internship.

Unwilling to provide data more because of confidentiality.

Lack of collecting essential data & information.

Information related to the Human Resource Management is top secrete.

Complete internship in a general branch instead of Human Resource

Department.

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2.1 Background:

EXIM Bank Limited was established in 1999 under the leadership of Late Mr.

Shahjahan Kabir, founder chairman who had a long dream of floating a commercial

bank which would contribute to the socio-economic development of our country. He

had a long experience as a good banker. A group of highly qualified and successful

entrepreneurs joined their hands with the founder chairman to materialize his dream.

In deed, all of them proved themselves in their respective business as most successful

star with their endeavor, intelligence, hard working and talent entrepreneurship.

Among them, Mr. Nazrul Islam Mazumder became the honorable chairman after the

demise of the honorable founder chairman.

This bank starts functioning from 3rd August, 1999 with Mr. Alamgir Kabir, FCA as

the advisor and Mr. Mohammad Lakiotullah as the Managing Director. Both of them

have long experience in the financial sector of our country. By their pragmatic

decision and management directives in the operational activities, this bank has earned

a secured and distinctive position in the banking industry in terms of performance,

growth, and excellent management. The authorized capital and paid up capital of the

bank are Tk. 1000.00 million and Tk 313.87 million respectively.

The bank has migrated all of its conventional banking operation into Shariah based

Islami banking since July/2004.

2.2 Vision & Mission:

Our vision and mission are stated in the following bullets:

To be the finest bank in the banking arena of Bangladesh under the Shariah

guidelines.

To maintain Corporate and business ethics.

To become a trusted repository of customers' money and their financial

advisor.

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Profile of Export Import Bank of Bangladesh

Limited

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To make our stock superior and rewarding to the customers/share holders.

To display team spirit and professionalism.

To have a Sound Capital Base.

To provide high quality financial services in export and import trade. To provide excellent quality Customer service

2.3 Corporate Culture:

This bank is one of the most disciplined Banks with a distinctive corporate culture.

Here we believe in shared meaning, shared understanding and shared sense making.

Our people can see and understand events, activities, objects and situation in a

distinctive way. They mould their manners and etiquette, character individually to suitthe purpose of the Bank and the needs of the customers who are of paramount

importance to us. The people in the Bank see themselves as a tight knit team/family

that believes in working together for growth. The corporate culture we belong has not

been imposed; it has rather been achieved through our corporate conduct.

2.4 Social Commitment:The purpose of our banking business is, obviously, to earn profit, but the promoters

and the equity holders are aware of their commitment to the society to which they

belong. A chunk of the profit is kept aside and/or spent for socio-economic

development through trustee and in patronization of art, culture and sports of the

country. We want to make a substantive contribution to the society where we operate,

to the extent of our separable resources.

2.5 Achievement:

It is a great pleasure that by the grace of Almighty Allah, we have migrated at a time

all the branches from its conventional banking operation into Shariah based Islami

banking operation without any trouble. Lot of uncertainties and adversities were there

into this migration process. The officers and executives of our bank motivated the

valued customers by counseling and persuasion in light with the spirit of Islam

especially for the non-Muslim customers. Our IT division has done the excellent job

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Mr. Khondoker Rumy Ehsanul Haq Mr. Fazal Akhter

Executive Vice-President Executive Vice-President

Mr. Mamun Mahmood Mr.Mohammad Alamgir

Executive Vice-President Executive Vice-President

Name Designation Place of Posting

Mr. Md. Akhtar Hossain SVP RMG Division, Head Office

Mr. Md. Zakaria Faruq SVP Nawabpur Branch, Dhaka

Mr. Md. Golam Mahbub SVP Board Secretariat, Head Office

Mr. A.Y.M. Naimul Islam SVP Narayanganj Branch, Narayanganj.

Mr. Md. Humayun Kabir SVPFinancial Administration Division, Head

Office

Mr. Shah Md. Abdul Bari SVP Human Resources Division, Head Office

Mr. Khondoker Nayeemul Kabir SVP Panthapath Branch, Dhaka

Mr. Md. Feroz Hossain SVP Motijheel Branch, Dhaka

Mr. Shaikh Bashirul Islam SVP International Division, Head Office

Mr. Sheik Moyeen Uddin SVP Investment Division, Head Office

Mr. Md Shahidullah SVP Agrabad Branch, Chittagong

Mr. Moniruzzaman Chowdhury SVP EXIM Bank Training Institute

Mr. Shahidur Rahman SVP Motijheel Branch, Dhaka

Mr. Md. Muniruzzaman SVP General Service Division, Head Office

Mr. Md. Shahjahan SVP Imamgonj Branch, Dhaka

Mr. Md. Anisul Alam VP Uttara Branch, Dhaka

Mr. Khorshed Alam Chowdhury VP New Eskaton Branch, Dhaka

Mr. Md. Zoshim Uddin Bhuiyan VP Rajuk Avenue Branch, Dhaka

Engr. Shamsur Rahman

Chowdhury, MBAVP

CBS Implementation Project, Head

Office

Mr. Md. Mosharraf Hossain

MazumderVP ICCD, Head Office

Mr. Mohammad Hanif VP Jubilee Road Branch, Chittagong

Mr. Md. Nasir Uddin Ahmad VP International Division, Head Office

Mr. S.M. Abu Zaker VP Agrabad Branch, Chittagong

Mr. Md. Moidul Islam VP Motijheel Branch , Dhaka

Mr. Abu Hena Md. Mohsin SAVPFinancial Administration Division, Head

Office

Mr. Abdul Jobbar Chowdhury SAVP Moulvibazar Branch, Moulvibazar

Mr. M. Sakhawat Hossain SAVP Narayanganj Branch

Mr. Tariqul Islam Choudhury SAVP Rajuk Avenue Branch, Dhaka

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Alamgir Kabir, FCA Kazi Masihur Rahman

Former Advisor Managing Director

Name of Directors Name of Sponsors

Mr. Md. Nazrul Islam Mazumder Mr. Md. Nazrul Islam SwapanMr. Md. Faiz Ullah Mr. Mohammad AbdullahMrs. Nasima Akhter

Mr. Md. Altaf HossainMr. A.K.M. Nurul Fazal Mrs. Nasreen IslamMr. Zubayer Kabir

Mr. Md. Mazakat HarunMr. Md. Habibullah

Mr. Abdullah Al-MamunMr. Md. Abdul Mannan

Mr. Md. Fahim Zaman PathanAl-haj Md. Nurul Amin

Mrs. Asma BegumMr. Abdullah Al-Zahir Sawpan

Engr. Aminur Rahman KhanMr. Mohammed Shahidullah

Mrs. Rizwana K. RizaBay-Leasing & Investment Ltd.Represented by Mr. Mahbubur Rashid Mr. Md. Nur Hussain

Mrs. Hasina Akhter

Mr. Anjan Kumar Saha

Mrs. Rabeya Khatoon

Mrs. Mahmuda Begum

Mrs. Sabira Sultana

Mrs. Mamtaj Begum

Mr. Md. Shaiful Alam

Mrs. Hamida Rahman

Meer Joynal Abedin

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Mrs. Nahida Akter

Mr. Md. Nurul Amin

Mrs. Rubina Shahid

2.8 Shariah Board:

The Board of directors has formed a Sharia Supervisory Board for the Bank. Their

duty is to monitor all the Banks transactional procedures, & assuring its Sharia

compliancy. This Board consists of the following members headed by its Chairman.

The tasks of the Sharia supervisor in summary is replying to queries of the Banks

administration, staff members, shareholders, depositors, & customers, follow up with

the Sharia auditors and provide them with guidance, submitting reports & remarks to

the Fatwa & Sharia Supervision Board and the administration, participating in the

Banks training programs, participating in the supervision over the AlIqtisad AlIslami

magazine, & handling the duty of being the General Secretary of the Board.

Members of Shariah Council:

Professor Moulana Mohammad Salah UddinMr. Md. Nazrul Islam

Mazumder

Moulana Mohammad Sadequl Islam Mr. A.K.M Nurul Fazal Bulbul

Professor H.M. Shahidul Islam Barakaty Mr. Md. Abdul Mannan

Mr. A.S.M. Fakhrul Ahsan Mr. Zubayer Kabir

Hafez Moulana Mufti Mohammad Khair Ullah Mr. Abdullah Al-Zahir Sawpan

Hafez Quari Moulana Mufti Mohammad NurUddin

Mr. Kazi Masihur Rahman

Shariah Auditing:

This is the civil supervisory aspect that shapes the Banks main feature. Its existence

is part of the Sharia Supervision procedures. One of its main tasks is to check the

Sharia compliancy in the Banks transactional procedures in accordance to the Fatwas

issued in that regard, under the guidance of the Sharia Supervisor.

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3 Surplus/(shortage) of capital 498,916,145 420,987,980

4 Total assets 51,503,027,985 68,446,464,000

5 Total deposits 41,546,568,592 57,586,991,798

6 Total investment 40,195,239,222 53,637,677,103

7 Total contingent liabilities and

commitments

22,632,654,873 26,070,569,525

8 Ratio on investments and deposits 96.75% 93.14%

9 Ratio on classified investments

and total investments

1.58% 1.88%

10 Profit after tax and provisions 930,843,607 1,096,627,046

11 Classified investments 635,106,791 1,007,844,801

12 Provision held against classifiedinvestments

270,763,271 369,899,801

13 Surplus/(shortage) of provision - 6 ,950,000 -

14 Cost of fund 9.07% 9.52%

15 Profit earning assets 42,357,645,536 56,192,524,486

16 Non-profit bearing assets 9,145,382,449 12,253,939,514

17 Return on investment (shares and

bonds)

8.77% 2.03%

18 Return on assets (after tax) 2.00% 1.83%

19 Income on investment (shares and

bonds)

205,594,883 54,249,612

20 Earnings per share 43.45 4 0.95

21 Net income per share 43.45 40.95

22 Price earning ratio (times) 9.02 7.85

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2.12 Share Information of EXIM Bank:

Export Import Bank of Bangladesh Limited

Name of the Company Export Import Bank of Bangladesh Limited

Instrument Code EXIMBANK

Number of shares issued in IPO 31,38,750

Total Number of shares including

Sponsors62,77,500

Face Value Tk.100.00 per share

Premium Tk.30.00 per share

Market lot 50

Date of publication of Prospectus June 28, 2004 in The Daily Janakantha

Opening Date for Subscription of

SharesJuly 24, 2004

Closing Date for Subscription of Shares July 28, 2004

Date and Place of Lottery for Allotment

of Shares

August 19, 2004; Bangladesh China Friendship

Conference Center

Number of Allotment Letter Issued 56755

Date of Issuance of Allotment Letter(s) August 21, 2004

Date of listing with DSE September 26, 2004

Date of listing with CSE September 04, 2004Date of 1st Trading October 16, 2004

Opening price on 1st Trading Date 517.00

Highest price (2004-2005) 805.00

Lowest Price (2004-2005) 450.00

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2.13 Product & Services:

Super Savings Scheme Monthly Savings Scheme Monthly Income Scheme

Multiplus Savings Hajj Deposit

Investment / Finance:

Corporate Finance

Industrial Finance

Project Finance

Syndicate Investment

Mode of Investment:

Murabaha Quard

Bai Muazzal Local Documentary Bill Purchased

Izara Bil Baia Foreign Documentary Bill Purchased

Wazirat Bil Wakala

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Deposit:

Al-Wadia Current Deposit

Mudaraba Savings Deposit

Mudaraba Short Term Deposit

Mudaraba Term Deposit:

One Month Twelve Months

Three Months Twenty Four Months

Six Months Thirty Six Months

Foreign Currency Deposit

Mudaraba Savings Scheme:

Monthly Savings Scheme(Money Grower) More than triple the Deposit in 10 years

(Multiplus Savings)

Monthly Income Scheme(Steady Money) Mudaraba Hajj Deposit

More than Double the deposit in 6 years

(Super Savings)

We emphasize on non-fund business and fee based income. Bid bond/ bid security

can be issued at customers request.

Our Bank is posed to extend L/C facilities to its importers / exporters through

establishment of correspondent relations and Nostro Accounts with leading banks all

over the world.

Moreover, Consumers can deposit their Telephone bill of Grameen Phone in all the

branches except Motijheel and the consumers of Palli Buddut somity of Gazipur can

deposit their electricity bill to Gazipur branch.

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2 U.S.A.Standard Chartered Bank ,

New YorkUSD SCBLUS33 3582-048957-001

3 U.S.A. Mashreqbank psc , New York USD MSHQUS33 70119908

4 U.S.A. Citibank N. A. , New York USD CITIUS33 3615-1783

5 U.S.A.Wachovia Bank N.A. , New

YorkUSD PNBPUS3NNYC 2000193008917

6 U.S.A HSBC Bank N.A. , New York USD MRMDUS33 000148849

7 Hong Kong

Union De Banques Arabes Et

Francaises (UBAF) HongKong Limited, Hong Kong

USD UBAFHKHX60-044200-001-

03-0-53

8 Hong Kong

Union De Banques Arabes Et

Francaises (UBAF) Hong

Kong Limited, Hong Kong

HKD UBAFHKHX60-044200-001-

26-0-53

9 Germany Commerzbank AG, Frankfurt EUR COBADEFF400 8701526 00

EUR

10 Germany HypoVereinsbank , Munchen EUR HYVEDEMM 69105530

11 GermanyAmerican Express Bank

GMBH, FrankfurtEUR AEIBDEFX 018124200

12 U.K.Standard Chartered Bank,

LondonGBP SCBLGB2L 01-7083394-01

13 U.K. HSBC BANK PLC, London GBP MIDLGB22 59180818

14 JapanAmerican Express Bank Ltd.,

TokyoJPY AEIBJPJX 313000832

15 JapanUnion De Banques Arabes EtFrancaises (U.B.A.F.), Tokyo

JPY UBAFJPJX 1028157000 1000

16 JapanSumitomo Mitsui Banking

Corporation, TokyoJPY SMBCJPJT 4324

17 Switzerland Habib Bank AG Zurich, Zurich CHF HBZUCHZZ1-1-1-20110-1-

124701

18 SwitzerlandUnion Bank of Switzerland

AG, ZurichCHF UBSWCHZH80A 230-75605.05A

19 CanadaThe Bank of Nova Scotia,

TorontoCAD NOSCCATT 527120027413

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Acquisition of Human Resources:

It is here that management ensure that is has the right number and kind of people, at

the right places, at the right times, capable of effectively and efficiently completing

the work required so that the organization can achieve its overall objectives.

If human resource planning uncovers the need to hire additional employees, one must

discover potential applicants. These potential applicants must be screened to identify

job applicants who are likely to be successful if hired.

The acquisition function is completed when the selected applicants cants have been

placed in the organizations culture and their work environment. The organizations

culture conveys how things are done and what matters. When employees have

adapted to the organizations culture, they have learned the rope or Socializing the

New Employee.

Development of Human Resources:

Competent employees will not remain competent forever. Some are minimally

qualified upon entering the organization but require additional training or education.

Others enter the organization capable of performing at an optimal level, but their

skills become obsolete over time. And, of course, organizations change over time, and

management must ensure that there is an appropriate match of individual abilities with

organizational needs fro future. Each of these is considered in the development

function.

Employee training gives individuals specific skills that they will use on the job;

management development looks at practice for ensuring a continual flow of managers.

When human resources have been developed effectively, one can expect to have

competent employees with up-to-date skills ad knowledge.

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Figure: Human Resource Management Model or Wheel

31

Human Resource Areas

Outputs:

Quality work life

Productivity

Readiness for change

Personnl Research

&

Information Systems

Focus: assuring a

personnel information

base.Selection & staffing

Focus: matching people

and their career needs

and capabilities with

jobs and career path.

Compensation/Benefits

Focus: assuring

compensation and

benefits fairness and

consistency.

Employee Assistance

Focus: providing

personal problem

solving, counseling to

individual employee.

Union/Labor

Relation

Focus: assuring health

union/organization

relationship.

Training & Development

Focus: identifying,

assessing and through

planned learning helping

develop the key

competencies which

enable individuals to

perform current or future

jobs. Organization

development

Focus: assuring healthy

inter and intra-unit

relationships and

helping groups initiate

and manage change.

Organization/Job Design

Focus: defining how tasks,

authority and systems willbe organized and integrated

across organization units

and in individual jobs.

Human Resource

Planning

Focus: determining the

organizations major

Human Resource needs,strategies and

philosophies.

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3.1 INTODUCTION:

General banking department is the heart of all banking activities. This is the busiest

and important department of a branch, because funds are mobilized, cash transactions

are made; clearing, remittance and accounting activities are done here.

3.2 ACTIVITIES OF GENERAL BANKING DEPARTMENT:

Since bank is confined to provide the services everyday, general banking is also

known as retail banking. In EXIM Bank LTD Principal Branch, the following

departments are under general banking section:

Account opening section

Deposit section

Cash section

Remittance section

Clearing section

Accounts section

ACCOUNT OPENING SECTION:

Account opening is the gateway for clients to enter into business with bank. It is the

foundation of banker customer relationship. This is one of the most important sections

of a branch, because by opening accounts bank mobilizes funds for investment.

Various rules and regulations are maintained and various documents are taken while

opening an account. A customer can open different types of accounts through this

department. Such as:

I. Al Wadia (Current) account.

II. Mudaraba Savings (SB) account.

III. Mudaraba Short Term Deposit (MSTD)

TYPESOF ACCOUNTSWITH TERMSAND CONDITIONS:

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ACCOUNTS OPENING PROCEDURE:

Step 1

The account should be properly introduced by Any one of the

following: An existing Current Account holder of the Bank.

Officials of the Bank not below the rank of an Assistant officer.

A respectable person of the locality well known to the

Manager/Sub-Manager of the Branch concerned.

Step 2Receiving filled up application in banks prescribed form mentioning

what type of account is desired to be opened

Step 3

The form is filled up by the applicant himself / herself

Two copies of passport size photographs from individual are taken,

in case of firms photographs of all partners are taken

Applicants must submit required documents

Application must sign specimen signature sheet and give mandate

Introducers signature and accounts number verified by legal

officer

Step 4 Authorized Officer accepts the application

Step 5 Minimum balance is deposited only cash is acceptedStep 6 Account is opened and a Cheque book and pay-in-slip book is given

DOCUMENTS REQUIREDFOROPENING ACCOUNT:

Individual / Joint Account:

1. Introduction of the account.

2. Two photographs of the signatories duly attested by the introducer.

3. Identity (copy of passport).

4. Joint Declaration Form (For joint a/c only).

5. Employees Certificate (in case of service holder).

Partnership account:

1. Introduction of the account.

2. Two photographs of the signatories duly attested by the introducer.

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demand.

Payment

from

Payment from

issuing branch

only

Payment from ordered

branch

Payment from ordered

branch

Generally

used to

Remit fund

Within the

clearinghouse

area of issuing

branch.

Outside the

clearinghouse area of

issuing branch. Payee

can also be the

purchaser.

Anywhere in the

country

Payment

Process of

the payingbank

Payment is

made through

clearing

1. Confirm that the DD

is not forged one.

2.Confirm with sent

advice

3.Check the Test

Code

4.Make payment

1.Confirm issuing

branch

2.Confirm Payee A/C

3.Confirm amount

4.Make payment

5.Receive advice

ChargeOnly

commission

Commission + telex

charge

Commission +

Telephone

3.6 CLEARING SECTION:

Cheques, Pay Order (P.O), Demand Draft (D.D.) Collection of amount of other banks

on behalf of its customer are a basic function of a Clearing Department.

Clearing:

Clearing is a system by which a bank can collect customers fund from one bank to

another through clearing house.

Clearing House:

Clearing House is a place where the representatives of different banks get together to

receive and deliver cheque with another banks.

Normally, Bangladesh Bank performs the Clearing House in Dhaka, Chittagong,

Rajshahi, and Khulna & Bogra. Where there is no branch of Bangladesh Bank, Sonali

bank arranges this function.

Member Of Clearing House:

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3.8 ACCOUNTS SECTION:

Accounts Department is called as the nerve Centre of the bank. In banking business,

transactions are done every day and these transactions are to be recorded properly and

systematically as the banks deal with the depositors money. . Improper recording oftransactions will lead to the mismatch in the debit side and in the credit side. To avoid

these mishaps, the bank provides a separate department; whose function is to check

the mistakes in passing vouchers or wrong entries or fraud or forgery. This

department is called as Accounts Department. If any discrepancy arises regarding any

transaction this department report to the concerned department.

Besides these, the branch has to prepare some internal statements as well as some

statutory statements, which are to be submitted to the Central Bank and the Head

Office. This department prepares all these statements.

Workings of this department:

Recording the transactions in the cashbook.

Recording the transactions in general and subsidiary ledger.

Preparing the daily position of the branch comprising of deposit and cash.

Preparing the daily Statement of Affairs showing all the assets and

liability of the branch as per General Ledger and Subsidiary Ledger

separately.

Recording inters branch fund transfer and providing accounting treatment

in this regard.

Preparing the monthly salary statements for the employees.

Preparing the weekly position for the branch which is sent to the Head

Office to maintain Cash Reserve Requirement (C.R.R)

Preparing the monthly position for the branch which is sent to the Head

Office to maintain Statutory Liquidity Requirement (S.L.R)

Preparing the budget for the branch by fixing the target regarding profit

and deposit so as to take necessary steps to generate and mobilize deposit.

Recording of the vouchers in the Voucher Register.

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Negotiating

Bank

It is the bank, which negotiates the bill and pays the amount

of the beneficiary. The advising bank and the negotiating

bank may or may not be the same. Sometimes it can also be

confirming bank.

Accepting Bank It is the bank on which the bill will be drawn (as per condition

of the credit). Usually it is the issuing bank.

Reimbursing

Bank

It is the bank, which would reimburse the negotiating bank

after getting payment instructions from issuing bank.

4.3 STEPSFORIMPORT L/C OPERATION 8 STEPSOPERATION

Step 1 - Registration with CCI&E:

o For engaging in international trade, every trader must be first registered with

the Chief Controller of Import and Export(CCI & E) .By paying specified

registration fees to the CCI & E. the trader will get IRC/ERC (Import/Export

Registration Certificate), to open L/C with bank, this IRC is must

Step 2 - Determination terms of credit:

The terms of the letter of credit are depending upon the contract between the importer

and exporter. The terms of the credit specify the amount of credit, name and address

of the beneficiary and opener, tenor of the bill of exchange, period and mode of

shipment and of destination, nature of credit, expiry date, name and number of sets of

shipping documents etc.

Step 3 -Proposal for Opening of L/C:

To have an import L/C limit an importer submits an application to department to

EXIM Bank. The proposal contains the following particulars:

o Full particulars of the bank account

o Nature of business

o Required amount of limit

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Usually payment is made within seven days after the documents have been received.

If the payment is become deferred, the negotiating bank may claim interest for

making delay.

Preparing Sale Memo:

A sale memo is made at B.C rate to the customer. As the T.T & O.D rate is paid to the

ID, the difference between these two rates is exchange trading. Finally, an Inter

Branch Exchange Trading Credit Advice is sent to ID.

Requisition for the Foreign Currency:

For arranging necessary fund for payment, a requisition is sent to the International

Department.

Transmission of Message:

Message is transmitted to the correspondent bank ensuring that payment is being

made.

4.5 EXPORT BUSINESS

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. The formalities and

procedure are enumerated as follows:

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1. Obtaining exports LC: To get export LC form exporter issued by the

importer.

2. Submission of export documents: Exporter has to submit all necessary

documents to the collecting bank after shipping of goods

3. Checking of export documents: After getting the documents banker used to

check the documents as per LC terms.

4. Negotiation of export documents: If the bank accepts the document and pays

the value draft to the exporter and forward the document to issuing bank that is

called a negotiating bank. If the bank does buy the LC then the bank normally

act as collecting bank.

5. Realization of proceeds: This is the period when the issuing bank has

realized the payment.

6. Reporting to the Bangladesh bank: As per instruction by Bangladesh bank

the bank has to report to respective department of Bangladesh bank by

mentioning latest payment.

7. Issue to proceeds realization certificate (PRC): bank has to issue proceed

realization certificate of export LC to the supplier / exporter for getting cash

assistance

EXPORTOPERATION

Bangladesh exports a large quantity of goods and services to foreign households.

Readymade textile garments (both knitted and woven), Jute, Jute-made products,

frozen shrimps, tea are the main goods that Bangladeshi exporters exports to foreign

countries. Garments sector is the largest sector that exports the lion share of the

country's export. Bangladesh exports most of its readymade garments products to

U.S.A and European Community (EC) countries. Bangladesh exports about 40% of its

readymade garments products to U.S.A. Most of the exporters who export through

EXIM BANK are readymade garment exporters. They open export L/Cs here to

export their goods, which they open against the import L/Cs opened by their foreign

importers.

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Export L/C operation is just reverse of the import L/C operation. For exporting goods

by the local exporter, bank may act as advising banks and collecting bank (negotiable

bank) for the exporter.

As an advising bank: It receives documents from the foreign importer and hands it

over to the exporter. Sometimes it adds confirmation on the L/C on request from the

Opening Bank. By adding confirmation, it assumes the responsibility to make

payment to the exporter.

As Negotiating Bank: It negotiates the bills and other shipping documents in favor of

the exporter. That is, it collects the proceeds of the export-bill from the drawee and

credits the exporters account for the same. Collection proceed from the export bill is

deposited in the banks NOSTRO account in the importers country. Sometimes the

bank purchases the bills at discount and waits till maturity of the bill. When the bill

matures, bank presents it to the drawee to encash it.

In our country, Export and Import operation of bank is very much related with one

another because of use of Back to Back and maturity of payment for Back-to-BackL/C is set in such that it can be paid out of export proceeds. .

BACK-TO-BACKL/C

It is simply issued to the clients against an import L/C. Back-to-Back mechanism

involves two separate L/Cs. One is master Export L/C and another is Back-to-Back

L/C. On the strength of Master Export L/C bank issues bank to Back L/C. Back-to-

Back L/C is commonly known as Buying L/C. On the contrary, Master Export L/C is

known as Selling L/C.

Features of Back-to-Back L/C:

An Import L/C to procure goods /raw materials for further processing.

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It is opened based on Export L/C.

It is a kind of Export Finance.

Export L/C is at Sight but back to Back L/C is at Usance.

No margin is required to open Back to back L/C

Application is registered with CCI&E

Applicant has bonded warehouse license.

L/C value shall not exceed the admissible percentage of net FOB value of

relative Master L/C.

Usance period will be up to 180 days.

The import L/C is opened for 75% of the value of Export L/C.

Here L/C issued against the lien of export L/C.

Arrangements are such that export L/C matures first then out of this export

profit, import L/C is paid out.

Documents Required for Opening a Back-to-back L/C:

In EXIM Bank Principal Branch, following papers/ documents are required for

opening a back-to-back L/C-

1. Master L/C

2. Valid Import Registration Certificate (IRC) and Export Registration

Certificate (ERC)

3. L/C Application and LCAF duly filled in and signed

4. Performa Invoice or Indent

5. Insurance Cover Note with money receipt

6. IMP Form duly signed

In addition to the above documents, the followings are also required to export oriented

garment industries while requesting for opening a back-to-back L/C

1. Textile Permission

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2. Valid Bonded Warehouse License

3. Quota Allocation Letter issued by the Export Promotion Bureau (EPB) in

favor of the applicant for quota items.

Checklist of exports L/C:

Following defective points are usually found in the Master L/C. So, the bank officials

so much carefully check these points. These are:

1. Name of the Advising Bank.

2. Name of Transferring Bank

3. Form of Doc. credit:

Name of Issuing Bank

Documentary Credit No. and issuing date

Date of shipment

Expiry date and place

4. Applicant/ for order of/ On Account.

5. Beneficiary/ Favoring

6. Amount

7. Availability of Credit8. Partial shipment/ Transshipment

9. Payment condition /Draft Sight

10. Category.

11. Description of goods:

Item

Total Qty

Unit price

12. B/L Clause

13. Reimbursement clause.

14. UCPDC Clause

15. Net FOB value.

Payment of back-to-back L/C:

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the same on the basis of banker- customer relationship. This is known as Foreign

Documentary Bill Purchase (FDBP).

If the bank is not satisfied with the documents submitted to EXIM Bank gives the

exporter reasonable time to remove the discrepancies or sends the documents to L/C

opening bank for collection. This is known as Foreign Documentary Bill for

Collection (FDBC)

Presentation of export documents for negotiation/Purchase:

After shipment, exporter submits the following documents to EXIM Bank for

negotiation.

Bill of exchange

Bill of Lading

Invoice

Insurance Policy/Certificate

Certificate of Origin

Inspection Certificate

Consular Invoice

Packing List

Quality Control Certificate

G.S.P. certificate.

Foreign documentary bills for collection (FDBC):

EXIM Bank forwards the documents for collection due to the following reasons,

If the documents have discrepancies.

If the exporter is a new client.

FDBC signifies that the exporter will receive payment only when the issuing bank

gives payment. EXIM Bank make regular follow-up with the L/C opening Bank in

case of any delay in getting payment.

Settlement of Local Bills:

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4.7 Activities of this department:

1. Issuance of TC, Cash Dollar /Pound

2. Issuance of FDD, FTT & purchasing, Payment of the same.

3. Passport endorsement.4. Encashment certificate.

5. F/C Account opening &filing.

6. Opening of Export FC retention Quota A/C& maintain.

7. Maintenance of ledger of Cash Dollar, FC Deposit A/C & TC.

8. Maintain FBC register &follow up FBC.

9. Opening of Student file &Maintain.

10. Preparation of all related statement, Voucher & posting.

11. Preparation of Weekly, Monthly, Yearly Statement for Bangladesh Bank

returns timely.

12. Attending all related correspondence to other Bank or Institutions.

Modes:

The remittance process involves the following four modes

Cash

Remittance

Dollar/

Pound

Sell Bank sell Dollar / Pound for using in abroad by thepurchaser. The maximum amount of such sell is

mentioned in the Bangladesh Bank publication of

Convertibility of Taka for Currency Transactions in

Bangladesh.

Purchase Bank can purchase dollar from resident and non

resident Bangladeshi and Foreigner. Most dollars

purchased comes from realization of Export Bill of

Exchange.

TravelersCheque

(TC)

Issue of TC TC is useful to traveler abroad. Customers can encashthe TC in abroad from the drawee bank. TC is

alternative to holding cash and it provides better

security than holding cash in hand.

Buying

Of TC

If any unused leaf of TC is surrendered bank buys it

from the customer. All payments are made in local

currency. Banks generally buy only those TC.

Telex Outward

TT

It remits fund by tested TT via its foreign

correspondence bank in which it is maintaining its

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To provide a broad guide line for the credit operation towards achieving the objective

of the bank, for efficient and profitable development of its mobilized resources and to

administer the credit portfolio in the most efficient way, a clearly defined, well

planned, comprehensive and appropriate credit policy and control guidelines of the

bank is a prerequisite.

In view of the above, this credit policy and guidelines of the bank has been prepared

subject to amendment, revision, re-adjustment and refinement as and when required

by the bank.

The purpose of this policy statement, which replace all previous ones, is to set out the

credit policies of the Board of Directors. The policies are described under.

Credit principles.

Global credit portfolio limits.

Types of credit activities.

Credit administration.

5.3 Credit Principles:

The following are the principles to be adopted for lending authority, approval,

monitoring and control on a basis consistent with the global operational objectives

and business strategies of the bank.

General :

The bank will provide suitable credit services and products for the markets in which it

operates.

Loans and advances shall be normally be financed from customer deposits and not out

of temporary funds or borrowing from other Bank. Credit will be allowed in a

manner, which wills in no way compromise the banks standards of excellence and to

customers who will complement such standards. All credit extension must comply

with the requirements of the Banks Memorandum & Articles of Association,

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Banking Companies Act 1991 as amended from time to time, Bangladesh Banks

instruction and other applicable rules and regulations.

The authority structure extension of credit should enable effective adaptation to

changes in the economic, technological, regulatory and competitive environment

within which the Bank operates.

Performance :

The conduct and administration of the loan portfolio should contribute. Within define

risk limitation, to the Banks achievement of portfolio growth and superior return on

the hanks capital.

Credit advancement shall focus on the development and enhancement of customer

relationship and shall be measured on the basis of the total yield for each relationship

with a customer (on a global basis), through individual transactions should also be

profitable.

Credit facilities will be extended to those companies/persons, which can make best

use of them, thus, helping to maximize our profits as well as economic growth of the

country. To ensure achievement of this objective it will base its leading decision

mainly on the borrowers ability to repay. If credit facilities are grantee on a

transaction one-off basis the yield from the facility should be commensurate with the

risk.

Loan Pricing:

Interest on various lending categories will depend on the level of risk and type of

security offered. It should be kept in mind that late of interest is the reflection of risk

in the transaction. The higher is the risk the higher is the interest rate. Interest may be

reviewed at least once in 6 (six) months and more often when appropriate. Fixed

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interest rate should be discouraged; preferably all rates should vary with cost of funds

fluctuation based on a spread for profit.

Effective yield can be enhanced to the extent borrowers are required to maintain

deposits to support borrowing activities. Commitment fee and service charges should

further improve yield where possible. All pricing of loans should however have

relevance with the market condition and be approved by the executive

committee/Managing Director from time to time.

Administration/Monitoring:

The administration of the loan process shall ensure. Compliance with all laws and

regulations at both local and global levels including bank policy as set out in this

document and the Banks credit manual/circulars.

Proper analysis of credit proposal is complex and requires a high level of numerical as

well as analytical ability and common sense to ensure effective understanding of the

concepts and thus common sense. To ensure effective understanding of the concepts

and thus to make the overall credit portfolio of the bank healthy proper staffing of the

credit departments shall be done through placement of qualified officials who have

got the right aptitude, formal training in finance, credit risk analysis, bank credit

procedures as well its required experience. Where repayment and interest servicing

performance of a credit deteriorates shall be identifies at an early state and closely

monitored to avoid low losses.

Loans/facilities, where appropriate and related security shall be monitored and

reviewed by a separate unit unconnected with the credit approval process on a regular

basis in order to assess the collect ability of the loan and effectiveness of the security.

This unit will report to the Managing Director or his designated officer.

Exception of Loan Policy:

It is recognized that there will be exception to the state policy, which can be justified.

However, the board should approved these by the Executive Committee or and the

circumstance must be fully documented in the credit file.

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Global Credit Portfolio Limits:

The nature of credit portfolio shall be governed within guidelines set down by Head

Office and regulatory requirement. These guidelines will however be consistent with

the global limits identified below for the banks credit portfolio in aggregate. Criteriafor exposure to customers are set as under.

Total Facilities :

The aggregate of all cash facilities shall not exceed 80% of customer deposit. It is

further government by the statutory and liquidity reserve requirement of Bangladesh

Bank.

Term Facilities:

Aggregate long-term facilities shall not exceed 20% of the total credit portfolio.

Facilities shall not be allowed for a period exceeding 5 (five) years. Any exceptions

will require the approval of the board of directors.

Country /Cross Border Exposure:

Limits to be established by the board for individual country as well as for aggregate

bank credit exposures to different countries. These times are to be reviewed from timeto time with due regard to the political and economic environment in each country.

The country exposure limits may be utilized up to maximum amounts for different

mature, as follows:

For maturity up to one year: 100%

For maturity up to two year: Maximum 50% of the limit.

For maturity up to three year: Maximum 25% of the limit.

For maturity beyond three year: Maximum 10% of the limit.

For exceptions, approval is required from the Board of Director.

5.4 Exposure to Customer Groups:

Credit facilities in aggregate extended to any one customer group shall not normally

exceed 15% of the capital fund or Tk. 10 (ten) crore which ever is lower. However,

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Board of Directors may relax these limits in deserving cases. All proposals submitted

to Head Office will also be required to indicate the extent of Banks global exposure to

that customer group.

5.5 Sector Wise Allocation:

Sector wise allocation of credit shall be made annually with the approval of Executive

Committee/Board of Directors. This will be reviewed from time to time.

5.6 Security:

Security accepted against credit facilities shall be properly valued and affected in

accordance with the laws of the country in which the security is held. An appropriate

margin of security will tic taken to reflect such factors as the disposal costs or

potential price movements of the underlying assets.

Only one factual study has been made of the extent to which term loans be divided

among more than one bank. That study was part of the Federal Reserve business loan

survey of 1955. At that time about 30 percent of outstanding term loans conceited of

individual loan contract under which the credit had been extended by more than one

Bank. The use of multiple participation may arise in either of three kinds of

Circumstances.

First, a small Bank may be faced with a credit demand that is in excess of its legal

lending limit, in which case it may seek in dispose of the over line credit to its city

correspondent. This form of over line lending is way of accommodating large local

customers while at the same time avoiding, the commutative risk of losing them to

some other city lender. It is generally understood implicitly that a city correspondent

will not solicit the business customers of its country correspondents without their

permission.

Second, Large Banks, hared pressed for reserve funds, often sell portions of their term

and, other loans to country correspondents. The extent to which this practice is

followed varies with the tightness of money markets. In recent years New York has

often been hard pressed for funds while country financial institutions have still had

unused lending capacity.

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Third, some financial institutions prefer participation in lending in order to improve

their credit diversification. This, circumstance has arisen particularly during those

periods in which, the demand for special kinds of loans in some areas of the country

has been so large that the local institutions have become overburdened with this one

type of credit. For example-Banks in the southwestern state sometimes have

encountered heavy demands, for petroleum industry loans. Large scale syndicates or

pools were often formed for the granting of such loans.

5.7 Types of Credit Activities:

Depending on the various nature of financing all the lending activities has been

brought under the following major heads.

5.8 Loan (General):

Short term and long term loans allowed to individual/firm/industries for a specific

purpose but a definite period and generally repayable by the installments fall under

this head. These types of lending are mainly allowed to accommodate financing under

the categories.

a) Large and medium scale industries.

75

Loan

Short-termLong Term

Commercial loan

House building loan,

project or industrial

loan and transport

loanCash credit (pledge), cash credit

(Hypo), loan general, secured

overdraft (SOD), loan against

imported merchandise (LIM) and

others loan.

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b) Small and cottage industries, very often term financing for agriculture and

others are also included here.

5.9House Building Loan (General):

Loans allowed to individual /enterprise construction of house (residential or

commercial) fall under this of advance. The amount is repayable by monthly

installment within a specified period, advances are known as loan (HBL-GEN).

Introduction:

House building loans is one of the common credit policies of banking sector. Therewas only one institution in our country, which is specified in HBFC, Bangladesh

House Building Finance Corporation. Now days, besides this bank many commercial

banks and leasing company provides house building loan to the customers.

Interest Rate:

Currently the interest rate is 15%. But it may changes from time to time depending on

the market interest rate. From the customer point of view this change has an adverse

impact on the customers. Some times if they have to bear a higher interest on the

principal amount which causes a great burden on them.

But from the banks point of view this is very good to maintain the mark-up. Because

when the market interest rate raises 1% than they are getting 1% less mark-up. So for,

these clauses of increasing interest rate they can have the same markup by increasing

the interest rate changing on the clients. So this is very effective for the Bank to

maintain markup.

Disbursement Procedure:

The disbursement procedure or timing of disbursement depends on the client or the

progress of work of the construction. The disbursement can be made two or three

stages or more depending on the above conditions.

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Made of Repayment:

The loan shall be adjustment by monthly installment basis. The repayment will stall

from 6 (six) months, of the date of first disbursement (it may change according to the

terms and conditions or the agreement).

Collateral:

The land and the construction of the land are normally given as collateral. It may

changes:-

The documents to be obtained:

a) DP note.

b) Letter of disbursement.

c) Letter of installment.

d) Letter of guarantee.

5.10 Cash Credit (Pledge):

Financial accommodations to individual /Firms for trading as well as for wholesaler to

industries as working capital against pledge of goods as primary security fall under

this head of advance. It is also a continuous credit and like the above allowed under

the categories.

a) Commercial Lending

b) Working Capital.

The formalities for opening cash credit:

The intending cash credit holder should submit the following documents and being

fulfill properly.

Stock report, rent receipt.

trade license

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Lease financing is one of the most convenient sources of acquiring capital machinery

and equipment whereby a client is given the opportunity to have an exclusive right to

use an asset usually for an agreed period of the time against payment or rent. It is a

term financing repayable by installment.

5.11 Consumers Credit Scheme of EXIM Bank Ltd.:

Introduction:

Consumers Credit Scheme is a major program of EXIM Bank Ltd. In CCS the bank

engage an agent who works on behalf of the Bank. This agent performs all the works

prior to the sanction of the CCS. They do the inspection and make all the documents

necessary for CCS. For this purpose they get commission.

Clients:The clients are service holders and businessmen. Service holders can be Govt. and

private. In case of govt. officer, the main client must be an officer in rank.

Products:

Electronic goods, cars jeeps, microbus, mobile telephone, T&T telephone etc.

Interest Rate:

Interest rate is 16%, 2% risk fund and 2% service charge.

Down Payment:

Down payment is 20% of the CCS amount. It is considered as equity. The payment is

50% for vehicles.

Maturity and Loan Limit:

1-2 Years for electronic goods. Here limit is 1,00,000/-, 3 years for vehicles. Here

limit is 37,00,000/-.

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The documents, which is demands by the bank:

Two letters of guarantee.

Bank statements the assets and liabilities of the clients.

Assurance letter from the organization where lie is currently working.

Trade license for the businessman or Articles of Association.

Non judicial stamp amounting Tk. 300/-.

Penalties:

2% penal interest is charged in the residual amount.

Recovery Rate:

Recovery rate is 93%.

It is a special credit scheme of the purchase of consumers durable to the fixed income

group to raise standard of living. The customers allow the loans on soft terms against

personal guarantee and deposit of specified percentage of equity. The loan is

repayable by monthly installment within a fixed period.

Secured Overdraft (SOD) General:

Advance allowed to individual/firms against financial obligation (i.e. lien onFDR/PSP/BSP/insurance policy share etc.). This may or may not be a continuous

credit.

Secured Overdraft (SOD) Others:

Advance allowed against assignment of work order or execution of contractual works

falls under this head. This advance is generally allowed for a definite period and

specific purpose i.e. it is not a continuous credit. It falls under the category others.

Secured Overdraft (SOD) Export:

Advance allowed for purchasing foreign currency for payment against L/Cs (Back to

Back) where the exports do not materialize before the import payment. This is also

an advance for temporary period, which is known as export finance and under the

category commercial lending.

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Payment Against Document (PAD):

Payment made by the bank against lodgment of shipping documents of goods

imported through L/C falls under this head. It is an interim advance connected with

import and is generally liquidated against payments usually made by the party for

retirement of the documents for release of imported goods from the customers

authority. It falls under the category commercial bank.

Loan against Imported Merchandise (LIM):

Advances allowed for retirement of shipping documents and release of goods

imported through LIC taking effective control over the goods by pledge in go downs

under banks lock & key fall under this type of advance. This is also a temporary

advance connected with import, which is known as post-import financing, falls under

the category commercial lending.

Loan Against Trust Receipt (LTR):

Advance allowed for retirement of shipping documents, release of goods imported

through LIC falls under trust with the arrangement that sale proceed should be

deposited to liquidate within a given period. This is also a temporary advance

connected with import, which is known as post-import financing, falls under thecategory commercial lending.

Inland Bill Purchased (IBP):

Payment made through purchase of inland bills/checks to meet urgent requirement of

the customer falls under this type of credit facility.

This temporary advance is adjustable from the proceeds of bill/checks purchased for

collection. It falls under the category commercial lending.

Export Cash Credit (ECC):

Financial accommodation allowed to customer for exports of goods falls under this

head is categorized as Export Credit. The advance must be liquidated out of export

proceeds within 180 days.

Foreign Documentary Bill Purchased (FDBP) (Foreign):

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Payment made to a customer through purchase/negotiation of a foreign documentary

bills falls under this head. This temporary advance is adjustable from the proceeds of

the shipping /export documents. Its falls under the category Export Credit.

Foreign Documentary Bill Purchase (FDBP) (Local):

Payment made against documents representing sells of gods industries, which are

deemed as export, and which is currency/foreign currency falls under this head. This

temporary liability is adjustable from proceeds of the bill.

Local Documentary Bill Purchase (LDBP):

Payment made to a customer through purchase of inland documentary bills. This

temporary liability is adjustable from proceeds of the bill.

5.12 Credit Administration:

The principle elements of bank credit administration are as follows:

a) Credit approval.

b) Credit files maintenance.

c) Facility evidence maintenance.

d) Credit monitoring and review.

Credit Approval:

The primary factor determining the quality of the Banks credit portfolio is the ability

of each borrower to honor, in a timely basis, all credit commitments made to the bank.

The authorizing credit personnel period to credit approval must accurately determine

this.

The credit approval process shall be governed by the bank credit policy framework,

which can be summarized under the following:

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Credit Evaluation Principles:

To have the optimum returns from the deployed funds in different kinds of lending,

more emphasis shall be given on refund of loans and advances out of funds generated

by the borrowers from their business activities (cash flow) in read of realization of

money by disposing of the securities held against the advance which is very much

uncertain and time consuming.

Accordingly the credit evaluation principles must be adhered to at every level of

approval.

The lending risk analysis tool containing analysis of both the business risk and

security risk provides overall rating of risk in a particular to in under the following

lending process:

Assess risk of failure to repay.

Decide whether to accept or reject a loan proposal.

Set price and items.

Obtain sanctioning documents and disburse loan.

Monitor performance and ensure repayment /recovery.

The most prominent and part or the process is assessment of risk of failure to repay

which deals with the overall lending risk combining the business risk and the security

risk in a matrix derived out or six segments of the business risk.

Suppliers risk.

Sales risk.

Performance risk.

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Resilience risk.

Management competence risk.

Management integrity risk.

The overall matrix provides four kinds of lending risk for decision makers:

Good

Accepted

Marginal

Poor

Which are detailed in the lending risk analysis circular/credit manual. Bank shall not

approve any lending having an overall risk as managerial and poor without proper

justifications-except for renewal of existing facilities under compelling

circumstance or for other reason such as salvage, which shall also contain

convenience future improvement of the position. All credit applications rated Poor

shall require approval of the board regardless of purpose, tenor or amount. Credit Risk

Evaluation:

The importance of a detailed and complete credit risk assessment for each facility and

customer relationship cannot be over emphasized. The steps that should be followed

in carrying out such an assessment are set out in the bank credit manual and in Head

Office circulars issued from time to time. All proposals of credit facilities must be

supported by a complete analysis of the proposal credit. A comprehensive and

accurate appraisal of risk in every credit exposure of the bank is mandatory. No

proposal can put up for approval unless there has been a complete written analysis. It

is the absolute responsibility of the proposal officer to ensure that all necessary

proposal documentation is collected before the facility request is sent to the

sanctioning officer.

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Lending Authority:

Assure proper and orderly conduct of the business of the Bank, the Board of

Directors will empower the Managing Director and other Executives of the Bank to

lend up certain amount under certain terms and conditions at their discretion. The

lending officer is broadly categorized as follows:

Managing Director

Deputy Managing Director

Executive Vice-President Asstt.

Senior Vice-President

Vice President

Senior Asstt. Vice-President

Asstt. Vice-President.

The amount and scope of each officer lending authority is a function of the amount

and extent of authority required by the officer to carry out his/her responsibilities to

the Bank and its clients ma prudent, effective manner. It must be emphasized that an

officer will not be delegated lending authority only on the basis of his position. In

other words, an officer does not automatically get lending authority by virtue of his

corporate and /or functional title. Specified lending authority will be delegated by

the Managing Director to various Executives after taking into consideration his

proven credit judgments, knowledge and experience. The amount of lending

authority approved by the board for various executives form the upper limits of the

authority that may be delegated to an officer holding corporate title. Each individuals

lending authority will be delegated to him in writing. The Managing Director with the

Executive Committee/Board will review all lending authorities periodically.

Approval under Dual Signature:

All approval of credit facilities must be conveyed under dual signature, and ideally

both the signatures must have the lending authority. If however, two lending officers

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of the required lending authority are not available, one of the signatories must have

the lending authority.

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7.1 SWOT ANALYSIS

Not surprisingly, in the competitive arena of marketing era SWOT analysis is a must

based on Product, Price, Place and Promotion of a financial institute like private bank.

From the SWOT analysis we can figure out ongoing scenario of the bank. So to have

a better view of the present banking practices of EXIM Bank Ltd.

SWOT Analysis

In SWOT analysis two factors act as prime movers

Internal factors which are prevailing inside the concern which include Strength

and weakness. On the other hand another factor is external factors which act as opportunity

and threat.

STRENGTH:

Usage of faster PC Bank software.

Membership with SWIFT.

Good banker-customer relationship.

Online banking system.

Islami Shariah based Banking system.

Energetic as well as smart work force.

Competitive Profit provider comparing with other Islamic Bank.

Strong Financial Position.

Efficient administration.

WEAKNESS:

Reluctance to ad campaign.

InternalFactorsInternalFactors

ExternalFactorsExternalFactors

StrengthStrength WeaknessWeakness OpportunityOpportunity

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Findings of The Study

Threats

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Existing manual vouchers.

Lack of consumer credit scheme.

Manpower is not sufficient.

Marketing policy is not well setup.

Limited number of branches in its network.

Officers have limited experience and not enough trained.

The bank has no own ATM booth.

Insufficient number of deposit Scheme and loan.

OPPORTUNITY:

Huge business area.

Introducing consumer credit scheme.

Growth of sales volume.

Introducing branch banking through online.

Develop relations and correspondence with foreign banks.

More concentrated Banking based on Islamic Shariah.

Few Competitors practicing Islamic Banking.

THREATS:

Competitors have more attractive deposit schemes.

Bangladesh Bank has no well established Islami Banking Rules.

Different classic services of other banks.

Entrance of new private commercial banks.

Young, energetic, dynamic, talent and smart work force of competitors.

Govt. imposes high rate of taxes and VAT.

Political unrest and Economic recession.

Illegal business operation by the some clients.

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7.2 FINDINGS

A survey was conducted among the customers. Sample size is 50 and data collected

from 50 respondents by using a Questionnaire. After collecting the data Descriptive

and Regression analysis was conducted this showed following results:

DESCRIPTIVE ANALYSIS:

Introduction of e-banking:

Introduction of e-banking

Frequency Percent Valid Percent Cumulative Percent

Valid Agree 19 38.0 38.0 38.0

Strongly Agree 31 62.0 62.0 100.0

Total 50 100.0 100.0

As can be seen, of the 50 respondents who participated in the survey, 62% customers

Strongly Agreed and 38% customers Agreed. That means almost 100% of customers

Strongly agreed and Agreed with the statement. So from the table and chart we can

conclude a result that EXIM Bank should introduce e-banking.

Introduction of own ATM booth facilities:

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Introduction of own ATM booth facilities


Valid Neither disagree nor agree 1 2.0 2.0 2.0

Agree 22 44.0 44.0 46.0

Strongly Agree 27 54.0 54.0 100.0

Total 50 100.0 100.0


Strongly Agreed and22% customers Agreed. That means almost 98% of customers

Strongly agreed and Agreed with the statement. So from the table and chart we canconclude a result that EXIM Bank should introduce their own ATM booth facilities.

Cordiality:

Cordiality


Valid Disagree 3 6.0 6.0 6.0

Neither disagree nor agree 10 20.0 20.0 26.0

Agree 20 40.0 40.0 66.0

Strongly Agree 17 34.0 34.0 100.0

Total 50 100.0 100.0

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Strongly Agreed, 40% customers Agreed, 20% Neither disagreed nor agreed and 6%Disagreed. That means almost 60% of customers Strongly agreed and Agreed with the

statement. So from the table and chart we can say that the employees of EXIM Bank

Satmasjid Road branch are cordial.

Number of branches:

Number of branches


Valid Neither disagree nor agree 5 10.0 10.0 10.0

Agree 19 38.0 38.0 48.0

Strongly Agree 26 52.0 52.0 100.0

Total 50 100.0 100.0

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Interest rate


Valid Strongly disagree 4 8.0 8.0 8.0

Disagree 9 18.0 18.0 26.0


Agree 19 38.0 38.0 90.0

Strongly Agree 5 10.0 10.0 100.0

Total 50 100.0 100.0


Strongly Agreed, 38% customers Agreed, 26% Neither disagreed nor agreed, 8%

Strongly disagreed and 18% Disagreed. That means almost 48% of customers

Strongly agreed and agreed, and 26% Neither disagreed nor agreed with the

statement. So from the table and chart we can say that the EXIM Bank is providing

adequate interest rate to the customers.

Corporate social responsibilities

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Corporate social responsibilities



Disagree 12 24.0 24.0 28.0


Agree 7 14.0 14.0 94.0


Total 50 100.0 100.0

From the 50 respondents who participated in the survey, 6% customers Strongly

Agreed 14% customers Agreed, 52% Neither disagreed nor agreed, 4% Strongly

disagreed and 24% Disagreed. Here majority 52% Neither disagreed nor agreed withthe statement. From the table and chart we can conclude that the EXIM Bank is not

fulfilling their Corporate Social Responsibilities properly or the customers are not

aware about it.

Security system:

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Security system



Disagree 12 24.0 24.0 32.0


Agree 15 30.0 30.0 92.0


Total 50 100.0 100.0



Strongly disagreed and 24% Disagreed. That means almost 38% of customers are

Strongly agreed and agreed, and 30% Neither disagreed nor agreed with the

statement. So from the table and chart we can say that the security system of EXIM

Bank is enough but they have to give more emphasis on security system.

Satisfied with their services:

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Satisfied with their services



Disagree 1 2.0 2.0 4.0


Agree 31 62.0 62.0 78.0

Strongly Agree 11 22.0 22.0 100.0

Total 50 100.0 100.0


Strongly Agreed, 62% customers Agreed, 12% Neither disagreed nor agreed, 2%Strongly disagreed and 2% Disagreed. That means almost 84% of customers Strongly

agree and agree, and 12% Neither disagree nor agree with the statement. So from the

table and chart we can say it clearly that the customers are satisfied with their

services.

Flexibility of terms & condition:

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Flexibility of terms & condition




Agree 16 32.0 32.0 56.0

Strongly Agree 22 44.0 44.0 100.0

Total 50 100.0 100.0


Agreed, 32% customers Agreed, 16% Neither disagreed nor agreed, and 8%

Disagreed. That means almost 76% of customers Strongly agreed and agreed, and

16% Neither disagreed nor agreed with the statement. So from the table and chart wecan say it clearly that the terms and conditions should be more flexible for loan

purpose.

Taking too much time for providing any services:

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Taking too much time for providing any services



Disagree 15 30.0 30.0 52.0


Agree 8 16.0 16.0 96.0


Total 50 100.0 100.0


Agreed, 16% customers are Agreed, 28% Neither disagreed nor agreed, 30% Disagree

and 22% Strongly disagree. That means almost 52% of customers Strongly disagreed

and Disagreed, and 28% Neither disagreed nor agreed with the statement. So from the

table and chart we can conclude that they are not taking too much time for providing

any services.

Increase the no. of branches:

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Increase the no. of branches



Disagree 1 2.0 2.0 6.0


Agree 17 34.0 34.0 46.0

Strongly Agree 27 54.0 54.0 100.0

Total 50 100.0 100.0


Strongly Agreed, 34% customers Agreed, 6% Neither disagreed nor agreed, 2%Disagreed and 4% Strongly disagreed. That means almost 88% of customers are

Strongly agreed and Agreed. So from the table and chart we can say easily that they

have to increase the number of branches all over the country as early as possible.

Complexity of opening account:

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Complexity of opening account



Disagree 7 14.0 14.0 18.0


Agree 20 40.0 40.0 90.0


Total 50 100.0 100.0


Strongly Agreed, 40% customers Agree, 32% Neither disagreed nor agreed, 14%

Disagreed and 4% Strongly disagreed. That means almost 50% of customers Strongly

agreed and Agreed, and 32% Neither disagreed nor agreed. So from the table and

chart we can conclude that the procedures of opening any types of account is too

much complex.

Emphasis on Shariah guidelines:

Emphasis on Shariah guidelines



Disagree 3 6.0 6.0 12.0


Agree 16 32.0 32.0 82.0


Total 50 100.0 100.0

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Agreed, 32% customers Agreed, 38% Neither disagreed nor agreed, 6% Disagreed

and 6% Strongly disagreed. That means almost 50% of customers are StronglyAgreed and Agreed, and 38% Neither disagreed nor agreed with the statement. So

from the table and chart we can conclude that as a Islamic bank they have to give

more emphasis on shariah guidelines.

Problem solved promptly




Agree 24 48.0 48.0 88.0


Total 50 100.0 100.0

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Disagreed. That means almost 60% of customers Strongly agreed and Agreed, and

20% Neither disagreed nor agreed. So from the table and chart we can conclude that

they are solving cust