Export Import Bank of Bangladesh Ltd

Executive Summary

Commercial banks are one of the key contributors in the economy of developing countries. They act as financial intermediaries by performing the function of mobilizing the funds from one party and lending the same to another while making a reasonable amount of profit after meeting the cost of fund. People and the government itself are very much dependent on the services provided by the 55 banks in the financial market. Banking system of Bangladesh has gone through three phases of development. They are nationalization, privatization and lastly reform the financial sector. Export Import of Bangladesh Limited has started its journey as a private commercial bank on August 3, 1999.

The whole working process of Principal Branch, EXIM BANK Ltd is divided into 3 sections. They are 1) General Banking, 2) Credit and 3) Foreign Exchange. To know how well a bank is performing actually, a case study on Nawabpur Branch of EXIM BANK Ltd. is being taken. This report has been presented based on observation from each section, which is consisted of various departments. Foremost, I have tried to make acquainted with the bank and branch in this report. The banking practice of conventional banking and Islamic banking is highly different from the concept.

The Islamic concept thinks, interest is harmful for the economy and banking should be done on the Shariah basis. From the very beginning of this bank it was not operated under this concept of Islamic Shariah system, which was converted into Islamic banking later. The Islamic banking collects deposit from different viewpoint, so the whole banking practice with the clients differ highly from conventional banking. The Islamic bank gives the depositors the amount of profit they earn from their operation, not the interest. So the credit contracts are ultimately differ from the conventional banking. The Islamic banking used the credit in different name that is “investment”. Here the bank goes with the client a type of business relationship where the bank made arrangement to conduct business for the client, the bank is the owner of the money and property where the client just provide the labor and share the profit with the bank.

General banking is the starting point of all the banking operations. This department provides day to day services the customers. It opens new accounts, remit funds, issue bank drafts and pay orders etc. provide customer through quick and sincere service is the goal of the general banking department.

Foreign Exchange department plays significant roles through providing different services for the customers. Letter of Credit is the key part of foreign exchange business. With the globalization of economies, international trade has become quite competitive. Timely payment for exports and quicker delivery of goods is, therefore, a pre-requisite for successful international trade operations. To ensure this purpose EXIM Bank Limited transmits L/C through SWIFT (Society for Worldwide Inter bank Financial Telecommunication) to the advising bank.

EXIM Bank Ltd is providing different sorts L/C services like L/C opening, lodgment, BLC (Bill under letter of credit), back to back L/C etc. Foreign Exchange department also provide

foreign remittance lie traveler’s cheque, foreign demand draft, endorsement of US $ in passport etc.

This repot in its beginning introduced the EXIM Bank Ltd. which shows its historical background, the mission, values, performance and the other aspect like the capital constituents of the bank. Next the report shows highlights on the overall banking activities. These are general banking, foreign exchange and investment. From the investment and general banking we got to understand the Islamic banking concepts and the way the Islam thinks the interest and what a bank should be.

Different products/ services offered by EXIM Bank are shown in brief. Also different types of loans and advances are discussed in brief.

Performance of the Nawabpur Branch of EXIM Bank is shown, with SWOT analysis showing its strengths, weakness, opportunity and threats. Also different problems areas of EXIM Bank are discussed at the end.

Chapter1 Introduction

1.1)Background of the reportThis report is prepared for fulfilling a partial requirement of both the BBA and the Internship

Programs. The EXIM Bank Limited is the host organization for the 3-months Internship

Program, which began on February10, 2010 and ended on May09, 2010. To prepare the

report as an apprentice I have taken necessary assistance from EXIM Bank Limited during

my internship Nazneen Fatema Madam is the internship Adviser who authorized the topic of

this report. And I am working most of my internship period with the foreign exchange

division and investment division.

1.2) Objective of the reportThe objectives of this report are to find out the followings:

1. To find out the functions of International Operational Associates Bank of the world with EXIM Bank of Bangladesh Ltd.

2. To evaluate the role of Export and Import Department to facilitate the international trade.

3. To find out the operational procedures of L/C in international trade.

4. To find out different types of Export-import procedures of EXIM Bank of Bangladesh limited.

1.3) Significant of the study

Importance of the topic to choose:The world is now become globalize so we have to sustain in the competitive world. We must

take the competitive advantage. We should more involvement in international economy. It is

important to me because I feel very much interest about international business. I think we are

in the same world so all of us should enjoy each and every resource in the world. And it has

another importance to me that is implementation my educational knowledge and theoretical

knowledge to the practical. Find out the advantage, disadvantage and diplomacy we should

compliance in international trade.

Importance to the study:The important of my study to the employees is great deal because an employee should have

knowledge about the international trade why international trade is important not only that

how international trade work trade balance. Crystal clear knowledge about the importance of

international trade motivates the employees to work in foreign exchange division in bank.

Importance to the employers:The importance of employees implies the importance of employers. Because if the employees

can be more sincere in their duties the company will able to attract more clients into their

bank and ultimately the profit the bank will increase significantly.

Management practitioners:The management will also be benefited from my study because it will also helps the

management to understand their weakness and strength dealings in international trade in

import financing and export financing. They will find out the new area of investing in

international trade. They will obviously find our new strategies to smooth the foreign

exchange and ultimately fulfill their social and economical objectives and goals of the

organizations.

Stoke holders and society at large:It is found when at the project in the EXIM Bank the people are involved in international

trade but do not know some trams and conditions and paper to be ready for imports and

export the merchandise. So, will also have importance to the stack holder to know the rule

and regulation they must need to obey the rules and regulations of the Trade and commerce

Ministry of Bangladesh.

To smooth the progress of international is now become more important duty in the age of

globalization. So, international trade is become more important than before. One country

cannot be efficient of producing each and every goods as well as every country have not al

kind of natural resources that the country needs. Facilitating the international trade the banks

play an important role. The proper financing in international trade can play an important rule

to regulate on to the exported and imported products.

1.4) MethodologySource of informationThe data are collected from two sources:

Primary Source: Personal experience gained by observing the different tasks of bank.

Personal investigation with bankers

Secondary Source: “PROSPECTUS” published by EXIM Bank 2006.

Publications of News paper

Publications

Internet

Annual Report

1.5) Budgeted for the Study

Financial Budget for conducting my Study for the project:The Sources of money conducting for my study:

The EXIM Bank does not provide any financial motivation to the internship students but they provide quality work place for the students.

So I had to spend everything from my guardian money for conducting my studies during my internship period.

1.6) Limitation of the studyThe study has a numbers of boundaries, describe followings:

The first limitation of this study is the time constrain, the duration for the time was very small.

Experiences gathered from one branch of the Bank so it’s difficult to find out every transaction of a Bank.

Another draw back of the study is confidentiality to disclose their data, information because the market is more competitive.

The officers of a Bank are too much busy to provide information and interviews to my project.

Chapter2 Orientation of EXIM Bank LTD

2.1) IntroductionEarly banking system served mainly as depositors for funds, while the more modern system

has considered the supplying or credits their main purpose. A Bank not only accepts money

or deposits, but it also lends money and creates its own people. Sawyers states, We can define

a bank as an institution whose debts (bank deposits) are widely accepted in settlement of

other peoples debts to each other Banks are financial institutions or financial intermediary

that collect fund from people as deposit and lend this fund as loans and advances to the

borrowers in different sectors of the economy against interest for a certain period. Banks play

a very important role in both national and international trade. Banks provide some other non-

traditional services like-factoring, issuing bank guarantees etc. Moreover, Bank is financing

to the international trade because on country can survive without international trade. The

financings are very much supportive to the global economy.

In Bangladesh, there are Government Banks, Private Banks and Foreign Banks. The EXIM

Bank of Bangladesh Limited is one of the leading private sector commercial bank in

Bangladesh.

Name of the Organization & locations Export Import Bank of Bangladesh Limited

Head Office Corporate Branch:“Symphony”, Plot # SE (F)-9, Road # 142

Gulshan Avenue, Gulshan Dhaka – 1212, Bangladesh.Tel : 956104, Fax: 880-2-9556988E-mail : eximho@bdonline.comWebsite : www.eximbankbd.comSWIFT : EXBKBDDH

Branch Office where I am deployed for my Project:

Nawabpur Branch 198/1 Nawabpur Road,

Dhaka-1100, Bangladesh.

2.2) Management Philosophy, Mission, Vision, Goal of the Company

The Vision is….

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

And the Missions of EXIM Bank Limited are stated in the following bullets:

To maintain Corporate and business ethics. To become a trusted repository of customers’ money and Financial advisor.

To make our stock superior and rewarding to the customers and 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) Leadership pattern of the organization:Leadership: Leadership is the process of influencing and supporting others to work

enthusiastically toward achieving objectives. It is the critical factor that helps an individual or

a group identifies its goals and them motivate and assist in achieving the stated goals.

Leadership is the important part of the management.

There are three types of leadership

Autocratic leadership

Consultative leadership and

Participative leadership

The EXIM Bank believes in participative leadership. The Bank always gets suggestion from

the officers and management.

2.4) Historical Background of the OrganizationEXIM 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 start 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 Islamic banking since July 2004.

2.5) Name and the Characteristics of the FoundersThe following are top management and the founder and sponsor director of the company

Late Shahjahan Kabir Md. Nazrul Islam Mazumder Alamgir Kabir, FCA (Founder Chairman & Former Advisor) Mohammed Lakiotullah (Chairman & Managing Director)

2.6) Structure of the OrganizationOrgan gram of EXIM bank

Advisor Board of DirectorsChairman

Figure: Organ gram of EXIM Bank Limited

2.7) Corporate Culture of EXIM Bank Bangladesh Ltd.

Managing Director

Deputy Managing Director

Senior Executive Vice

presidents

Executive Vice President

Senior Vice President

Vice President

Senior Assistant Vice-

President

Assistant Vice President

Junior Officer

Assistant Officer

Officer

Senior Principal Officer

Principal Officer

Executive Officer

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 suit the 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.

2.8) Organizational Culture of EXIM Bank Bangladesh Ltd.Organizational culture means the common perception held by the organization’s members; a system of shared meaning that distinguishes from one organization to other organizations. This bank is one of the most disciplined Banks with a distinctive prorate 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. Hey mould their manners and etiquette, character individually to suite purpose of the Bank and the needs of the customers who are of remount importance to us. The people in the Bank see themselves as a; ht knit team/family that believes in working together for growth. The prorate culture we belong has not been imposed; it has rather been levied through our corporate conduct.

2.9) Quality of Work-life (QWL)The EXIM Bank of Bangladesh Ltd has a great working condition, working environment. The organization has well decorated branches Office. The office has world class facilities. The branches are well equipped. And the organization's works are divided into different segments. So officers are well knowledge about their jobs. So Officers never feel confuse about their works. And they can work more sincerely and with great responsible way. The strategy provides more effective and efficiency for the organization.

Project Finance Syndicate Loans Retail Loans Mortgage Loans Loan against Share and Securities

Foreign Exchange:

Non Resident Foreign Currency Deposit Account (NFCD) Foreign Currency Deposit Account

2.10) Achievements of EXIM Bank

In order to ensure delivery of smooth and most reliable remittance services to NRBs living and working in UK, Export Import Bank of Bangladesh Limited (Exim Bank) has started operation of its wholly owned subsidiary “EXIM Exchange Company (UK) Ltd”. on 30th June 2009 in London, United Kingdom, one of the oldest destinations for the expatriate Bangladeshis. It is the first exchange house owned by a Bangladeshi private bank.

Bangladesh Bank Governor Dr. Atiur Rahman inaugurated the exchange house as the Chief Guest, while H.E. Dr. M. Sayeedur Rahman Khan, Honorable High Commissioner, Government of the People's Republic of Bangladesh, was present in the program as special guest. Chairman of EXIM Bank and Director of EXIM Exchange Company (UK) Ltd. Mr. Md Nazrul Islam Mazumder presided over the program.

Deputy High Commissioner Mr. Allamah Siddique, Director of EXIM Bank Mr. Muhammed Nurul Fazal Bulbul, Mrs Nasrin Islam, Mr. Abdullah-Al-Zahir Swapan, Mr. Md. Shahidullah, Managing Director of EXIM Bank Mr. Kazi Masihur Rahman and local elites were also present in the opening ceremony.

With the opening of EXIM Exchange the Bangladeshi expatriates will now be able to send remittances to their family members back home within shortest possible time through online transfer to all the branches of EXIM Bank. EXIM Exchange Company (UK) Ltd is located at the Universal House of Wentworth Street London which is a very convenient location for the Bangladeshi community and business houses. Unlike any other exchange company operating in UK, as EXIM Exchange is completely owned and supervised by EXIM Bank under the approval of Bangladesh Bank and UK regulators, it is expected to be the most reliable and trusted Exchange House for the NRBs.

2.11) Implementation of the world renowned Core Banking Software (TEMENOS T24):In order to provide IT enabled products and services to our valued customers, bank has implemented a world renowned shariah based centralized core banking software named TEMENOS T24. This software is capable enough to provide all sorts of electronic banking services to the valued customers through various electronic delivery channels.

2.11) VISA ISLAMIC CARD

By the grace of Almighty Allah, Exim Bank Ltd has started commercial operation of fully Shariah based VISA Islamic Card (Local, International & Dual Currency) under the principle of Bai-Murabaha. This is the first Islamic electronic product for any Islamic bank in Bangladesh.

The Salient Features of the card are-

First Shariah Based Islamic Card by any Islami Bank in Bangladesh. Lowest Profit Rate in the Card Market Simple Profit Rate No Hidden Charge Dual Currency Facility in One Card Free Supplementary Card 24 Hours Customer Service

2.12) Growth of BankFigure in Crore

Sl. Particulars 2004 2005 2006 2007 20081 Authorized Capital 100.00 100.00 350.00 350.00 350.002 Paid-up Capital 62.78 87.90 171.38 214.22 267.783 Reserve Fund 35.73 57.00 81.09 113.46 153.264 Deposits 1907.82 2831.90 3503.20 4154.66 5758.705 Investment (General) 1933.20 2604.60 3264.13 4019.52 5363.776 Investment ( Shares on Bonds) 154.30 163.30 223.33 245.77 289.407 Foreign Exchange Business 4931.24 7294.00 9617.51 11790.01 15643.46

  a) Import Business 2678.10 4143.20 4959.67 6139.94 7854.05  b) Export Business 2241.84 3128.50 4623.46 5579.04 7646.56  c) Remittance 11.31 22.30 34.38 71.03 142.858 Operating Profit 83.58 117.58 137.87 190.82 251.849 Loan as a % of total Deposit 101.33% 91.97% 93.18% 96.75% 93.14%10 No. of Foreign Corresponden 200 222 246 246 27811 Number of Employees 768 934 1020 1104 131212 Number of Branches 28 28 30 35 4213 Return on Assets 1.57% 1.65% 1.73% 2.00% 1.83%

Chapter3Activities of EXIM Bank

3.1) The Activities of EXIM Bank are divided into the following Departments:3.3.1) General Banking department

Accepting different types of Deposits Account Opening Cheque Book issue Transfer of an Account

Closing of Account

3.3.2) Remittance department:

Issuing and Payment of Demand Draft All related Correspondence with other Branches and Banks Compliance of Audit and Inspection Balance of local Demand Pay Order and Maintenance of record and proof sheet. Payment of incoming TT Issuing Encashment of pay Order and Maintenance of record and proof Sheet. Issuance local Drafts Issuing Outgoing TT, Issuance of ICA, IBCA and IBDA

3.3.3) Clearing Department:

Clearing House Operation:

The followings are the main functions performed by the department:a. Pass outward instruments to the Clearing-House.b. Pass inward instruments to the respective departments.c. Return issue to the clearing-house incase of any dishonor.d. Prepare IBCA and IBDA for the respective branch and OH.

3.3.4) Advance or loan department:The advanced depart perform one of the most important task for it generate the income for the company. So the company must sell its product very carefully, so that it can provide more income and the Bankers get to be more about bad loss of the loans and advances. So the organization has lending authority.

They evaluate and assessment credit risk of loan. They approve loan and advance under dual signs one must be by the lending authority

3.3.5) Foreign Exchange DepartmentThey have done the transactions with the foreign affairs. They proposal to buy currency for them to Head Office. They open L/C. They do lodgment and other foreign dealing.

3.2) Export and Import Trade Handling and Financing

As a commercial bank, we do all traditional Banking including the wide range of saving and credit scheme products, retail banking and ancillary services with the support of modern technology and professional Excellency. But our main focus on export and import trade handling and the development of entrepreneurship and patronization of private sectors.

3.3) Motivational Factors:3.3.1) Financial Incentives

1. Bonus (each 10 corer profits)

2. Annual Performance based incentives

3. Employee super compensation fund

3.3.2) Non-Financial motivational factors1. Festival Gift to the Employees

2) Call together Ceremony

3) Annual Picnic

4) Merit based Scholarships

Chapter4 Investment & Foreign Exchange Business

4) Investment parts4.1.) Product and Services:

Product and Services:

Super Saving Hajj Deposit Multiplus Savings Scheme

Monthly Saving Monthly Income Scheme Scheme

4.2) Investment and Finance:

Corporate Finance Industrial Finance Project Finance Syndicate Investment Mode of Investment

Murabaha Bai Muazzal Izara Bil Baia Wazirat Bil Wakala Quard Local Documentary Bill Purchased

Foreign Documentary Bill Purchased

4.3) Deposit:

Al-Wadia Current Deposit

Mudaraba Savings Deposit

Mudaraba Short Term Deposit

Mudaraba Term Deposit

One Month Three Months Six Months Twelve Months Twenty Four Months Thirty Six Months

Foreign Currency Deposit

Mudaraba Savings Scheme

Monthly Savings Scheme (Money Grower) Monthly Income Scheme (Steady Money) More than Double the deposit in 6 years (Super Savings) More than triple the Deposit in 10 years (Multiplus Savings) Mudaraba Hajj Deposit

We emphasize on non-fund business and fee based income. Bid bond/ Bid security can be issued at customer’s 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 Biddut somity of Gazipur can deposit their electricity bill to Gazipur branch.

MUDARABA SUPER SAVINGS SCHEME  

Objectives of the Scheme:

Savings help to build up capital and capital is the principal source of business investment in a country. That is why savings is treated as the very foundation of development. To create more awareness and motivate people to save, EXIM Bank offers super savings scheme.

Terms and Conditions of the Scheme:

Any individual, company, educational institution, government organization, NGO, trust, society etc. may invest their savings under this scheme.

The deposit can be made in multiples of Tk. 5,000.00. Any customer can open more than one account in a branch in his/her name or

in joint names. A Deposit Receipt will be issued at the time of opening the account.

The Deposit will approximately be double in 6 (six) years.

Highlights of the Scheme:

Some examples are given in the table below. Any amount can be deposited in multiples of Tk. 5,000.00.

Deposit Payable (approximately) at maturity 5,000.00 10,002.00 10,000.00 20,004.00 20,000.00 40,008.00 50,000.00 1,00,020.00 1,00,000.00 2,00,040.00 2,00,000.00 4,00,081.00 5,00,000.00 10,00,203.00

Savings will be treated as projected and it will be adjusted after the declaration of profit at the end of the year. The weight age of deposit will be 1.17.

Not less than 65% of investment income shall be distributed among the Mudaraba Deposit holders as per weight age of deposit.

Premature encashment of the scheme:

In case of premature encashment before 1 year no profit shall be paid. In case of premature encashment after 1 year but before 3 years profit shall be

paid at Savings Rate plus 0.75%. In case of premature encashment after 3 years but before maturity profit shall

be paid at Savings Rate plus 1.00%.

In case of any unexpected situation:

In case of death of depositor before the term, the amount will be given to the nominee according to the rules of premature encashment. In the absence of nominee, the heirs/ successors will be paid as per succession certificate.

In case of issuing duplicate receipt the rules of issuing a duplicate receipt of Term Deposit will be applicable.

The nominee may, at his option continue the scheme for the full term.

Quard facility under the scheme:

A depositor can avail quard up to 90% of the deposit under this scheme.

Additional terms and conditions:

Bank reserves the right to change the weight age of deposit & percentage of distribution of Investment Income. At the time of payment, Income Tax shall be deducted upon profit

MUDARABA MONTHLY SAVINGS SCHEME (MONEY GROWER)

Objective of the scheme:

A monthly savings scheme secures your future with ease. A small savings of today will provide you comfort tomorrow.

Savings Period and Monthly Installment Rate:

The savings period is for 5, 8, 10 or 12 years.

Monthly installment is Tk. 500/-, 1000/-, 2000/- or 5000/-.

Not less than 65% of investment income shall be distributed among the Murabaha Depositors as per weight age. The deposit will bear weight age 1.16, 1.17, 1.18, 1.19 respectively.

Bank reserves the right to change the weight age of deposit & percentage of distribution of Investment Income.

Monthly Installment Deposit:

The savings amount is to be deposited within the 10th of every month. In case of holidays the deposit amount is to be made on the following day.

The deposits may also be made in advance. The depositor can have a separate account in the bank from which a standing

instruction can be given to transfer the monthly deposit to the scheme account. If the depositor fails to make the monthly installment in time, then 5% on

overdue installment amount will be charged. The charged amount to be added with the following month(s) installment and the lowest charge will be Taka Ten.

Withdrawal:

Generally, withdrawal is not advised before a 5 (five)-year term, but if it is withdrawn before the above term, profit will be paid at savings rate. However, no profit will be paid if the deposit is withdrawn within 1 (one) year of opening the account.

In case the depositor wishes to withdraw between the 5, 8, 10 or 12 years period then full profit will be paid for a completed term and savings rate will be applicable for the fractional period.

Quard Advantage:

After 3 (three) years of savings in this scheme the depositor (if adult) is eligible for a quard up to 90% of his/her deposited amount. In that case, profit rates on the quard will be applicable as per prevailing rate at that time.

Reasons for disqualification from this scheme:

If the depositor fails to pay 3 (three) installments in a row, then he/she will be disqualified from this scheme and profit will be applicable as mentioned in withdrawal clause.

If a depositor fails to pay 5 (five) installments in a row after completion of any one of these terms, then the Bank reserves the right to close the account and profit will be paid as mentioned in withdrawal clause.

In case of death of the depositor the scheme will cease to function. The amount will be handed over to the nominee of the deceased depositor. In case of absence of the nominee, the bank wills handover the accumulated amount to the successor of the deceased.

Achievement from the scheme:

The accumulated amount may be more or less of following table:

Term Monthly Installment   500/- 1,000/- 2,000/- 5,000/- 5 yrs. 39,041/- 78,082/- 1,56,164/- 3,90,411/- 8 yrs. 74,202/- 1,48,404/- 2,96,809/- 7,42,024/- 10 yrs. 1,05,095/- 2,10,190/- 4,20,380/- 10,50,952/- 12 yrs. 1,44,461/- 2,88,923/- 5,77,847/- 14,44,618/-

Rules: A form has to be filled at the time of opening the account. Attested

photographs are advised. The depositor can select any of the installment amounts which cannot be

subsequently changed. In case of minors, the guardians may open and supervise the account in his

favor. A single person can open more than one account for saving under several

installment amounts. The accumulated deposit with profit will be returned within one month of

completion of a term. The depositor should notify the bank immediately on any change of address. The government tax will be deducted from the profit accumulated in this

scheme. If necessary, at the request of the depositor, the scheme can be transferred to

another branch.

The Bank reserves the right to change the rules and regulations of the scheme as and when deemed necessary.

Income Tax on profit paid shall be deducted at the time of payment.

MUDARABA MONTHLY INCOME SCHEME (STEADY MONEY)

Objectives of the scheme:

A monthly scheme that really makes good sense. A sure investment for a steady return. Actually, steady money makes your money work for you.

Proper utilization of savings from stipend, wage earning, retirement benefit and so on.

Higher monthly income for higher deposit.

Formalities of opening an account:

An account is to be opened by filling up a form. The Bank will provide the customer a deposit receipt after opening the

account. This receipt is non-transferable.

 Highlights of the scheme:

Minimum deposit Tk. 1, 00,000/-. The scheme is for a 3 (three)-year period.

The income is estimated which may be more or less at the year end and accordingly the same shall be adjusted. The deposit will bear 1.15 weight ages.

Not less than 65% of Investment Income shall be distributed among the Mudaraba Deposit holders as per weight age.

Bank reserves the right to change the weight age of deposit & percentage of distribution of Investment Income.

Quard facility:

A depositor can enjoy investment facility (excluding Quard) up to 80% of the deposited amount under these scheme complying investment norms of the bank. In this case, profit, will be charged against the investment facility as per Bank's norms. During the tenure of the investment, the Monthly Income will be credited to the investment account until liquidation of the invested amount inclusive of profit.

Disbursement of monthly income:

Monthly income will be credited after one month i.e., on the due date of the next month to the depositor's account.

Deposit Amount Income (Tk.) 1,00,000/- 1,000/-

Premature encashment of the account:

If the deposit is withdrawn before a 3 (three)-year term, then saving rate plus 0.75% of profit will be applicable and paid to the depositor. However, no profit will be paid if the deposit is withdrawn within 1 (one) year of opening the account and monthly income paid to the customer will be adjusted from the principal amount.

Additional terms and conditions:

Applicant must open/have an Al-wadia CD or Mudaraba SB A/C with the branch in which monthly income will be credited automatically.

The government taxes will be paid to the debit of monthly income.

MUDARABA MULTIPLUS SAVINGS SCHEME

Objective of the scheme:

To gather public's idle money in exchange of high return within the shortest possible time.

Terms and Conditions of the Scheme:

Any individual, company, educational institution, government organization, NGO, trust, society etc. may invest their savings under this scheme.

The deposit can be made in multiples of Tk. 5,000.00. Any customer can open more than one account in a branch in his/her name or

in joint names. A Deposit Receipt will be issued at the time of opening the account.

The period of deposit is 10 (ten) years.

Highlights of the Scheme:

Some examples are given in the table below. Any amount can be deposited in multiples of Tk. 5,000.00.

Deposited Amount Amount payable approximately after maturity 5,000.00 15,879.00 10,000.00 31,758.00 50,000.00 1,58,793.00 1,00,000.00 3,17,587.00

Payable amount will depend on projection and will be adjusted after the declaration of profit at the end of the year. The weight age of deposit will be 1.17.

Not less than 65% of investment income shall be distributed among Mudaraba Depositors as per weight age.

In case of premature encashment:

In case of premature encashment before 1 year no profit shall be paid. In case of premature encashment after 1 year but before 3 years profit shall be

paid at Savings Rate plus 0.75%. In case of premature encashment after 3 years but before 5 years profit shall be

paid at Savings Rate plus 1.00%. In case of premature encashment after 5 years but before 8 years profit shall be

paid at Savings Rate plus 1.50%. In case of premature encashment after 8 years but before maturity profit shall

be paid at Savings Rate plus 2.00%.

In case of unexpected situation:

In case of death of depositor before the term, the deposit amount will be given to the nominee according to the rules of premature encashment. In the absence of nominee, the heirs/ successors will be paid on production of succession certificate.

In case of issuing duplicate receipt the rules of issuing a duplicate receipt of Term Deposit will be applicable.

The nominee may, at his option continue the scheme for the full term.  

Quard facility against the scheme:

The depositor can enjoy loan up to 80% of the deposit under this scheme.

Additional Terms and Conditions:

Bank reserves the right to change the weight age of deposit & the portion of distribution of Investment Income.

At the time of payment of deposit Income Tax on profit shall be deducted.

4.3) The functions of Export Import Bank of Bangladesh Limited are followings:

a. To maintain depositsb. To make investmentc. To conduct foreign exchange businessd. To extend other banking servicese. To conduct welfare activities

4.4) Foreign Exchange Division of EXIM Bank Ltd:

As I have passed most of my time in the foreign exchange division, I (we) need to have clear concept about the letter of credit in a bank. That’s why I gave a brief description about LC:

The clause of the credit authorizing the negotiating bank to provide pre-shipment advance to the beneficiary is printed/ typed in red, the credit is called “Red Clause Letter of Credit.” Under the said clause, the opening bank is liable for the pr-shipment advances made by the negotiated bank, in case the beneficiary fails to repay or deliver the documents for negotiation.

PARTIES OF A LETTER OF CREDIT

Within a L/C, there are several parties and every party has different liabilities and rights. The names of the parties are given below;1. Importer or Buyer

The party who request or give order the bank to open L/C is called Importer or Buyer. This party also called L/C opener or Applicant.

2. Opening or Issuing BankThe bank who open or issue L/C in favor of the Importer is called L/C opening or issuing bank. The L/C opening bank is also entitled Importer or Buyer bank. 3. Exporter or Seller or BeneficiaryThe L/C is opened in favor of that party is called Exporter or Seller or Beneficiary. 4. Advising or Notifying BankAdvising or Notifying Bank is the bank by whom L/C is advertised to the exporter. This bank is generally situated in exporter’s country. 5. Confirming BankThe bank which adds confirmation of its own to the L/C is called Confirming Bank. It has been done on the request of L/C Issuing Bank. The Advertising Bank himself becomes Confirming bank or any other Bank.6. Negotiating BankThe bank that negotiates and pay bill to the beneficiary is called Negotiating Bank. The Advertising Bank and the Negotiating Bank will be same or not.7. Paying or Reimbursing BankAccording to the condition of L/C, the L/C is prepared on the bank is called Paying or Reimbursing Bank. This bank becomes Issuing bank or not.

CONTENTS OF LETTER OF CREDITIn the L/C, the following terms are included

1. The name and full address of L/C applicant.2. The signature of person permitted by L/C applicant firm.3. The name and full address of Beneficiary4. The name and date of L/C5. Type of shipment with total cost 6. Type of payment7. Short description of product8. The name of the issuing firm with proforma voice or indent number9. The fixed date of loading and the destination harbor.10. The expired date of L/C11. the chart of required documents

12. The number of IRC and L/C13. The direction for payment of bank charges14. The name of the medium by which L/C is sent.If additional directions are available than those must be mentioned in L/C

STEPS INVOLVED IN OPENING LETTER OF CREDIT

Opening letter of Credit means the bank issuing L/C on the request of applicant/ importer in favor of exporter/beneficiary. The bank by which L/C is opened is called L/C opening or Issuing Bank. The applicant/ Importer expresses desire by writing on own Letter Pad to the selected bank. Afterward, the following steps are seen to taken for opening L/CA. Steps Taken by the ImporterThe importers of both sectors Government and Private need to submit the following documents to the bank for opening the L/C forms;1. Letter of Credit Authorization Form Duly Filled in & Signed.2. Letter of Credit Application Form Duly Filled in & Signed.3. Indent or Proforma Invoice Issued by the Indenter or Foreign Supplier.4. Insurance Cover Note.5. Import Permit Duly Filled in & Signed6. Written Application for Opening L/C in the Letter Pad of the Firm.7. The importers of Government sector will submit attested permission copy form

Administrative Ministry or Division or Authorities.

The private sector importers will submit the following documents in addition1. The legal membership certificate from registered local business and trade society or trade or business society representing the special type of business for whole Bangladesh. 2. The certificate of payment of renew fee of import registration certificate of certain year.3. The three declaration paper of payment of tax of previous year of importer or submission of income tax return 4. The proven paper of tax identification number (TIN) receives in the case of other objective of import except personal uses.5. Under the principle import law of 2003-2006, the papers or necessary documents that the main controller notified by government notices or wants by direction or will want.

B. Steps Taken by L/C Opening BankThe bank will check the following matters before opening L/C1. To check the signature with seal of L/C forms. 2. To check the signature of both parties of suppliers of Proforma Invoice.3. The compares of the product & price of L/C and L/C forms that both are same.4. Whether the exchange rate mentioned accurately.5. Whether there is insurance cover note in the name of issuing bank. 6. Whether there any direction to negotiating bank according to bank’s rules. 7. Whether reimbursement clause is available.8. Whether the interest rate is mentioned in the case of youjence L/C.

Besides these, bank will sure about the following matters & takes necessary steps.

1. The selected bank will sure about the matters when receiving L/C, A form from all private importers.

A. The selected importer has legal import registration certificate (I. R. C) B. The renew fee is paid accordingly of that year. AndC. the description of treasure invoice is recorded in I. R.C accordingly.If the private sectors importers haven’t certificate of without I. R.C, the L/C, A form will not accept or debenture will not establish without the legal I.R.C.

2. In the case of import of goods in land port, the name of the festinated land port is mentioned in all debentures.

3. To import capital machinery and primary machinery for new settled industry, L/C is opened without the registered import certificate. In that case, no need to collect the IRC cancellation letter from the department of main import-export controller. In the case of free sectored industry, the formal gradation letter is not necessary to the sponsor to import capital machinery & machinery by cash foreign currency

4. to record the H.S code no: Bank will not permit any L/C forms until record the H.S code systemically.

5. Registration of L/C, A forms: Cash foreign currency, product pledge, donation and other cases where the registration of Bangladesh bank is necessary, in that cases the selected bank will send five copies of L/C, A form to the registration unit of Bangladesh bank. The 1st and 2nd copies of L/C,A form’s will send to the selected bank and 4th and 5th copies to the authorities of import control for auditing and record within fifteen (15) days.

6. The rules of those sectors where the L/C, A form registration is not necessary against the Government sanction: Import under loan, donation, negotiation or special commerce deed where the Bangladesh bank registration is not necessary, in that cases, selected bank records the above description in the importers L/C, A form. Then the importer requests the selected bank to open L/C by sending L/C, A / L/C application form with others necessary documents. Then the selected banks opens the L/C, A form and send 3rd and 4th copy of that form to the authority of import control within 15 days.

7. L/C, A form in cash foreign currency: In the cases of importing in cashforeign currency, foreign currency is purchased with the permission of Bangladesh Bank. Only these cases the declared L/C, A form in cash foreign currency will registration in the registration unit of Bangladesh Bank. The Rubber Stamp entitled “Declared in cash foreign currency” will print on the right corner on all the declared L/C, A form. The bank that opens debenture against issuing cash foreign currency, will sent 3rd and 4th copy of L/C, A form to the authorities of import control of related area within fifteen (15) days after opening the debenture.

8. Sending copy of bond to import controller authority for recording: after opening a bond, related bank sends a readable copy of bond and if it is rectified then a copy of that bond to the import control authority for recording it within fifteen days.

9. Sending income tax notice which is submitted by private importer: The related

private importers nominated bank will keep one copy of income tax notice which is

submitted by importer and send another copy to the director of NBR or national board of revenue, Shegun Bagicha, Dhaka.

10. Changing of nominated bank: the nominated bank can be changed by informing the local import export controller portfolio with giving approval of both of the registered bank.

There are many formal and informal matters involved in opening import L.C or departure or bond. In many factors the liability of bank is shown excessively in that situation the importer should not overlook his responsibility. The importer should regularly supervise that whether the bank is doing his tasks in proper way or not and it should have full skill and experience about every steps of bank. Because, importer has to bear the liability of LC.

4.5) Retirement of Documents:

After sending the contractual goods in the ship. The seller starts collecting and preparing documents which is mentioned in the bond/debenture. The exporter submits the bill of lading through collecting from shipping company and trade invoice, certificate of origin, packing list, bill of exchange, etc to the bank after preparing all of there. Bank receives the documents from their customer and negotiates in the furtherance of the contract. After that, negotiating bank send the shipping documents to the bond opening bank.After having the shipping documents from the negotiating bank, the L.C opening bank examines the documents in furtherance of the contract.

The fact, which has to be examined, very well is written below:1. The documents has been negotiated within the précised date or period 2. The written value of the documents should not be more than the amount

showed in the bond3. The bill of exchanger has to be drawn as same as the bond 4. Whether the invoice has been written in importers name or either the

description of goods, no of product, weight, value etc has been written accurately.

5. Bill of lading: It is an important document used in foreign trade without submitting this paper, the importer not able to discharge the goods from the port. The following statements should be examined for assuring that the bill of lading is flawless.

The goods are being lifted in the ship The endorsement are being directed by the issuing bank and the

paid freight In which port the goods are being lifted and in which port the

goods will be discharged should be mentioned. The name of the importer, the date of shipment has written in

furtherance of the contract and the bill of lading has been signature accurately by the shipping company or his agent

The date of bill of lading is not expired. 6. the same certificate has given which has been asked in the bond

7. Other documents such as- weight statement, packing list and pre-shipment superintendence certificate etc are being collected and whether they are related to the conditions of the bond.

In case any fault has been seen in documents, the bank immediately informs the importer, whether it is acceptable or not. If the documents are not acceptable by the importer then L.C opening bank send message by telex, fax, or emails to the negotiating bank for perceiving what namely has to be taken.

The documents can be spotters or it may have fault. But if it is acceptable by the importer then it should be placed as debit in payment against documents account. Bills for collection selling rate which is existent in the date lodgment should be placed as debit in customers account after lodgment, bank will suggest the importer for paying bill and in this matter which due money should be paid, the sector of due money has to be mentioned clearly in the lodgment period.

Importer can follow the following steps for discharging the documents from the bank:

1. The documents can be collected through paying dues to bank in cash.

2. Importer can collect documents from bank by opening. Loan against import merchandise or LIM account. This account is one type of loan opportunity given by the bank to importer. In this matter, the goods are being stored in bank’s own warehouse after clearing goods. Importer pays the value in installment system and collects the goods from the bank in the rule of installment.

3. Letter of trust receipt-LTP: Importer can collect the documents from bank by opening a LTR or letter of trust receipt. By LTR account, bank can stretch out loan opportunity for importer. In this matter, bank does not took responsibilities of goods. Here, the importer pays the due money of bank by taking responsibility of the imported goods and selling that goods. (A sample of letter of trust receipt or LTR has given in the termination part of the chapter)

4.6) Step involved in clearing goods:The foreign supplier send the main document of clearing foods by the beneficiaries to L.C opening bank within the mentioned period after the shipment of goods.In case, if the importer deposit any L.C in the financing of bank, then the bank is bound to give the main document of clearing goods to the nominated C&F agent.If the financing of bank does not satisfy the importer, then they can make arrangements for clearing goods through their nominated C&F agent.The nomination of clearing goods should be nominated in written from to the C&F agent. Along with the nomination the documents which are endorsed by the following banks are being transferred by the C&F agent:

1) BL on AWB on travel receipt 2) Commercial invoice3) Packing list4) Certificate of origin. 5) Master L.C6) Letter of credit authorization-LCA7) Insurance cover note8) Clean report of findings

After having these aforesaid documents, the nominated C&F agent of importer takes the following step for clearing goods:

1) Bill of entry: The C&F agent usually prepares the bill of entry in favor of importer. The description of imported goods, the quantity and foreign exchange rate is being mentioned in the bill of entry. Along with the conversion of foreign exchange rate to local exchange rate, the value of imported goods has to be mentioned in taka. Besides this, the name and address, the source no of documents and the related matter of exporter and importer have to be mentioned in the bill of entry.

2) Submission of Bill of entry to customs authority: After preparing the bill of entry, the C&F agent submits the bill of entry along with all of the related documents of clearing goods to the customs authority. Along with the bill of entry the customs department investigate the imported goods in the spot. And according to the rule, the authority changes the import duty. After this , the importer deposits the imposed amount of import duty by the appurtenant bank. After having the receipt of import duty, customs authority gives the clearance of clearing goods.

3) Collection of delivery order-DO: after collecting the clearance from the customs authority, it has to be deposited to the appurtenant shipping agent. Shipping agent issues a delivery order to importer in the completion of their asset – liability expectant/ conditional

4) Payment of jetty charge: After receiving the delivery order, it has to be submitted to the port commissioner by filling up the jetty invoice in favor of importer and with this the jetty charge and other freight has to be paid. After accomplishing the foregoing proceedings, C&F agent can discharge the clearing goods from the dock superintendent.

5) Consignment received finally: After receiving the goods from the dock superintendent, importer can bring the responsibility of goods in two way:

a) Incase of releasing foods by the letter of trust receipt, the importer directly arranged the preservation of goods in his own warehouse.

b) In case of loan against import merchandise, the preservation of goods is arranged in the warehouse of appurtenant bank. In this case, the importer has to give the letter of hypothecation to the bank. Initially, if importer desires, he can take the chance of having loans from bank by depositing keeping letter of hypothecation for paying the value of bill.

4.7) Back to Back letter of credit:

An importer takes any one step after receiving letter of credit from foreign buyer due to gather importing goods:1) An importer can take the chance to buy exporting goods in cash for export which is almost impossible.2) To gather exporting goods or to buy exporting goods from another firm, exporter can establish another L.C by mortgaged export L.C in bank. In business term export L.C is called master L.C and which L.C is opened depend on master L.C is called back to back L.C. Generally back to back L.C is opened amounted to taka 75% of net F.O.B value of master L.C. Back to Back L.C is opened based on usance. But it may be opened based on at sight basis. At sight back to back L.C is opened from finance of Bangladesh bank under export development fund scheme (EDFS). EDF facilities are an export incentives declaring by Bangladesh government. These facilities give due to enhance export remittance. Under this facility, an exporter can import raw materials against finance of Bangladesh bank from

foreign country. In that case, importers have to pay loan amount with interest within 180 days (270 days on request) and the interest rate is 1% greater than LIBOR rate. Bangladesh ready made garments, production and exporting institutions collect raw materials ready made garments through back to back L.C. Back to Back L.C can be open over foreign supplier or local supplier. Exporters open back to back L.C according to instruction of Bangladesh bank.

Condition for opening back to back letter of credit1) Only those approved exporting industries who have legal register certificate from CCI

& E and bonded warehouse license can open back to back L.C2) There is need to enough time in master L.C for collection of raw materials, production

and shipment.3) The value of back to back L.C must be less than the F.O.B value of master L.C. If

freight charge, insurance cost and commission are included in F.O.B value of master L.C, that must be eliminated/ deducted.

4) Any change of renew in master L.C is noted carefully. 5) Back to Back L.C is not permitted under the situation of barter/ SPA (special trading

agreement) before taking the permission of Bangladesh bank.6) Inspection certificate about the quality and the quantity of the goods before shipment

from international inspection firm is included in the case of importing back to back letter of credit.

Documents used in back to back LC:

Following documents are used for exporting garments:1. Master LC2. LC application and agreement form duly filled in and signed. 3. Proforma invoice or indent4. Insurance cover note with money receipt. 5. Indemnity bond for tk.1506. IMP form in case of import from foreign country.7. LCA form duly filled in and signed8. Valid bonded warehouse license.9. Textile permission from ministry of textile.10. Export credit guarantee – ECG policy11. Valid IRC and ERC12. Membership certificate of BGMEA

1. Factors related to back to back LC application form:a) Whether the application form signature by the applicant along with the name

and address of the applicant.b) The date and place of clearing goods, the date of submission documents and

the expired date of LC c) Name and the address of the beneficiary d) The type of repaying price and price of LCe) Confirmation clause.f) Name of the port of shipment, partial shipment, Trans shipment, type and

route of transport.g) Country of origin.h) Description of goods of the company.

i) The name of number of necessary documents and paper for negotiating.j) Further any condition applied.

2. Factors related to export LC on master LC:a) Whether the LC issuing bank is renown or not.b) Whether the LC is authenticate or not. c) The no. of LC, the date of issuing LC, advising bank, confirming bank, the

financial establishment of the beneficiary on applicant.d) The date and time of shipment and negotiation. e) The unit value of goods with description.f) The quantity and total value of goods.g) The condition of supply. h) The type of shipment, partial shipment, and trans-shipment is grantable or not.i) Whether the incorporation of UCP is certainly mentioned in LC or not.j) Insurance clause.

3. Inspection of textile permission:a) The permission of textile should be in the name of back to back LC applicant. b) The production capability of the factory. c) The collection of inspection period of supplying before opening a LC

4. Inspection of proforma invoice:a) Invoice is to be signature by the buyer and seller.b) The condition of supply.c) The name of the port for shipment.d) The type of transport.e) The unit value, quantity and HS code of goods with descriptionf) The date of issue and no of invoiceg) The capability of the supplier.h) Whether the described goods of invoice is importable in against of bonded

warehouse license.i) The no of indent incase of indent and the approval no of Bangladesh bank.j) Whether the total value of LC is certainly less than the value of FOB in master

LC.k) Whether the value of goods is competitive or not.

5. Inspection of insurance cover note:a) Whether the cover note is in the mentioned currency.b) Whether the value of cover note is calculated after adding 10% with the value

of LC.c) Whether all of the related risks are covered.d) Whether it is issued by the name of bank.e) Whether the value is determined on the basis of essential time.f) Whether the name of the port for shipping and clearing of goods, the type of

transportation which mentioned in the cover note is similar to invoice on indent.

g) The date mentioned in the cover note can not be determined after the date of LC

h) Whether the receipt of collection money is attached along with cover note.

i) The cover note must be reinsured by the general insurance corporation which is issued by the private company.

6. Inspection of IMP form :a) Whether the complete IMP form is signature by the applicant or not.

7. Inspection of LCA form:a) Whether the LCA form is signature by the applicant or the authorized person

of the company. b) The description of goods should be explained along with the HS code.

The bank will scrutinized the above factors with care.

The payment of back to back letter of credit: The due of back to back LC is to be paid within the expired period. In case, the goods mentioned in master LC is not exported or the money is not collected or the dues of back to back LC can not be covered by the value collected from exporting, the dues of back to back LC should be paid in due time. A letter is send to national revenue board and related tax commissioner to inform about unable for exporting with details. One copy of this letter along with an application for granting the payment of back to back LC to Bangladesh bank.

In the above process Internal Back-to-Back L.C. can be opened for procuring the ingredients for exported items.

Example:

The process of opening Back-to-Back L.C. (Letter of Credit) by any company is shown by a fictitious example- Let us assume, company “A” of Bangladesh opens a L.C. for exporting 5 thousand T-shirts valued at 1 hundred thousand dollars. In order to execute the purchase order, the company “A” should collect this cloth from any other country outside Bangladesh. Let us assume that, the importer entered into an agreement with company “C” of Singapore for the purchase of cloth worth 65 thousand dollars and accordingly procured a pro-forma invoice. The businessmen of Bangladesh, locally tem the L.C. received from America as Export L.C. or Master L.C. Now, the exporter submits the master L.C. of company “B” to its designated bank and applies for the Back-to-Back L.C. Along with the master L.C., the pro-forma invoice procured by the company “C”, and Utilization Declaration (UD), the exporter collects other papers generally required for opening a L.C. from the bank and submits after duly filling it up. The bank examines all the papers and verifies whether the calculations are consistent with master L.C. and then opens the L.C. This is called the Back-to-Back L.C. All the conditionality of other import L.C.s is mentioned in the Back-to-Back L.C. However, the number and date of master L.C. should be clearly mentioned in the Back-to-Back L.C. as an additional requirement.

4.8 ) Import Procedure of Industrial Goods:

The Import Policy Order 2003-2006 approved by the Ministry of Commerce of the Government of People’s Republic of Bangladesh stipulates the following rules and regulations for importers in the industrial sector.

Where commercial import of a good is not possible and its import is allowed by industrial consumers only, industrial consumers accepted on a regular basis may import up to three times the value of the entitlement for such items.

Industrial consumers accede on an adhoc basis may import the above mentioned restricted items only up to double the value of the half-yearly amount as recommended by the sponsoring authority.

The industrial consumers, upon acceptance of the first adhoc share, will apply to the Chief Controller of Imports and Exports (CCIE) through its sponsoring authority for regulation of its import entitlement. The entitlement and the Import Registration Certificate (IRC) of the concerned industrial consumer will be regularized on the basis of recommendation of the sponsoring authority after it uses up at least 80% of the adhoc share. Otherwise, clearance for release of second adhoc share will be issued.

The adhoc IRC of the concerned industrial consumer will not be renewed until and unless CCIE issues the second adhoc share or regularize the import entitlement on the basis of recommendation of the sponsoring authority.

If the import entitlement of an industrial consumer is not regularized upon complete use of its first adhoc share, permission will be given to it for second adhoc share on the basis of recommendation of the sponsoring authority. The second adhoc share will be issued to the industrial consumer after it uses the first adhoc share. On the basis of recommendation of the sponsoring authority its adhoc import entitlement and adhoc industrial IRC could be regularized.

In case of import by those sectors of industries for which entitlement has been fixed on the basis of more than one shift, units on the basis on a regular basis, under such a sector, shall not be eligible to import more than 100% of the annual entitlement for such restricted item like raw materials and packaging materials accepted on an adhoc basis, under such a sector, shall not be eligible to import more than 100% of the half-yearly amount for such restricted items.

For import of restricted items by the industrial units in the public sector their actual annual requirement for the item concerned shall be determined and necessary approval from the Ministry of Commerce shall be obtained for importation of the same on the basis of specific recommendation of their administrative ministry at the beginning of each financial year.

Incase of Import of industrial raw materials/ packaging materials/ spare parts against regular industrial IRC where exemption of advance income tax and special financial facilities has been given, these items could not be imported in excess of maximum three times of import entitlement even if these are freely importable items.

In the Import Registration Certificate (IRC) issued in favor of industrial consumers by the office of Chief Controller of Imports and Exports (CCIE), the amount of the total import entitlement should be clearly mentioned both in number and words. In addition the regional of CCIE at the time of issuance of IRC, will furnish to the industrial consumers, a counter signature entitlement paper recommended by the sponsoring authority.

In case of allopathic medicine industries and export oriented garments, hosiery and specialized textile industries operating under bonded warehouse system these are some deviations of the above regulations.

An importer in the industrial sector is generally entitled to import raw materials, spare parts and other relevant materials which are used in his industry. In accordance with the decision of the departmental import procedure, the importer

himself may collect the required pro-forma invoice directly from the foreign supplier or through an indent house in order to initiate the import of goods. After this, the importer applies duly to its designated bank for opening of L.C. The import procedure is completed after taking steps like informing the foreign supplier at due time about opening of L.C., release of import documents after shipment of goods by the foreign supplier, release of imported goods etc.

4.9) Import Procedure of Commercial Goods:

According to the import order, 2003-2006, here is some rules & regulation for commercial importer which are issued by commerce ministry of Government of People’s Republic of Bangladesh.

Commercial import mainly occurs in cash foreign exchange. Upon certain money availability, imports of few commercial goods may be allowed under Government allocation. In such cases goods name, sources of finance and other condition will be notified by main controller.

Industrial raw and packing materials and spares which are not included in the banned and restricted lists shall be freely importable under cash foreign exchange by commercial importers.

Foreign Firms which are registered in Bangladesh under the companies Act, 1994 (18th number law of 1994) will be allowed to import permissible commercial items against their commercial import registered order paper, without any prior permission from the Chief Controller, However, in such cases of import of commercial items Foreign Firms shall inform the Office of the Chief Controller in writing the detailed information of the item (e.g. HS code of the item, description of the item, quantity, value, name and address of the exporting foreign firm etc.) before starting the import.

In the Import of capital machinery for commercial purpose, Registered Commercial Importers may import allowable items of industrial capital machinery and accessories under cash foreign exchange without any value limit for commercial purpose.

Besides this, following the above mentioned rules & regulation import may possible for legal & licensed goods on commercial basis.

Normally commercial importer owned the import of reserved commodity for resale by his company. In accordance with the decision of the departmental import procedure, the importer himself may collect the required pro-forma invoice directly from the foreign supplier or through an indent house in order to initiate the import of goods. After this, the importer applies duly to its designated bank for opening of L.C. The import procedure is completed after taking steps like informing the foreign supplier at due time about opening of L.C., release of import documents after shipment of goods by the foreign supplier, release of imported goods etc.

4.10) Financing in Import Trade:

To supply money in import trade is the mostly large activities of commercial Bank. Naturally import credit is less risky than other credits and it is very profitable for business. For that reason commercial Banks are excited to financing in Import trade.

Pre-Import Credit:

After complete the purchase agreement with seller or foreign supplier, from then to goods shipment, the whole processing time is called pre-division procedure. In that section Bank mainly giving the opportunity of credit to the importer by establishing the Letter of Credit. Subject to this matter that establishing the noticeable Letter of Credit, bank may not pay the cash immediately from the fund but it keeps at possible credit in the bank book. If the main importer failures to pay the freight charge then bank will take this responsibility. For that reason Letter of Credit maintains all the formalities and cautions just like normal credit procedure.

In fact Letter of Credit is an essential means of international trade. It helps to connect with mutual unknown purchasers in Export-Import trade. Before establishing the Letter of Credit one must careful about the capacity and honesty of local importer as well as foreign buyer.

After receiving the negotiating documents related with shipment from bank if importer fails to pay for goods, the regarding bank may be responsible for paying money for the good and unloading those imported goods. To face that situation, bank demands margin in the form of cash before opening L.C. so that the bank can recover its loss with the marginal amount if the selling price of the good is less than its debt.

Generally, foreign exporter get price for his goods by presenting all documents of shipment to the negotiating bank if import is done through Letter of Credit. After sending those documents to the opening bank, the later bank collects money of the bill from importer and handover those documents.

Post Import Credit: Post import credit is called that kind of credit which is managed for unloading and warehousing the imported goods. Importer should bear its price, duty and sales tax etc. after reaching the goods in the port. Importer comes to the bank to settle one position of these payments because of fund deficiency. Most of the time, importer does not come at all to unload those goods. In these cases, bank unloads the goods with its own accord and loan to the importer’s account, which is called forced loan in the banking terminology. Importer can take loan facility by the following names.

1. Loan against Import Merchandise: Post import credit is denoted as LIM or LAM. Generally, it is a short term loan that must be paid within one month. Most of the time, importer repays the loan after selling the imported goods gradually.

2. Loan against letter of Trust Receipt (LTR): Import documents are delivered against LTR, issued by the importer, to the bank for unloading goods. Generally, this facility is given to the importer of government sector or the reliable clients of the bank. This type of loan is also granted to those people who take other types of loan facility from the bank. This facility is granted for maximum three months.

On the basis of deferred payment, exporter submits bill of exchange, drawn over importer, to his bank to discount it by the importer’s bank. His bank collects money from the importer’s bank after maturity of the bill. Importer’s bank repays the amount of bill by debiting importer’s account. In most cases, bill is paid by debiting party’s account.

Risks in Import Finance:The following risks may be occurred in import financing,

1. Fraud in Documentation: Foreign seller can open Letter of Credit by presenting duplicate license and other fake documents.

2. Attempt to import banned items: Importer can also attempt to open L.C. for importing banned goods.

3. Fraud in L/CA Form: Bank may face difficulty if letter of credit is opened without registering the L/CA form.

4. Absence of Insurance: Bank may face difficulties in collecting receivables if the goods are damaged moreover the goods are not insured.

5. Opportunity of Inadequacy of information about exporters: Without collecting any kinds of report about honesty and goodwill, importer creates business relation with the foreign seller or exporter. But sometimes, exporters collect money from the negotiating bank by opening L.C. submitting fake shipping documents. But in later, both bank and importer faces loss due to false documents and unravel of goods in the country.

6. Reducing price of Products: Sometime, importer does not clear import bill and pay payable due to demand reduction of import goods, price reduction and increased cost of unloading goods. In this situation, bank faces difficulty with those import goods. Most of the time, bank sells those goods in the market and carry the loss occurred.

7. Reduced Market Demand: importer may unable to unload imported goods under AAM because reducing market demand. For this reason, bank faces problems.

8. Insolvency of Importer: Most of the time, insolvency makes the importer unable to retire the bill. And this creates extra problem for the bank.

9. Misuse of Trust Receipt: Many dishonest businessmen does not pay their dues after unloading when they import goods against trust receipt.

Withdrawal of excessive Goods: Sometimes, importer withdraws goods with the help of wear housekeepers without depositing money or withdraws excessive goods which are more than the deposited money. Generally, it hampers the bank’s goodwill.

4.11) Import control:In case of import, most of the nations take some policy to control their import and foreign currency. Different country adopts different policy. Exporter should aware about the general characteristics and different aspect of those policies. Import control policy implement for following reason:a) To record about the nature of import, quantity and the value of import goods.b) To ensure the frugality of foreign reserve.c) To restrict the import of sensible goods.d) To ensure the full utilization of shipping space.Success of import control policy depends on the fully awareness about the clause of the rules and its feasible implementation of this knowledge. Because, misuse of import control policy may hamper the natural import flow of a nation, which result the reduction of production and

competence of commercial activities.The nature of import control policy also depends on its goods. However, all policy defined as a trade barrier in business. Import control policy divided into two categories:

Tariff barriers: Almost all countries in the world impose tariff for their import. This tariff may impose on the basis of the value of the goods or on the basis of per unit. Some developed countries give some privilege about tariff to developing countries for import goods under GSP. Again, if the exporting nation has agreement of "Most favorite nation" with importing nation, exporting nation can get some benefit about tariff under GATT. It is clearly understand that Bangladeshi goods can enter into foreign market under the tariff privilege of GSP. Import tariff generally collect from the destination place of the goods and the importer make the payment. Therefore, this tariff should not be included in the price quotation, given to the importer, if instructions are not given in the sales order.

Foreign Exchange Control: Sometimes the exporters may face problems related to the control of foreign exchange in the importer’s country. This fact is applicable for the developing importing nations. Because, these counties are overthrown under the scarcity of perpetual foreign exchange. In this situation, the central bank of the related country strictly controls the matter of allotting foreign exchange for import. This control is generally applied to certain classified commodities. In certain cases, import is restricted for only the necessary goods. As, bringing exporting commodities according to the sales order is very importantly under the consideration of the exporters, so they should be completely careful about the importing country’s foreign exchange. So that, this may be easy for the exporters to justify the suitable commodities and markets. And the countries, can be avoided, from which, problems may rise in bringing the foreign currency earned from sales.

Basic Concepts:1. B.C (Bills for Collection) selling rates: The B.C selling rate is the exchange rate for the repayment of the bill made by the foreign exporters or their banks drawn on the importers or their banks.2. Revocable Letter of Credit: A Revocable Credit is a credit which can be amended or canceled by the issuing bank at any time without prior notice to the seller.3. Irrevocable Letter of Credit: An Irrevocable credit constitutes a definite undertaking of the issuing bank, provided that the stipulated documents are presented and the terms and conditions are satisfied by the seller. This type of LC cannot be canceled or amended without the consent of all the related parties.4. Revolving Letter of Credit: The revolving credit is one which provides for restoring the credit to the original amount after it has been utilized. How many times it will be taking place must be specifically mentioned in the credit and will not be more than the total amount, mentioned in the credit at any situation.5. Transferable Letter of Credit: A Transferable credit is one that can be transferred by the original beneficiary in full or in part to one or more subsequent beneficiaries. The term “Transferable LC” should be written on the main credit. In case of partial shipment, the term “Partial Shipment is not prohibited” should be written on.6. Back to Back Letter of Credit: The Back to Back Letter of Credit is a new credit opened on the basis of an original credit in favor of other beneficiaries. Under Back to Back concepts, the seller, as the beneficiaries of the first credit offers it as security to the advising

bank for the issuance of the second credit. The Beneficiary of this credit may be located inside or outside the original beneficiary’s country.7. Anticipatory Letter of Credit: The anticipatory Credit makes provision for reshipment payment to the beneficiary in anticipation of his effecting the shipment as per LC conditions. The exporters get the chance of accumulation of wealth for collecting or gathering the preparation components of the ordered commodities.8. Red clause Letter of Credit: When the clause of the credit authorizing the negotiating bank to provide reshipment advance to the beneficiary is printed in red, the credit is called “Red Clause Letter of Credit”. Under the said clauses, the opening bank is liable for the pre-shipment advances made by the negotiated bank, incase the beneficiary fails to repay or deliver the documents for negotiation.

9. Parties related to Letter of Credit: More than one party may be involved with a LC and their responsibilities may be different. The notable parties are mentioned below:

1. Importer/ Buyer;2. Opening or issuing bank of LC;3. Exporter/ Seller/ Beneficiary;4. Advising or Notifying Bank;5. Confirming Bank;6. Negotiating Bank;7. Paying/ Re-Inversing Bank

10. Opening/ issuing Bank: The bank that issues LC in favor of the importers is the LC opening or issuing bank. It may also be known as “The importers Bank” or The Buyers Bank.11. Advising/Notifying Bank: Advising /Notifying Bank is the bank through which the LC is advised to the exporter. It is a bank situated in the exporting country and 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 credit.12. Confirming Bank: Confirming Bank is a bank, which adds its confirmations to the credit, and it is done at the request of the issuing bank. The Advising Bank, situated in the exporters country or any other bank may give this confirmation.13. Negotiating Bank: It is the bank, which negotiates the bills and 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 and The Negotiating Bank may or may not be one and the same. Sometimes, it can also be the confirming bank.14. Paying / Re- imbruing Bank: Paying /Re- imbruing Bank is the bank or whom the bill will be drawn as per conditions of the credit. It is nominated in the credit to make payments against stipulated documents complying with the terms of the credit. It may or may not be the issuing bank.15. Bill of Lading: The bill of lading is a receipt endorsed by the captain of the ship as a proof of loading of goods in the ship. It gives the importer ownership on the imported goods. Because, with the help of it the importer can clear the goods from the shipping company. Through it, the shipping company promises the exporters to carry their goods to the attainable port in exchange of fair. So, it is also known as the agreement of ship rent. The term “freight paid” is written on the re- payment of fair by the exporter. But if they do not do so “freight forward” is written on. 16. Nostro Account: Nostro account means “our account with you”. A nostro account is a foreign currency account of a bank maintained with its foreign correspondents abroad. For example – Agrani Bank, Dhaka’s US dollar account maintained with Citi Bank N.A New York, USA is a Nostro account of Agrani Bank i.e. from the point of view of Agrani Bank it is their Nostro Account.

17. Vostro Account: Vostro Account means “your account with us”. The account maintained by a foreign correspondent in a bank of a particular country is known as Vostro account. For example, State Bank of India’s Taka account maintained with Agrani Bank, Dhaka is a Vostro account i.e. from the point of Agrani bank it is Vostro Account held for State Bank of India.

18. Loro Account: The term ‘Loro’ is an Italian word. It means- “their”. If the two master banks have their Nostro Account with the same foreign bank in the abroad, one’s Nostro account will be the Loro Account for another. For example – The NBL Bank and the Agrani Bank Maintain Vostro Account no. 1 & 2 respectively with New York’s chess Manhattan Bank, Agrani Bank’s account no 2 is the Loro account for the NBL Bank.

19. G.S.P: The G.S.P or Generalized System of Preference is a new addition to the world trade. Under this system, certain developed nations arranged to fix duty at the rate of remission in case of importing certain commodity from the developing nation. This duty facility is provided by the imposition of zero or decreased rate of duty on the imported goods. Under the G.S.P system the country, enjoying duty facility, are known as the Receiving Country.

20. Utilization Declaration – UD: The Utilization Declaration is the approval given for the import and ware housing of raw materials and other commodities of exportable goods of the RMG exporters and goods, produced by those materials and other related commodities, circulated by the national Board of revenue according to propaganda no-271/law/94/1564,dated 19/9/94.

The exporters will prepare the calculation for the essential raw materials of the exportable goods and the nominated BGME members will give permission by their signatures. After the completion of the export process the export import balance statement has to be presented timely to the collector of jurisdiction along with the attestation of the Lien Bank.

Consular Invoice: Basically, it is a copy of the invoice. But it has to be signed by the Consular of the importing nation. That is, the Invoice constructed by the exporter and signed by the consular is known as the Consular Invoice. Sometimes, the Consular is appointed to the exporting country on the part of the importers. The exporters have to submit three copies of constructed invoice to the consular before sending goods to the importers.

The consular signs these copies at his satisfaction of scrutiny and keeps one copy for him. He sends the other two copies to the port authority of the importing country and to the exporter. The exporters send the consular invoice to the importers along with shipping documents.

22. Bill of Entry: This is just a license by the appropriate authority on the delivery of imported goods. The clearing agents, on the part of the importer, or the importers themselves present the form to the authority by filling it up with all essential documents after the ship loaded with imported goods, reaches the importing country’s port. This form with full description of goods is the Bill of Entry.

The importers have to prepare 8 copies of it and to submit 7 copies to the customs authority by keeping one for them. The customs authority determines the tax amount after scrutinizing these bills. The goods are being permitted for clearance after the importer, or any other

person on behalf of the importer, pays the tax. The topic mentioned in the bill of Entry involves:

1. Name & Address of the exporters;2. Name & Address of the importers;3. Value of the imported goods;4. Ship rent & other costs;5. Idea about the size, shape & Measuring unit of the goods;6. Total no of packets etc.

23. Delivering order/ DO: It is a circulation to the harbor master by the shipping authority. With the help of it, the instructor, orders the harbor authority to deliver goods to the definite person. The importers make arrangements for the delivery of goods after receiving these instructions. It is mentionable that, if the exporters do not pay the rent it has to be repaid by the importers before delivery of goods. Otherwise, the shipping authority will not give the delivery order.

24. Lodgment: After receiving the main shipping documents, the importers bank check up those with the LC, and record the Inward Foreign Documentary Bill for collection (IFDBC) kept in the in the register. This is called – Lodgment. If there is any type of faults, it has to be informed within 7 days. Also the importers have to be informed about these faults.

25. Indent Firms: It is one kind of intermediate firm. This kind of institution does not import products directly. There basic function is to create opportunity for opening LC by issuing indent to the domestic importers and searching for foreign supplier of certain products. In exchange they get commission from the foreign supplier as per agreement. To get Registration certificate as indenter they have to apply in a specific form provided by the export import controller office.

26. Usance back to back LC: The back to back LC’s in which, the specific period of repayment is mentioned is the Usance back to back LC. These kinds of LCs may be of 30, 60, 90 or 120 days. Generally, the repayment date of the back to back LC is determined by calculating the period of receiving value from the export LC. Chapter5Expected Hypothesis

The expected hypotheses

1. To find out the limitations in international financing by the bank.

2. To find the possible solutions that foster the international trade so that business man can

export and import different products so that they can play and important role in our economy.

3. To find the expected hypotheses my sample size is 20.

Regression (MPS & DSE All):

Variables Entered/Removed (b)

Model Variables Entered Variables Removed Method1 DSEALL(a) . Enter

a) All requested variables entered.b) Dependent Variable: MPS

Model Summary

Model R R SquareAdjusted R Square

Std. Error of the Estimate

1 .788(a) .621 .612 7.65877a) Predictors: (Constant), DSEALL

ANOVA (b)

Model Sum of Squares df Mean Square F Sig.

1 Regression 4223.711 1 4223.711 72.007 .000(a)

Residual 2580.897 44 58.657 Total 6804.609 45

a) Predictors: (Constant), DSEALLb) Dependent Variable: MPS

Coefficients (a)

Model

Unstandardized Coefficients

Standardized Coefficients

T Sig.B Std. Error Beta1 (Constant

) 196.003 34.467 5.687 .000

DSEALL .235 .028 .788 8.486 .000a) Dependent Variable: MPS

In this regression analysis depended variable is MPS and independent variable is DSE all share.

By using this analysis we found R square is .612, which means 62.1% of the dependent variable is explained by the independent variable. Where variable depended is MPS and independent variable is DSE all share. And significance of the regression is .000 that means this model is significant.

Regression equation:

Y ¿

=a0+b1f 1=196.0-.788f 1

If one unit off 1 increasesY¿

will also increaseRegression (MPS & DSE20):

Variables Entered/Removed (b)

Model Variables Entered Variables Removed Method1 DSE20(a) . Enter

a) All requested variables entered.b) Dependent Variable: MPS

Model Summary

Model R R SquareAdjusted R Square

Std. Error of the Estimate

1 .795(a) .632 .624 7.54263a) Predictors: (Constant), DSE20

ANOVA (b)

a) Predictors: (Constant), DSE20b) Dependent Variable: MPSCoefficients (a)

Model

Unstandardized Coefficients

Standardized Coefficients

T Sig.B Std. Error Beta1 (Constant

) 167.321 36.934 4.530 .000

DSE20 .208 .024 .795 8.695 .000a) Dependent Variable: MPSIn this regression analysis depended variable is MPS and independent variable is DSE20 share.

By using this analysis we found R square is .632, which means 63.2% of the dependent variable is explained by the independent variable. Where variable depended is MPS and independent variable is DSE20 share. And significance of the regression is .000 that means this model is significant.

Regression equation:

Y ¿

=a0+b2 f 2 =167.321+.795f 2

If one unit of f 2 increases Y¿

will increaseCorrelations (DSE All & DSE20)

DSEALL DSE20DSEALL Pearson Correlation 1 .970(**)

Sig. (2-tailed) . .000N 46 46

Model Sum of Squares df Mean Square F Sig.

1 Regression 4301.390 1 4301.390 75.607 .000(a)

Residual 2503.219 44 56.891 Total 6804.609 45

DSE20 Pearson Correlation .970(**) 1Sig. (2-tailed) .000 .N 46 46

** Correlation is significant at the 0.01 level (2-tailed).

Here we found by regression analysis, DSE 20 explain perfectly 97% of DSE all share. And significance of the regression is .000 that means this model is significant. That means my statistical model is almost 100% right.

EXIM Bank of Bangladesh

Year

Return (%) Inflation EPS

Value PS

Net Profit

P/E Ratio

Dividend (%) Govt.Regulation Competition

2003 3.15 5.83 81.18 238.4 254.79 0 0 1 12004 3.44 6.48 60.82 381.8 381.8 6.25 40 1 12005 1.65 6.1 63.19 555.34 555.34 8.08 30 1 12006 1.73 7.04 43.48 650.29 650.29 7.74 25 1 1

Regression (Return & Inflation):Variables Entered/Removed (b)

Model Variables Entered Variables Removed Method1 INFLATION(a) . Enter

a) All requested variables entered.b) Dependent Variable: RETURNModel Summary

Model R R SquareAdjusted R Square

Std. Error of the Estimate

1 .363(a) .132 -.302 1.06664a) Predictors: (Constant), INFLATIOANOVA (b)

Model Sum of Squares df Mean Square F Sig.

1 Regression .346 1 .346 .304 .637(a)

Residual 2.275 2 1.138 Total 2.621 3

a) Predictors: (Constant), INFLATIONb) Dependent Variable: RETURNCoefficients (a)

Model

Unstandardized Coefficients

Standardized Coefficients

T Sig.B Std. Error Beta1 (Constant

) 6.611 7.489 .883 .471

INFLATI -.647 1.174 -.363 -.551 .637

ONa) Dependent Variable: RETURN

In this regression analysis depended variable is Return and independent variable is Inflation.

By using this analysis we found R square is .132, which means 13.2% of the dependent variable is explained by the independent variable. And significance of the regression is .637 that means this model is not significant.

Regression equation:

Y ¿

=a0+b1f 1= 6.611- .363f 1

If one unit off 1 increasesY¿

will also decrease

Regression (Return & EPS)

Variables Entered/Removed (b)

Model Variables Entered Variables Removed Method1 EPS(a) . Enter

a) All requested variables entered.b) Dependent Variable: RETURNModel Summary

Model R R SquareAdjusted R Square

Std. Error of the Estimate

1 .569(a) .324 -.014 .94138a) Predictors: (Constant), EPSANOVA (b)

Model Sum of Squares df Mean Square F Sig.

1 Regression .849 1 .849 .958 .431(a)

Residual 1.772 2 .886 Total 2.621 3

a) Predictors: (Constant), EPSb) Dependent Variable: RETURNCoefficients (a)

Model

Unstandardized Coefficients

Standardized Coefficients

T Sig.B Std. Error Beta1 (Constant

) .348 2.241 .155 .891

EPS .034 .035 .569 .979 .431a) Dependent Variable: RETURN

In this regression analysis depended variable is Return and independent variable is earning per Share.

By using this analysis we found R square is .324, which means 32.4% of the dependent variable is explained by the independent variable. And significance of the regression is .431 that means this model is not significant

Regression equation:

Y ¿

=a0+b2 f 2 = .348+.569f 2

If one unit of f 2 increases Y¿

will increaseRegression (Return & Value per share)

Variables Entered/Removed (b)

Model Variables Entered Variables Removed Method1 SHARE(a) . Enter

a) All requested variables entered.b) Dependent Variable: RETURNModel Summary

Model R R SquareAdjusted R Square

Std. Error of the Estimate

1 .868(a) .753 .629 .56939a) Predictors: (Constant), SHAREANOVA (b)

Model Sum of Squares df Mean Square F Sig.

1 Regression 1.973 1 1.973 6.085 .132(a)

Residual .648 2 .324 Total 2.621 3

a) Predictors: (Constant), SHAREb) Dependent Variable: RETURNCoefficients (a)

Model

Unstandardized Coefficients

Standardized Coefficients

T Sig.B Std. Error Beta1 (Constant

) 4.515 .868 5.202 .035

SHARE -.004 .002 -.868 -2.467 .132a) Dependent Variable: RETURN

In this regression analysis depended variable is Return and independent variable is net asset value per share.

By using this analysis we found R square is .753, which means 75.3% of the dependent variable is explained by the independent variable. And significance of the regression is .132 that means this model is not significant

Regression equation:

Y ¿

=a0+b3f 3 = 4.515+.868f 3

If one unit off 3 increases Y¿

will increase

Regression (Return & Profit)Variables Entered/Removed (b)

Model Variables Entered Variables Removed Method1 PROFIT(a) . Enter

a) All requested variables entered.b) Dependent Variable: RETURN

Model Summary

Model R R SquareAdjusted R Square

Std. Error of the Estimate

1 .877(a) .770 .655 .54919a) Predictors: (Constant), PROFIT

ANOVA (b)

Model Sum of Squares df Mean Square F Sig.

1 Regression 2.018 1 2.018 6.691 .123(a)

Residual .603 2 .302 Total 2.621 3

a) Predictors: (Constant), PROFITb) Dependent Variable: RETURN

Coefficients (a)

Model

Unstandardized Coefficients

Standardized Coefficients

T Sig.B Std. Error Beta1 (Constant

) 4.632 .871 5.315 .034

PROFIT -.005 .002 -.877 -2.587 .123a) Dependent Variable: RETURN

In this regression analysis depended variable is Return and independent variable is Net Profit.

By using this analysis we found R square is .770, which means 77.0% of the dependent variable is explained by the independent variable. And significance of the regression is .123 that means this model is not significant

Regression equation:

Y ¿

=a0+b4f 4 = 4.632+.877f 4

If one unit off 4 increases Y¿

will increase

Regression (Return & P/E Ratio)

Variables Entered/Removed (b)

Model Variables Entered Variables Removed Method1 PERATIO(a) . Enter

a) All requested variables entered.b) Dependent Variable: RETURN

Model Summary

Model R R SquareAdjusted R Square

Std. Error of the Estimate

1 .643(a) .414 .120 .87663a) Predictors: (Constant), PERATIO

ANOVA (b)

Model Sum of Squares df Mean Square F Sig.

1 Regression 1.084 1 1.084 1.411 .357(a)

Residual 1.537 2 .768 Total 2.621 3

a) Predictors: (Constant), PERATIOb) Dependent Variable: RETURN

Coefficients (a)

Model

Unstandardized Coefficients

Standardized Coefficients

T Sig.B Std. Error Beta1 (Constant

) 3.374 .862 3.915 .059

PERATIO -.160 .134 -.643 -1.188 .357

a) Dependent Variable: RETURN

In this regression analysis depended variable is Return and independent variable is P/E Ratio.

By using this analysis we found R square is .414, which means 41.4% of the dependent variable is explained by the independent variable. And significance of the regression is .357 that means this model is not significantRegression equation:

Y ¿

=a0+b5f 5 = 3.374+.643f 5

If one unit off 5 increases Y¿

will increaseRegression (Return & Dividend)

Variables Entered/Removed (b)

Model Variables Entered Variables Removed Method1 DIVIDEND(a) . Enter

a) All requested variables entered.b) Dependent Variable: RETURN

Model Summary

Model R R SquareAdjusted R Square

Std. Error of the Estimate

1 .135(a) .018 -.473 1.13437a) Predictors: (Constant), DIVIDEND

ANOVA (b)

Model Sum of Squares df Mean Square F Sig.

1 Regression .048 1 .048 .037 .865(a)

Residual 2.574 2 1.287 Total 2.621 3

a) Predictors: (Constant), DIVIDENDb) Dependent Variable: RETURN

Coefficients (a)

Model

Unstandardized Coefficients

Standardized Coefficients

T Sig.B Std. Error Beta1 (Constant

) 2.668 1.076 2.481 .131

DIVIDEND -.007 .038 -.135 -.193 .865

a) Dependent Variable: RETURNIn this regression analysis depended variable is Return and independent variable is Dividend. By using this analysis we found R square is .018, which means 1.8% of the dependent variable is explained by the independent variable. And significance of the regression is .865 that means this model is not significant.

Regression equation:

Y ¿

=a0+b6 f 6 = 2.668+.135f 6

If one unit off 6 increases Y¿

will increase

CorrelationsRegression (Return with Net Profit, Inflation, EPS, Dividend, P/E Ratio, Value per Share):

Variables Entered/Removed (b)

Model Variables Entered Variables Removed Method1 DIVIDEND, PROFIT,

INFLATIO(a) Enter

a) Tolerance = .000 limits reached.b) Dependent Variable: RETURN

Model Summary

Model R R SquareAdjusted R Square

Std. Error of the Estimate

1 1.000(a) 1.000 1.000 .a) Predictors: (Constant), DIVIDEND, PROFIT, INFLATIO

ANOVA (b)

Model Sum of Squares df Mean Square F Sig.

1 Regression 2.621 3 .874 . .(a)

Residual .000 0 . Total 2.621 3

a) Predictors: (Constant), DIVIDEND, PROFIT, INFLATIOb) Dependent Variable: RETURN

Coefficients (a)

Model

Unstandardized Coefficients

Standardized Coefficients

T Sig.B Std. Error Beta1 (Constant

) -.308 .000 . .

INFLATIO .916 .000 .514 . .

PROFIT -.007 .000 -1.397 . .DIVIDEND .016 .000 .288 . .

a) Dependent Variable: RETURN

In this regression analysis we consider dependant variable is Return and independent variables are Inflation, EPS, Profit, P/E Ratio, and Value per Share. By this analysis we found that R square is 1.000, which means 100% of the dependent variable is explained by the independent variable or factor.

Correlations

RETURNINFLATIO EPS SHARE PROFIT PERATIO DIVIDEND

RETURN Pearson Correlation 1 -.363 .569 -.868 -.877 -.643 -.135

Sig. (2-tailed) . .637 .431 .132 .123 .357 .865 N 4 4 4 4 4 4 4INFLATION Pearson

Correlation -.363 1 -.957(*) .739 .734 .651 .514

Sig. (2-tailed) .637 . .043 .261 .266 .349 .486 N 4 4 4 4 4 4 4EPS Pearson

Correlation .569 -.957(*) 1 -.894 -.888 -.832 -.623

Sig. (2-tailed) .431 .043 . .106 .112 .168 .377 N 4 4 4 4 4 4 4VALUE PERSHARE

Pearson Correlation -.868 .739 -.894 1 1.000(**) .887 .517

Sig. (2-tailed) .132 .261 .106 . .000 .113 .483 N 4 4 4 4 4 4 4PROFIT Pearson

Correlation -.877 .734 -.888 1.000(**) 1 .874 .492

Sig. (2-tailed) .123 .266 .112 .000 . .126 .508 N 4 4 4 4 4 4 4P/E RATIO Pearson

Correlation -.643 .651 -.832 .887 .874 1 .842

Sig. (2-tailed) .357 .349 .168 .113 .126 . .158 N 4 4 4 4 4 4 4DIVIDEND Pearson

Correlation -.135 .514 -.623 .517 .492 .842 1

Sig. (2-tailed) .865 .486 .377 .483 .508 .158 . N 4 4 4 4 4 4 4

* Correlation is significant at the 0.05 level (2-tailed).** Correlation is significant at the 0.01 level (2-tailed).

Where the consideration of individual correlation between the Dependent variable with the independent variable, by this consideration we found that dependent variable Return has positive. But the relationship with Inflation, Profit, and P/E Ratio shows negative relation. Summary:

I have done a regression analysis on EXIM Bank of Bangladesh Ltd. I have collected data from 2003-2006. On the basis of data I found entire variable is not enough capable to explain the dependent variable. We know if significant is less than .05 it is represent regression analysis is significant. That means model is almost 100% right. But here all of the independent variable’s significance level with Return is much more high then .05. So we can not accept all of our decision.

Finally we can say that return of EXIM Bank can not be properly defined by the factor individually. But when we consider the entire variable together (Excluding market risk) we may have good result.Chapter-6Company Findings Analysis

6) The company’s competitive condition and strength, weakness, opportunities and threaten: 6.1) The competitive condition and the industry analysis:

The year 2004 remarkably year simultaneously for development and achievements of growth

rate in all the areas of banking operation. The bank has successfully been marching ahead

with its prime business objectives by earning pre-tax profits of Tk 645.64 Million registering

an annual growth of 34.93 than that of the previous year. It has successfully mobilized Tk:

19078.18 Million deposit from depositors and arranged disbursement of Tk: 19332.44

Million.

Accounts as on 31 December 2004 trough its 24 branches. The total income and expenditure

of the bank were Tk. 2644.59 million and 1808.78 million respectively during the review.

The return on assets (ROA) was 3.44% well above the industry average. The achievements

were possible because of the service excellence of management team with support from a

very resourceful and skilled workforce who are rendering efficient and specialized services.

At the end of 2005 the bank has 28 branches in total. And the profit increased to before tax 1200.28 millions.

6.2) SWOT Analysis Strength of the organization:

The major strength of the bank is the Board of Directors of EXIM bank as they themselves a large financed based, and they invest a lot of capital to the bank and their endeavor.

Another strengthens of EXIM bank is the supervision of advisors and chairman of the bank.

The major strengthen of Exim Bank is the skillful and good combination of young and experienced brand of workforce.

The financial strengthen that is capital adequacy ratio of EXIM bank is 9.49 in 2004. As Islamic shariah based bank EXIM bank has a prominent shariah Council.

Weakness of the organization: Amongst the weakness of this bank is the unavailability of ATM (automated teller

Machines) and credit which are customers demanding.

Credit Cards need to be expanded vastly with market demand. The advertisement activity should increase about the bank. The banking should be fully online based.

Opportunities of the organization:

The EXIM bank has reputation the bank is going to become more popular bank in

our country. People feel better about the services of EXIM bank. If EXIM bank introduce

online banking all over the country the bank will be able provide more effective and very

especial service to the clients ultimately can more profits. And in future can one of the best

financial institutes in the world.

Threaten of the Organization:

The large threat for the EXIM bank may deposit crisis because the EXIM bank cannot borrow at short notice (Call money) being a Islamic bank.

Another threaten is the Technology, the bank must be adjusted with new technologies and information.

Another threaten is the free trade agreement.

6.3) Finding analysis6.3.1) Strategic and operational and legal issues and problems facing the company and the strategies and tactics used to cope with them.Being the time passage almost all organization faces some problems that are operational,

strategic and legal. The challenge is how the company can possibly cope up with that

problem. Now there have been discrepancies which were legal such as originally the name of

EXIM bank was EXIM bank of Bangladesh Ltd. Later the management of the Bexim Bank

changed the name of the bank as EXIM bank of Bangladesh Ltd. Because of the case lodges

Beximco group of industries. There are also some operational problems such as operational

forging cheques, deposit.

The EXIM bank converted into an Islamic shariah based they facing some problem to match

their clients with the Islamic banking. But now, it is a great pleasure that by the grace of

Almighty Allah, the EXIM Bank have migrated at a time all the branches from its

conventional banking operation into Shariah based Islamic 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. The IT is

EXIM Bank Ltd. Division has done the excellent job of converting and fitting the

conventional business processes into the processes based on Shariah. It has been made

possible by following a systematic procedure of migration under the leadership of honorable

Managing Director.

6.3.2) Findings on the trade financing by the EXIM Bank of Bangladesh Limited are followings

They foreign Exchange Department is very much Strong. Clauses they use in dealing with the foreign Bank in term of L/C opening and amendment of L/C, are very much expedient to the foreign Bank. So it is giving a competitive advantage to the EXIM Bank. So business men like to deal their business with the EXIM Bank Ltd.

Another one they are very much helpful to the business man some of our business men do not know exactly they should to export their goods and to import the merchandise from others country. The officer of EXIM Bank helps them properly to execute their business.Financing to the international trade is very crucial to the economy and as well as it is risky. Some time the government has restriction to import some products and to export some product. But some time it may happen that the customers under invoice to import goods out side.And very problematic things may happen people may buy banded products.

6.3.3) These are the Followings recommendation in order to get competitive advantage and to deliver quality and to be more fruitful to our economy

International trade is to make our trade balance healthy and to make good business relation to the abroad and to buy some product which actually need to buy and also to sell that we should sell or excess. We need to buy some industrialist products; sometimes we need to buy surgical material, medicine and foods etc.

So the Bank should not finance to that people who under invoice in case of importing. The Bankers must be aware about this unwanted happening. And they should observe the invoice to open a letter of Credit (L/C).

If the bankers can scrutinize the Commercial invoice it will decrease the Money Laundering. And people will send more money to our country our foreign currency reserve will healthier than our country has.

And not only bankers The Assistant Commissioner of Tax and can contribute more. They must be more careful about under invoicing and restricted products.

The bankers must get to be careful to finance international trade because they should finance the people who satisfy 5'Cs. So that, the bank does not fall in bad loss provision sated by BB.

The banker should not provide loan (LIM) against the perishable Goods. If the provide loan against the Perishable goods, the Bank may causes loss in case of bad debt.

Chapter 7Recommendation & conclusion

7.1) RecommendationFrom the experience of concluding the report a number of recommendations may be given which, may be useful. Such as:--

A special officer should be appointed to every Bank for guiding the users and recording their complaint and reporting to the management.

For more security, customer submitting their necessary papers should be verified by responsible officers before opening L/C that is very essential for Export or Import goods.

Bank should provide the facility and gives opportunity to the customer to transact a certain sum of money in credit limit.

For protecting the robbing it is needed to program a safety alarm system in the required foreign exchange, which is connected to the Bank.

Bills payment facility of all types of utility may be given to the Bank than offering some selected utilities.

In selecting goods, which is valid or not valid to export, or import Bangladesh Bank takes the rules that is must abide by the rules. Bank suggests the rules to customer.

At present people does not deprived of facilities of modern world due to its sum hindrance. Every better have its own negative aspects. Think about transportation facilities that makers the world so advanced. Nobody can think to stop it or avoid it. It is the part of our life. So everybody thinks to reduce its negative aspects rather than avoid or stop it.

Similarly now a day in our Banking sectors exports and imports facilities are necessary elements. In banking sectors people keeps their excess money for various kind of our country. If proper steps are taken in this regard we think it will be a highly prospective edition of the Banking sectors of Bangladesh.

In our country, now it is the golden period of banking sectors. So there is a greater suitable place to keep customer’s money and dealing their transaction for their necessary works. All new entrance and existing documents, Bank always keep in mind this thing because it will be a highly competitive area.

7.2) Conclusion

There are number of nationalized and foreign bank are operating their banking in Bangladesh, The export Import Bank of Bangladesh Limited is promising one among these Banks. The growing competition bound EXIM Bank not only to compete with the other commercial bank but also with the public banks. For the future planning and the successful operation in achieving its prime goal in this current competitive market this can be helpful in international trade financing that suggested mostly for the betterment of country.

The EXIM Bank can bring glories prospects for our nation on international Trading and other Banking services. And ultimately we will get benefit from their success in financing international trade. The EXIM Bank maintaining a very superior business relationship with the other international associate involved in international trade successfully.

This study was very much significant to me cause through this internship for working my project. I have got introduced with practical field which is my destination. And this gives me a crystal idea about the work place how to deal in an office, the manner of organization practically and a make abridge with practical and theoretical knowledge.

Banks always contribute towards the economical development of a country. EX1M Bank of Bangladesh Limited compared with other banks are contributing more to country by investing most of their fund in fruitful international financing and very essential projects. The projects are leading to increase in production resulted from investing in the field of Export and Import Business. Is obvious that the right thinking of this bank establishing a successful network over the country and increasing resources, will be able to play an important role in the development our industrial sector and make available for international trade to get competitive advantage of the global economy.

Chapter8References

8.1) References

Web Sources http://www.google.com http://www.eximbankbd.com http://www.todaytimes.com http://www.bangladeshbank.com http://www.dsebd.org http://www.cpd.bd.com http://www.financialexpress.com

Other sources Annual Report of EXIM Bank Limited 2007 Various types of publications of EXIM Bank Limited. Mr. Parvez Akhter (SPO, GB, Head Office corporate, EXIM

Bank Limited.)

EXIM Bank Library DBL Library BIBM Library Bangladesh Bank Library I.I.U.C. Library

Book Sources Hossain Mr. Kabir Vol-7, no 3 & 4.

(The Banking sector crisis and government in Bangladesh) , Thoughts on economics.

Charles P Jones (Investment Analysis and Management)

7th Edition, Chapter 3 & 8. Brigham

(Investment Analysis), 9th Edition, Part-2, Chapter no 6.

Hassan, M. Kabir and Adnan (Managerial Finance) Volume 25, Number 5, 1999:

60-113. Jeff Madura

(International Financial Management), 7thedition.

Van Horne (Financial management and Policy) Tenth Edition

Robinson (The Management and Policy)

9th Edition.