CHAPTER ONE INTRODUCTION
1.1 ORIGIN OF THE REPORT
Although total M.B.A. program combines an excellent blend of theoretical and classroom classroom knowledge but aside this internship program facilitates a student to bring light on their theoretical knowledge to apply this in practical ground. ground. I was assigned to Janata Janata Bank, Sonargaon Road Branch, Branch, and foreign exchange department for my practical execution. I am required to prepare an internship report under the supervision of our honorable teacher Mohammad Anisur Rahman “Foreign Exchange Management of Janata Bank Limited” to conduct a precision analysis on the typical subject. I have always tried my best to reflect my experience of the practical incidence in this report.
1.2 BACKGROUND OF THE STUDY To sup supply ply well-v well-vers ersed ed gradu graduate atess Depart Departmen mentt of MIS is conduc conductin ting g MBA progra program m with with excell excellent ent reputation. Each of the degree needs practical knowledge of respective field of discipline to be fruitful. To complete MBA program also has an Internship Report, relating to the exchange of theoretical knowledge into the partial fulfillment of the Internship program. During During the the Intern Internshi ship p Progra Program, m, I am und under er the sup superv ervisi ision on and guidan guidance ce of Mohammad Mohammad Anisur Anisur Rahman assigned to prepare a report about particular topic among some option which should be relevant
to my practical knowledge knowledge within 90 days MBA program. To fulfillment of the the Internship program the report is originated entitled “ Foreign Exchange Management Of Janata Bank Limited .”
1.3 OBJECTIVES OF THE REPORT 3.1. BROAD OBJECTIVE
This report report is prepared prepared primarily primarily to fulfill the Masters
of Business Business Administratio Administration n (MBA) degree
requirement in MBA program of the faculty of business studies, department of management information systems, University of Dhaka. 3.2. SPECIFIC OBJECTIVES
The main purpose of the report is to get a clear idea about Foreign Exchange Management of Janata Bank limited
To identify the Export procedures
To identify the Import Procedures
To observe the Foreign Remittance functionality of Janata Bank Ltd. at at
To get a clear knowledge about SWIFT
1.4 SCOPE OF THE REPORT
This study would focus on the following areas of Janata Bank Limited. • Actual Foreign Exchange Exchange management of Janata Bank Limited. • Overview the current procedure procedure of export & import and and remittance management. • Opening LC and maintenance maintenance of other formalities formalities of foreign exchange. • Organizational structures structures and responsibilities responsibilities of management. management. Each of the above areas would be critically analyzed to determine the proper efficiency of Janata Bank’s Foreign Exchange Management system.
1.5 METHODOLOGY OF THE REPORT The study requires a systematic procedure from selection of the topic to final report preparation. To perform the study the data sources are to be identified and collected, they are to be classified, analyzed, interpreted and presented in a systematic manner and key points are to be found out. The over all process of methodology is given in the following page in a form of table that has been followed in the study. 1.5.1 1.5. 1.5.2 2
Selection of the topic
The topic of the study was assigned by our supervisor. Before assigning the topic it
Iden Identi tify fyin ing g data data sou sourc rces es
was discussed with me so that a well organized internship report can be prepared. Essential data sources both primary and secondary are identified which will be
ii) The Second Secondary ary sou source rcess :
needed to complete and work out the study.. Face Face to face face conv convers ersati ation on with with the the offi officer cers. s. Practical desk work. Relevant files study as provided by the concerned officers. Annual Annual report reportss of of JBL. JBL.
Colle ollect ctio ion n of of da data
Foreign exchange of JBL. Periodic reports of JBL. Annual Reports of Bangladesh Bank (BB). Relevant books, newspapers, journals, etc. Primary data are collected by using interviewing technique. The reports are an
i) The The primar primary y sources sources are: are:
1.5.3 .5.3
exploratory research and for qualitative survey open ended question were ask to the 1.5.4
1.5. 1.5.5 5
1.5. 1.5.6 6
Sampling
Bank official. Population: All the Branches of JBL located in everywhere in Bangladesh has been
Sample:. Clas Classi sifi fica cati tion on,, anal analys ysis is,,
taken into consideration as population. JBL, Main Branch, is the vital sample some some arithm arithmeti eticc and graphica graphicall tools tools are used used in this this report report for analyz analyzing ing the
interpretations and
collected data and to classifying those to interpret them clearly.
presentation of data: Find Findin ings gs of the the stud study: y:
The collected data were scrutinized very well and were pointed out and shown as findings. Few recommendations are also made for improvement of the current
1.5. 1.5.7 7
Fina Finall repo report rt pre prepa para rati tion on:
situation. On the basis basis of the the suggestions suggestions of our honorable honorable faculty advisor some corrections corrections were made to present the paper in this form.
6. LIMITATIONS
I have faced some limitations, when I was preparing this report which is mentioned below.
Time limitation It was one of the main constraints that affected covering all aspects of the study.
Lack of Secondary Information: The import export data of Bangladesh is not much available over the net. Secondary source of information was not sufficient for the completion of the report.
Limitation of the Scope: Much confidential information was not disclosed by respective personnel of the department.
CHAPTER TWO LITERATURE VIEW
2.1 FOREIGN EXCHANGE ITS MEANING AND DEFINITIONS The exchange of one currency for another, or the conversion of one currency into another currency. Foreign exchange also refers to the global market where currencies are traded virtually around-the-clock. The term foreign exchange is usually abbreviated as "forex" and occasionally as "FX."
2.2FUNCTIONS OF THE FOREIGN EXCHANGE MARKET The foreign exchange market performs the following important functions: (i) to effect transfer of purchasing power between countries- transfer function; (ii) to provide credit for foreign trade - credit function; and (iii) to furnish facilities for hedging foreign exchange risks - hedging function.
Transfer Function: The basic function of the foreign exchange market is to facilitate the conversion of one currency into another, i.e., to accomplish transfers of purchasing power between two countries. This transfer of purchasing power is effected through a variety of credit instruments, such as telegraphic transfers, bank drafts and foreign bills.In performing the transfer function, the foreign exchange market carries out payments internationally by clearing debts in both directions simultaneously, analogous to domestic clearings.
Credit Function:
Another function of the foreign exchange market is to provide credit, both national and international, to promote foreign trade. Obviously, when foreign bills of exchange are used in international payments, a credit for about 3 months, till their maturity, is required.
Hedging Function: A third function of the foreign exchange market is to hedge foreign exchange risks. In a free exchange market when exchange rates, i.e., the price of one currency in terms of another currency, change, there may be a gain or loss to the party concerned. Under this condition, a person or a firm undertakes a great exchange risk if there are huge amounts of net claims or net liabilities which are to be met in foreign money. Exchange risk as such should be avoided or reduced. For this the exchange market provides facilities for hedging anticipated or actual claims or liabilities through forward contracts in exchange. A forward contract which is normally for three months is a contract to buy or sell foreign exchange against another currency at some fixed date in the future at a price agreed upon now. No money passes at the time of the contract. But the contract makes it possible to ignore any likely changes in exchange rate. (http://www.preservearticles.com/2012012721683/what-are-the-functions-ofthe-foreign-exchange-market.html, 2012)
2.3 EXPORT ITS MEANING AND DEFINITIONS : Janata Bank Limited exports a large quantity of goods and services to many countries. Readymade textile garments (both knitted and woven), Jute, Jute-made products, frozen shrimps, tea, hide and skin, vegetables are the main goods that Bangladeshi exporters exports to foreign countries. Garments sector is the largest sector that exports the lion share of the country's export. Bangladesh exports most of its readymade garments products to U.S.A and European Community (EC) countries. Bangladesh exports about 40% of its readymade garments products to U.S.A. Most of the exporters who export through Janata Bank Limited foreign exchange Branch are readymade garment exporters. They open export L/Cs here to export their goods, which they open against the import L/Cs opened by their foreign importers
2.4 FORMALITIES OF EXPORT PROCEDURE
There are a number of formalities, which an exporter has to fulfill before and after shipment of goods. These formalities or procedures are enumerated in brief as follows:
Obtaining Export Registration Certificate ERC: No exporter is allowed to export any
commodity for export from Bangladesh unless he is registered with Chief Controller of Imports and Exports (CCI & E) and holds valid Export Registration Certificate (ERC). After applying to the CCI&E in the prescribed from along with the necessary papers, concerned offices of the Chief Controller of Imports and Exports issues ERC. Once registered, exporters are to make renewal of ERC every year.
Securing the order: After getting ERC, the exporter may proceed to secure the export order. He
can do this by contracting the buyers directly through correspondence.
Obtaining EXP: After having the registration, the exporter applies to Janata Bank Limited with
the trade license, ERC and the Certificate from the concerned Government Organization to get EXP. If the bank is satisfied, an EXP is issued to the exporter.
Signing of the contract: After communicating with buyer the exporter has to get contracted for
exporting exportable items from Bangladesh detailing commodity, quantity, price, shipment, insurance and mark, inspection, arbitration etc.
Receiving the Letter of Credit: After getting contract for sale, exporter
should ask the buyer for Letter of Credit clearly stating terms and conditions of export and payment.
Procuring the materials: After making the deal and on having the L/C opened in his favor, the
next step for the exporter is to set about the task of procuring or manufacturing the contracted merchandise.
Endorsement on EXP: Before the exporter with the customs or postal authorities lodges the
export forms, they should get all the copies endorsed by Janata Bank Limited. Before shipment, exporter submits EXP. form with commercial invoice. Then Janata Bank’s respective officers check it properly, if satisfied, certified the EXP. Without EXP exporter cannot make shipment. The customer must declare all export goods on the EXP issued by the authorized dealers. (http://www.nfpl.net/pdf/procedure%20for%20import%20and%20export.pdf, 2012)
2.5 DISPOSAL OF EXPORT PROCEDURE
•
Original: Customs authority reports first copy of EXP to Bangladesh Bank after shipment
of the goods. •
Duplicate: Negotiating bank reports the Duplicate to Bangladesh Bank in or after negotiation
date but not later than 14 days from the date of shipment. •
Triplicate: On realization of export proceeds the same bank to
the same authority reports
Triplicate. Quadruplicate: Finally, the negotiating bank as their office copy retains Quadruplicate.
Shipment of goods: Exporter makes shipment according to the terms and condition of L/C.
Presentation of export documents for negotiation: After shipment, exporter submits the following documents to Janata bank Limited for negotiation.
Bill of Exchange or Draft
Bill of Lading
Invoice
Insurance Policy/Certificate
Certificate of origin
Inspection Certificate
Consular Invoice
Packing List
Quality Control Certificate
G.S.P. certificate
Photo
Examination
of Document: Banks
deal
with
documents
only,
not
with commodity. As the
negotiating bank is giving the value before repatriation of the export proceeds
it is
advisable to
scrutinize and examine each and every document with great care whether any discrepancy(s) is observed in the documents. The bankers are to ascertain that the documents are strictly as per the terms of L/C Before negotiation of the export bill. Bank officers assigned for examining the export documents may use a checklist for their convenience. Negotiation of export documents: Negotiation stands for payment of value to the exporter against the
documents stipulated in the L\C. If documents are in order, Janata Bank Limited purchases (negotiates) the same on the basis of banker- customer relationship. This is known as Foreign Documentary Bill Purchase (FDBP).If the bank is not satisfied with the documents submitted to Janata Bank Limited and gives the exporter reasonable time to remove the discrepancies or sends the documents to L/C opening bank for collection. This is known as Foreign Documentary Bill for Collection (FDBC). Settlement of Local Bills:
The settlement of local bills is done in the following ways,
The customer submits the L/C to Janata Bank Limited along with the documents to negotiate
Janata Bank Limited officials scrutinize the documents to ensure the conformity with the terms and conditions.
The documents are then forwarded to the L/C opening bank.
The L/C issuing banks gives the acceptance and forwards an acceptance letter.
Payment is given to the customer on either by collection basis or by purchasing the document. (http://www.nibusinessinfo.co.uk/content/exporting-and-other-ways-disposing-inward processing-goods, 2012)
2.6 IMPORT ITS MEANING AND DEFINITIONS Import means purchase of goods or services from abroad. Normally consumers, firms and Government organizations import foreign goods or services to meet their various necessities. Main import items are food item, edible oil, fertilizer, petroleum, machineries, chemicals, raw materials of industry, cement clinkers etc. So, in brief, we can say that import is the flow of goods and services purchased by local agent staying in the country from foreign agent staying abroad.
2.7 IMPORT PROCEDURE Authorized Dealer, banks are always committed to facilitate import of different goods into Bangladesh from the foreign countries. Import Section, which is under Foreign Exchange Department of a bank, is assigned to perform this job. And to serve its parties demand to import goods, it always maintains required formalities that are collectively termed as “Import Procedure”. i) At first, the importer must obtain Import Registration Certificate (IRC) from the CCI&E submitting the following papers:
Up to date Trade License. Nationality and Asset Certificate.
Income Tax Certificate.
In case of company, Memorandum & Articles of Association and Certificate of Incorporation.
Bank Solvency Certificate etc.
Required amount of registration fee
ii) Then the importer has to contact with the seller outside the country to obtain the Proforma Invoice. Usually an indenter, local agent of the seller or foreign agent of the buyer makes this communication. Beside these other sources are: • Trade fair. • Chamber of Commerce. • Foreign Missions in Bangladesh. • Journals etc. iii) When the importer accepts the Proforma Invoice, he/she makes a purchase
contract with the
exporter detailing the terms and conditions of the import. iv) After making the purchase contract, importer settles the means of payment with the seller. An import procedure differs with different means of payment. The possible means are Cash in Advance, Open Account, Collection Method and Documentary Letter of Credit. In most cases, the Documentary Letter of Credit in our country makes import payment. Purchase Contract contains which payment procedure has to be applied. (http://www.nfpl.net/pdf/procedure%20for%20import%20and%20export.pdf, 2012)
2.8 PAYMENT MODES
Cash in advance: Importer pays full, partial or progressive payment by a foreign DD,
MT or TT. After receiving payment, exporter will send the goods and the transport receipt to the importer. Importer will take delivery of the goods from the transport company.
Open Account: Exporter ships the goods and sends transport receipt to the importer.
Importer will take delivery of the goods and makes payment by foreign DD, MT, or TT at some specified date.
Collection Method: Collection methods are either clean collection or documentary
collection. Again, Documentary Collection may be Document against Payment (D/P) or Document against Acceptance (D/A). The collection procedure is that the exporter ships the goods and draws a draft/ bill on the buyer. The exporter submits the draft/bill (only or with documents) to the remitting bank for collection and the bank acknowledges this. Then the remitting bank sends the draft/bill (with or without documents) and a collection instruction letter to the collecting bank. Acting as an agent of the remitting bank, the collecting bank notifies the importer upon receipt of the draft. The title of goods is released to the importer upon full payment or acceptance of the draft/bill.
Letter of credit: Letter of credit is the well-accepted and most commonly used means of
payment. It is an undertaking for payment by the issuing bank to the beneficiary, upon submission of some stipulated documents and fulfilling the terms and conditions mentioned in the letter of credit. (http://www.nibusinessinfo.co.uk/content/exporting-andother-ways-disposing-inward-processing-goods, 2012)
2.9 OPENING LETTER OF CREDIT (L/C) In global business environment, buyers and sellers are often unknown to each other. So seller generally demands guarantee of payment for his exported goods. In this situation bank has an important role. Bank gives export guarantee that it will pay for the goods on behalf of the buyer. This guarantee is called “Letter of Credit” or LC. Thus by letter of credit the contract between importer and exporter find a legal sphere.
2.10 PROCEDURE OF OPENING THE LETTER OF CREDIT (L/C) After receiving the perform invoices from the exporter, by applying for the issue of documentary credit, the importer requests his/her bank to make a promise of payment to the supplier. Obviously, the bank will only agree to this request if bank can rely fully on reimbursement by the applicant. According to the accepted custom as the sole security for the credit, particularly if they are not the sorts of commodity that
can be traded on an organized market, such an agreement would make the bank to bear excessive risk outside its specialized field. The applicant must therefore have adequate fund in the bank account or a credit line sufficient to cover the required amount. Banks deals with documents and not with goods. Once the bank has issued the credit its obligation to pay is conditional on the presentation of the stipulated documents within the prescribed time limit. The applicant cannot prevent a bank from honoring the documents on the grounds that the beneficiary has not delivered goods.
The importer submit the
following documents with the application for opening the L/C • Tax Identification Number (TIN) • Valid trade license • Import registration certificate (IRC) The bank will supply the following documents before opening the L/C • LCA form • IMP form • Necessary charger documents for documentation
2.11 SWIFT SWIFT Society for the Worldwide Interbank Financial Telecommunication means High-value payment market infrastructures focus primarily on security and resilience to support time-critical payments, efficiency to have the right trade-off between risks and cost. Liquidity cost reduction by early finality, easy collateral coverage and better liquidity management through real-time interactive services Balancing cost, efficiency and risk are your key requirements, and SWIFT meets them with a reliable, secure and reusable messaging infrastructure, supporting international and proprietary standards. More than 62 high-value payments clearing and settlement systems covering more than 90 countries and carrying more than 240 million payments a year, rely on SWIFT for secure messaging services and common message standards essential to their smooth operation. Because customers are multilateral, customers need a trusted third party like SWIFT to provide secure, reliable and proven messaging solutions. SWIFT’s offering is more compelling in terms of cost and risk than alternatives, thanks to reusability of participants’ existing SWIFT infrastructures, value-added services such as FIN Copy, and
standard support services. SWIFT solutions for
high-value payment clearing systems support the
messaging layer for payment transaction processing, cash management, business administration functions, reporting and generic communication. ((http://www.janatabank-bd.com/jb7.htm, 2013), 2013)
2.12 THE FUNCTIONS OF SWIFT SOLUTIONS FOR
For payments
Cash Reporting
Supporting your real-time account information needs
Payments and cash management
Economic changes in the payments landscape have forced the banking community to find new ways to reduce their operational costs, mitigate their liquidity risk and increase the revenue and efficiency of their
core payment products. Under the pressure of regulators, the cash management service offering becomes more transparent to meet new customer expectations. While conforming to regulation is a must, service quality becomes a key differentiator. SWIFT has developed offerings in payments and cash management to help the banking community meet these urgent challenges: Enhance customer service: automate exceptions and investigations in order to reduce enquiry turn-around time and to provide transparency on enquiry status to your customers, provide a compelling value proposition for corporate or person-to-person retail payments for immigrants (workers’ remittances) – including mobile payments. Improve liquidity and risk management: receive end-of-day as well as intra-day cash reports – information vital to get visibility on cash positions across your organization and to improve liquidity management. In addition, SWIFT is considering extending its value proposition to include liquidity risk management tools. Increase operational efficiency and save costs: SWIFT’s single window allows you to rationalize your connectivity channels with: 1. Correspondent banks for clearing and settlement of domestic or foreign currency payments using SWIFT’s payments clearing messaging services 2. High value payments clearing and/or settlement systems operating on a real-time gross settlement basis using SWIFT’s secure and reliable FIN domestic services for high value payment market infrastructures 3. Retail payments clearing systems using SWIFT’s cost efficient services for retail payments market infrastructures: the services help to clear “batches” of payments prior to settlement at discrete intervals, with or without netting. ((http://www.janatabank-bd.com/jb7.htm, 2013), 2013)
CHAPTER THREE 3. ORGANIZATIONAL PROFILE 3.0.1 HISTORICAL BACKGROUND OF THE ORGANIZATION
Janata Bank Limited is the 2nd largest state owned commercial bank in Bangladesh. Immediately after the liberation of Bangladesh in 1971, the erstwhile United Bank Limited and Union Bank Limited were renamed as Janata Bank. The established of Janata Bank was happened under the
Bangladesh Bank order 1972. It was incorporated as a public Limited Company on 21, May 07 vide certificate of incorporation No-C66933(4425)07 in the early era of privatization. Janata Bank Limited, one of the state owned commercial banks in Bangladesh, has an authorized capital of Tk. 20000 million (approx. US$ 250 million), paid up capital of Tk. 11000.00 million, reserve of Tk.17234 million. The Bank has a total asset of Tk. 508567 million as on 31 st December 2012. Immediately after the emergence of Bangladesh in 1971, the erstwhile United Bank Limited and Union Bank Limited were renamed as Janata Bank. On 15th November, 2007 the bank has been corporatised and renamed as Janata Bank Limited.
Janata Bank Limited
operates through 889 branches including 4 overseas branches at United Arab Emirates. It is linked with 1202 foreign correspondents all over the world. The Bank employees more than 15(fifteen) thousand persons. (http://www.janatabank-bd.com/jb1.htm, 2013)
3.2 ORGANIZATIONAL STRUCTURE 13.2.1. MANAGEMENT ASPECT
Like every other business organization, the foremost duty of the top management is to makes all the major decisions of Janata Bank. The boards of directors are being at the topmost level of organizational structure plays an important role in policy formulation and successful execution, but it is not a direct concern of the day-day operations of the bank. The duty was delegated to the management committee. The board mainly sets the objectives and policies of the bank. The management consists of one chairman, eleven directors, one CEO & MD and one company secretary.. Mid and lower level employees get the direction and instruction from the Board of Directors about the tasks they have to meet. The chief
executive provides the guideline to the managers and employees, but bears
the responsibility for
determining how tasks and goals are to be attained. (http://www.janatabank-bd.com/jb1.htm, 2013)
(http://www.janatabank-bd.com/jb1.htm, 2013)
3.2. ORGANIZATION MISSION AND VISION 3.2.1 MISSION:
As it is recognized as the leading commercial bank in the aspect of Bangladesh market and it is providing retail and corporate banking services, it is trusted and respected as a partner in the social and economic development program in our country and among our nation. (http://www.janatabank-bd.com/jb1.htm, 2013) 3.2.2 VISION:
Becoming effective largest commercial bank in the perspective of Bangladesh to support socio-economic development of the country and assists go ahead for becoming leading bank in South-Asia. (http://www.janatabank-bd.com/jb1.htm, 2013)
3.3 OFFERED SERVICES BY THE ORGANIZATION Beside regular banking operation, Janata Bank Limited offers specialized services to different walks of clients/agencies throughout the country. Under the network of utility services, customers of different govt. organizations, corporate bodies, local bodies, educational institutions, students, etc are getting essential benefits from the Bank continuously. The utility services of Janata Bank Limited's are: 3.3.1 BILLS COLLECTION:
• Collecting the gas bills of Titas, Bakhrabad and Jalalabad Gas Transmission and Distribution Companies. • Regular collection of electricity bills of Dhaka Electricity Supply Authority,
Dhaka Electricity
Company, Bangladesh Power Development Board and Rural Electrification Board. • Regularly collects the telephone bills of Telegraph and Telephone Board. • Collects Water/Sewerage bills of Water and Sewerage Authority. • Municipal holding tax of City Corporation/ Municipalities is collected by JBL.
3.3.2 PAYMENTS MADE ON BEHALF OF GOVT.
• Payment of non- Govt. teacher’s salaries • Providing girl Students scholarship/stipend & Primary Student Stipend. • Provides army pension • Payment of widows, divorcees and destitute women allowances • Old-age Allowances
• Food procurement Bills As per decision of the govt. 46 (Forty Six) branches of JBL(40 branches in Dhaka city, 1(one) branch in Narayangonj city and 5(five) branches in Chittagong city) are involved to receive all utility bills in a same station from January'04. (http://www.janatabank-bd.com/jb8.htm, 2013)
3.4 SERVICES AREAS Branches
There are 851 branches of Janata Bank Limited in home and abroad. Among them 443 branches are situated in urban areas including four foreign branches and 408branches are in rural areas. And all foreign branches are situated in United Arab Emirates. There are 851 branches of Janata Bank Limited in home and abroad. Among them 443 branches are situated in urban areas including
four
foreign
branches
and
408branches are in rural areas. All foreign branches are situated in United Arab Emirates. (http://www.janatabank-bd.com/jb9.htm, 2013)
3.4.1List Of Branch Local Office
1
Corporate-1 Branch
12
Corporate-2 Branch
40
Overseas Branch
04
Grade-1 Branch
204
Grade-2 Branch
209
Grade-3 Branch
296
Grade-4 Branch
117
Total Branches :
883
(http://www.janatabank-bd.com/jb9.htm, 2013)
3.4.2 Overseas Branch
SL. 01. 02. 03. 04.
Name
Status Foreign Foreign Foreign Foreign
Abu Dhabi Al-Ain Sharjah Dubai Total : 04
(http://www.janatabank-bd.com/jb9.htm, 2013)
CHAPTER FOUR 4.0 FINDINGS
4.1 FOREIGN EXCHANGE MANAGEMENT OF JBL One of the most important businesses carried out by the commercial bank is foreign trading. General focusing states that, the trade among various countries falls for close link between the parties dealing in trade. The situation calls for expertise in the field of foreign operations. The
bank, is referred to as rending international banking operation which provides such services. Transactions with overseas countries in respect of export, import and foreign remittance dealings are under the preview of foreign exchange department. International trade demands a flow of goods from seller to buyer and of payment from buyer to seller. In this case the bank forms bridge between the buyer and seller. Among all departments Foreign exchange department of Janata Bank Limited is one of the most important. This department handles various types of activities.Among these main three are as follows: Export Import and Foreign remittance
JBL collects remittances from NRB from different countries and transfers the currency in BDT to the destined location. Here I have tried to describe the remittance processing structure of JBL. Along with, I have included the changes made by wired transfer service SWIFT. In this report I have tried to show the contribution of JBL’s remittance earning on national remittance earning. JBL’s performance is not dissatisfactory but the remittance earning is not increasing as the rising national remittance curve. After analyzing the data of JBL’s remittance earnings process this report have suggested that JBL lacks in foreign currency collection structure. Its remittance earning is increasing but the increase is far below the national remittance increase. JBL should take up to the mark structural change in service to cope with the national trend and help Bangladesh earn more remittance.
4.2 EXPORT Janata Bank Limited exports a large quantity of goods and services to many countries. Readymade textile garments (both knitted and woven), Jute, Jute-made products, frozen shrimps, tea, hide and skin, vegetables are the main goods that Bangladeshi exporters exports to foreign countries. Garments sector is the largest sector that exports the lion share of the country's export. Bangladesh exports most of its readymade garments products to U.S.A and European Community (EC) countries. Bangladesh exports about 40% of its readymade garments products to U.S.A. Most of the exporters who export through
Janata Bank Limited foreign exchange Branch are readymade garment exporters. They open export L/Cs here to export their goods, which they open against the import L/Cs opened by their foreign importers
4.3 Export Finance
To boost up country's Export, Janata Bank Limited has been providing different kinds of assistance to exporters. Some of which are as under:
Providing Pre-Shipment and Post-Shipment Finance, Export Guarantee and bonding facility etc.
Concessional rate of interest for exports Finance.
Back to Back L/C under bonded Warehouse facility
Sight & Unasked L/C against Firm Contract for import of raw materials.
Sight L/C under EDF
Exporter's Retention Quota A/C both interest bearing and non-interest bearing.
Export incentive Program.
Banking at Export Processing Zone
Scope for establishment of export oriented industry by 100% foreign investment and by joint-venture
The sole bank to disburse Government Export Promotion Fund against export of Computer Software & Data Entry Processing.. (http://www.janatabank bd.com/jb5.htm, 2013)
Janata Bank Limited's Export Performance In 2011 Janata Bank Limited's export target is Tk.- 14,400.00 cr and the achievement is
Tk.- 15,375.82 cr what is about 109.82% of the target with 29.74% growth.
Export growth of Janata Bank Limited (20022011): Year
Target
Achievement
2002 4000.00 3445.46 2003 4000.00 4286.49 2004 4800.00 5462.33 2005 6825.00 5839.48 2006 7000.00 7089.66 2007 7,798.38 7185.55 2008 8622.66 8541.78 2009 6648.00 8565.31 2010 10500.00 11851.52 2011 14000.00 15375.82 (http://www.janatabank-bd.com/jb5.htm, 2013)
Export growth of Janata Bank Limited (20022011):
(Taka in Core) Achievement Rate 78.84% 107.16% 113.80% 85.56% 101.28% 92.14% 99.06% 128.84% 112.87 109.82%
Growth
+6.38% +24.40% +27.43% +6.90% +21.40% +01.35% +18.87% +00.28% +38.37% +29.74%
(Taka in Core)
(http://www.janatabank-bd.com/jb5.htm, 2013) Contribution to National Export business of Janata Bank Limited (Million US$) National Export
Contribution to National Export of
Janata Bank Limited Achievement Percentage 632.90 8.21% 692.80 8.00% 958.02 9.10% 1057.68 9% 1107.50 8% 1293.21 8% 1407.11 8.68% 2075.38 9.05%
Target Achievement Financial Year 7227.70 7603.00 2003-2004 8565.78 8655.00 2004-2005 10159.20 10526.16 2005-2006 12500.00 12187.50 2006-2007 14500.00 14111.08 2007-2008 16298.43 15565.19 2008-2009 17600.00 16204.65 2009-2010 18500.00 22924.38 2010-2011 (http://www.janatabank-bd.com/jb5.htm, 2013)
Contribution to National Export business of Janata Bank Limited (Million US$)
(http://www.janatabank-bd.com/jb5.htm, 2013)
Commodity-wise Export performance: 2005 to 2011 (Taka in Core) Year
RMG
Frozen
Hide &
Raw
Jute
Vegetable
Tea
Others
Total
2005 2006 2007 2008 2009 2010 2011
2933.4 7 3549.8 2 3540.9 3 4214.5 5 4447.8 2 6367.0 7 9597.2 8
Fish 595.63
Skin 615.34
Jute 56.80
Goods 479.87
s 126.58
9.64
1022.15
5839.48
674.47
758.66
68.84
544.40
136.35
2.79
1354.33
7089.66
743.28
780.70
75.91
495.55
127.05
1.94
1420.19
7185.55
797.60
837.55
74.68
644.54
162.90
5.20
1804.76
8541.78
817.53
1021.22
101.78
521.41
156.60
2.09
1796.86
8865.31
1032.42
1318.93
182.74
790.16
163.54
0.20
1996.46
11851.52
1427.54
1899.86
146.30
916.63
211.64
0.00
1176.57
15375.82
(http://www.janatabank-bd.com/jb5.htm, 2013)
(http://www.janatabank-bd.com/jb9.htm, 2013)
4.5 IMPORT Import means purchase of goods or services from abroad. Normally consumers, firms and Government organizations import foreign goods or services to meet their various necessities. Main import items are
food item, edible oil, fertilizer, petroleum, machineries, chemicals, raw materials of industry, cement clinkers etc. So, in brief, we can say that import is the flow of goods and services purchased by local agent staying in the country from foreign agent staying abroad.
4.6 Import Finance Through quite a good number of Authorized Dealer Branches and 1198 nos. foreign correspondents world wide Janata Bank Limited has been extending full range import and relevant finance facilities. Import Items : Capital Machineries and Industrial raw materials. Fuel & Lubricants. Intermediate goods. Consumer durable, spare parts and equipments. Consumer goods : Food & Food Grains, Baby food, Petroleum, CDSO (Crude Degummed Soya bean Oil), CPO (Crude Palm Olin) Oilseeds, Cement Clinker, Construction Materials, Fertilizer, Chemicals and many other goods permissible by Import by Import Policy of the country. (http://www.janatabank-bd.com/jb5.htm, 2013)
Facilities Offered : Opening of L/C at competitive/ reasonable margin and commission Interest at concession rate on import finance to the prime customers & interest rebate facilities.
Import Trend
Setting Industrial vision to facilitate optimally, bank's involvement has been showing sharp rising trend as under: Year
Taka in Million
2000 2001 2002 2003 2004 2005 2006 2007
48004.80 54666.30 58889.10 60476.80 74919.70 72912.20 128809.00 84065.40
(http://www.janatabank-bd.com/jb5.htm, 2013)
4.7 FOREIGN REMITTANCE Inward foreign remittance through Janata Bank Ltd. up to November 2012 is Tk. 51508.55 million. Foreign remittance from NBRs reached record high of Tk. 45924 million in 2011 against Tk.36788
million in 2010 and continue to play an important supporting role in strengthening the economy of the county Janata Bank ltd. by reducing lead-time, has ensured quick delivery of foreign remittance, an NBR branch has been opened to serve exclusively Non-resident Bangladeshis through Speedy Money Remittance System with instant to the beneficiaries. Anybody willing to remit foreign currency from any corner of the world can use wide network of the bank. The remittance reaches to the beneficiary within 3 days without charging any commission. Our worldwide network includes 4 branches in UAE, 2 exchange houses in Italy and correspondent relationship with all the major Banks and all important trade centers of the world. Recently Janata Bank Ltd. has launched its Speedy Foreign Remittance Payment System which enables beneficiaries to receive their money within shortest possible time. The beneficiary also gets information of remittance through automated SMS. It’s a secured, easy, cost effective and speedy way of remittance for the remitter.
Janata bank Ltd. has signed an agreement with Western Union Network to
facilitate wide range of remittance of the globe. Both the organizations make it possible to receive the money from about 300,000 locations of 200 countries instantly with prevailing mutual mechanism and workforce. The achievement of Janata Bank Ltd. in attracting foreign remittance as compared to country’s performance is given bellow: COUNTRY WISE REMITTANCE OF JANATA BANK LIMITED
To facilitate sending money in Bangladeshi Taka directly, Janata Bank Limited has Taka Drawing Arrangement with many banks/exchange companies in different countries. The expatriate Bangladeshis may send their money in BDT (Bangladeshi Taka) through the branches/subsidiaries of Janata Bank Limited and foreign banks/exchange companies. Remittance services are available at all branches and foreign remittances may be sent to any branch by the remitters favoring their beneficiaries. Remittances are credited to the account of beneficiaries instantly or within shortest possible time. Inward remittance from Bangladeshi nationals working abroad continued to play an important role in strengthening the current account. Receipts on this sector increased gradually in every year from 2006 to 2009. The underlying reason was that Bangladesh Bank has simplified the approval policy of drawing arrangements between foreign exchange houses and domestic bank. Janata Bank’s management has taken this opportunity. For quick payment of TTs issued by 4(Four) UAE branches of Janata Bank Limited ( Abu Dhabi, Al-Ain, Dubai &Sharjah branch) Foreign Exchange Corporate Branch, Dhaka( FECB, Dhaka), Laldighi East Corporate Branch, Chittagong(LDE, Ctg), Foreign Exchange Corporate Branch, Sylhet( FECB, Sylhet), Khulna Corporate Branch, Khulna, Barisal Corporate Branch, Barisal &Rajshahi Corporate Branch, Rajshahi are nominated.
To facilities to its remitters Janata bank Limited has started1. FECB, Dhaka will cover whole Dhaka Division, 2. LDE, Ctg will cover whole Chittagong Division, except branches under greater Comilla and Noakhali Area. 3. FECB, Sylhet will cover whole Sylhet Division, 4. Khulna Corporate will cover whole Khulna Division, 5. Barisal Corporate will cover whole Barisal Division, 6. Rajshahi Corporate will cover whole Rajshahi Division, 7. Comilla Corp. will cover all branches under greater Comilla district. 8. Noakhali Corp. will cover all branches under greater Noakhali district. Commission for issuance of Taka Drafts from our UAE branches has been reduced and refixed from AED 10.00 to AED 4.00 and commission for issuance of TTs drawn on Bangladesh and payable at any bank branches are re-fixed at AED 12.00 from AED 30.00. Commission for issuances of Taka drafts at UAE branches has been reduced irrespective of amount. 1% interest above the normal savings deposit rate is offered to SB accounts receiving foreign remittance.
4.8 SWIFT SWIFT Society for the Worldwide Interbank Financial Telecommunication means High-value payment market infrastructures focus primarily on security and resilience to support time-critical payments, efficiency to have the right trade-off between risks and cost. Liquidity cost reduction by early finality, easy collateral coverage and better liquidity management through real-time interactive services
Balancing cost, efficiency and risk are your key requirements, and SWIFT meets them with a reliable, secure and reusable messaging infrastructure, supporting international and proprietary standards. More than 62 high-value payments clearing and settlement systems covering more than 90 countries and carrying more than 240 million payments a year, rely on SWIFT for secure messaging services and common message standards essential to their smooth operation. Because customers are multilateral, customers need a trusted third party like SWIFT to provide secure, reliable and proven messaging solutions. SWIFT’s offering is more compelling in terms of cost and risk than alternatives, thanks to reusability of participants’ existing SWIFT infrastructures, value-added services such as FIN Copy, and standard support services. SWIFT solutions for
high-value payment clearing systems support the
messaging layer for payment transaction processing, cash management, business administration functions, reporting and generic communication. ((http://www.janatabank-bd.com/jb7.htm, 2013), 2013)
List of SWIFT Branch/Office SL No. 1. 2. 3. 4. 5. 6.
Branch/Office Janata Bank Ltd. Head Office Janata Bhaban Corp. BR Local Office, Dhaka Dilkusha Corp. BR, Dhaka Motijheel Corp. BR Foreign Ex. Corp. BR, Dhaka
SWIFT Code JANBBDDH JANBBDDHJBC JANBBDDHJBD JANBBDDHDCB JANBBDDHMCA JANBBDDHFEC
7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25.
Imamgonj Corp. BR Topkhana Corp. BR Kamal Ataturk Corp. BR, Dhaka Shantinagar Corp. BR Ramna Corp. BR, Dhaka B B Road Corp. BR, N.Gonj Bogra Corp. BR Rangpur Corp. BR MK Road Corp. BR, Jessore Khulna Corp. BR Barisal Corp. BR For. Ex. Corp. BR, Sylhet Comilla Corp. BR Laldighi East Corp. BR, Ctg. Foreign Ex. Corp. BR, Ctg. SK Mojib road Corp. BR, Ctg. Sadharan Bima Bhaban Corp. Ctg. Dinajpur Corp. BR Faridpur Corp. BR
JANBBDDHIMA JANBBDDHTKD JANBBDDHKAC JANBBDDHSNB JANBBDDHJRD JANBBDDHBNG JANBBDDHBOG JANBBDDHRNP JANBBDDHJMK JANBBDDHKDA JANBBDDHBSL JANBBDDHFES JANBBDDHCCN JANBBDDHLDE JANBBDDHCDA JANBBDDHSMS JANBBDDHSBB JANBBDDHDNJ JANBBDDHFAR
((http://www.janatabank-bd.com/jb7.htm, 2013), 2013)
Overseas Branches Branch/Office Janata Bank Ltd. UAE
SWIFT Code JANBAEAA
Abu Dhabi BR AL-AIN BR DUBAI BR SHARJAH BR
JANBAEAAAUH JANBAEAAALN JANBAEAADXB JANBAEAASHJ
((http://www.janatabank-bd.com/jb7.htm, 2013), 2013)
CHAPTER FIVE RECOMMENDATION
It is clear that the Janata Bank Limited Foreign Exchange department has ensured both quality and services which helps to improve the overall status of the Bank. Janata bank Limited has able to achieve second position in country and op position among public banks in export sector in 2013. For a greater achievement and attain more priority among the customers and clients JBL can walk through the way under some precision direction:
JBL should approach more attractive facilities with clear go ahead.
To survive in the cut throat competition JBL must step into launching ATM service as well as debit and credit card facilities.
Insufficient number of exporter and importer is not enough to achieve the goal who operate through this bank. So JBL should offer more facilities to attract their clients.
It is a crying need to provide more quality services to their clients in order to compete in the market.
Total revival of investment of commodity in commercial sector JBLrequires a very rapid and complete action to provide a more accurate and fast recycling of invest
Less interesting export facilities should be proven improved.
Finding out the newer destination of our export goods and ending up with being
adjusted with the newer sector’s customs.
With successful promotional programs JBL can attract more people from this
particular walk of life. The overall matter of foreign remittance should be driven under a complete computerized system having a main server country wide to keep up a congenial environment.
CONCLUSION Nearly edge is seen while inspecting the Foreign Exchange Department of Janata Bank Ltd.’s success. That means, this bank successfully finished last year with an appreciable performance .JBL attained first place in the last year among the government banks fort’s flawless completion of blending of solid quality and sincere service. For a greater achievement and attain more priority among the customers and clients JBL can walk through the way under some precision direction:
23.01.2012
Was acquainted with all the employees of the branch.
24.01.2012
Worked in the reception table.
25.01.2012
Worked in the reception table.
26.01.2012
Worked in the scroll table
29.01.2012
Worked in the table of DD entry to the computer
30.10.2012
Worked in the scroll table
31.01.2012
Worked in the table of Pay Order writing
01.02.2012
Worked with the computer in charge.
02.02.2012
Worked in the RMS+ table.
06.02.2012
Worked in the RMS+ table.
07.02.2012
Worked in the scroll table.
08.02.2012
Worked in the reception table.
09.02.2012
Worked in the reception table
12.02.2012
Worked in the clearing table.
13.02.2012
Worked with computer in charge.
14.02.2012
Worked with computer in charge.
15.02.2012
Worked with computer in charge.
16.02.2012
Worked with computer in charge.
19.02.2012
Worked in the Pay Order table.
20.02.2012
Worked in the scroll table
My duties in these tables
Reception Table:
Helping the customers to find the appropriate table.
Account opening
Giving different forms
Scroll Table:
To write down serial no., account no., amount in the scroll. All the deposit amounts are enlisted here before they are deposited. Pay
Order Table:
To help customers to write pay order forms
To write pay order serial
number.
Computer in charge:
Working with him to understand the software functionality.
To get
the primary knowledge to write the report.
RMS+ table:
To see functionality of the online support for DD, TT, and MT.
enroll the printed copy of the order.
Clearing table:
To receive cross cheques,
To
