Internship Report

on
Foreign Exchange Operation of Social Islami
Bank Ltd.

Supervisor
Mahjabeen Ferdous
Assistant Professor
Department of Business Administration
Stamford University Bangladesh

Submitted By
Raihan E Jannat Eva
ID No: BBA 05416859
Batch: BBA 054 (G)
Major: Finance & Banking
Stamford University Bangladesh

Stamford University Bangladesh

Date of Submission: 2nd April, 2018

i
 Letter of Transmittal

Date: 2nd April, 2018

To
Mahjabeen Ferdous
Assistant Professor
Department of Business Administration
Stamford University Bangladesh

Subject: Submission of Internship report.

Dear Madam,
I am proud to be a student of BBA of Stamford University Bangladesh. I have completed
the internship report Foreign Exchange Operation of Social Islami Bank Ltd. that has
been prepared as an integral part of my degree requirement. I have tried my best to follow
the instructions in preparing this report and submitted it to you for further action.

I hope you would find this report up to your expectation. I would be grateful to receive
your suggestions and comments regarding this.

It will be my pleasure to clarify any matter regarding this report. I thank to you for
allowing me the opportunity to undertake the task and for your sincere guidance and
cooperation.

Sincerely Yours,

Raihan E Jannat Eva

ID No: BBA 05416859
Batch: BBA 054 (G)
Major: Finance & Banking
Stamford University Bangladesh

ii
 Student’s Declaration

I here announce that the extensive study entitle

Foreign Exchange Operation of Social Islami Bank Limited

Conducted on behalf of Social Islami Bank Limited (SIBL)
Presented in Partial accomplishment of the Requirement for the award of the degree
Bachelor of Business Administration
From

STAMFORD UNIVERSITY BANGLADESH

Is my original work and not put forward for

the award of any other degree/Diploma/ fellowship
or other similar or honor

Raihan E Jannat Eva

ID No: BBA 05416859

iii
 STAMFORD UNIVERSITY BANGLADESH

“Certificate of supervisor”

To Whom It May Concern

This is to certify that the internship report on “Foreign Exchange Operation of Social
Islami Bank Limited” for the degree of Bachelor of Business Administration (BBA)
major in Finance & Banking from Stamford University Bangladesh carried out by
Raihan E Jannat Eva, ID No: BBA 05416859 under my supervision. No part of the
report has been submitted for any degree diploma, title, or recognition before.

Mahjabeen Ferdous
Assistant Professor
Department of Business Administration
Stamford University Bangladesh

iv
 Acknowledgement

I would start by thanking Almighty for all His blessings to make the report complete.
It was my academic advisor, Mahjabeen Ferdous, Assistant Professor, Department of
Business Administration, Stamford University Bangladesh, who helped me to choose
the topic to work on and I am very thankful for getting the opportunity to do my report
under his supervision. Her valuable suggestions and guideline helped me a lot to
prepare the report. Though I was always interested to be a part of research work, but
have not thought that I would get a chance to do a research work in this point of time
for my internship report.

I am really glad that this opportunity came to me because surely this project helped me
to know how to apply educational study in real life, what problems need to face to do
that, what are the way to find the information from people and many more. Again I
would like to thank my faculty to understand the problems I faced, and for his
valuable time and knowledge to help me correct the report.

Then I would like to thank my organizational supervisor MD. Sazzadur Rahman for
his support throughout the internship period by providing me all the information to
make this report the answer every questions that was curious to know and needed for
the report. He has showed me how to perform my tasks and most importantly, He has
encouraged me to learn and work in banking sectors.

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 Executive Summery

This report is a partial requirement for the Bachelor of Business Administration program.
The prime objective of the bank report is to conduct an analysis of “Foreign Exchange
Operations of Social Islami Bank Limited.” The data has been collected from primary
and secondary sources. Primary sources are group discussion, case study. Secondary
sources are library, several books, and periodicals related to the Annual report.

The Social Islami Bank Ltd (SIBL), a second-generation commercial bank, operating
since 22nd November, 1995 based on Shariah' Principles, has now 135 branches all over
the country with two subsidiary companies - SIBL Securities Ltd. & SIBL Investment
Ltd. Targeting poverty, Social Islami Bank Ltd, is indeed a concept of 21st century
participatory three sector banking model in one. In the formal sector, it works as an
Islamic participatory commercial bank with human face approach to credit and banking
on the profit and loss sharing. It has a Non-formal banking sector too with informal
finance and investment package that empowers and humanizes real poor family and
create local income opportunities and discourages internal migration.

SIBL does not open L/C for the product like energy drinks, CD, VCD, and DVD.
However other banks make high profit by opening these types of L/C recently. The
number of exporter and Importer who operate through this banks in not enough to achieve
the goal. Lack of latest or improved technologies and skilled manpower for operating
Foreign Exchange business. Lack of legal Islami Framework for conducting Foreign
Exchange business. In Conventional Banking system Foreign currency is considered as
goods not as currency and its value fluctuate continuously which in not in accordance
with Islami Framework. Backward linkage is a problem for foreign exchange business
which is related to back to back L/C. Backward Linkage refers to those small industries
that support the large industry.
They should solve Backward linkage for foreign Exchange business which is related back
to back L/C. Bank should introduce consumer credit scheme. Bank should increase their
office space and take more care in interior decoration. Some new investment schemes are
to be introduced for socio-economic development and welfare of the distressed humanity.
Bank should introduce ATM system. Should introduce one-stop service centre.

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 TABLE OF CONTENTS
Name of Topic Page No
Letter of Transmittal ii
Student’s declaration iii
Supervisor’s certificate iv
Acknowledgment v
Executive Summery vi-vii
Chapter:1 – Introduction 01-04
1.1 Background of the Study 02
1.2 Rationale of the Study 02
1.3 Objectives of the Study 03
1.4 Scope of the Study 03
1.5 Methodology of the Study 03-04
1.6 Limitations of the Study 04
Chapter:2 – Background of the Social Islami Bank Ltd. 05-17
2.1 An Overview of Social Islami Bank 06-07
2.2 Mission, Vision, Strategy Statement of Social Islami Bank Ltd: 07-08
2.3 Ownership Structure of Social Islami Bank Ltd. 08
2.4 Composition of the Board of Social Islami Bank Ltd. 08
2.5 Capital and Reserves of Social Islami bank Ltd. 09
2.6 Milestones in the Development of Social Islami bank Ltd. 10
2.7 Management Structure of Social Islami Bank Ltd. 11
2.8 Risk Management of SIBL: 12
2.9 HRD of Social Islami Bank Ltd. 13
2.10 Division -wise Branch Distribution: 13
2.11 Balance sheet 14-15
2.12 Profit and Loss Account 16
2.13 Cash flow Statement 17
Chapter 3-Foreign Exchange 18-22
3.1 Foreign exchange 19
3.2 Foreign exchange market and Bangladesh 19
3.3 Foreign Exchange Products in Bangladesh 20
3.4 Different Foreign Exchange Rate in Bangladesh 20-21
3.5 History of Exchange Rate System in Bangladesh 21-22
3.6 Interbank Transaction in Foreign Exchange in Bangladesh 22
3.7 Change in Exchange Rate in Bangladesh: 22
Chapter -4Foreign Exchange Department Of SIBL 23-32
4.1 Foreign Exchange 24
4.2 Foreign Trade 24
4.3 Different modes of International Trade Payments 25-26
4.4 Foreign Trade and Foreign Exchange 269
4.5 Functions of Foreign exchange division 27
4.6 Import Section 28-32
Chapter -5 Export section 33-40
5.1 Export Section 34-35
5.1.1 Export operation 35-36
5.1.2 Back-To-Back L/C 36-38

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5.1.3 Negotiation of Export Documents: 39-40
Chapter 6- Remittance Section 41-47
6.1 Remittance Section 42-43
6.1.1 Remittance procedures of foreign currency 43
6.1.2 Modes 44
6.1.3 Miscellaneous Services by This Department 45
6.1.4 Formalities for opening foreign currency (FC) Account 45-46
6.2 Risks in Foreign Exchange Business 47
Chapter -7 Analysis Part 48-59
7.0 Trend Analysis 49
7.1 Export 49-50
7.2 Import 51-52
7.3 Remittance 53-54
7.4 Ratio Analysis 55
7.4.1. Return on Import 55
7.4.2 Return on Export 56
7.4.3 Return on Inward Foreign Remittance 57
7.5 SWOT Analysis 58-59
Chapter:8– Findings 60-61
8.1 Findings 61
Chapter:9- Recommendations and Conclusion 62-66
9.1 Recommendations 63
9.2 Conclusion 64
References 65
Abbreviations 66

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 List of Figures

Name of Figures Page no.

Flowchart No: 2.1 Management Structure of Social Islami Bank Ltd. 11
Flowchart No: 5.1: Back-To-Back L/C 36
Figure 6.1: Export volume of SIBL 49
Figure 7.2: Export Growth Rate 50
Figure 6.3: Import volume million in tk 51
Figure 7.4: Import Growth Rate 52
Figure 7.5: Remittance Volume 53
Figure 7.6: Remittance Growth Rate 54
Figure 7.7 Return on Import of Social Islami Bank. 55
Figure 7.8: Return on Export of Social Islami bank Ltd. 56
Figure 7.9: Return on Foreign Remittance 57

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 List of Tables

Name of Tables Page no.

Table 2.1: Composition of the Board of Social Islami Bank Ltd. 08
Table 2.2: Capital and Reserves of Social Islami bank Ltd. 09
Table 2.3: Division -wise Branch Distribution 13
Table 3.1: Interbank Foreign Exchange Rates 22
Table : 6.1: Modes 44
Table 7.1: Export volume of Social Islami Bank Ltd. 49
Table 7.2: Export Growth of Social Islami Bank Ltd. 50
Table 7.3: Import volume of Social Islami Bank Ltd. 51
Table 7.4: Import Growth Rate of Social Islami Bank Ltd. 52
Table 7.5: Remittance Volume of Social Islami bank Ltd. 53
Table 7.6: Remittance Growth of Social Islami Bank Ltd. 54
Table 7.7 Return on Import of Social Islami Bank. 55
Table 7.8: Return on Export of Social Islami bank Ltd. 56
Table 7.9 Return on Foreign Remittance 57