Professional Documents
Culture Documents
An Internship Report
On
“Foreign Exchange operations of Janata bank Limited”
Submitted To:
Md. Zakir Hosain
Department of finance
Submitted By:
Sharmin Akter
ID: 11123101043
Department: Finance
Letter of Transmittal
Md.zakir Hosain
Department of finance
Dear Sir,
With due respect, It is my pleasure to submit the “Internship Report on the performance
of Foreign Exchange Operations of Janata Bank ltd”.I enjoyed preparing this report,
which enriched my practical knowledge of the theoretical concept. I tried to reflect the practical
operational aspects of the bank, which is complementary to the theoretical lessons. I collected
information from my practical knowledge, annual report of prime bank ltd. internet, different
books and different institutions.
I am very much thankful to you, as you gave me the opportunity to prepare this report & hope
that this report will meet the standards of your judgment.
Thanking you for your kind supervision.
Sincerely yours,
_______________
Sharmin Akter
ID: 11123101043
Department of Finance
Date:
Department of finance
Dear Sir,
This is my declaration that the internship report “Foreign Exchange Activities: “A Study
on Janata Bank, Mirpur Branch.” Which is submitted to you not a copy of any other
internship report previously made by any other student.
I also express my confirmation in support if the fact that the said internship report
has neither been before to fulfill any other course related purpose nor it will be
submitted to any other person or authority in future.
Sincerely,
…………………
Sharmin Akter
BBA, Major in
Finance
ID: 11123101043
Intake: 28th
Latter of acceptance
This is to certify that sharmin akter Bearing Id: 11123101043 have prepared this internship
report entitle “Foreign Exchange Activities of Janata Bank Ltd: A study on Mirpur Branch.”
Under my supervision & guidance. This is for the partial fulfillment of four year graduation
degree of BBA in Major-Finance of bangladseh university business of technology.
I have gone through the Master paper. He has accomplished the report by himself under
my supervision.
………………………………………..
Department of finance
At first, I would like to express my profound gratitude and deep regards to our honourable
sir Md. zakir Hosain, chairma ,Department of finance ,Bangladesh university business of
technology (BUBT) for his exemplary guidance, monitoring and constant
encouragement for this report. The blessing, help and guidance given by his time to time
shall carry me a long way in the journey of life on which I am about to embark.
I would like to pass thanks from my core of heart to Principle Manager of Janata Bank for
his random and unconditional support to complete my internship successfully.
I also like to give my thanks to all senior and junior staff Janata bank Limited at
Mirpur branch, whose cooperation helped me to complete my internship properly. I must
mention the excellent working environment and the positive group behavior of this Bank,
which helped me tremendously.
Executive Summary
Main objective of this report is to analysis the performance of foreign exchange operation
of janata bank ltd. This is description in the nature that has been administrated by collecting
secondary data .source of data were collected from annual report of JBL and reading
material published JBL etc. For analyzing data M.S office and M.S Excel software were
used.
This report has been shown that trend of export import and remittance increases year by
year but in 2011 and 2012 the growth rate of export and import got lowest due to world
recession and inflationary pressure respectively. Remittance flows are greatly affected in
2012.Operating profit has strong positive relation with export and import with significant
level lower than .05 remittance also has strong positive relation but significant level higher
than.05.In total national market share of export, import and remittance, JBL contribute with
the proportion at 14%, 8%, and 7% for export, import and remittance respectively. Huge
amount of remittance come from UAE where most of Bangladeshi expatriate lives and
almost 4 overseas branches are situated.
Although export, import, remittance increase gradually and their relationship with
profitability has strong positive relation JBL should concern that their export, import and
remittance will not be fall down that’s why they can develop attractive financing packing
such as pre-shipment and post-shipment finance, Export Guarantee facility etc at a law rate
for exporters and importers, JBL should increases strong network with the overseas
Exchange companies and banks in different parts of the world to ensure better remittance
services for its customers and online banking in every branch to promote remittance, in case
of L/C opening, bank should provide low margin facility to clients. More Import and Export
item can be included JBL can provide consulting facility by an export group of officials
for exchange, In case of payment of remittance, they should introduce debit card so that
customer can withdraw money within a second at anywhere.
Chapter-1
Introduction
q
1.1 Background of the study:
The internship program of BBA is a partial requirement of take test of real life
challenge conducted by the intern. It is an important part of BBA program. This
program is of three month duration. During this period I have worked closely with
employee of Janata Bank ltd, Mirpur Branch. The goal of this analysis is to expose the
student in the organization work situation.
Internship report prepared as a requirement for the completion of the BBA program
of the Bangladesh university business & technology. The primary goal of internship is
to provide an idea on the job exposure to the student and an opportunity for
translation of theoretical conceptions in real life situation. Students are placed in
enterprises, organizations, financial institutions, research institutions as well as
development projects. The program covers a period of 12 weeks of organizational
attachment.
After the completion of four-year academic BBA program I, sharmin akter, student of
Bangladesh university business & technology, Bangladesh was placed in Janata Bank
Bangladesh limited for the internship program. As a requirement for the completion
of the program I need to submit a report which includes “Foreign exchange operation
of Janata Bank
1.2 Scope of study:
In order to maintain the speed of development now Banks must compete in the
market place both with local institution as well as foreign ones. The report has been
prepared through extensive discussion with the Bank employees and clients.
The scope of this report is limited to the overall description of the Bank, its services,
its position in the industry and its performances analysis. The scope of the study is
limited to organization setup, functions and performance.
Primary Data:
Practical desk work.
Face to face conversation with the respective officers and clients.
Questionnaire survey of Bank customer.
Personal observation.
Relevant file study as provided by the officers concerned.
Secondary Data:
Some data and information for obvious reasons that could be very much essential. From
the beginning to the end, the study has been conducted with the intention of making as a
complete and truthful one. The report is an overall view Foreign Exchange operation of
Janata Bank Ltd, At Mirpur Branch. But there is some limitation for preparing this
report. These are,
Overview of Janata
Bank limited
The undertakings of existing banks specified in the 1st column of the table below stands
transferred to and vested in, the new banks mentioned in the 2nd column of the said table:
Nationalization of Banks:
1. National Bank.
2. Bank of Bahawalpur Ltd Sonali Bank
3. Premier Bank Ltd.
4. Habit Bank Ltd. Agrani Bank.
5. Commerce Bank Ltd.
6. United Bank Ltd. Janata Bank.
7. Union Bank Ltd.
8. Muslim Commercial Bank Ltd. Rupali Bank.
9. Standard Bank Ltd.
10. Australasia Bank Ltd.
11. Eastern Mercantile Bank Ltd. Pubali Bank.
Inception
In this backdrop, in order to rebuild the country’s economy, measures had been taken to
merge a number of banks previously operated in this region and make new banks and this
initiatives led to formation of Janata Bank in 1972 by combining the erstwhile United Bank
Limited and Union Bank Limited under the Banks Nationalization Order (President’s Order
No. 26) of 1972.
Corporatization
In 15 November, 2007 Janata Bank got registered with the Joint Stock of Registrars and
restructured it as a public limited company with the name Janata Bank Limited.
Roundup
Including 4 overseas branches in United Arab Emirates Janata Bank runs its business with
908 branches across the country having a big family of around 14,244 (As on 01.05.2015)
employees with its head office located at Janata Bhaban at Motijheel C/A, the heart of the
capital city, Dhaka.
At the end of 2014 the Bank held Deposit JBL crossed BDT 550,000 million, Advance
BDT 349,800 million with Authorized capital BDT 30,000 million and Paid-up Capital
BDT 19,140 million.
Janata Bank Limited, a corporate body trusted over the years, the 2nd largest (in respect of
Deposits/Assets) commercial bank in Bangladesh, has been playing pivotal role in overall
financial activities of the country and is possessing a long heritage of discharging laudable
services to the society since her embankment immediately after the emergence of this
verdant rich alluvial soil as a sovereign, independent state.
The contribution of the Bank to the national economy and social reform has set standard bar
so high that others in this business can’t help aspire touching the benchmark of success
earned by JBL. More so a matter of great honor is that the contribution, commitment and
success of the Bank have been recognized with a number of prestigious awards by national
and international organizations of repute.
Local Office 01
Corporate-1 Branch 15
Corporate-2 Branch 61
Overseas Branch 04
Grade-1 Branch 290
Grade-2 Branch 209
Grade-3 Branch 294
Grade-4 Branch 109
Domestic Network
Number of Branch: 904
Number of Divisional office: 11
Number of Area Office: 50
Number of AD Branch: 56
Overseas Network
Number of Branch: 04
Location: Abudhabi, Dubai, Al-Ain and Sarjah. UAE
Chief Executive Office Obeid Sayah Al – Mansuri Building Zayed
1st Street (Electra Road), Post Box No 2630
Abu Dhabi, United Arab Emirates
Subsidiaries
Janata Capital and Investment Ltd: Dhaka.
Janata Exchange Company srl : Italy
Janata Exchange Company Inc.: New York, United States of America (USA)
Number of Correspondence: 1251
Number of Employees: 14,244 (As on 01.05.2015)
Number of Exchange House: 76
Corporate Rating Status
Entity Rating: A + in the long run
As govt. owned Bank: AAA in the long run
Telex: 675840JBDBJ, 671288 JBHOBJ
Phone P ABX: 9560000, 9566020, 9556245-49, 9565041-45, 9560027-30
Fax: 88-02-9564644, 9560869
E-mail: md@janatabank-bd.com
Website: www. Janatabank-bd.com; jb.com.bd
Swift Code: JANBBDDH
Refers: JBL_Annual_Report-2015
2.6 Awards and Achievements.
Recently The Bank has been recognized internationally and domestically for its good
performance. Few of these recognitions are given below:
YEAR Awards
Name Designation
By SWOT Analysis, an organization can also observe their current position. It can also be
considered as an important tool for making changes in the strategic management of the
organization.
SWOT is an acronym for the internal strength and weakness of a firm and the
environmental Opportunity and Threat facing that firm. So if we consider Janata Bank as a
business firm and analyze its strength, weakness, opportunity and threat the scenario will be
as follows:
Strength:
Good Management
Weakness:
Opportunity:
Experienced Managers
Threats:
Upcoming Banks/Branches
Financial Crisis
2.9 Vision
To become the effective largest commercial bank in Bangladesh to support socio-economic
development of the country and to be a leading bank in South Asia.
2.10 Mission
Janata Bank Limited will be an effective commercial bank by maintaining a stable growth
strategy, delivering high quality financial products, providing excellent customer service
through an experienced management team and ensuring good corporate governance in
every step of banking network.
2.11 Objectives.
The objectives for which the bank is established as follows:
To carry on, transact, undertake and conduct the business of banking in all
branches.
Private sector banks are owned by the private lenders. The private banks are also
managed and controlled by private promoters and these promoters are free to
operate according to the market forces.
The interest rates of private banks are generally slight costly as compared to public
sector banks. Banking has been originated in the form of private banking. Generally,
the private banks are looked as a large organization with global operations. A
private bank may have retail banking facilities for their clients. They are known for
better customer services and investment opportunities. Shareholders of the private
banks generally seek short-term profits as their highest priority. The private banks
are known for being well equipped with all kinds of contemporary tools and
techniques.
Government holds a major share in public sector banks and thus, important
decisions are made by the government. The decisions are generally in the interest of
the public. Their
Main aim is to carry out the banking activities that cater to all the sections of the
society. On the other hand, a private bank mainly focuses on short term interest.
These banks do not have much interference of the government but at the same time
these banks lack the administrative support of the government. To sustain in the
competitive banking sector, the private sector banks have been using the best and
latest software’s.
Government is where majority of the stake in the shareholders that more than fifty
percent of the stake is held by them.
Fees and services of private banks have made names by providing better service.
However, they charge for extra services they provided by them. On the other hand,
government banks fees and services are less such as on balance maintenance. A lot
of government banks are still picking up in the services.
Chapter 3
THEORETICAL ASPECT
3.1. Foreign Exchange operations
Exchange:
Foreign exchange:
Foreign Exchange is a process, which is converted one national currency into another and
transferred money from one country to other countries. Foreign Exchange is that section of
economic science which deals with the means and method by which right to wealth in one
country’s currency are converted into rights to wealth in terms of another country’s
currency. It involved the investigation of the method by which the currency of one country
is exchanged for that of another and the ratio or equivalent values at which such exchanges
are affected. Foreign Exchange is the rate of exchange in the both country’s currency.
Import:
An import is a good or service brought into one country from another. The word "import" is
derived from the word "port," since goods are often shipped via boat to foreign countries. Along
with exports, imports form the backbone of international trade; the higher the value of imports
entering a country, compared to the value of exports, the more negative that country's balance of
trade becomes.
Export:
An export is a function of international trade whereby goods produced in one country are shipped
to another country for future sale or trade. The sale of such goods adds to the producing nation's
gross output. If used for trade, exports are exchanged for other products or services in other
countries.
Remittance:
A remittance is the funds an expatriate sends to their country of origin via wire, mail, or online
transfer. These peer to peer transfers of funds across borders are economically significant for
many countries that receive them.
Letter Of Credit:
A letter of credit is a letter from a bank guaranteeing that a buyer's payment to a seller will be
received on time and for the correct amount. In the event that the buyer is unable to make
payment on the purchase, the bank will be required to cover the full or remaining amount of the
purchase.
Letter of credit
Revocable credit:
This type of credit can be revoked or caned at any time me consent of, or notice of the
beneficiary. In case of seller (beneficiary), revocable credit involves risk, as the credit
may be amended or cancelled while the goods are in transit and before the documents
are presented, or although presented, before payment has been made. In modern
banking, the use of revocable credit is not widely spread.
Irrevocable Credit:
The irrevocable credit is a commonly used type of documentary credit. The credit which
cannot be revoked, varied or change/ amended without the consent of all parties- buyer,
seller, issuing bank, and confirming bank irrevocable credit gives the seller grater
assurance of payments, but he remains dependent on an undertaking of a foreign bank.
Irrevocable credit may be confirmed or unconfirmed.
3.3. Classification of letter of credit:
Cash L/C
Letter of Deferred
Back to
Back L/C Credit L/C
Cash L/C:
Cash L/C denotes that, the payment is paid in cash. In other words , after shipment, the
applicant makes payment to the beneficiary L/C.
Sight Payment:
The payment is made as soon as documents shown to the issuing Bank and payment
received from importer; Instruction is given to reimbursing bank to give payment.
Deferred Payment:
The payment of this kind of L/C is made after 30/60/90/120 or 180 days soon as
documents shown to the issuing Bank. The credit with deferred payment differs only
slightly in its effect on the beneficiary from the credit with time draft.
In case of a ―Back-to-Back‖ letter of credit, a new L/C (an import L/C) is opened on the
basis of an original L/C (an export L/C). Under the ―Back-to-Back‖ concept, the seller as
the beneficiary of the first L/C offers it as a ‗security ‘ t o the Advising Bank for the
issuance of the second L/C. The beneficiary of the back-to-back L/C may be located
inside or outside the original beneficiary‘s country. In case of a back-to-back L/C, no
cash security (no margin) is taken by the bank; bank liens the first L/C. In case of a back-
to-back L/C, die drawn bill is usage/time bill.
3.4. Form of L/C
Mail L/C
SWIFT L/C
Mail L/C:
The L/C comes in mail is called Mail L/C.
SWIFT:
The Bank has become the member of SWIFT Alliance Access, a multi-branch secure
financial messaging system provided by the Society for Worldwide Inter-bank Financial
Telecommunication [SWIFT], Belgium. With the activation of the SWIFT system the
Bank enjoys instant, low-cost, speedy and reliable connectivity for L/C transaction, fund
transfers, message communication and other worldwide financial activities.
Chapter-4
FOREIGN EXCHANGE
OPERATIONS OF JANATA BANK
3.2. Types of Foreign Exchange Sanctioned by EXIM Bank:
Export Business.
Import Business.
Foreign Exchange Remittance.
Foreign Trades:
JBL provides a wide range of banking services to all types of commercial concerns such
as Import & Export Finance and Services, Investment Advice, Foreign Remittance and
other specialized services as required. Although we are a private commercial Bank, we
have a strong global network that helps us to undertake international trade smoothly and
efficiently.
Import Business:
Janata Bank supports its customers by providing facilities throughout the import process
to ensure smooth running of their business. The facilities are:
a. Import Letter of Credit
b. Post Import Financing (LIM, LTR etc)
c. Import collection services & Shipping Guarantees.
Export Business:
Janata Bank offers extra cover to its customers for the entire export process to speed up
receipt of proceeds. The facilities are:
Remittance:
Janata Bank provides to its customers the following services:
I. Revocable credit: This type of credit can be revoked or caned at any time me consent
of, or notice of the beneficiary. In case of seller (beneficiary), revocable credit involves
risk, as the credit may be amended or cancelled while the goods are in transit and before
the documents are presented, or although presented, before payment has been made. In
modern banking, the use of revocable credit is not widely spread.
• Sight Payment: The payment is made as soon as documents shown to the issuing Bank
and payment received from importer; Instruction is given to reimbursing bank to give
payment.
• Deferred Payment The payment of this kind of L/C is made after 30/60/90/120 or 180
days soon as documents shown to the issuing Bank. The credit with deferred payment
differs only slightly in its effect on the beneficiary from the credit with time draft.
3.2. Functions of Foreign Exchange:
Commercial Import
Commercial Export
Foreign remittance
Rate of exchange
How the rate of exchange works.
Forward and spot rate.
Methods of quoting exchange rate.
Premium and discount.
Risk of exchange rate.
Causes of exchange rate.
Exchange control and position.
Convertibility.
Intervention money.
Foreign exchange transaction.
Foreign exchange trading.
Export and Import letter of credit.
Non-commercial letter of trade.
Nature and function of foreign exchange market.
Rules and regulation used in foreign trade.
IMPORTER EXPORTER/
es or confirms L/C
resent documents
Submits documen
kes Payment
3.4. Registration for foreign Exchange:
Like other business the exporter are required to obtain ERC from the offices of the chief
controller of import and export government of Bangladesh. No person is allowed to export any
goods from of Bangladesh without obtaining such ERC. For obtaining ERC an exporter has to
submit the following papers or documents:
Application form
Partnership deed (registered)
Memorandum & Articles of Association and Incorporation Certificate.
Valid Trade License
Fees paid treasury challis.
Trade license from municipal authority.
Bank, Nationality and Income tax Certificate
Register partnership deed in case of partnership concern.
Export Business.
Import Business.
Foreign Exchange Remittance.