Executive Summary

AB bank Limited is a private commercial bank in Bangladesh. The Bank

is now a well known and playing an important role in banking sector.
Foreign Exchange Business, i rightly organi!ed " directed, can help
expansion o our economy. This is why, the importance o e#ective
involvement o Bank. $n Financing $mport, Export " %emittance
business is enormous. AB Bank Limited, a &nancial institute that has
been e#ectively playing its important role not only or its growth but
also or the economic development o Bangladesh.
$n this report various actors in'uencing the program and
administration o oreign exchange business by ABBL are analy!ed. The
impacts o the present Foreign Exchange administration system upon
its &nancial perormance are also presented in this report.
(ost importantly, this report attempted to satisy the need o resh
students who should have some knowledge o &nance o oreign trade
and oreign exchange with particular reerence to Bangladesh
condition.
The report tries to deal, though not comprehensively, with both the
theory and practice o Foreign Exchange. This report consists o )
chapters and mainly ocuses on one aspect o Foreign Exchange,
Export*$mport operation " %emittance $nward*+utward o ABBL,
Agrabad Branch, ,hittagong.
The report will be -uite useul or the executive.s particularly new
entrants in banking proession " will also be help to the students o
business in college " universities.

Table of Content
1 1 1 1 1 1 1
SL NO Particular Page No
Acknowledgement /
Executive 0ummery 1
Chapter One: Introduction
2.2 $ntroduction 3
2.4 +b5ective o the %eport 6
2./ 0cope o the 0tudy 6
2.1 (ethodology o the 0tudy 27
2.8 Limitation o the %eport 22
Chapter Two: About ABBL
4.2 Background o the ABBL 2/
4.4 9ision*(ission 21
4./ 0trategic :riority 21
4.1 ,orporate $normation 28
4.8 :roducts " 0ervices o ABBL 2)
4.8.a :roduct o ABBL 2;
4.8.b 0ervice o ABBL 23*26
4.) +rgani!ational 0tructure o ABBL 47
4.; At a <lance o ABBL F,(: (arket 42*44
4.3 0=+T Analysis 4/*41
Chapter Three: Foreign Exchange
/.2 Foreign Trade 4)
/.4 Functions o Foreign Exchange 4)*4;
/./ Letter o ,redit 43
/.1 Types o >ocumentary ,redits 46
/.8 :arties o Letter ,redit 46*/7
/.) 0ome $mportant >ocument o L?, /7*/2
/.; (echanism o Letter ,redit /2
/.3 :rocedure to +pen an L?, /4
/.6 Lodgments o >ocument /4
Chapter Four: Iport Operation
1.2 (eaning o $mport /1
2 2 2 2 2 2 2
1.4 $mport :rocedure /1
1./ $mport Form /8
1.1 $mport (echanism /)
1.8 <eneral ,onditions o $mport o <oods /)*/3
1.) Total $mport o ABBL@Agrabad BranchA /6
1.; Total (a5or $mport by ABBL @Agrabad Br.A 17
Chapter Fi!e: Export Operation
8.2 (eaning o Export 14
8.4 Export :olicy 1/
8./ Export $ncentives 14*1/
8.1 Exports :rocedures 11*1)
8.8 Export Financing 1)
8.) :re*0hipment ,redit 1;*16
8.; Back to Back Letter o ,redit 16*87
8.3 :ost 0hipment ,redit 87*82
8.6 Begotiation o >ocument Cnder L?, 82
8.27 Foreign >ocumentary Bill :urchase 82
8.22 Export >ocument ,hecking 84
8.24 Total Export o ABBL @Agrabad BranchA 84
8.2/ (a5or Export by ABBL @Agrabad BranchA 8/
Chapter Six: "eittance
).2 >e&nition o %emittance 88
).4 $nward %emittance 88
)./ Foreign ,urrency @BankA Botes 88*8)
).1 (iscellaneous 0ervices <iven by This
>ept.
8)
).8 Foreign $nward %emittance 8;
).) Foreign +utward %emittance 8;*83
).; %emittance o ABBL @Agrabad BranchA 86
FIN#IN$S )7
"ECO%%EN#ATION )2
CONCL&SION )4
BIBLIO$"AP'( )/
3 3 3 3 3 3 3

1.1 Introduction
Bank is a financial institution. The economy is mostly depended on the bank since the
bank facilitates the economic and financial transactions. Every industry large, medium & small is
absorbing the facilities provided by the bank relating to its production to eport and also to
import the materials.
The Bank !ill put reliance on market forces and provide increased inducement to savers
" 4 4 4 4 4 4
to mobili#e savings and hold fast to profitability potential to allocate funds to the users of such
sectors of trade, commerce and industries as may be consistent !ith the socio$economic
ob%ectives of the nation. Bank is a financial intermediary !hose prime function is to move scarce
resources in the form of credit from savers to those !ho borro! for consumption and investment.
&n a modern society, banks are very much important to the economy because of their ability to
create money.
Economy of Bangladesh is in the group of !orld's most underdeveloped economies.
(ne of the reasons may be its underdeveloped banking system. )ince 1**+, Bangladesh
government has taken a lot of financial sector reforming measures for making financial sector as
!ell as banking sector more sound and transparent, an formulation and implementation of this
reform activities have also been participated by different international organi#ation like ,orld
bank, &-. etc.
The government of Bangladesh has been pursuing a liberal policy to attract foreign
echange business because foreign echange business is considered as a key to economic
development. /ountries like Bangladesh are mostly depended on import of ra! materials to
eport 0uality goods.
1.2 Objective of the Report
&n this report & tried to find out all sorts of practical dealings that are conducted in case of
handling various type of banking activities in each department, specially foreign echange
department, the theoretical aspects, that is !hat should be the procedures and re0uirements
maintained from first to last, and actual practices as !ell as the ultimate gain for the bank in
conducting financial activities are mainly discussed. )o the purpose and ob%ective of this report
can be summari#ed as follo!s1
2rimary1
To depict the Trade service operations and its impact in the economic development of
Bangladesh from the perspective of 3B Bank 4td.
)econdary1
5 5 5 5 5 5 5
1 To 6no! about 7ules & 7egulation of .oreign Echange Business.
2 To discuss about the .oreign Echange Business of sample bank.
3 To analy#e the .oreign Echange performance of sample bank.
1.3 Scope of Study 1
The report is highlighting the ma%or functional area of foreign echange department and
procedure of import, eport & remittance. ,hile preparing the report & had a great opportunity
to have real life kno!ledge about the .oreign Echange procedure. & had to go related
department to collect the necessary information for my report. & also talked !ith the clients of
3B Bank and then & came to kno! ho! they feel about 3BB4. This report focuses on the bank's
management and organi#ational structure, functions, foreign trade. This study helped me a lot
about gaining practical kno!ledge about the foreign echange. & do believe that the bank as !ell
as the clients !ill also be benefited through this study.
8 6 6 6 6 6 6
1.4 Methodology of the Study :
The methodology of this report is totally different from conventional reports. &
have emphasi#ed on the practical observation. 3lmost the entire report consists of my practical
observation. ,hile preparing the report, & have taken information from the follo!ing sources1
D! "O##$"!IO%:
9ata of this report are gathered from different sources as !ell as !ith close observation
!hile proceeding had run through. 9uring the eploratory research, in$depth intervie!s !ere
conducted !ith various employees of 3BB4 and clients of it in /hittagong.
The follo!ing sources have been used for the purposes of gathering and collecting data1
. &RIMR' SO(R"$S:
2rimary data have been gathered and assembled by follo!ing !ays
1 2ractical 9esk!ork
2 (bservation in the organi#ation
3 .ace to face contact !ith the officials
" .ace to face conversation !ith the clients
). S$"O%DR' SO(R"$S:
)econdary data have been collected by using follo!ing sources1
5 3nnual 7eport of the bank.
6 9ifferent 7eports and :ournals
7 ;niversity 4ibrary, 9epartmental )eminar & Bank's sources
8 ,ebsites
< 7 7 7 7 7 7
1.* #i+it,tion of the Report
There !ere some problems !hile & conducted the orientation program. 3 !holehearted
effort !as applied to conduct the program and to bring a reliable and fruitful result. &n spite of
having the !holehearted effort, there eit some limitations, !hich acted as a barrier to conduct
the program. 3s the report is prepared in a short span of time, it could not be made
comprehensive and conclusive. -oreover, the accuracy of the report is largely depended upon
the information obtained from the relevant sources. =reater emphasis !as given to collect
information from informal sources like discussion !ith clients and our officials, !hich may
appear to be an inherent limitation of the study. The limitations are1 .
1 Time frame for the research !as very limited. The actual survey !as done !ithin a
month.
2 4arge$scale research !as not possible due to constraints and restrictions posed by the
organi#ation.
3 The research only covers the customers of /hittagong.
4 The survey !as limited to the customers of 2ersonal banking division and covers fe! of
the organi#ational or corporate customers of 2B4 due to the time constraints.
5 2art on organi#ational culture !as !ritten from individual's perception and may vary
from person to person.
6 &n many cases, up to date information is not published.
7 The information regarding the competitors is difficult. To get and to ac0uire information
is very limited.
8 =etting 7elevant papers and documents !ere strictly prohibited.
9 To protect the organi#ational loss in regard of maintaining confidentially, some parts of
the report are not in depth.
> 8 8 8 8 8 8

2.1 ),c-ground of ) ),n-
3B Bank 4imited is one of the fasted gro!ing banks among all the commercial banks in
Bangladesh. 3BB4 bears a uni0ue history of its o!n. The organi#ation started its %ourney in the
financial sector of the country as an &nvestment /ompany back in 1*>1. The aim of the company
!as to mobili#e resources from !ithin and invest them in such !ay so as to develop country's
industrial and Trade )ector and playing a catalyst role in the formation of capital market as !ell.
* 9 9 9 9 9 9
&ts membership !ith the bourse helped the company to a great etent in this regard. The
company operated !ith <+ branches till 2++<.
9uring last 25 years of its operation 3BB4 has ac0uired commendable reputation by
providing sincere personali#ed service to its customers in a technology based environment.

The bank has set up a ne! standard in financing in the industrial. Trade and .oreign
Echange business. &ts various deposit and credit products have also attracted the clients both
corporate and individuals !ho feel comfort in doing business !ith the bank.
2.2 .i/ion0Mi//ion
?ision
To be the best 2rivate /ommercial Bank in Bangladesh in terms of efficiency, capital ade0uacy,
asset 0uality, sound management and profitability having strong li0uidity.
-ission
To build 3B Bank 4imited into an efficient, market driven, customer focused institution !ith
good corporate governance structure.
/ontinuous improvement in our business policies, procedure and efficiency through integration
of technology at all levels.
2.3 Str,tegic &riority:
To have sustained gro!th, broaden and improve range of products and services in all areas of
1+ 10 10 10 10 10 10
banking activities !ith the aim to add increased value to shareholders investment and offer
highest possible benefits to our customers.
.or /ustomers
To become most caring Bank $ by providing the most courteous and efficient service in every
area of our business.
/ore ?alues
.or Employees@@..
By promoting !ell $ being of the members of the staff.
.or )hareholders@@@
By ensuring fair return on their investment through generating stable profit.
.or /ommunity@@@@@@
By assuming our role as socially responsible corporate entity in a tangible manner through close
adherence to national policies and ob%ectives.
2.4 "OR&OR!$ I%1ORM!IO%:
/(72(73TE &A.(7-3T&(A (. 3B B3A6 4&-&TE9 3T 3 =43A/E1
1. 9ate of incorporation 9ecember 31, 1*>1
2. Branch of the 3B Bank 4imited <+
3. 3uthori#ed /apital 2+++ -illion
". 2aid$up /apital "+++ -illion
5. /hairman -r. ,ahidul Bo0ue
<. ?ice /hairman -r. )alim 3hamed
>. -anaging 9irector of the Bank -r. 6aiser 3. /ho!dhury
*. 9irectors aC -r. )yed =olam 6ibria
bC -r. =olam )ar!ar
cC -r. ).-. )alahuddin
dC -r. -ohammad Tipu
)ultan,./3
11 11 11 11 11 11 11
cC -r. 9.). .aisal Byder
2.* &roduct/ 2 Service/ of ))#:
D 7etail Banking
D /orporate Banking
D )-) Banking
D )-E Banking
D 2ro%ect .inancing
D 4oan )yndication
D 4ending 7ates
D 9eposit 7ates
D Echange 7ates
D A7B Banking
D -oney Transfer
D &slami Banking
D &nvestment Banking
D /ards
D 4ocker )ervice
2.*. ,. &roduct of ))#:
The Bank offers different types of product. 3BB4 performs the follo!ing products !hich are
given belo!1$
Depo/it:
D /urrent 9eposit
12 12 12 12 12 12 12
D )aving 9eposit
D -onthly )aving 9eposit )cheme D-)9)C
D 9eposit 9ouble )cheme D99)C
D .ied 9eposit
D -onthly &ncome 9eposit )cheme D-&9)C
D )hort Term 9eposit
#o,n:
D 2ersonal 4oan
D 3uto 4oan
D Easy 4oan D.or EecutiveC
D =old =race E :e!ellery 4oan
D BouseF(ffice .urnishingF7enovation 4oan
D Education 4oan
D )mall Business 4oan
D /onsumers 4oan )cheme
D )taff 4oan BB DBouse BuildingC
D 2acking /redit
D Bouse 4oan )cheme
2.*. b. Service of ))#:
The first primary function of the bank is to accept deposits of money from the customers or saver
group. 3BB4 offers all types of deposit services to its customer available in today's bank in
Bangladesh.
Banking business in mainly related !ith lending. &n fact, deposits are accepted for lending or
investment. &t interest rate ranges from 1+G to 15G. 3BB4 provides loans and advances in the
follo!ing sectors1
D (nline facilities through all branches
D &nforming information provided by the bank in every bank.
D 3ccount opening
D 2ay order issue
D Telegraphic Transfer DTTC
D 9emand 9raft D99C issue
D 3ccount Transfer facilities
D )olvency /ertificate issuing
D 4ocker )ervice
D 4etter of /redit D4F/C
13 13 13 13 13 13 13
D Traveler /he0ue issue
D /apital .ormation.
D /ash /redit DBypothecationC
D /ash /redit D2ledgeC
D 4oan =eneral
D )ecurity (rder 9raft D)(9C against .97
D )(9 Eport
D )(9 =eneral
D 4oan against Trust 7eceipt DT7C
D 2ayment 3gainst 9ocuments D239C
D 4ease .inance
D Bire 2urchase
D .oreign 9ollar Bill 2urchase D.9B2C E D9ocsC
D .9B2 D/leanC
D Eport 9evelopment .und DE9.C
Besides these, it's some 3ncillary services are1
D Brokerage Bouse )ervice under central depository !ith membership of bourse.
D .oreign /urrency 7emittance
D 7epresentative )ervice
D /onsultancy
D ),&.T
D 2ioneer in 3gro .inancing
D &nternational business
2.3 OR4%I5!IO%# S!R("!(R$ O1 ))#:
Chairman
Managing Director
1" 14 14 14 14 14 14
Deputy Managing Director(DMD)
Senior Executive Vice-President (SEVP)
Executive Vice-President (EVP)
Senior Vice- President (SVP)
Vice- president (VP)
Senior Assistant Vice President (SAVP)
Assistant Vice President (AVP)
Senior Executive Oicer (SEO)
Executive Oicer (EO)
Princip!e Oicer (PO)
Senior Oicer
Oicer
"unior Oicer ("O)
2.< 3t a =lance of 3BB4 ./-2 -arket
.igure in -illion Taka
2articulars 2++* 2++> 2++< 2++8 2++5
15 15 15 15 15 15 15
(perating 2rofit D2B2
& TC
<1+.8* <55.+3 38+.+< 183.35 1+2.1>
Aet (perating 2rofit
D2BTC
532.1* "+<."5 1*+.+< "<.12 "<.1>
2rofit after Ta D23TC532.1* 182."5 *+.+< 1<.12 23.8*
3uthori#ed /apital 2+++.++ >++.++ >++.++ >++.++ >++.++
2aid$up /apital 5<1.<" 51*.<8 "*5.+1 "<1."" "+*.*5
)tatutory & (ther
7eserves
1"58."< >28.33 823.** 5*2.1+ 58*.+5
)hareholders' E0uity 25>2.<8 1528.>> 12"3.5> 1135.*> 11+5.32
9eposits "2+<<.++ 2<381."" 2>2**.23 2<28+.18 2552".5>
4oans & 3dvances 312>*.25 213>".83 1<++>.5+ 2+"35.2" 1*"<<.32
&nvestments 83+1.2* "+8+.*5 8<3>.15 3335.>< 321>.83
.ied 3ssets 11">."8 3<+.+8 2<8.8< 2>5.2+ 2>>.55
Total 3ssets "<*>*.3" 33+85."+ 32513."> 32*8*."5 31*1>.*+
&mport Business "2>8+.2" 2315+.>5 1*288.++ 1*2>1.23 1<213.++
Eport Business 1<><8.15 125*5.2+ 1+1++.++ *<"3.+> >"8<.++
=uarantee Business 3"*8.3> 25+<.*1 2353.++ 15*>.>* 2+*+.52
Ao. of Branches 8> 8< <+ 8* 8*
Ao. of Employees 15*+ 1525 1<28 18+2 185*
6$' &$R1ORM%"$ I%DI"!ORS
Earnings per )hare DTk.C *3.+> 31.28 1>.1* 3.83 5.<>
2rice Earning 7atio DTimesC *.5* 11.8> 2+.*5 53.>* 53.++
Book ?alue per )hare DTk.C "51.<" 2*3.<8 251.22 2"+.*8 28*.82
7eturn on E0uity$7(EDGC 2+.81 1+.8" <.2" 1.53 2.+<
7eturn on 3ssets$7(3DGC 1.11 +.5+ +.3* +.+< +.+<
18 16 16 16 16 16 16
/apital 3de0uacy 7atio *.23 *.1< *.+* *.1< >.25
A24 as G of 3dvances ".+2 >.21 11.3< 1*.25 2".<"
3dvance 9eposit 7atio DGC <".38 <>.18 8+.1+ <".*8 <8.31
3ssets ;tili#ation 7atio DGC <8.3< <2.8+ 8<.12 82.5> 5*.1*
1< 17 17 17 17 17 17
2.7 S8O! %#'SIS O1 ))#:
.rom the ),(T 3nalysis, it !ould be easy to figure out the ongoing scenario of the 3BB4.
&t is possible to find out the strength, !eakness, opportunities and threats of 3BB4. )o to
have a better vie! of the present business practices of 3BB4. ),(T 3nalysis is done.
&n ),(T 3nalysis, t!o factors act as prime movers.
&nternal factors1 ,hich are prevailing inside the concern, !hich include strength
and !eaknesses.
Eternal factors1 !hich act as opportunity and threatH
Strength:
1 ?ery good profit margin earn by the last fe! years.
2 )trong capital back to bring available li0uidity.
3 Efficient and eperienced management team.
4 9irectors of the bank are not over ruling the decisions made by the management
team.
5 )everal deposit schemes and financial products offered by the 3BB4, so clients
have enough options to invest their money.
6 Bank 0uickly epanding its business all over the country.
7 =etting the membership of ),&.T.
8e,-ne//e/:
8 2erformance of the marketing sector is not satisfactory
9 4imited geographic coverage.
10 Traditional banking system is follo!ed.
11 Bigh employee turnover.
12 4ack of technological improvement.
Opportunitie/:
13 /lient's reliability on 3BB4 is gro!ing day by day on the bank.
14 3BB4 has no! the global market reputation.
15 3BB4 offers many popular schemes to the people and !ith these schemes 3BB4
can raise its deposit promptly.
16 7ecently 3BB4 provides credit card facility to the customer.
17 =ood chance of epanding geographically !ithin Bangladesh.
18 (pportunity to take market share from rivals by offering ne! innovative products
or services.
19 Taking advantage of emerging ne! technologies in banking especially online
1> 18 18 18 18 18 18
3T-, &nternet Banking etc.
!hre,t/:
20 ?ery competitive market.
21 2olitical unsuitability affects the banking sector very often.
22 &n Bangladesh, economy no! passing recession this also affects the bank.
23 /entral Bank's policies sometimes are not in favor of the private bank's policies.
24 Entry of ne! commercial banks, leasing companies and merchant bank etc. they
all are competitors.
25 /ompetitors are offering innovative ne! products and services.
26 /ompetitors are using several ne! marketing policies to attract the
customer

3.1 1oreign !r,de
.oreign echange department is international department of the bank. &t deals !ith
globally and facilitates international trade through its various modes of services. &t deals !ith
globally and facilitates international trade through its various modes of services. &t bridges
bet!een importers and eporters. These banks are kno!n as authori#ed 9ealers. &f the branch is
authori#ed dealer in foreign echange market, it can remit foreign echange from local country
to foreign country. This department mainly deals !ith foreign currency. This is !hy this
department is called foreign echange department.
)ome national and international la!s regulate functions of this department. 3mong these,
.oreign echange 3ct, 1*"< is for dealing in foreign echange business, and import and eport
control 3ct, 1*5+ is for documentary credits. =overnments' import & eport policy is another
important factors for import and eport operation of banks. 3lso ;/29/ 8++ and ;7/ 522 both
of them are very important guideline
3.2 1unction/ of 1oreign $9ch,nge
The Bank actions as a media for the system of foreign echange policy. .or this reason, the
employee !ho is related of the bank to foreign echange, specially foreign business should have
kno!ledge of these follo!ing functions 1$
1* 19 19 19 19 19 19
1 7ate of echange.
2 Bo! the rate of echange !orks.
3 .or!ard and spot rate.
4 -ethods of 0uoting echange rate.
5 2remium and discount.
6 7isk of echange rate.
7 /auses of echange rate.
8 Echange control.
9 /onvertibility.
10 Echange position.
11 &ntervention money.
12 .oreign echange transaction.
13 .oreign echange trading.
14 Eport and import letter of credit.
15 Aon$commercial letter of trade.
16 .inancing of foreign trade.
17 Aature and function of foreign echange market.
18 7ules and 7egulation used in foreign trade.
3.3 #etter of "redit:
.oreign trade can be easily defined as a business activity, !hich crosses national boundaries.
These may be bet!een parties or government ones. Trade among nations is a common
occurrence and normally benefits both the eporters and importers.
.oreign trade can usually be %ustified on the principle of comparative advantage. 3ccording to
this economic principle, it is economically profitable for the country to speciali#e in production
of that commodity in !hich the producer country has the grater comparative advantage and to
2+ 20 20 20 20 20 20
allo! the other country to produce that commodity in !hich it has the lesser comparative
advantage. &t includes the spectrum of goods, services, investment, technology transfer etc. These
trades among various countries calls for lose linkage bet!een the parties dealing in trade. The
banks, !hich provide such transactions, are referred to as rendering international banking
operations. &nternational trade demands a flo! of goods from seller to buyer and of payment
from buyer to seller. 3nd this flo! of goods and payment are done through letter of credit D4/C.
1.#etter of "redit:
4etter of credit D4F/C can be defined as a I/redit /ontractI !hereby the buyer's bank is
committed Don behalf of the buyerC to place an agreed amount of money at the seller's disposal
under some agreed conditions. )ince the agreed conditions include, amongst other things, the
presentation of some specified documents, the letter of credit is called 9ocumentary 4etter of
/redit. The ;niform /ustoms & 2ractices for 9ocumentary /redit D;/29/C published by
international /hamber of /ommerce D1**3C 7evision, 2ublication Ao. 8++ defines
9ocumentary /redit1
3ny arrangement ho!ever named or described !hereby a bank Dthe Iissuing
bankIC acting at the re0uest and on the instructions of a customer Dthe I3pplicantIC or on itJs
o!n behalf.
v To make a payment or to the order of a third partyDthe beneficiaryC or is to accept
and pay bills of echangeD9raftsCdra!n by the beneficiary, or
v 3uthori#es another bank to effect such payment or to accept and pay such bills of
echange D9raftsC
v 3uthori#es another bank to negotiate against stipulated documents provide that
terms and conditions are complied !ith.
3.4 !ype/ of Docu+ent,ry "redit/:
9ocumentary /redits may be either1
(i) 7evocable, or, DiiC &rrevocable.
7evocable credit1 3 revocable credit is a credit that can be amended or cancelled by the issuing
bank at any time !ithout prior notice to the seller.
&n case of seller DbeneficiaryC, revocable credit involves risk, as the credit may be amended or
cancelled !hile the goods are in transit and before the documents are presented, or although
presented before payments has been made. The seller !ould then face the problem of obtaining
payment on the other hand revocable credit gives the buyer maimum fleibility, as it can be
amended or cancelled !ithout prior notice to the seller up to the moment of payment buy the
issuing bank at !hich the issuing bank has made the credit available, &n the modern banking the
21 21 21 21 21 21 21
use of revocable credit is not !idespread.
&rrevocable credit1 3n irrevocable credit constitutes a definite undertaking of the issuing bank
Dsince it can not be amended or cancelled !ithout the agreement of all parties theretoC, provided
that the stipulated documents are presented and the terms and conditions are satisfied by the
seller. This sort of credit is al!ays preferred to revocable letter of credit
)ometimes, 4etter of /redits are marked as either J!ith recourse to dra!eK or J!ithout recourse
to dra!erJ.
3.* &,rtie/ of #etter of "redit:
The parties are1
1 The &ssuing Bank,
2 The /onfirming Bank, if any, and
3 The Beneficiary.
(ther parties that facilitate the 9ocumentary /redit are1
1 The 3pplicant,
2 The 3dvising Bank,
3 The Aominated 2ayingF 3ccepting Bank, and
4 The Transferring Bank, if any.
1. &mporter $ )eller ,ho applies for opening the 4F/.
2. &ssuing Bank $ &t is the bank !hich opensFissues a 4F/ on behalf of the importer.
3. /onfirming Bank $ &t is the bank, !hich adds its confirmation to the credit and it is don at
the re0uest of issuing bank. /onfirming bank may or may not be advising bank.
". 3dvising F Aotifying Bank $ is the bank through !hich the 4F/ is advised to the
eporters. This bank is actually situated in eporters country. &t may also assume the
role of confirming and F or negotiating bank depending upon the condition of the credit
5. Aegotiating Bank $ is the bank, !hich negotiates the bill and pays the amount of the
beneficiary. The advising bank and the negotiating bank may or may not be the same.
)ometimes it can also be confirming bank.
8. 2aying F 3ccepting Bank $ is the bank on !hich the bill !ill be dra!n Das per condition of
the creditC. ;sually it is the issuing bank.
<. 7eimbursing bank $ is the bank, !hich !ould reimburse the negotiating bank after getting
payment $ instructions from issuing bank.
3.3 So+e I+port,nt Docu+ent/ of #:":
.or!arding1 .or!arding is the letter given by the advising bank to the issuing bank.
)everal copies are sent to the issuing bank. 3ll copies including original should be kept in the
bank.
Bill of Echange1 3ccording to the section +5, Aegotiable &nstruments DA&C 3ct$1>>1, 3
22 22 22 22 22 22 22
Ibill of echangeI is an instrument in !riting containing an unconditional order signed by the
maker, directing a certain person to pay Lon demand or at fied or determinable future timeM a
certain sum of money only to or to the order of a certain person or to the bearer of the
instrument. &t may be either at sight or certain day sight. 3t sight means making payment
!henever documents !ill reach in the issuing bank.
&nvoice is the price list along !ith 0uantities. )everal copies of invoice are given. T!o
copies should be given to the client and the other copies should be kept in the bank. &f there is
only one copy, then its photocopy should be kept in the bank and the original copy should be
given to the client. &f any original invoice contains the customJs seal, then it cannot be given to
the client.
2acking list is the letter describing the number of packets and there si#e. &f there are
several copies, then t!o copies should be given to the client and the remaining should be kept in
the bank. But if there is only one copy, then the photocopy should be kept in the bank and the
original copy should be given to the client.
Bill of 4ading1 Bill of 4ading is the bill given by shipping company to the client. (nly
one copy of Bill of 4ading should be given to the client and the remaining copy should be kept in
the bank.
/ertificate of (rigin1 /ertificate of origin is a document describing the producing country
of the goods. (ne copy of the certificate of origin should be given to the client and the
remaining copy should be kept in the bank. But if there is only one copy, then the photocopy
should be kept in the bank and the original should be given to the client.
)hipment 3dvice1 The copy mentioning the name of the insurance company should be
given to the client and the remaining copies should be kept in the bank. But if only one copy is
given, then the photocopy should be kept in the bank and the original copy should be given to the
bank.
3.; Mech,ni/+ of #etter of "redit

3fter opening the 4F/, 3BB4 Dissuing bankC must receive the documents for any other
proceedings. These documents are $$$
1 Bill of 4ading,
2 &nvoice,
3 2acking 4ist,
4 /ountry of (rigin.
3.7 &rocedure to Open ,n #:":0
23 23 23 23 23 23 23
To open an 4F/, the re0uirements of an importer are1
1 Be must have an account in 3BB4.
2 Be must have &mporters 7egistration /ertificate D&7/C.
3 7eport on past performance !ith other bank. 3BB4 collects this report from
Bangladesh Bank.
4 /&B D/redit &nformation BureauC report from Bangladesh Bank.
5 3 proposal approved by the meeting of eecutive committee of the bank. &t is
necessary only !hen the 4F/ amount is small or there is no limit.
6 &f the 4F/ amount is large or there is a limit, then an approval from Bangladesh
Bank is needed.
3.< #odg+ent of docu+ent/:
3fter receiving the documents from the eporters, at first 3BB4 !rite it in the 239
7egistrar. 239 7egister contains date, 239 number, 4F/ number, name of the dra!er, name of the
dra!ee, amount, number of copies of various documents, name of the imported items. This !ritten
procedure is called 4odgment.
Accounting Application:
,hile doing lodgment, 3BB4 makes the follo!ing entries$
239 3ccount 9r.
3B =eneral 3ccount /r.
Echange =ain 3ccount /r.
3BB4 makes the payment to the reimbursing bank against the documents. ThatJs !hy, it debts the 239
3ccount.
.or payment, 3BB4 deposits the money at the miscellaneous account K8*.35 Dcurrent rateC. 3nd sends
an &nter Branch /redit 3dvice D&B/3C to credit the amount to a nostro account maintained in a bank of
eportersJ country from !hich payment !ill be made. By this transaction, 3BB4 makes a profit K(. 1 5
per dollar.
2" 24 24 24 24 24 24

I+port Oper,tion
4.1 Me,ning of I+port
&mports of goods into Bangladesh is regulated by the ministry of commerce and industry interims
of the &mport and Eport D/ontrolC 3ct, 1*5+, !ith import policy orders issued by annually, and
25 25 25 25 25 25 25
2ublic Aotices issued from time to time by the office of the /hief /ontroller of &mport and
Eport D//& & EC. Through the process of import some vital but !hich are inade0uate in our
country products are imported to meet the local needs of the people.
4.2 I+port procedure
3n importer is re0uired to have the follo!ing to import through 3BB4$
i. 3pplicant has to apply for opening 4/ by a prescribed form.
ii. 3pplicant has to submit the 4etter of &ndent or 4etter of 2roforma &nvoice.
4etter of &ndent1 -any sellers have their agent in sellers country. &f the contract
of buying is made bet!een the buyers and the agent of the sellers then 4etter o
&ndent is re0uired.
4etter of 2eoforma &nvoice1 &f the contract is made directly bet!een the buyer and
the sellers then 4etter of 2erforma &nvoice is needed.
iii. 3pplicant has to submit &7/ D&ndentors 7egistration /ertificateC. &t is a certificate
being rene!ed every year. This certificate is necessary if the contract is made
bet!een the buyers and the agents of the sellers. &7/ is of t!o types $ /(- and
&A9. /(- is given for commerce purpose and &A9 is given for industrial
purpose.
iv. 3pplicant has to submit 4/3. D4etter of /redit 3uthori#ation .ormC.
v. 3pplicant has to submit insurance document.
vi. 3pplicant has to prepare .(7-$&-2.
vii. 7ecently, there has been made a provision to give a certificate named T&A DTa
2ayers &dentification AumberC.Taation department issues this certificate.
viii. Then after proper scrutiny bank !ill open an 4F/.
,hile opening4F/, importer must keep certain percentage of the document value
in the bank as margin.
4.3 IM&OR!01or+
This form is prepared for maintaining account of the money, !hich goes out side the country for
the purpose of payment. This form is re0uired by Bangladesh Bank. &t is an application for
permission under "F5 of the .oreign Echange 7egulation 3ct, 1*"< to purchase foreign
28 26 26 26 26 26 26
currency for the payment of import.
&-2 $ .(7- has four copies1
1 (riginal copy for Bangladesh Bank.
9uplicate copy for authori#ed dealers. &t is issued for processing
Echange /ontrol /opy of bill of entry or certified invoice.
Triplicate copy for authori#ed dealersJ record.
Nuadruplicate copy for submission to the bank in case of imports
!here documents are retired.
.ollo!ing documents are sent !ith .(7-$&-21
D 4etter of /redit 3uthori#ation .orm,
D (ne copy of invoice,
D &ndent copy F proforma invoice.
The follo!ing &nformation is included in the .(7-$&-21
n Aame and address of the authori#ed dealer,
n 3mount of foreign currency in !ords and figures,
n Aames and address of the beneficiary,
n 4F/ 3uthori#ation .orm number and date,
n 7egistration number of 4F/ 3uthori#ation .orm
!ith Bangladesh Bank, and
n 9escription of the goods.
3fter opening the 4F/, 3BB4 Dissuing bankC must receive the documents for any other
proceedings. These documents are $$$
i. Bill of 4ading,
ii. &nvoice,
iii. 2acking 4ist,
iv. /ountry of (rigin.
2< 27 27 27 27 27 27
4.4 I+port Mech,ni/+
To import, a person should be competent to be an Jimporter. 3ccording to &mport and Eport
D/ontrolC 3ct, 1*5+, the officer of /hief /ontroller of &mport and Eport provides the
registration DM7/C to the importer. 3fter obtaining this, the person has to secure a letter of credit
authori#ationD4/3C from Bangladesh Bank. 3nd then a person becomes a 0ualified importer.
Be re0uests o instructs the opening bank to open an 4F/.
&mport may be allo!ed under the follo!ing sources of finance1
DaC /ash$
i. /ash foreign echange Dbalance of the foreign echange reserve of Bangladesh BankO
ii. .oreign currency accounts maintained by Bangladeshi Aational !orkingFliving
abroad.
(b) Eternal economic aid.
(c) /ommodity echange.
4.* 4ener,l "ondition/ of I+port of 4ood/
1. &mport Trade /ontrol Aumbers1 ;sing of ne! &T/ numbers DB.)./odeC based on
Barmoni#ed /ommodity 9escription and /oding )ystem shall be mandatory in all
relevant import documents.
2. 7estriction regarding source of procurement of goods1 =oods from &srael of goods on
mating from that country shall not be importable goods shall also not be importable in the
flag vessel of that country.
3. 2re$shipment inspection1 2re$shipment inspection of importable goods shall be
mandatory in case of import by the private sector importers ecept those eempted by the
=overnment Threes inspection /ompanies. Burcan ?ertitas, &nspectorate =riffith 4imited
and &ntertek Testing )ervices have been appointed by the =overnment as 2re$shipment
&nspection 3gency.
2> 28 28 28 28 28 28
4. )hipment on Bangladesh .lag ?essels1 )hipment of goods shall normally be made on
Bangladesh flag vessels.
a. &mport of goods up to maimum 2+ metric tons in case of single individual
consignee or up to maimum 1++ metric tons in case of group import may be
made in non$ Bangladesh flag vessels.
b. The 9irector =eneral of )hipping may notify general !aivers in the follo!ing
cases, such as
o )hipment of goods from ports !hich are not visited by Bangladesh
vessels and
o &mport of goods on the basis of specific agreements !hich provide for
/.7 /ontract.
c. &n all other cases a /ertificate of ,aiver shall be obtained from the 9irector
=eneral of shipping for import of goods in non$ Bangladesh flag vessels.
d. &f there appears to be no possibility of any Bangladesh flag vessels visiting a
port !ithin nest < days, !aiver shall be given !ithin 2" hours of application for
!aiver. (ther!ise it !ill be considered that !aiver has been given.
e. The preceding condition of compulsory shipment of goods on Bangladesh flag
vessels or the condition of obtaining certificate of !aiver shall not apply in
cases of import under foreign aids, loans or grants !hich contain specified
provisions regarding shipment of goods.
f. &n case of import of goods by eport$oriented industries, shipment may be made
in non$ Bangladesh flag vessels.
5. &mport at competitive rate1 3ll imports shall be made at the most competitive rate.
6. &mport on /.7 and .(B basis1 3ll imports by sea, air and land route shall be made either
on /.7 or .(B basis.
2* 29 29 29 29 29 29
,. In case of import on .(B basis the concerned importer shall have to comply the
circulars issued by Bangladesh Bank is this regard.
b. Before opening of 4F/ Aecessary insurance cover note shall have to be
purchased from the )adharan Bima /orporation or any other Bangladesh insurance
company
c. Ao import shall be allo!ed on /&. basis !ithout prior approval from the
-inistry of /ommerce
d. Bo!ever, Bangladeshi Aational living abroad, for sending goods against their
earned foreign echange and foraging investors, for sending capital machinery and
ra! materials against their e0uity share portion shall be allo!ed on /&. basis.
7. &mport by mentioning Icountry of origin1 &n all cases of import, Pcountry of
organI shall be mentioned clearly on goods, packageFcontainer. 3 certificate regarding
Pcountry of originI issued by the concerned =overnment agency F approved authority F
organi#ation of the eporting country must be submitted along !ith import documents to
the /ustom 3uthority at the time of release of goods.
8. 7adioactivity /ertificate is compulsory for the import of food items. 2roduction and epiry date
also compulsory or import of food items
4.3:!ot,l I+port of ))# =gr,b,d br,nch>
.rom 2++5 to 2++* 3B Bank &mport is as follo!s1
QE37 &-2(7T D-illion Tk.C
2++5 1*2>1
2++8 1*288
2++< 23151
2++> "2>8+
2++* ">""1
3+ 30 30 30 30 30 30

0
10000
20000
30000
40000
50000
2005 2006 2007 2008 2009
YEAR
IMPORT
IMPORT

The figure sho! the import performance of 3B Bank 4td. Bere !e see the import performance
of 3B Bank 4td. &n 2++5 import !as more than 1*+++ million. .or the net year there !as a
small decreased of import. &n 2++< import again increased. But there !as a dramatically
increased in 2++>, !hich is "2>8+ million. &n 2++* it also increased near to "*+++ million. )o !e
can say that there !as an up!ard trend !ith some fluctuation.
4.;: !ot,l M,jor I+port by ))# =gr,b,d )r,nch> =1I4. I% "ROR$>
.rom 2++5 to 2++* 3B Bank -a%or &mport is as follo!s1
QE37 2++5 2++8 2++< 2++> 2++*
.((9 &TE-) 13++ 12++ 1<++ 25++ 3+++
TERT&4E 5++ "++ 5++ *++ 1+++
)/732 ?E))E4) 2++ 35+ 2++ >>+ >"5
31 31 31 31 31 31 31

MAJOR IMPORT BY AB BANK
0
1000
2000
3000
4000
2005 2006 2007 2008 2009
YEAR
V
A
L
U
E
S

FOOD ITEMS
TEXTILE
SCRAP
VESSELS
The above graph sho!s the ma%or import by 3B Bank. The ma%or import finance !as the area of
.ood &tem, Tetile, and )crap ?essels. .ood &tems import !as gradually increased in 2++5 to
2++*. 6nit!ear eport !as increased in 2++5 to2++> ecept2++8. )crap ?essels import !as
gradually increased in 2++5 to 2++*, but there !as some decrease in 2++<. &mports at the end of
the year stood at Tk. ">"5 core. -a%or &mport finance !as in the areas of food items, tetiles,
and scrap vessels among others
32 32 32 32 32 32 32

$9port Oper,tion
*.1 Me,ning of $9port
Eport means carrying anything form one country to another country. &n other !ay sending of
visible things outside the country for sale .Eport play great role in our economy.
33 33 33 33 33 33 33
3fter careful and through eamination of he documents ,the banker has to list out the
discrepancies, !hich may be classified as ma%or or minor, irremovable or removable .
The removable discrepancies can be corrected by proper mechanism stated in the 4F/.
9ifferent types of discrepancies are as follo!s1
1. 4F/ epired
2. 4ate shipment
3. 3mount dra!n in ecess of that of the 4F/.
4. Bill of echange not properly dra!n .
5. 9escriptions of goods differ.
6. Bill of lading or air!ay Bill being state.
7. &nsurance /over note not in conformity !ith terms of 4F/.
8. &nsurance cover note obtained after the bill of lading or air!ay bill date.
9. Enough number of copies not submitted as re0uired by 4F/.
10. Aegotiation under 4F/ restricted.
11. 2acking list and certificate of analysis are not as per the 4F/.
12. 9ocument not properly endorsed in favor of the bank .
13. .ull shipment not effective and part shipment prohibited.
14. )ame of the documents re0uired by lFc not submitted.
15. 9ocument inade0uately stamped.
*.2 $9port policy:
Eport policies formulated by the -inistry of /ommerce, =(B provide the
overall guideline incentives for promotion of eports in Bangladesh. Eport policies also set out
3" 34 34 34 34 34 34
commodity$!ise annual target. &t has been decided to formulate these policies to cover a five$
year period to make them contemporaneous !ith the five$year plans and to provide the policy
regime.
The eport$oriented private sector, through their representative bodies and chambers a consulted
in the formulation of eport policies and are also represented in the various epo promotion
bodies set up by the government.
*.3 $9port Incentive/:
. 1in,nci,l Incentive/:
E 7estructuring of Eport /redit =uarantee )cheme$,
E /onvertibility of Taka in current accountO
E Eporters can deposit "+G of .(B value of their eport earnings in o!n account in
dollar and pound sterlingO
E Eport 9evelopment .undO
E Epansion of eport credit period from 1>+ days to 2<+ daysO
E 5+G ta rebate on eport earningsO
E 9uty dra! backO
E Bonded !arehouse facilities to 1++G eport oriented firms
E 9uty free import of capital e0uipment for 1++Geport oriented firmsO
). 4ener,l incentive/:
E Aational Eport Trophy to successful eporters$,
E Training course on eternal tradeO
E 3rrangement of international trade fairs, commodity$based ehibitions in the country
35 35 35 35 35 35 35
and participation in foreign trade fairs.
". Other incentive/:
E 3ssistance in improvement of 0uality and packaging of eportable itemsO
E )implification of eports procedures.
*.4 $9port &rocedure/:
The import and eport trade in our country are regulated by the &mport and Eport D/ontrolC 3ct,
1*5+.
;nder the eport policy of Bangladesh the eporter has to get valid Eport registration
/ertificate DE7/C from /hief /ontroller of &mport & Eport D//&&EC. The E7/ is re0uired to
rene! every year. The E7/ number is to incorporate on ER2 forms and other papers connected
!ith eports.
1 Regi/tr,tion of $9porter/:
.or obtaining E7/, intending Bangladeshi eporters are re0uired to apply to the controllerF :oint
/ontrollerF 9eputy /ontrollerF 3ssistant /ontroller of &mports and Eports, 9hakaF /hittagongF
7aishahiF -ymensinghF )ylhetF /omillaF BadshalF BograF 7angpurF 9ina%pur in the prescribed
form along !ith the follo!ing documents1
n Aationality and 3ssets /ertificate$
n -emorandum and 3rticle of 3ssociation and /ertificate of &ncorporation in case of
4imited /ompany$,
n Bank /ertificate
n &ncome Ta /ertificate
n Trade 4icense etc.
2 Securing the Order:
3fter getting E7/ /ertificate the eporter may proceed to secure the eport order. Be can do
this by contacting the buyers directly or through agent.
38 36 36 36 36 36 36
&n this purpose the eporter may get help from1
v 4icense (fficer
v Buyers 4ocal 3gent
v Eport 2romoting (rgani#ation
v Bangladesh -ission 3broad
v /hamber of /ommerce Dlocal & foreignC
v Trade .air etc
3 Signing the "ontr,ct:
3fter communicating buyer, eporter has to get contracted D!riting or oralC for
eporting eportable items from Bangladesh detailing commodity, 0uantity, price, shipment,
insurance and marks, inspection and arbitration etc.
4 Receiving #etter of "redit:
3fter getting contract for sale, eporter should ask the buyer for 4etter of /redit D4F/C clearly
stating terms and conditions of eport and payment.
The follo!ing are the main points to be looked into for receivingF collecting eport proceeds by
means of 9ocumentary /redit$.
1 The terms of the 4F/ are in conformity !ith those of the contractI
2 The 4F/ is an irrevocable one, preferably confirmed by the advising bankO
3 The 4F/ allo!s sufficient time for shipment and negotiation.
DBere the regulatory frame!ork is ;/29/$8++, &// publicationC
Terms and conditions should be stated in the contract clearly in case of other mode of payment1
F /ash in advance$,
F (pen account,
F /ollection basis D9ocumentaryF /leanC
DBere the regulatory frame!ork is ;7/$522, &// publication
) &rocuring the M,teri,l/:
3< 37 37 37 37 37 37
3fter making the deal and on having the 4F/ opened in his favor, the net step for the eporter is
to set about the task of procuring or manufacturing the contracted merchandise.
D Ship+ent Of 4ood/1
Then the eporter should take the preparation for eport arrangement for delivery of goods as
per 4F/, prepare and submit shipping documents for 2aymentF 3cceptanceF Aegotiation in due
time.
1 Docu+ent/ for /hip+ent:
i. ER2 form,
ii. E7/ DvalidC,
iii. 4F/ copy,
iv. /ustomer 9uty /ertificate,
v. )hipping &nstruction,
vi. Transport 9ocuments,
vii. &nsurance 9ocuments,
viii. &nvoice
i. (ther 9ocuments,
. Bills of Echange Dif re0uiredC /ertificate of (rigin,
i. &nspection /ertificate
ii. Nuality /ontrol /ertificate,
iii. =.).2. /ertificate,
iv. 2hyto$sanitary /ertificate.
*.* $9port 1in,ncing:
.inancing eports constitutes an important part of a bankJs activities. Eporters re0uire financial
services at four different stages of their eport operation. 9uring each of these phases eporters
need different types of financial assistance depending on the nature of the eport contract.
D 2re$shipment credit
D 2ost$shipment credit
3> 38 38 38 38 38 38
*.3 &re0/hip+ent credit:
2re$shipment credit, as the name suggests, is given to finance the activities of an eporter prior to
the actual shipment of the goods for eport. The purpose of such credit is to meet !orking
capital needs starting from the point of purchasing of ra! materials to final shipment of goods
for eport to foreign country. Before allo!ing such credit to the eporters the bank takes into
consideration about the credit !orthiness, eport performance of the eporters, together !ith all
other necessary information re0uired for sanctioning the credit in accordance !ith the eisting
rules and regulations. 2re$shipment credit is given for the follo!ing purposes$
F /ash for local procurement and meeting related epenses.
F 2rocuring and processing of goods for eport.
F 2acking and transporting of goods for eport.
F 2ayment of insurance premium.
F &nspection fees.
F .reight charges etc.
3n eporter can obtain credit facilities against lien on the irrevocable, confirmed and unrestricted
eport letter of credit in form of the follo!ings$.
F Eport cash credit DBypothecationC
F Eport cash credit D2ledgeC
F Eport cash credit against trust receipt.
F 2acking credit.
F Back to back letter of credit.
F /redit against 7ed$clause letter of credit.
Eport cash credit DBypothecationC1
;nder this arrangement, a credit is sanctioned against hypothecation of the ra! materials or
finished goods intended for eport. )uch facility is allo!ed to the first class eporters. 3s the
bank has got no security in this case, ecept charge documents and lien on eports ;/ or
contract, bank normally insists on the eporter in furnishing collateral security. The letter of
3* 39 39 39 39 39 39
hypothecation creates a charge against merchandise in favor of the bank. But neither r the
o!nership nor the possession is passed to it.
Eport cash /redit D2ledgeC1
)uch /redit facility is allo!ed against pledge of eportable goods or ra! materials. &n this case
cash credit facility are etended against pledge of goods to be stored in the god o!n under bankJs
control by signing letter of pledge and other pledge documents. The eporter surrenders the
physical possession of the goods under banks effective control as security for payment of bank .
&n the event of failure of the eporter to honor his commitment, the bank can sell the pledged
merchandise for recovery the advance.
Eport /ash /redit 3gainst Trust 7eceipt1
&n this case, credit limit is sanctioned against trust receipt DT7C. Bere also unlike pledge, the
Eportable goods remain in the custody of the eporter. &t is re0uired to eecute a stamped
eport trust receipt in favor of the bank, he holds !herein a declaration is made that goods
purchas"ed !ith financial assistance of bank in trust for the bank. This type of credit is granted
!hen the eporter !ants to utili#e the credit for processing, packing and rendering the goods in
eportable condition and !hen it seems that eportable goods cannot be taken into bankJs
custody. This facility is allo!ed only to the first class party and collateral security is generally
obtained in this case.
2acking /redit1
2acking /redit is essentially a short$term advance granted by a Bank to an eporter for assisting
him to buy, process, manufacture, pack and ship the goods. =enerally for movement of goods
from the hinterland areas to the pots of shipment the Banks provide interim facilities by !ay of
packing credit.
This type of credit is sanctioned for the transitional period starting from dispatch of goods till
the negotiation of the eport documents. 2ractically ecept for single transaction, most of the
pre$shipment credits are allo!ed in the form of limits duly sanctioned by Bank in favor of
regular eporters for a particular period. The dra!ings are re0uired to be ad%usted fully once
!ithin a period of 3 to 8 months. )uiting to the breed and nature of eport, sometimes an
eporter may also be allo!ed to avail a combined /ash /redit and 2acking /redit limit !ith
fied ceiling on revolving basis. But in no case the borro!er !ould be allo!ed to eceed
"+ 40 40 40 40 40 40
individual credit limit fied for the purpose. The dra!ings under Eport /ash /redit limits are
generally ad%usted by the dra!ing in packing credit limit, !hich is, in turn li0uidated by the
negotiation of eport documents.
/harge 9ocuments for 2./.
Banker should obtain the follo!ing charge documents duly stamped prior to disbursement1
1 9emand 2romissory Aote
2 4etter of 3rrangement
3 4etter of 4ien of 2acking /redit D(n special adhesive stampC
4 4etter of 9isbursement
5 2acking /redit 4etter
3dditional 9ocuments for 2./.
1 4etter of 2artnership along !ith 7egistered 2artnership 9eed in case of
2artnership 3ccounts.
2 7esolution of the Board of 9irectors along !ith -emorandum & 3rticles of
association in case of 3ccounts of 4imited /ompanies. &n case of
/orporation, 7esolution of the Board -eeting along !ith /harter.
3 2ersonal =uarantee of all the 2artners in case of 2artnership 3ccounts and
aSof all the 9irectors in case of 4imited /ompanies.
4 3n undertaking from the 9irectors of the 2ublic 4imited /ompany to obtain
prior clearance from the Bank before declaring any intendFfinal dividend.
*.; ),c- to ),c- #etter of "redit =)!)>:
Bangladesh is a developing country. 3fter receiving order from the importer, very fre0uently
eporters face problems of scarcity of ra! material. Because some ra! materials are not
available in the country. These have to be collected from abroad. &n that case, eporter gives
lien of eport 4F/ to bank as security and opens an 4F/ against it for importing ra! materials.
This 4F/ is called Back To Back 4F/. &n back to back 4F/, 2B4 keeps no margin.
)ometimes there is provision in the eport ;/ that the importer can use the certain portion of the
eport 4F/ amount for importing accessories that are necessary for the making of the product.
"1 41 41 41 41 41 41
(nly in that case, BTB is opened.
2ayment of Back to Back 4/1
/lient gives the payment of the BTB 4F/ after receiving the payment from the importers. But in
some cases, client sells the bills to the 3BB4. But if there is discrepancy, the 3BB4 sends it for
collection.
&n case of BTB 4F/, 3BB4 gives the payment to the beneficiary after receiving the payment
from the ;/ of the finished product Di.e. eporterC. Bank gives the payment from 9./ 3ccount
D9eposit .oreign /urrency 3ccountC !here 9ollar is deposited in national rate.
.or BTB 4F/, opener has to pay interest at 4&B(7 rate D4ondon &nter Bank (ffering 7ateC.
=enerally 4&B(7 rate fluctuates from 3G to 5G.
3 schedule named 2ayment (rderO .or!arding )chedule is prepared !hile making the payment.
This schedule is prepared !hen the payment of ;/ is made. This schedule contains the
follo!ings1
E 7eference number of the beneficiaryJs bank and date.
E BeneficiaryJs name.
E Bill value.
E 2ayment order number and date.
E E0uivalent amount in Taka.
3dvance against 7ed$clause 4etter of /redit1
;nder 7ed clause letter of credit, the opening bank authori#es the 3dvising BankFAegotiating
Bank to make advance to the beneficiary prior to shipment to enable him to procure and store the
eportable goods in anticipation of his effecting the shipment and submitting a bill under the
4F/. as the clause containing such authority is printed in red ink, the 4F/ is called 7ed clause and
=reen clause respectively. Though it is not prohibited, yet very rare in Bangladesh.
*.7 &o/t Ship+ent "redit:
This type of credit refers to the credit facilities etended to the eporters by the banks after
shipment of the goods against eport documents. Aecessity for such credit arises as the eporter
cannot afford to !ait for a long time for !ithout paying manufacturersFsuppliers. Before
etending such credit, it is necessary on the part of banks to look into carefully the financial
"2 42 42 42 42 42 42
soundness of eporters and buyers as !ell as other relevant documents connected !ith the eport
in accordance !ith the rules and regulations in force. Banks in our country etend post shipment
credit to the eporters through$.
1 Aegotiation of documents under 4F/
2 .oreign 9ocumentary Bill 2urchase D.9B/C$.
*.< %egoti,tion of docu+ent/ under #:":
The eporter presents the relative documents to the negotiating bank after the shipment of the
goods, 3 slight deviation of the documents from those specified in the 4F/ may rise an ecuse to
the issuing bank to refuse the reimbursement of the payment already made by the negotiating
bank. )o the negotiating bank must be careful prompt, systematic and indifferent !hile
scrutini#ing the documents relating to the eport.
*.1? 1oreign Docu+ent,ry )ill &urch,/e =1D)">:
)ometimes the client submits the bill of eport to bank for collection and payment of the BTB
;/. &n that case, bank purchases the bill and collects the money from the eporter. 3BB4
subtracts the amount of bill from BTB and gives the rest amount to the client in cash or by
crediting his account or by the pay order.
.or this purpose, 3BB4 maintains a separate register named .9B/ 7egister. This register
contains the follo!ing information1
1 9ate
2 7eference number D.9B/C
3 Aame of the dra!er
4 Aame of the collecting bank
5 /onversion rate
6 Bill amount both in figure & in Taka.
7 Eport form number
8 Eport 4F/ number
*.11 $9port Docu+ent/ "hec-ing:
"3 43 43 43 43 43 43
=eneral verification1 $
1 4F/ restricted or not.
2 Eporter submitted documents before epiry date of the credit.
3 )hortage of documents etc.
2articular verification1
22 Each and every document should be verified !ith the 4F/.
*.12 !ot,l $9port of ))# =gr,b,d )r,nch> :
.rom 2++5 to 2++* 3B Bank Eport is as follo!s1
QE37 ER2(7T D-illion Tk.C
2++5 *<"3
2++8 1+1++
2++< 125*5
2++> 1<><8
2++* 2+8<<

0
5000
10000
15000
20000
25000
2005 2006 2007 2008 2009
YEAR
EXPORT
EXPORT
The above graph sho! the eport situation of 3B Bank 4td for the last fe! year. Bere !e sees
that the eport performance of 3B Bank 4td in 2++5 !as more then *+++ million. .or the net
year there !as a little increase in 2++8. &n 2++< eport !as 125*5 million. &n 2++> it also
dramatically increased and there !as rapidly increase in 2++*, !hich accounts !as 2+8<<
million. Bence !e can say that the eport of 3B Bank !as an up!ard trend !ith some
fluctuation
*.13 M@OR A&OR! )' ))# =gr,b,d )r,nch> =1I4. I% "ROR$ !-.>
.rom 2++5 to 2++* 3B Bank -a%or Eport is as follo!s1
"" 44 44 44 44 44 44
QE37 2++5 2++8 2++< 2++> 2++*
7E39Q-39E
=37-EAT) 5++ <++ 1+++ 12++ 13++
6A&T,E37 25+ 2++ 15+ "++ 5++
.7(TEA .&)B 1++ >+ >+ 1++ 1++
&A9&=EA(;)
27(9;/T) 1++ 5+ 5+ 1++ 18>

0
500
1000
1500
VALUES
2005 2007 2009
YEAR
MAJOR EXPORT BY AB BANK
READYMADE
GARMENTS
KNITWEAR
FROEN FIS!
INDIGENO"S
PROD"CTS
The above graph sho! the ma%or eport by 3B Bank. The ma%or eport finance !as the area of
7eadymade =arments, 6nit!ear, .ro#en .ish and &ndigenous 2roduct. 7eadymade =arments
item eport !as gradually increased in 2++5 to 2++*. 6nit!ear eport !as increased in
2++5,2++> and 2++*, but there !as some decrease in2++8 and 2++<. .ro#en .ish eport !as
same in 2++5 to 2++* ecept 2++8 and 2++<. &ndigenous 2roduct eport !as gradually increased
in 2++5 to 2++* !ith some fluctuation.
"5 45 45 45 45 45 45

R$MI!!%"$ :
3.1 Definition of Re+itt,nce
.oreign remittance means remittance of foreign currencies from one placeFpersons
to another placeFperson. &n broad sense, foreign remittance includes all sale and purchase of
foreign currencies on account of &mport, Eport, Travel and other purposes. Bo!ever,
"8 46 46 46 46 46 46
specifically foreign remittance mean sale & purchase of foreign currencies for the purposes other
than eport and import. 3s such, this chapter !ill not cover purchase & sale of foreign currencies
on account of &mport & eport of goods.
3ll foreign remittance transactions are grouped into t!o broad categories$
&. (ut!ard remittance &
&&. &n!ard remittance
3.2 InB,rd Re+itt,nce :
The term in!ard remittance includes not only purchase of foreign currency by TT, -T, 9rafts
etc. but also purchase of bills, purchase of traveler's che0ues. T!o forms are prescribed by
Bangladesh Bank are used for purchase of foreign currencies such as1 ER2 .orm1 7emittances
received against eports of goods from Bangladesh are done by form ER2.
.orm /1 &n!ard remittances e0uivalent to ;)U 2+++F$ and are above are done by .orm P/V.
Bo!ever, declaration in .orm / is not re0uired in case of remittances by Bangladesh Aationals
!orking abroad.
;tmost care should be taken !hile purchasing /urrency Aotes, Travelers che0ue, 9emand 9raft
& similar instrument for protecting the bank from probable loss as !ell as safety of the Bank
officials concerned.
3.3 1oreign "urrency =),n-> %ote/
=eneral 2rinciples and 2recautions
1 Branches may freely buy foreign currency notes from Bangladesh as !ell as foreign
nationals.
2 /urrency notes, especially notes of higher denominations, i.e. ;) U notes of 5+ and
1++ denominations, should be checked carefully to ascertain their genuineness.
3 .oreign Echange 9epartment shall maintain currency !ise ../. in hand /ontrol
4edger to record each day's transactions.
4 (n the last !orking day of each month the branch shall calculate the echange gain
or loss and carry out necessary ad%ustment in the control ledger.
"< 47 47 47 47 47 47
5 .oreign currencies shall be purchased at the rates instructed by the Bead (ffice,
3.4 Mi/cell,neou/ Service/ 4iven by !hi/ Dep,rt+ent:
)tudent file )tudents !ho are desirous to study abroad can open file in the bank.
By opening this file. Bank assures the remittance of funds in abroad
for study.
A7&T 3ccount WAon$resident &nvestor's Taka 3ccount is an account by !hich Aon$
resident Bangladeshi can deposit foreign currency for investment in
security of stock echanges. .or such account holders, 5G of
primary shares are reserved.
../. 3ccount .oreign /urrency 3ccounts are opened in the names of Bangladeshi
nationals or persons of Bangladeshi origin !orking or self$employed
in abroad and are maintained as long as the account holder's desire.
A./9 )tands for Aon$resident .oreign /urrency 9eposit
Eligible persons may open such accounts even after their return to
Bangladesh, !ithin si months of their arrival.
7./9 3ccounts )tands for 7esident .oreign /urrency 3ccounts
2ersons ordinarily resident in Bangladesh may maintain foreign
currency accounts !ith foreign echange brought in at the time of
their return to Bangladesh from visiting abroad. Balance of such
accounts is freely remittable to abroad.
3.* 1OR$I4% I%8RD R$MI!!%"$:
(ne of the strategic links of international trade financing of the bank is the in!ard remittance.
To!ards the end 3B Bank strengthened the eisting remittance relationships !ith various
echange house. Besides 3B signed an agreement !ith 7&3 an echange house having etensive
presence !orld$!ide to enhance the remittance net!ork.
3B bank is also focusing on enhancing the customer service !indo!s through the eisting <+
branches net!ork. Besides an 3T- based remittance net!ork , predominantly on card base , is
being !orked upon through the proposed &T %oint venture !ith fe! other banks of the country.
"> 48 48 48 48 48 48
/orporate clients of 3B remain another ma%or source of foreign currency . Bank is also trying to
broaden its base through solicitation of indigenous eport clients.
3.3 OutB,rd Re+itt,nce:
The term I (ut!ard 7emittancesI include not only remittance i.e. sale of foreign currency by TT.
-T, 9rafts, Traveler's che0ue but also includes payment against imports into Bangladesh &
4ocal currency credited to Aon$resident Taka 3ccounts of .oreign Banks or /onvertible Taka
3ccount.
T!o forms are used for (ut!ard 7emittance of foreign /urrency such as1 $
&-2 .orm 1 3ll out!ard remittance on account of &mports is done by this form
T.- .orm 1 .or all other out!ard remittances form T.- is used.
A. Private Remittance:
1. .amily remittance facility1
2. 7emittance of -embership feesFregistration fees etc.
3. Education1
". 7emittance of /onsular .ees1
5. 7emittance of evaluation fee1
8. Travel1
<. Bealth & -edical1
>. )eminars & !orkshops1
*. .oreign Aationals1
1+. 7emittance for Ba%i1
11. (ther 2rivate remittance1
B. (fficial & Business Travel1
1. (fficial ?isit1
2. Business Travel Nuota for Ao! Eporters1
3. Business Travel Nuota for &mporters and Aon$eporting producers1
". EportersJ 7etention Nuota1
"* 49 49 49 49 49 49
/. /ommercial 7emittances:
1. (pening of branches or subsidiary companies abroad1
2. 7emittance by shipping companies airlines & courier service1
3. 7emittance of royalty and technical fees1
". 7emittance on account of training & consultancy.
5. 7emittance of profits of foreign firmsFbranches1
8. 7emittance of 9ividend1
<. )ubscriptions to foreign media services1
>. /ostsF for 7outer monitors1
*. 3dvertisement of Bangladeshi 2roducts &n mass media abroad1
1+. Bank /harges1
3.; Re+itt,nce of ))# =gr,b,d )r,nch>
.rom 2++5 to 2++* 3B Bank &n!ard 7emittance is as follo!s1
QE37 &A,379 7E-&TT3A/E D-illionC
5+ 50 50 50 50 50 50
2++5 U <3.85
2++8 U >3."<
2++< U 115."1
2++> U 131.8"
2++* U 158.38
&n the above graph sho! the in!ard remittance of 3B Bank 4td for the last fe! year. Bere !e
sees that the in!ard remittance of 3B Bank 4td in 2++5 !as U <3.85 million. .or the net year it
!as moderately increased and account !as U >3."< million. &n 2++< in!ard remittance !as U
115."1 million. &n 2++> it !as dramatically increased and account !as U 131.8" million. &n 2++*
in!ard remittance !as U 158.38 million. Bence !e can say that the eport of 3B Bank !as an
up!ard trend !ith some fluctuation.
1I%DI%4S:
9uring my &nternship reports follo!ing problems are found out from my observations1
1) -uch people have little kno!ledge about Banks foreign echange services & products.
51 51 51 51 51 51 51
2) Bank takes heavy charge on inland remittance services.
3) )ince Bank does not take necessary undertaking from the importer to cover the
fluctuation in foreign echange rate.
4) 3B Bank does not have sufficient number of international correspondent in foreign
countries.
5) =uidelines of &// and ),&.T regarding charges in international level are different,
!hich creates problems.
6) =ovt. 2olicy regarding foreign echange operation is very strict.
7) Total &mport, Eport, 7emittance of 3B Bank !as gradually increased in 2++5 to 2++*
!ith some fluctuation. &n 2++> &mport and Eport !as dramatically increased.
52 52 52 52 52 52 52
R$"OMM$%D!IO%
(n the basis of preceding description and analysis of the overall banking activities some
recommendations are given belo! !hich may be effective for the organi#ation 1
1C The bank needs to maimi#e its advertisement service for account holders or selected
customer groups to attract more deposit.
2C Bank should offer free inland remittance services for account holders or selected
customer groups to attract more deposit.
3C Bank may be obtained necessary undertaking from the importer to cover the fluctuation
in foreign echange rate.
"C The international division of 3B Bank may should set up additional correspondent
relationship in the potential territories on merit basis.
5C The &// & ),&.T may frame some common guidelines to nationali#e the charges in
international level so that no single country becomes the victim of !illful increase in
charges.
8C The Bankers may pursue the financial authorities like Bangladesh Bank, -inistry of
.inance, Aational Board of 7evenue DAB7C etc. to liberali#e the policy matters so that
genuineF bonafide importers do not suffer due to any adverse policy matter.

"onclu/ion
53 53 53 53 53 53 53
Banks play a very vital role in the economic development of the country. The popularity
of banks is increasing day by day !hich leads to increase competition as !ell. /urrently 52
Banks are operating in Bangladesh. 3ll the /ommercial banks are offering almost the same
products and services and almost same their operation system. But the !ays they provide the
services are different from each other. )o people choose their Bank according to their satisfaction
and need. 3nd they !ill prefer the bank of !hich service is easily accessible and understandable.
(ne the other hand, Bank innovate ne! products and services to attract their desired customers.
3BB4 is one of the most potential banks in the banking sector. &t has a large portfolio
!ith huge assets to meet up its liabilities and the management of this bank is e0uipped !ith the
epert bankers and managers in all level of management. )o it is not an easy %ob to find out the
dra!backs of this bank.
5" 54 54 54 54 54 54
)I)#IO4R&C'

1 =uidelines for foreign echange transaction.
2 &mport and Eport policy order.
3 Echange rate policy.
4 &mporters , Eporters and &ndenters D 7egistration C order , 1*>1
5 ;niform rules for collection, international /hamber of commerce, publication no.522
!idely epressed as ;7/, &//$ 522.
6 ;niform rules for Bank$ to Bank 7eimbursement , &nternational /hamber of /ommerce,
publication no. 525 !idely epressed as ;77, &//$ 525
7 &nternational )tandard Banking practice D&)B2C.
8 &mport & Eport D controlC act, 1*5+
9 .oreign Echange 7egulation 3ct D ..73 C, 1*"<
10 (perational manual
11 ?arious /irculars sent by Bead (ffice and Bangladesh Bank, broachers, publications on
Bank
12 9aily diary Dcontaining my activities of practical orientation in 3B Bank 4tdC maintained
by me,
13 ,ebsites,
14 2ersonal investigation !ith bankers,
15 7eading materials of B&B-
16 3nnual 7eport 2++5, 2++8 ,2++<, 2++> & 2++* of 3B Bank 4imited
17 3sk and learn of .oreign Echange from, -r 3hsanul Ba0ue )(, 3grabad Branch, 3B
B3A6 4&-&TE9.
18 !!!.abbank.com.bd
?arious :ournals, Booklet published by 3B Bank 4imited.
55 55 55 55 55 55 55