1.

1 Introduction:
Bankis a very old institution that is contributing toward the Development of any economy and is treated as an
important service industry in the modern world. Economic history shows that development has started
everywhere with the banking system and its contribution towards financial development of a country is the
highest in the initial stage. Modern banks play an important part in promoting economic development of a
country. Bank provides necessary funds for executing various programs in the process of economic
development. They collect savings from large masses of people scattered throughout the country, which in the
absence of banks would have remained ideal and unproductive. These scattered amounts are collected, pooled
together and made available to commerce and industry for meeting the financial requirements. Economy of
Bangladesh is in the group of worlds most underdeveloped economies. One of the reasons behind this may be
its underdeveloped banking system.
Bank plays a vital role in the economy by providing means of payment and in mobilizing resources. Bank is
the most important financial institution in the economy. The economic development of a country depends on
the development of banking sector. Todays modern banks are not only providing traditional banking but also
expanding the many financial services. In todays world the life of the people directly or indirectly are within
the arena of banking whether conventional or Islamic banking. Although Islamic banking is not a newer
concept in Bangladesh as it has started its operation since 1983, very few people are aware about its operation.
But things are changing. Islamic Banking is also getting popularity in the country.
Internship program is essential for every student, especially for the students of Business Administration, which
helps them to know the real life situation. For this reason a student takes the internship program at the last
stage of the bachelors degree, to launch a career with some practical experience. Against this backdrop, I have
completed my three months internship in the EXIM Bank Ltd, Mirpur Branch, Dhaka which has helped me
a lot to understand the real life situation of banking business.

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1.2 Background of the report:

This report is one of the major parts of BBA program offered by Bangladesh University of Business &
Technology (BUBT).In todays world, education is not just limited to books and classrooms. Education now-adays is understanding the real world and applying knowledge and education for the betterment of the society.
So the Internships such a way that helps to apply the knowledge and understanding of the courses and to use
them in a practical field. A business report is defined as an orderly, objective communication of information
that serves some business purpose. Therefore, in order to serve this business purpose a topic of the report has
to be clearly stated. The topic that has been defined for studying in this report is in infinitive phase. It means
that there are further scopes to improve and study on the topics that are discussed in this report. The topic has
been defined as; an orderly, objective communication of information that serves this business purpose a topic
of the report has to be clearly stated. The topic has been defined as Performance analysis of foreign
exchange operations of EXIM Bank Limited.

1.3 Origin of the report:

As a pre-requisite for the Bachelor of Business Administration (BBA program) of Bangladesh University of
Business & Technology. I was required to complete an internship for a period of three months in a suitable
business organization and submit a report on my findings. I had selected to work as an internee in ExportImport Bank of Bangladesh Limited (EXIM),Mirpur Branch, for a period of three months. During this period I
learned how the host organization works with the help of the internal supervisor. As a result I have decided to
make a report on Performance Analysis Foreign Exchange Operations of EXIM Bank Limited.

1.4 Scope of the report:

During this 3 months internship program in EXIM Bank Limited, Mirpur Branch almost all the desks have
been observed. There I had to work in Foreign Exchange departments Export desks as a routine attendee. It
was difficult to collect all the information relevant to my report because the people of this Bank was so busy
with their scheduled task that they could not be able to provide me much time. Here I tried to cover the
activities and rules and regulation related to Foreign Exchange operations in a private commercial bank. Due
to successful completion of essential part of the report have the opportunity to discuss regarding following
issues: to obtain practical experience about Foreign Exchange activities by involving in such type of
program,to find the bridge between academic study and real practices in organization, to build professional
career inthe banking sector as well as any Financial Institution, to maintain the organizational behavior&good
manners inside the organization.

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1.5 Objectives of the report:

Broad objective:

The prime objective of this report is to analyze the Foreign Exchange Operations of EXIM Bank Ltd.

Specific Objectives:

The prime objectives of the report are as follows:

To find out the operational procedure of Export & Import business financing and Remittance flow
conducted by EXIM Bank Ltd.

To analyse the growth rate of export, import and remittance and its earnings of EXIM Bank Limited.

To compare the EXIM Bank Limited Export financing, Import financing & Remittance flows
contributions with national export financing, import financing & remittance flows.

To examine the country wise inflow of foreign remittance of EXIM Bank Ltd.

1.6 Methodology of the report:

1.6.1. Research Design:
This is a Descriptive Research, which briefly reveals the overall activity of EXIM Bank Limited and mainly
analyzes the performance of Foreign Exchange Operations of this bank. To prepare this report all the necessary
information are collected from primary and secondary sources. Trend analyses are then used to analyze trend
of import, export, remittance, national foreign exchange wise import, export, remittance and also remittance
performance. This study has been conducted by collecting data for the period of 6 years from 2009 to 2014 but
the data has been for Foreign Exchange Performance for the period of 5years from 2010 to 2014 to compare
with national context. Different types of computer software are used to reporting and interpret the data as
Microsoft Word and Microsoft Excel.

1.6.2. Sources of Data Collection:

Two sources of data have been used but I have more concentrated on secondary data to make this report more
meaningful and presentable.

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1.6.3. Data Collection Procedure

Primary Sources:
The primary data are collected from the following primary sources:
Practical desk work.
Informal conversation with the concerned officers.

Secondary Sources:
For this report I used some tools and these are,

Annual Report of EXIM Bank Limited.

Foreign Exchange Manual of EXIM Bank Ltd.
Various report related to the study.
Web base support from the internet.

1.7 Limitations of the Study:

In all respect some limitation and weakness remain within which I failed to escape by any means. These are
follows:
To continue study in such a vast area requires a big deal in time. As an internee I had only three
months time, which was not enough.
To collect information required, I faced difficulty because of the excessive nature of
confidentiality maintained by the officials of EXIM Bank.
Difficulty in gaining accesses to financial sector, bank software & confidential documents.
In most cases I simply did not have any option but to furnish data without verification.
Getting Relevant papers and documents were strictly prohibited.
Non-availability of the most recent statistical data.
Shortage of written materials.

Since the bank personals were very busy, they could provide me very little time. In spite of all this limitations
I have put the best effort as far as possible in developing the study.

2.1 Overview of EXIM Bank:

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Generally by the word Bank we can easily understand that the financial institutions deal with money. But
there are different types of banks like; Central Banks, Commercial Banks, Savings Banks, Investment Banks,
industrial Banks, Cooperative Banks etc. But when use the term Bank without any prefix, or qualification it
refers to the commercial banks. Commercial banks are the primary contributor to the economy of a country.
So we can say commercial banks are a profit making institution that holds the deposit of the individuals &
business in checking & savings account and then uses these funds to make loans. For these, people and
government are very much dependent on these banks. As banks are profit earning concern; they collect deposit
at the lowest possible cost and provide loans and advances at higher cost. The differences between two are the
profit for the bank.Generally, the commercial banks and financial companies provide a myriad of banking
products/ facilities and service to cater to the needs of their customers. These include 24 hour banking, home
banking (Tele Banking) [Via use of modems and phones] and general banking and service products. For
customers' convenience, such products are available throughout the banks' branches in Bangladesh.
However, the Bangladesh banking industry is characterized by strict banking rules and regulations set by
Bangladesh Bank. All banks and Financial Institutions (FIs) are highly governed and controlled under The
Bank Companies Act (Act 14 of 1991), which lays many restrictions besides other guidelines. Among the
many regulations imposed, Bangladesh Bank does not allow any FI to go into bankruptcy or insolvency.

2.2 Background of EXIM Bank:

The Export Import Bank of Bangladesh Limited (popularlyknown as EXIM Bank)is a private commercial
bank that operates banking operation by maintaining the Islamic Shariah and principles regarding the business
transactions.
The Bank was incorporated on 2nd June 1999as a private sector banking company under the COMPANIES
ACT 1994with a target to play the vital role on the socio-economic development
Of the country. It started operations on 3rd August 1999with an authorized capital of Tk. 1 billion (1000
million) divided into 10 million ordinary shares of Tk. 100 each. The initial paid up capital of the bank was Tk.
225 million, fully subscribed by 28 sponsors.
Initially the Bank started its operation as a private commercial Bank, but later on, the Bank has taken up the
challenge to start Islamic Banking operation in all kinds of transaction. Banking Operations were migrated &
all of its conventional banking operation turned into Shariah based Islamic banking operations after obtaining
approval from Bangladesh Bank on July 01, 2004. The Bank went for public issue of shares in the year
2004and its shares are now listed with Dhaka Stock Exchange (September 26, 2004) and Chittagong Stock

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Exchange (September 04,2004).Initially the bank was known as the BEXIMBank Limited, which stands for
"Bangladesh Export Import Bank limited". But for some legal constraints the bank had to change the name and
according to the proposed name of the Governor of Central Bank at that time it was named as "Export Import
Bank of Bangladesh Limited" or in short EXIM Bank Limited.
The bank finances export and import businesses and also conducts traditional commercial banking activities by
maintaining the Islamic Shariah regarding the business. The commercial Banking activities of the Bank consist
of services including mobilizing deposits, providing investment facilities, discounting bills, conducting money
transfer, foreign exchange transactions and providing services, issuing guarantees, safe keeping, acceptances
and letters of credit etc.
The Bank offers full range of Personal, Corporate, International Trade, Foreign Exchange, Lease Finance and
Capital Market Services. EXIMBank Limited is the preferred choice in banking for its friendly and
personalized services, cutting edge technology, tailored solutions for business needs, global reach in trade and
commerce and high yield on investments, assuring Excellence in Banking Services.

2.3 EXIM Bank ata Glance:

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Name of the Institution

Date of incorporation
Commencement of operation
Authorized Capital

Export Import Bank of Bangladesh Limited

June 02,1999
August 03.1999
Tk. 1000.00 million (initial) Tk. 350.00 million

Paid up Capital

(as on 31 December, 2007)

Tk. 12838.65 Million

Converted to Islamic bank

Legal form
Slogan
Industry
Nature of business

July 01,2004
"A Shariah based Islamic Bank"
"Together Towards Tomorrow"
Banking industry of Bangladesh
Shariah based Islamic banking with different

Target customers
Deposits (2014)
Total Investments (2014)
Investments (shares & bonds)
Foreign Exchange Business (2014)

financial services/products
Individuals and Corporate customers
Tk. 200294.38 Million
Tk. 177936.84 Million
Tk. 15221.69 Million
Tk. 284984.68 Million

Number of branch (2015)

Total manpower
Chairman
Managing director
Web address

103
2515
Md. Nazrul Islam Mazumder
Dr. Mohammed Haider Ali Miah, Ph.D
www.eximbankbd.com

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2.4 Vision:
The gist of EXIM banks vision is 'Together Towards Tomorrow'. Export Import Bank of Bangladesh Limited
believes in togetherness with its customers, in its march to growth and progress with services. To achieve the
desired goal, there will be pursuit of excellence at all stages with a climate of continuous improvement,
because, in EXIM Bank, they believe, the line of excellence is never ending. Bank's strategic plans and
networking will strengthen its competitive edge over others in rapidly changing competitive environment.
Their personalized qualities services to the customers with the trend of constant improvement will achieve
operational success.

2.5 Mission:
The Bank has chalked out the following corporate objectives in order to ensure smooth achievement of its
goals.

To be most caring and customer friendly and service oriented bank.

To create a technology based most efficient banking environment for customers.
To ensure ethics, transparency, sustainable growth and full value of the shareholders.

2.6 Goal:
This bank is one of the most disciplined Banks with a distinctive corporate culture. Here employees believe in
shared meaning, shared understanding and shared sense making. Employees can see and understand events,
activities, objects and situation in a distinctive way. They mold their manners and etiquette, character
individually to suit the purpose of the Bank and the needs of the customers who are of paramount importance.
The people in the Bank see themselves as a tight knit family that believes in working together for growth. The
corporate culture has not been imposed; it has rather been achieved through continuous corporate conduct
The word "EXIM BANK" implies the meaning of its "Operation". To achieve the desired goals, it has the
intention to pursuit of excellence at all stages with a climate of continuous improvement. Eventually the bank
emphasizes on the following goals:

Achieving excellence in customer service, next to none and superior to all competitors.
Creating a technology based most efficient banking environment.
Providing high quality financial services in export and import trade.
Maintaining consistency in improving the service quality and customers' perception regarding the

bank.
Maintaining a constant growth in sales and profit time to time.
Maximizing shareholders wealth, by increasing the share price.
Making an effective contribution to the overall socio-economic growth of Bangladesh.

2.7 Objectives of EXIM Bank Limited:

The objectives of the Bank are-

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1. To receive, borrow or raise money through deposits, loan or otherwise and to give guarantees and
indemnities in respect of debts and contract.
2. To establish welfare oriented banking systems.
3. To play a vital role in human development and employment generation to invest money in such manner as
may vary from time to time.
4. To carry on business of buying and selling currency, gold and other valuable assets.
5. To extend counseling and advisory services to the borrowers/entrepreneurs etc. in utilizing credit facilities of
the bank.
6. To earn a normal profit for meeting the operational expenses, building of reserve and expansion of activities
to cover wider geographical area.
7. Providing high quality financial services in export and import trade.

2.8Values:
Core values includeClient is the centre of attention.
Quality.
Honesty
Team work.
Respect for individual.

2.9 Branch Information:

The number of branches as it stands now is approximately 103 (2015). Steps are taken to open few more
branches at commercial important places throughout the country by the year 2015.

2.10 Key Functions of EXIM Bank:

Like other commercial banks EXIM bank performs all traditional banking business including offering a wide
range of caving and credit products, retail banking and ancillary services, but the Bank emphasizes its function
in export and import trade handing and financing of export oriented industries will enhance wealth, quotes

Page | 9

more employment opportunities helps formation of capital and reduces in balance in the balance of payment of
the country.

2.11 Performance of EXIM Bank:

The Bank is widely acclaimed by the business community, from small business/entrepreneurs to large traders
and industrial conglomerates, including the top rated corporate borrowers from forward-looking business
outlook and innovative financing solutions. In year 2011 EXIM Bank Ltd. made commendable performance in
all business areas like Deposit, Credit, Fund Management, Investment and Foreign Exchange related business.

2.12 Social Commitment:

The purpose of the banking business is, obviously, to earn profit, but the promoters and the equity holders of
EXIM bank are aware of their commitment to the society to which they belong. A chunk of the profit is kept
aside and spent for socio-economic development through trustee and in patronization of art, culture and sports
of the country and the bank wants to make a substantive contribution to the society where it operates, to the
extent of separable resources. Through trustee and in patronization of art, culture and sports of the country and
the bank wants to make a substantive contribution to the society where it operates, to the extent of separable
resources.

2.13 Product and Services of EXIM Bank Ltd. :

During the short span of time, the bank has been highly recognized and praised by the business community,
from small entrepreneurs to large traders and industrial conglomerates and emerged as the fastest growing
among the third generation banks in respect of business and profitability. EXIM Bank successfully marketed
its products designed to fulfill the needs of various socio-economic strata. Attractive features of the products
have given a distinctive image among the private banks.
The bank has been making continuous endeavor to offer new products and services. As a commercial bank,
they provide all traditional banking services, which are:
General Banking Department
Foreign Exchange Department &
Investment Department

These three departments are providing services:

2.14 Deposit products:

Page | 10

Al-Wadiah Current Deposit Account

Mudaraba Monthly Income Scheme
Mudaraba Monthly Savings Scheme
Mudaraba Super Savings Scheme (Double Scheme)
Mudaraba Hajj Scheme
Mudaraba Savings Deposit Account (MSB, MSTD, RFCD, NFCD)
Mudaraba Term Deposit Receipt

2.15 Investment Products:

Corporate Finance
Commercial Finance
Industrial Finance
Project Finance
Lease Finance

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2.16 Organogram:

Managing Director& CEO

Deputy Managing Director
Senior Executive Vice President
Executive Vice President (EVP)
Senior Vice President
Vice President
Senior Asst. Vice President
Asst. Vice President
First Asst. Vice President
Senior Principal Officer
Principle Officer
Executive Officer
Management Trainee Officer
Senior Officer
Officer
Trainee Officer
Junior Officer
Assistant Officer
Trainee Asst. Officer
Customer Service Associate (CSA)

2.17 Slogan of EXIM Bank:

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Towards
Towards

Together
Together

Tomorro
Tomorro
w
w

2.18 Commitments:

To the regulators
To the shareholders
To the community
To the customer
To the employee
To Environment

2.19 Distinguish feature of Islamic Banking Vs. Conventional Banking:

The distinguish feature of the conventional banking and EXIM Bank are shown below:

Conventional Bank vs. Islamic Bank. The functions of operating modes of Islamic Bank are based on
the principles of Islamic Shariah. The investor is assured of a predetermined rate of interest. In
contrast, it promotes risk sharing between provider of capital (investor) and the user of funds

(entrepreneur).
It aims at maximum profit without any restriction. It aims at maximum profit without any restrictions.
It does not deal with Zakat. In the modern Islamic Banking system, it has becoming of the service-

oriented functions of the Islamic Bank to collect and distribute Zakat.

Leading money and getting it back with interest in the fundamental functions of the conventional

banks. Participation in partnership business is the fundamental function of the Islamic Bank.
In it very often, banks own interest becomes prominent. It makes no effort to ensure growth with

equity.
For interest-based commercial bank, it is comparatively difficult to borrow money from the money

market.
The conventional banks give greater emphasis on credit-worthiness of the clients. The Islamic Bank,
on the other hand, gives greater emphasis on the viability of the projects.

2.20 Branch Arrangement of EXIM Bank:

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EXIM Bank opened 3 new branches during the year 2012 raising total number of branches to 62 from 72 of
the previous year. The bank plans to gradually open more branches covering important commercial places both
in urban and rural areas. For effective control, close supervision and proper monitoring of the total operations
of the branches as well as to assist them in the development of business. Already new 4 branches have been
opened in the year 2014 and rest of the branches will be opened in December in the year 2014.

Year
2010
2011
2012
2013
2014
2015

Number of Branches(Cumulative)
59
62
72
80
84
103

Branch arrangement of EXIM Bank

EXIM Bank Mirpur branch at a glance:

Mirpur branch is situated at Mirpur Thana.It has been showing an outstanding performance (in term of growth
and profit) from its inception of operation at Mirpur. Some of its general information is given here:
Established
Relationship Manager

2003
Mr. Md. MeftaUddin Khan

No of Department

No of clients

12000

No of Employees

36
As on Nov 30th, 2014 EXIM Bank Mirpur Branch

Departments of EXIM Bank:

All branches of EXIM Bank Bangladesh Limited are divided into three departments:

General Banking Department

Foreign Exchange Department
Investment Department

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Foreign Exchange Department:

Bank plays a very important role in effecting foreign exchange transaction of a country. Mainly transactions
with overseas countries are in respect of imports; exports and foreign remittance come under the purview of
foreign exchange department. Banks are the vital sectors by which such transactions are effected settled.
Central Bank records all sorts of foreign exchange transactions. The other banks dealing with foreign exchange
are to report to Bangladesh Bank regularly (viz. daily, monthly, quarterly, yearly etc).The foreign exchange
department consists of three sections. They are:
Import Section
Export Section
Foreign Remittance Section

Branches of EXIM Bank:

The number of branches as it stands now is 103 (2015).Steps are taken to open few more branches at
commercial important places throughout the country.

Location Dhaka Mymensing

Chittagong Rajshahi

Sylhet

Khulna

Barishal

Rangpur

27

h
No.of
Branch

52

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2.21 Core Strategies of EXIM Bank:

Some of the cores strategies are taken by the EXIM Bank Limited are as follow as:

Introducing with the Islamic Shariah Based Banking system and maintaining the profit loss sharing

concept.
New and innovative products on deposit and loan and rewarding HR for the innovation.
Automated server connection and maintaining the web based software to entry the banking

information and extension of online banking.

Joint venture or co-branded operations with the other organization.
Rooting out the anomalies and corruption through making the audits.

2.22 Core values of EXIM Bank:

The core values of the EXIM Bank Limited include:

Client is the centre of attention

Quality
Honesty
Team work
Innovation
Integrity
Performance

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Client Attention

Quality

Core
value
Performance

Honesty & Team Work

2.23 Five years Performances of EXIM Bank at a glance:

The financial highlights of the EXIM Bank Limited of five years are given below:

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(Amount in MillionTaka)
Particulars

2010

2011

2012

2013

2014

Authorized
Capital
Paid-up Capital

10000.00

20000.00

20000.00

20000.00

20000.00

6832.27

9223.56

10514.86

11566.35

12838.65

Shareholders
Equity
Total Capital

12474.85

14484.22

16641.86

20624.36

23105.29

13957.40

16109.56

18214.31

21198.70

23519.59

Total Assets

113070.98

129874.42

167056.63

195452.52

232411.86

Total Liabilities

100596.13

115390.20

150414.77

174828.15

65616.80

Deposits

94949.40

107881.21

140369.66

165733.25

200294.38

Investment
(General)
Investment
(Shares &
Bonds)
Foreign
Exchange
Business
Total Fixed Asset

93296.65

99699.63

118219.99

143847.38

177936.84

4522.04

6734.03

10345.38

11222.20

15212.69

227966.60

254407.47

270081.50

268652.68

284984.68

463.74

467.98

433.09

3183.44

3309.76

13723.95

15801.88

20357.48

23614.71

25736.68

3.77

2.18

2.05

1.54

1.93

11.34

12.76

10.14

7.80

5.74

1686

1724

1909

2229

2458

59

62

72

80

87

354

336

398

386

398

Total Income
Earnings Per
Share (EPS)
Price earnings
ratio (times)
Number of
Employees
Number of
Branches
No. of Foreign
Correspondent
Banks

2.24 Corporate profile of EXIM Bank:

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The Export Import Bank of Bangladesh Limited (popularly known as EXIM Bank) is a private commercial
bank that operates banking operation by maintaining the Islamic Shariah and principles regarding the business
transactions.
Name
Banking License (obtained from Bangladesh

EXIM Bank of Bangladesh

July 01, 2004

Bank)
Registered Address

EXIM Bank Limited

Head Office
Symphony Plot # SE(F)
Road-142, Gulshan Avenue

Legal Status
Date of Incorporation
Authorized Capital
Paid up Capital
Face Value
Market Lot
Date of listing with DSE
Date of listing with CSE
Instrument Scrip Code
Date of 1st Trading
Date of 1st Trading
Opening price on 1st Trading Date
SWIFT Code
Website

Dhaka-1212
Private Commercial Bank Limited
June 02, 1999
TK. 20,000.00 Million
TK. 12838.65 Million
Tk.10.00 per share;
100 Shares.
September 26, 2004
September 04, 2004
EXIMBANK (DSE); EXIMBANK (CSE)
EXIMBANK (DSE); EXIMBANK (CSE)
October 16, 2004
517.00
EXBKBDDH
www.EXIMbank.bd.com

3.Theoretical Aspect
3.1.1Foreign Exchange:
Foreign trade is nothing but trade between the different countries of the world. It is also called as International
trade, External trade or Inter-Regional trade. It consists of imports, exports and intrepid. The inflow of goods
in a country is called import trade whereas outflow of goods from a country is called export trade. Many times
goods are imported for the purpose of re-export after some processing operations. This is called intrepid trade.

3.1.2SWIFT(Society for the worldwide Interbank Financial Telecommunication):

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Founded in Brussels in 1973, the society for the Worldwide Interbank Financial Telecommunication (SWIFT)
is a co-operative organization dedicated to the promotion and development of standardized global interactivity
for financial transaction.

3.1.3The International Chamber of Commerce:

ICC is the largest, most representative business organization in the world. Its hundreds of thousands of
member companies in over 180 countries have interests spanning every sector of private enterprise.ICC has
three main activities: rule setting, dispute resolution, and policy advocacy. Because its member companies and
associations are themselves engaged in international business, ICC has unrivalled authority in making rules
that govern the conduct of business across borders. Although these rules are voluntary, they are observed in
countless thousands of transactions every day and have become part of international trade.

3.1.4 Remittance:
The process of sending money isremove an obligation. This is most often done through an electronic network,
wire transfer or mail. The term also refers to the amount of money being sent to remove the obligation.

3.1.5 Exporter:
The seller is the beneficiary of the credit .The letter of credit is opened in his favor and addressed to
him. The beneficiary has the obligation to make export as per the contract and produce the documents
as required by the credit.
3.1.6 Importer:
The buyer is he who initiates the credit. He applies to bank for issue foreign a documentary credit. The
obligation between the importer and issuing bank are governed by the application-cum-agreement submitted
by the importer to the bank.

3.2 Letter of Credit:

A letter from a bank guaranteed that a buyers 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.

3.3 Classification of Letter of Credit:

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Revocable Letters of Credit:

Revocable letters of credit give issuer the amendment or cancellation right of the credit any time without prior
notice to the beneficiary. Since revocable letters of credit do not provide any protection to the beneficiary,
they are not used frequently. In addition, UCP 600 has no reference to revocable letters of credit. All credits
issued subject to UCP600 are irrevocable unless otherwise agreed between the parties.

Irrevocable letters of Credit:

Irrevocable letters of credit cannot be amended or cancelled without the agreement of the credit parties.
Unconfirmed irrevocable letters of credit cannot be modified without the written consent of both the issuing
bank and the beneficiary. Confirmed irrevocable letters of credit need also confirming banks written consent
in order any modification or cancellation to be effective.

Commercial Letter of Credit:

Commercial Letter of Credit is mainly used as a primary payment tool in international trade such as exporting
and importing transactions. Majority of commercial letters of credit are issued subject to the latest version of
UCP (Uniform Customs and Practice for Documentary Credits). The ICC publishes UCP, which are the set of
rules that governs the commercial letters of credit procedures.

Standby Letter of Credit:

Commercial letters of credit are a means of payment to be utilized when the principle perform its duties. As an
example, let us consider an exporter who ships the goods according to the sales contract and apply to the
nominated bank for the payment.

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 through L/C.

Sight L/C:
When the LC is opened, stipulating the condition that, on presentation of the negotiable set of shipping
document by the seller as per the terms of the L/C are made, the buyers bank will make payment at sight
meaning immediately to the sellers bank subject to fulfillment of terms and conditions of the L/C being
fulfilled, the L/C is called Sight L/C.

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Deferred L/C:
L/C in which a payment is made after agreed time period in installment basis or in a lump sum as in L/C is
known as deferred payment L/C. This type of L/C is normally used where a payment is required to make by
L/C for availing services rather than goods itself.

Back-to-back letter of credit:

Back-to-back documentary credit is used in situations where a transferable documentary credit cannot or is not
allowed to be used for some reason. Upon the intermediarys request the bank issues a back-to-back
documentary credit in favor of the supplier. The documentary credit, opened by intermediarys bank, is based
on documentary credit (so-called initial documentary credit) previously opened in favor of the intermediary.
Legally, these are two independent documentary credits; therefore, contrary to the transferable documentary
credit, the bank may require the intermediary to provide additional security for the issuing of a back-to-back
documentary credit (as the initial documentary credit is not a 100% security for a bank). At the same time the
use of back-to-back documentary credit allows the intermediary to avoid direct contacts between the buyer and
the seller.

3.4 Form of L/C:

Mail L/C:
The L/C that comes in mail is called, Mail L/C
SWIFT L/C:
SWIFT is the short form of Society for Worldwide Interbank Financial Telecommunication. Swift defines its
role in international financial transactions on its website as follow. Our role is two-fold. We provide the
proprietary communications platform, products and services that allow our customers to connect and exchange
financial information securely and reliably.

Page | 22

Mail L/C the L/C which is mailed bybeneficiary

Form of L/C

SWIFT L/C the L/C which is automaticallysent to beneficiary

3.5 Documents required under L/C Operation:

Draft: A draft is a bill of exchange and legally enforceable instrument which may be regarded as the
formal evidence of debt under a letter of credit. Draft drawn at sight are payable by the drawer on
presentation. Term drafts, after acceptance by the drawer are payable on their indicated due date.
Performa Invoice: It states description of the goods including quantity, unit price.
Commercial Invoice: The commercial invoice is an itemized account issued by the beneficiary and
addressed to the applicant and must be supplied in the number of copies specified in the letter of
credit.
Bill of lading: A bill of lading is a receipt issued by a carrier for goods to be transported to a named
destination which details the terms and condition of transit. In the case of goods shipped by the sea; it
is the document of title which controls the physical custody of the goods.
Air Waybill: An air way bill is receipt issued by an air carrier indicating receipt of goods to be
transported by air and showing goods consigned to a named party.
Packing list: A packing list is usually requested by the buyer to assist in identifying the content do
each package or container.
Bill of Entry: Bill of entry is a custom clearance copy. Custom authority certificates that imported
goods are legal or illegal. Bill of entry must deposit into importers bank by the importer because
central bank examines the parties bill of entry.

3.6 Application for issuing L/C:

Page | 23

The importer would apply on banks standard from to his bank for issuing a letter of credit. In addition to
recording the full details of the proposed credit, the application also serves as an agreement between the bank
and the buyer. The credit application must be clear and precise and generally includes the following items:

Full name and address of the supplier, manufacturer or beneficiary

Openers name and address
The total amount of credit asked for
Specific credit or a revolving letter of credit and amount of the currency in which the documents are to

be drawn.
The terms of sale, i.e. whether the contract is on CIF,CNF,FOB basis.
The risks to be covered under the policy and the amount of insurance.
Brief description of goods including quantity, quality and unit price.

3.5.1 Dollar/Travelers Check Endorsements:

A check endorsement refers to how the back of a check or written upon by the person that receives the check.
When receiving a check, there are many ways that it can be endorsed. These are Blank Endorsement,
Restrictive Endorsement, Conditional Endorsement, Special Endorsement and Qualified Endorsement.

3.7 Different account in L/C operation:

In L/C operation different accounts are maintained which are needed for foreign exchange transaction.

1. Nostro Account:
It means our account with you. A Nostro account is a foreign currency account of a bank maintained by its
foreign correspondents abroad. For example, US Dollar Account of EXIM Bank Limited is maintained with
Citibank, N.A, New York, is a Nostro account of EXIM Bank Limited i.e from the point of view of EXIM
Bank Limited, and it is their Nostro Account.

2. Vostro Account:
Vostro Account means your account with us. The account maintained with foreign correspondent in a bank
of a particular country is known as vostro account. For example, State Bank of Indias Taka account
maintained with EXIM Bank Limited Dhaka is the vostro a/c from the point of view of EXIM Bank Limited it
is a vostro account held for state bank of India.

3. Loro Account:

Page | 24

Loro Account means their account with you. Account maintained by third party is known as Loro account;
suppose EXIM Bank Limited is maintaining an account with Citi Bank N.A New York and at the same time
EXIM Bank is also maintaining a nostro account with Citi Bank N.A New York. From the point of view of
EXIM Bank Limited account maintained with Citi Bank N.A New York is the loro account.

4. Loan against Imported Merchandise (LIM):

EXIM create Advance against the security of Merchandise imported through the bank may be allowed either
on pledge or hypothecation of goods, retaining margin prescribed on their Landed Cost depending on their
categories and Credit restriction imposed by the Bangladesh Bank.

3.8 Parties of documentary letter of credit:

1. Issuing Bank:
Its the buyers bank. It means the bank that agrees to the request of the applicant and issues its letter of credit
on the instruction of the applicant.

2. The Advising Bank:

It is the bank of exporters country which is usually the foreign correspondent of importers bank though
which the L/C is advised to the supplier. If the intermediary bank simply advises the L/C to the exporter part,
its called advising Bank.

3. The Confirming Bank:

If the advising bank also adds its own undertaking to honor the credit while advising the same to the
beneficiary, he becomes the confirming bank. In addition, becomes liable to pay for is the primary liability and
it is not contingent on the fulfillment of the obligation by the issuing bank.

4. The Nominated Bank:

The bank that is nominated by the issuing bank (also known as paying bank) to pay or to accept drafts (also
known as accepting bank) or to negotiate (also as negotiating bank). Usually the advising bank is requested
and authorized to be the nominated bank unless the credit allows negotiation by any bank.

5. Negotiating Bank:

Page | 25

It is the bank, which negotiates the bill and pays the amount of the beneficiary. The advising bank and the
negotiating bank may or may not be the same. Sometimes it can be confirming bank.

4. Over View of Foreign Exchange:

4.1 Foreign Exchange Department:
Foreign Exchange Department: As per foreign exchange regulation act 1947 (Article 2 nd) Foreign Exchange
means Foreign Currency i.e. currencies other than local currency. It includes any instruction drawn, accepted,
made or issued all deposits, credits and balances payable in any draft, travellerscheque, letter of credit and bill
of exchange expressed or drawn in Bangladesh currency but payable in any foreign currency.
Many transactions with overseas countries are respects of imports; export and foreign remittance come under
the preview of foreign exchange transactions. International trade demands a flow of goods from seller to buyer
and payment from buyer to seller. In this case the bank plays a vital role to between the buyer and seller.
The Importer
(Buyer of Goods)

The Bank
(Third Party)

The Exporter
(Seller of Goods)

In exercise of the power conferred by section 3 of the Foreign Exchange Regulation Act, 1947 Bangladesh
Bank issues license to schedule Bank to deal with exchange. These banks are known as Authorized Dealers.
Licenses are also issued by Bangladesh Bank to person or firms to exchange foreign currency instruments such
as LC, Currency notes and coins. They are known as Authorized Money changers.

4.2 Definition of foreign Exchange :

Page | 26

Foreign Exchange means foreign currency and includes all deposits, credit and balance of payable in foreign
currency as we; as Draft, Travelerscheque, Letter of Credit, Bill of Exchange drawn in local currency but
payable in foreign currency.

4.3 Fundamentals of Foreign exchange policy:

There are 3 fundamental aspects in the general mechanisms of foreign exchange.
Every country has its own currency legal distinctive unit account.
The exchange rate affected by means of credit instruments e.g. draft, mail, transfer, telegraphic
transfer etc.
Banks by book keeping entry carried out in the two centres concerned effect the conversion of
one currency into another.

4.4 Foreign Exchange Department of EXIM Bank:

Foreign exchange is an important department of EXIM Bank Limited, which deals with import, export and
foreign remittances. Foreign Exchange is an International Department of the Bank. It facilitates international
trade through the services. It bridges between importers and exporters. This department mainly deals in foreign
currency, thats why it is called foreign exchange departments.

Functions of Foreign Exchange Department: (Figure)

Foreign Exchange

Import
Opening L/C

Export
Export
L/CAdvising

Payment
against

Preshipment

Loan against
Imported

Postshipment
Finance

Merchandise

Remittanc
e

Inward
Remittance

Outward
Remittance

Page | 27

Payment
against
Document

Foreign Bill
for
Collection

4.5 Activities of Foreign Exchange:

There are three kinds of foreign exchange transaction

Import
Export
Remittance

Foreign Exchange Mechanism:

Page | 28

4.5.1 Import Section:

Import is foreign goods and services purchased by consumers, Firms and government in Bangladesh. An
importer must have Import Registration Certificate (IRC) given by Chief controller of Import and Exports
(CCI & L) to import anything from country.
To obtain IRC the following certificates are required:
1. Trade license & Income tax certificate.
2. Nationally certificate.
3. Bank solvency certificate.
4. Asset certificate.
5. Registration partnership deed.
6. Memorandum and article of association.
7. Certificate of incorporation.

4.5.1 (i)Import Procedure of EXIM Bank:

Import or export any goods into Bangladesh except in case of exemption issued by the Government of the
Peoples Republic of Bangladesh as per Import & Export Control Act 1950.So for doing import business at
first every importershould obtain Import Registration Certificate (IRC).

a. To import through EXIM Bank of Bangladesh Ltd a customer requires:

Page | 29

Proforma Invoice is
received by the L/C
applicant

L/C applicant
submit it to the
Bank

Bank Issue L/C to

the applicant
favoring
beneficiary

L/C advised by
advising Bank

Goods shipped by
Beneficiary &
submit the
documents to
negotiate bank

Negotiate bank
forward the
documents to the
L/C issuing bank.

Documents
checked by L/C
issuing bank &
inform it to L/C
applicant

If documents are
ok, then L/C value
is paid by L/C
issuing bank to
negotiate bank

Goods release from

the customs

Submission of Bill
of Entry to L/C
issuing Bank by the
applicant

Report to
Bangladesh Bank

b. Major steps of Import L/C Operation procedures are as follows:

The overall import procedures are illustrated briefly in steps:
Step 1: By paying specified registration fees to the CCI&E, the trader will get Import/Export Registration
Certificate (IRC/ERC). To open L/C with bank, this IRC is must.
Step 2: The importer contacts with the seller outside the country to obtain the Pro-forma Invoice from him or
his agents within the country (Indenter).
Step 3: If the importer accepts the indent/pro-forma invoice, he makes agreement with the seller detailing the
term and conditions of the import.
Step 4: Importer opens L/C in his bank in favor of the seller and offers to take necessary steps regarding L/C.
Step 5: The Issuing bank asks another bank to Advice it to the seller.
Step 6: The Advising bank advises the L/C to the seller.

Page | 30

Step 7: The Issuing bank receives the documents and reimburses the payment by his reimbursing bank
provided that the delivered documents are according to the L/C and there is no discrepancy.
Step 8: The importer collects the documents from the bank and releases the goods.
The above described import procedure is usually maintained but the payment procedure of the advising may be
different if there is any clause regarding the movement of the L/C.

c. The issuing bank has to do the followings:

Obtain written application from the applicant of the credit duly singed and verified by bank.
Confirm that, in case of increase of value, application for amendment is to be supported by revised

indent/pro-forma invoice evidencing consent of the beneficiary;

Ensure in case of extension of shipment period,the relative LCA is valid/revalidated/increased up to

the period of proposed extension.

Confirm that amendment of insurance cover note also be submitted in case of both credit amount and

shipment period extension amendment.

Maintain proper recording and filing of amendments;
Recover charges for amendment (if on account of applicant) and pass necessary voucher.

4.5.2 Export Section of EXIM Bank:

By the term Export, we mean that selling of anything from home country to abroad. On the other hand
Bankers define export as sending of visible things outside the country for deal. Export Trade plays a vital role
in the development process of an economy. With the export earning, we meet our Import Bills. The export
trade of the country is regulated by the Import and Export (Control) Act, 1950.There are some formalities,
which an exporter has to fulfill before and after shipment of goods. The export section of EXIM Bank dealsExport
Local purchase

4.5.2. (i).
a. Export procedure of EXIM Bank:

Page | 31

L/c comes from the

exporter

Check the relevant

document

Take the charge &

Give the L/C value to
the exporter

Forwarding the
L/C & add it to
FDBP register

Check the credit

worthiness of
importer

Advice the L/C

Payment comes from the

Importer to the bank

b. Major steps of Export:

There are a number of steps or formalities, which an exporter has to fulfill before and after shipment of goods.
These procedures are enumerated as follows:

Step-1: Registration from Chief Controller of Import &Export (CCI & E):
No person without registration granted by the chief controller of imports and exports shall bring anything into
or out of Bangladesh except in case of exemption issued by the government.

Step-2: Obtaining Export Registration Certificate (ERC):

For obtaining Export Registration Certificate (ERC),Bangladesh exporter are required to apply to the chief
Controller of Import & Export (CCI & E) in prescribe form along with the following documents:
Nationality and assets Certificates.
Memorandum and Articles of Association and Certificate of incorporation in case of limited
company.
Bank Certificate.
Income Tax Certificate.
Trade License etc.

Step-3: Securing of Order:

Page | 32

After getting the ERC exporter may proceed to secure the export order. He can do this by contracting the
buyers directly through correspondence. In this purpose exporter can get help form?

Liaisons Offices.
Buyers Local Agent.
Export Processing Organization.
Bangladesh Mission Abroad.
Chamber of Commerce.
Trade Fair etc.

Step-4: Signing of the contract:

After communicating with buyer the exporter has to get contracted for exporting exportable items from
Bangladesh detailing commodity, quality, price, shipment, insurance and mark, inspection, and arbitration etc.

Step-5: Procuring the Materials:

After making the land on having the L/C opened in his favor, then the existed for the exporters to set about the
task of procuring or manufacturing the contracted merchandise.

Step- 6: Documents required for shipment:

These documents are needed for Shipment goods:

Bill of exchange or Draft

Export Form
Export Registration certificate (ERC) (valid)
Letter of Credit (L/C) copy
Bill of exchange
Bill of Draft
Bill of Landing
Custom Invoice of Importers Country
Insurance Policy or certificate
Certificate of Origin
Inspection Certificate by the Agent of Importer
Consular invoice
Packing List copies (including original)
Quality Control Certificate
G.S.P certificate

Page | 33

 Photo

Step-7: Shipment of goods:

Exporter makes shipment according to the terms and conditions of L/C.

Procedure for collection of Export Bill:

There are two types of procedures regarding collection of Export Bill:
Foreign Documentary Bill for Collection (FDBC): Exporter can collect the bill through negotiating
bank on the basis of collection. Exporter in this case, will submit all the documents to the negotiating
bank for collection of bill from importer. The exporter will get money only when the issuing bank
gives payment. In this connection bank will scrutinize all the documents as per terms and conditions
mentioned in L/C.
Foreign Documentary Bill for Purchase (FDBP): When exporter sale all the export documents to the
negotiating bank is known as Foreign Documentary Bill Purchase (FDBP)In this case, the exporter
will submit all the documents to the bank. The bank gives 60-80% amount to the exporter against total
L/C value.

Step-8: Final Step:

Submission of the documents to the Bank for negotiation:

Checking of export documents: After getting the documents banker used to check the documents as

per LC terms.
Negotiation of export documents: If the bank accepts the documents and pays the value draft to the
exporter and forward the document to issuing bank that is called a negotiating bank. If the bank does

buy the LC then the bank normally acts as collecting bank.

Realization of proceeds: This is the period when the issuing bank has realized the payment.
Reporting to the Bangladesh bank: As per instruction by Bangladesh bank the bank has to report to

respective department of Bangladesh bank by mentioning latest payment.

Issue to proceeds realization certificate (PRC): Bank has to issue proceed realization certificate of
export LC to the supplier/ exporter for getting cash assistance

After scrutinizes all the documents, if the documents are clean, EXIM Bank purchase the documents on the
banker customer relationship. This is known as Foreign Documentary Bill Purchases (FDBP).Foreign
Documentary Bill for Collection signifies that the exporter will receive payment only when the issuing gives
payment.

Page | 34

4.5.3 Foreign Remittance section of EXIM Bank:

EXIM Bank has 84 branches through out the entire country and therefore, they serve as best medium for
remittance of funds from one place to another.This service is available to both customers as well as noncustomer of the bank.The following are some of the import and modes of transferring funds from one to
another through bank.

4.5.3.1Functions of the Remittance Section:

Handlingof all incoming and out going foreign and local remittance is the major function for this
department.
Handling of incoming and outgoing T.T
Outstanding Cheque collection/purchase
Demand Draft Handling.
Other as sorted work.

4.5.3.2 Foreign Remittance Process:

Fund transfer form one country to another country goes through a process which is known as remitting
process:

Fill up the Remitter from by the client

Check the document from the clients

Insert the 10 digit code in the software

After confirmation, give money to theclient

Figure:Rmittance Process in flow chart

4.5.3.3 Remittance of Funds:

Following process of Rmittance Fund in EXIM Bank.

Page | 35

Remittance (Inward & Outward)

Outward

Inward

Figure: Remittance of funds

4.5.3.4 Instruments of Foreign Remittance:

Cash: Dollar,Pound,Franch Fr.Riyal or any other currency.

T.C: Travelers Cheque.
F.D.D: Foreign Demand Draft.
F.T.T: Foreign telephonic Transfer.
T.T:Telegraphic Transfer,Cable transfer or swift transfer.
M.T: Mail Transfer.
I.M.O: International Money Order.
Cheque: By any person & institution.
P.O: Payment Order.
D.D: Demand Draft
O.B.C: Outward Bill Collection
I.B.C: Inward Bill Collection

4.5.3.5 Inward Remittance:

Remittance comes from foreign countries to our country is called inward remittance.To the bankers or ADs
inward remittance means purchase of foreign currency by authorized dealers. Generally, inward remittances
are received by draft, mail transfer,TT,purchase of foreign bills & travellers Cheque, export bills.Basically,
these are the formal channels of receiving inward remittance. A local bank also receives indenting commission
of local firm also come sunder purview of inward remittance. Any person can remit finds to another through
Inland remittance by using the following means of remitting funds with charges.

Pay Order (PO)

Demand Draft(DD)
Telegraphic Transfer (T.T)
Mail Transfer

Page | 36

Draft

Mail Transfer
Inward Remittance

Telegraphic Transfer

Bills and Trave;ersCheque

Export Process

4.6.3.6 Outward Remittance:

Remittance from our country to foreign countries is called outward foreign remittance. On the other word,
sales of foreign currency by the authorized dealer or formal channels may be addressed as outward remittance.
The authorized dealers must utmost caution to ensure that foreign currencies remitted or released by them are
used only for the purposes for which they are released. Out ward remittance may be made by appropriate
method to the country to which remittance is authorized. Most outward remittance is approved by the
authorized dealer on behalf of Bangladesh Bank.
Outward remittance in favors of beneficiaries outside Bangladesh may be made in any of the following
manners:

Telegraph
Transfer

Mail
Trensfer

Outward
Remittanc
e

Demand
Draft

Letter of
Credit
Chart: Modes of Outward Remittance

Page | 37

Page | 38

5.1 Performance of Total Import Business Financing:

Here are the data of last 5 years performance of Import of EXIM Bank Limited
(Taka in Millions)

Year

Total Import Amount

Growth Rate

2009

83911.51

--

2010

129570.73

54.41 %

2011

128445.77

-0.87 %

2012

143314.40

11.58 %

2013

135409.88

-5.52 %

2014

146795.57

8.40%

Source: Annual Report of EXIM Bank Limited (2009 - 2014)

Graphical Presentation:
60
50

54.41

40
30
20

11.58

10
0
2010
-10

8.4

-0.87
2011

2012

-5.52
2013

2014

Figure: Performance of Import Financing of EXIM Bank Limited

Interpretation:
As our economy is expanding, import performance of EXIM Bank Limited shows that, the growth rate of total
import financing was fluctuated from the year 2010 to 2014. The poor economic condition, political instability,
exchange rate fluctuation etc. can be the reason of this fluctuating trend.

Page | 39

5.2 Earning from Import BusinessFinancing:

Import business contributed a great portion in the total earnings of EXIM Bank Limited in last 5 years which is
given below:
(Taka in Millions)

Year
Earnings from

2010
273.00

2011
336.00

2012
342

2013
326.00

2014
353

Import
Import earning

27.14%

32.15%

33.70%

29.72%

30.04%

as a % of Total
foreign Exchange
earnings
Source: Annual Report of EXIM Bank Limited (2010 - 2014)

Graphical Presentation:
40.00%
35.00%
30.00%
25.00%
27.14%
20.00%
15.00%
10.00%
5.00%
0.00%
2010

32.15%

2011

33.70%
29.72%

2012

2013

30.04%

2014

Figure: Growth Rate of Import Earnings of EXIM Bank Limited

Interpretation:
Here it has seen that, the growth rate of import earning was fluctuated during the period. In 2010 the growth
rate was in negative position. In 2011 its increased but not in standard position after that it is decreasing. The
economic condition, government rules and regulation, exchange rate fluctuation, business policy etc. can be
the reason of fluctuated increasing position.

5.3 Performance of Total Export Business Financing:

Page | 40

The Export performance of EXIM Bank Limited in last 6 years is given below:
(Taka in Millions)

Year
2009
2010
2011
2012
2013
2014

Total Export Amount

76,240.77
95,359.45
1,22,217.34
1,20,996.90
130353.32
134412.40

Growth Rate (%)

-25.08%
28.17%
-0.98%
7.73 %
3.11%

Source: Annual Report of EXIM Bank Limited (2009 - 2014)

Graphical Presentation:
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
2010
-5.00%

2011

2012

2013

2014

Figure: Performance of Export Financing of EXIM Bank Limited

Interpretation:
The graph shows that the growth rate of the EXIM Bank Limited total export financing was fluctuated
from the year 2009 to 2013. In the year 2009 the growth rate of total export financing was decreased.
Again the growth rate was increased gradually from the year 2010 to 2011. But for the economic
recession, political instability, fall down the commodity price in international market etc. the growth
rate again fell down in 2012. Again the growth rate was increased in the year 2013. Europe is one of the
big market for Bangladeshi garments product, Euro zone crisis affect export growth sharply.

5.4 Earning from Export Financing:

Page | 41

Export business contributed a great portion n the total earnings of EXIM Bank Limited in last 5 years
which is shown below:

(Taka in Millions)
Year
Earnings from

2010
667.00

2011
630.00

2012
638.19

2013
672.00

2014
693

Export
Total Earnings

1006

1045

1139.7

1097

1175

Growth Rate

66.30%

60.29%

58.35%

61.26%

58.97%

Source: Annual Report of EXIM Bank Limited (2010 - 2014)

Graphical Presentation:
68
66

66.3

64
62

60.29

61.26
60

60

58.97

58
56
54
2010

2011

2012

2013

2014

Figure: Performance of Export Earnings of EXIM Bank Limited

Interpretation:
The trend shows that the Export earnings growth rate from the year 2009 to 2013 was fluctuated. In the year
2009 export earnings growth rate was decreased, but 2010 it is boomed. Again 2011 it is slightly fell down and
from 2012 to 2013 the export earnings growth rate was also increased at positive rate.

5.5 Total Foreign Remittance:

Page | 42

Here are the data of last 5 years performance of Remittance of EXIM Bank Limited:
(Taka in Millions)

Year

Total Foreign Remittance Amount

Growth Rate (%)

2009
2010
2011
2012
2013
2014

2,452.33
3,036.42
3,744.36
5,770.20
2889.48
3776.67

--23.81%
23.31%
54.10%
-49.92 %
23.49%

Source: Annual Report of EXIM Bank Limited (2010 - 2014)

Graphical Presentation:
60

54.1

40
20

23.81

0
2010

23.49

23.31

2011

2012

2013

2014

-20
-40
-49.92
-60
Figure: Performance of Total Foreign Remittance of EXIM Bank Limited

Interpretation:
The graph shows that, growth rate of foreign remittance was not stable over the year. In the year 2010
the growth rate of foreign remittance was constant. But the growth rate of foreign remittance was
increased from year 2011 to 2012. Again in 2012 the growth rate was decreased than last two years. In
the year 2014 the growth rate of foreign remittance was increased.

Page | 43

5.6 Growth rate of Total Foreign Exchange:

Here are the data of last 6 years performance of total foreign exchange of EXIM Bank Limited
(Taka in Millions)

Year

Total Foreign Exchange Amount

Growth Rate (%)

2009
2010
2011
2012
2013
2014

162604.41
227966.60
254407.47
270081.50
268652.68
284984.70

-40.19%
11.59%
6.16%
-0.53 %
5.73%

Source: Annual Report of EXIM Bank Limited (2010 - 2014)

Graphical Presentation:
45
40 40.19
35
30
25
20
15
10

11.59
6.16

5
0
2010
-5

2011

2012

5.73
-0.53
2013

2014

Figure: Performance of Total Foreign Exchange of EXIM Bank Limited

Interpretation:
Although, import, export financing and foreign remittance were fluctuating trend in last five years. But total
foreign exchange transaction of EXIM Bank Limited was increasing mode but the growth rate was fluctuating.
In 2010 the foreign exchange growth rate was highest.

Page | 44

5.7 Performance of Total Foreign ExchangeEarnings:

Here are the data of last 5 years performance of total foreign exchange gain of EXIM Bank Limited:
(Taka in Millions)

Year

ExchangeEarnings in Amount

Growth Rate (%)

2009
2010
2011
2012
2013
2014

872.70
1006.0
1045.0
1139.7
1097.0
1175

--15.27%
3.87%
9.06%
-3.75%
6.63%

Source: Annual Report of EXIM Bank Limited (2010- 2014)

Graphical Presentation:
20
15

15.27

10

9.06
6.63

5
0
2010

2011
-3.87

-5

2012

2013
-3.75

2014

Figure: Performance of Total Foreign Exchange Gain of EXIM Bank Limited

Interpretation:
From the analysis, it has seen that exchange earnings amount of EXIM Bank Limited was high in the year
2009 but it was decreased from the year 2010 to 2011. Again in 2012 the trend was increased. In the year 2013
it was decreased. Thats mean it was in fluctuating situation exist during the period.

Page | 45

5.8 The Contribution of Total Foreign Exchange Earnings on Total Earnings of EXIM Bank
Ltd:
(Taka in Millions)

Year

Total Earnings

2010
2011
2012
2013
2014

13723.95
15801.88
20357.48
23614.71
25736.68

Contribution of
ForeignExchange
Earnings in Total
Income
7.33%
6.61%
5.59%
4.65%
4.57%

ForeignExchange
Earnings
1006.0
1045.0
1139.7
1097.0
1175.0

Source: Annual Report of EXIM Bank Limited (2010- 2014)

Graphical Presentation
8
7

7.33
6.61

5.59

4.65

4.57

4
3
2
1
0
2010

2011

2012

2013

2014

Figure: Contribution of Total Foreign Exchange Earnings in Total Incomeof EXIM Bank Ltd.

Interpretation:
The graph shows that the contribution of total foreign exchange earnings in total income of EXIM Bank
Limited were decreased from 2009 to 2013 forthe economic condition, government rules and regulation,
exchange rate fluctuation, business policy etc.

5.9 National Import Position and Share of EXIM Bank Ltd:

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The import contribution of EXIM Bank Limited to National Import in last 5 years is given below:
(Taka in Millions)

Year

National

EXIM Bank Limited

Share of EXIM Bank Ltd

2010
2011
2012
2013
2014

Import Position
16,42,428.17
24,00,281.78
27,13,002.23
2723279.00
22,54,100.00

Import Position
1,29,570.73
1,28,445.77
1,43,314.40
135409.88
1,46,795.57

(%)
7.88%
5.35%
5.28%
4.97%
6.51%

Source: Bangladesh Bureau of statistics and Bangladesh Bank (2010 -2014)

Graphical Presentation:
9
8 7.88
7
6

5.35

6.51

5.28

5
4.97

4
3
2
1
0
2010

2011

2012

2013

2014

Figure:Contribution of EXIM Bank Limited to National Import

Interpretation:
The graph shows that the contribution of EXIM Bank Limiteds import according to national import was
increased from 2009 to 2010. Then its going down slightly for international economic recession and intense
competition exists in the banking industry related to import business financing. So from 2011 to 2013 the
contribution of EXIM Bank Limited to national import was decreased.

5.10 National Export Position and Share of EXIM Bank Ltd:

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The Export contribution of EXIM Bank Limited to the National Import to business in last 5 years is given
below:

(Taka in Millions)
Year

National Export

EXIM Bank Limited

Share of EXIM Bank Ltd.

2010
2011
2012
2013
2014

Position
10,21,486.01
11,34,590.43
18,93,880.19
18,96,597.00
17,90,000.00

Export Position
95,359.45
1,22,217.34
1,20,996.90
1,30,353.32
1,34,412.44

(%)
9.33%
10.77%
6.38%
6.87%
7.51%

Source: Bangladesh Bureau of statistics and Bangladesh Bank (2010-2014)

Graphical Presentation:
12.00
10.00

10.77

9.33
8.00

7.51

6.38

6.00

6.87

4.00
2.00
0.00
2010

2011

2012

2013

2014

Figure: Contribution of EXIM Bank Limited to National Export

Interpretation:
The graph shows that the contribution of EXIM Bank Limited export according to national export was
increased from 2009 to 2011 and in 2011 it was highest. But again it was decreased in 2012. In the year 2013 it
was increased. So overall the total trend was fluctuated due to intense competition.

5.11 National Remittance Position and Share of EXIM Bank Ltd:

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The foreign remittance contribution of the EXIM Bank Limited to the national remittance in last 5 years is
given below:
(Taka in Millions)

Year

National Foreign

EXIM Bank Limited

Share of EXIM Bank Ltd.

2010
2011
2012
2013
2014

Remittance
7,60,109.83
9,17,481.38
10,18,827.81
11,56,460.78
10,61,145.56

Foreign Remittance
3,036.42
3,744.36
5,770.20
2889.48
3776.67

(%)
0.39%
0.41%
0.56%
0.25%
0.36%

Source: Bangladesh Bureau of statistics and Bangladesh Bank (2009-2013)

Graphical Presentation:
0.60

0.56

0.50
0.41

0.40
0.39
0.30

0.36
0.25

0.20
0.10
0.00
2010

2011

2012

2013

2014

Figure: Contribution of EXIM Bank Limited to National Foreign Remittance

Interpretation:
The graph shows that the contribution of EXIM Bank Ltd in foreign remittance according to national
remittance was gradually increased from the year 2009 to 2012. In the year 2012 the foreign remittance
contribution of EXIM Bank Ltd was highest position. But in the year 2013 the contribution of EXIM Bank Ltd
in foreign remittance according to national remittance was decreased.

5.12 Country Wise inflow of Foreign Remittance of EXIM Bank Ltd. In 2014: EXIM Bank Ltd.
Country wise inflow of Foreign Remittance in 2014 from different countries is given below:

Year

Japa

Kuwai

2014

n
3%

t
9%

UAE
19%

UK
9%

USA

Malaysi

Saudi

Singapor

Other

8%

a
6%

Arabia
29%

e
2%

s
15%
Page | 49

Source: Annual Report of EXIM Bank Limited in 2014

Graphical Presentation:
Country wise inflow of Fore ign Re mittance in 2014
Japan

6%

8%

Kuwait
29%

9%

UAE
Uk
USA

2%

19%
9%

3%

15%

Malaysia
Saudi Arabia
Singapore
Others

Figure:Country wise inflow of Foreign Remittance in 2014

Interpretation:
The pie diagram shows that the maximum remittance inflow from Saudi Arabia which was 29%. Afterwards,
19% was come from UAE, then some portion of remittance inflow from UK, USA, Kuwait, Malaysia,
Singapore and others.These variations occur because of the G to G agreement between countries.

6.1 Finding:
Banking system plays a very important role in the economic life of the nation. The health of the economy is
closely related to the soundness of its banking system. In a developing country like Bangladesh the banking
systems as a whole play a vital role in the progress of economic development. So the following findings &
recommendations we are identified for the EXIM Bank Limited:

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 The import growth rate was fluctuated during the period. Even the growth rate was in negative
position in 2011 and 2013 due to poor economic condition, political instability, exchange rate
fluctuation etc.
The growth of export business financing was more fluctuating because of changes in government
rules and regulation, international trade policy etc.
The growth of remittance sharply decreased from 2010 to 2011, due to a significant deceleration
of migrant workers during that period of period. But in 2012 total flow of remittance increased
because of the number of workers was likely to increase and Malaysia were interested to recruit a
significant number of workers from Bangladesh under the government-to government (G to G)
arrangement. In the year 2013 the growth of remittance was decreased.
Earnings growth from import and export business financing of EXIM Bank Limited is in
fluctuating mode due to intense competition in the banking industry.
The contributions of export, import business financing and foreign remittance were fluctuated.
Flow of foreign remittance through EXIM Bank Limited in the national context is not satisfactory.
The contribution of total foreign exchange earnings on total earnings of EXIM Bank Ltd were
decreased from 2009 to 2013.

The maximum remittance inflow from Saudi Arabia which was 29%. Afterwards, 19% was come
from UAE, then some portion of remittance inflow from UK, USA, Kuwait, Malaysia, Singapore
and others.

6.2 Recommendations:
I have the practical experience in EXIM Bank Limited for only three months, with my experience in the bank
with vast and complex banking system, it is very difficult for me to recommend. I have observed some
shortcoming regarding operational activities of the bank. On the basis of my observation I would like to
recommend the following suggestion:

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 EXIM Bank Limited may develop new attractive financing packages for importers which can help to
maintain steady and positive growth rate such as lowering the L/C margin to the importer and L/C
procedure may be made easier.
The growth rates of export business were fluctuating. They may take necessary steps to steady growth
rate so that not only depended on readymade garment products but also Export of non-traditional items
should be encouraged, Management Information System (MIS) may be developed for export business
financing.
Earnings from import and export growth rate were fluctuating. To make steady expected profit, it may
give more concentration on their Existing clients & potential clients. And they also may develop the
new plan and operate their activities more efficiently by active and experienced employee.
National import and remittance position of EXIM Bank Limited has decreased in 2013. So, they may
increase efficiency level such as unique needs of the clients in the changing pattern of world trade for
import and export business financing and also need to market survey, research and development of
new products like factoring, confirming.
The contribution of total foreign exchange earnings of total earningof EXIM Bank Ltd were decreased
from 2009 to 2013. To make steady expected profit, it may give more concentration on their Existing
clients & potential clients and also develop new plan.
Flow of foreign remittance through EXIM Bank Limited in the national context is not satisfactory.
EXIM Bank Limited should improve flow of foreign remittance. We know that our country is an
intensive country thats why EXIM Bank Limited should try to set up newer branches at rural area for
covering more remittance earnings.

6.3 Conclusion:
Many commercial banks have been established in last few years and these banks have made the banking sector
very competitive. The Export Import Bank Limited is promising one among these Banks. The growing
competition bound EXIM Bank not only to compete with other commercial bank but also with the foreign and

Page | 52

public banks. The major tasks for banks, to survive in this competitive environment is by managing its assets
and liability is an efficient way.
The EXIM Bank can bring glorious prospect for our nation on international trading and other banking
activities. And ultimately will get benefited from their success in financing international trade. The EXIM
Bank maintaining a superior business relationship with the other international associate involved in Foreign
Exchange Successfully.
Banks always contribute towards the economic development of a country. EXIM Bank Bangladesh Limited
compared with banks is contributing more by investing most of their funds in fruitful Foreign Exchange and
very essential projects. It is obvious that the right thinking of this bank establishing a successful network over
the country and increase resources, will be able to pay an important role in the development of our industrial
sector and make available Foreign Exchange to get competitive advantage in the global economy.

References:

C.R Kotheri, Research Methodology Second Edition, 2003-2004, wishwaPrakashan, Calcutta,India.

Lean Yu and king Keung, Foreign exchange rate forecasting, New Edition, International series

Publication, 2009
EXIM Bank limited, annual report from 2008 to 2014.
Fabozzi, J. Frank Foundation of Financial Markets and Institutions, 6 th Edition, Pearson Education.
Madhura, Jeff (2006) Financial Markets and Institutions 7th Edition, Thomson South-Western
Riaz, Md. and Alam, Shaiful, Md. and Shareef, Md. and Faisal, Md. (2002) Discovering Finance - A

Dictionary of Financial Jargons 1st Edition, Prasnanir Publications

Zikmund, William G. Business Research Method. 6th Edition, Thomson Learning
http://www.EXIMbankbd.com
Bangladesh Bureau of statistics and Bangladesh Bank (2009-2013)

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