Mouri Internship Report (Final)

1.
1 Introduction
Todays
Today’s world is a business world. Business is the main force to the economic development of
any nation. So students are willing to study BBA to learn the rules and tactics of competitive
business world. After the theoretical courses, students are sent to internship program, the aim of
internship program is to make oneself familiar to the business practice and to make theoretical
knowledge effective by comparing it to the practical field. As part of practical orientation
program, Internship is offered.
Foreign Trade is one of the most important segments of Bank Business. With the changes of time
international trade is diversifying gradually, so it is important to know about the policy, rules,
regulation and changing mechanism of foreign exchange. To gain in depth knowledge about
foreign exchange, the topic”Foreign Exchange Mechanism- A study of Bank Asia” has been
chosen.
1.2 Origin f the study

With the real practical world, Internship is highly required to gain idea, knowledge and
experience and accustomed with corporate world.
In today’s world only academic education does not make a student perfect to become
competitive r completing my BBA course in independent university Bangladesh, I was sent to
Bank Asia to gain practical knowledge and experience of modern banking system. I was also
assign to make a report to) on the experience that I gain two months long internship in the
different departments of Agrabad branch of Bank Asia Limited
1.3 Scope of the study
I have tried to prepare the report in such a way that it reflects what I learn during the orientation
period. The study covers analyzing the variable, like different deposits, loans and advances,
Customer Services, Foreign exchange mechanism and Policies and their impact on the
profitability of it.
Foreign Exchange Mechanism- A study of Bank Asia Page 1

1.4 Objective
The objective of the report is to familiarize with the operation in the Banking section. To grasp
an idea about bank involvement in Foreign Exchange including import and arena including
Management overview of bank and analysis of banking operation in different export and credit
facilities provided by the bank in Foreign Trade. The main objectives are:
1. This internship report intends to cover a comprehensive analysis of banking activities of

Agrabad Branch of Bank Asia.
2. The report is aimed to understand the activities of foreign exchange department of bank Asia.
3. To evaluate the performance of bank Asia, including its lackings and areas of correction.
1.5 About bank Asia
Bank Asia Limited is a scheduled commercial bank in the private sector established under the
Banking Company Act 1991 and incorporated in Bangladesh as a public limited company under
the Companies Act 1994 to carry out banking business in Bangladesh.
Its network Bank Asia began its journey on the 27th of November 1999 with the inauguration of
the bank’s Corporate Office at the Ring’s Brabant. The overwhelming public response has
enabled the Bank to keep up the plan of expanding
Its mission is to assist in bringing high quality service to our customers and to participate in the
growth and expansion of our national economy. Bank Asia's vision is to have a poverty free
Bangladesh in course of a generation in the new millennium, reflecting the national dream.

1.5 Methodology
An exploratory research has been conducted in order to make the report more meaningful and
presentable. Data were collected from two sources. They are:
1. Primary data source

2. secondary data source
• The primary sources:
• Face to face conversation with the respective officers.

• Practical work exposures from different desks.
• Reverent file study as provided by the officers concerned.
• In-depth study of selected cases
• Interview with the Clients
• Secondary data source:
The secondary data source includes Reports. Relevant books, Journals, Relevant booklets etc.
Research approach:
* Qualitative and quantitative approach has been adopted for data analysis and
interpretation taking the processed data as the base.
* Finally, that way, collected data are classified, tabulated, analyzed, interpreted and
presented in the form of research report.
1.6 Limitations of the study
There were some problems while I conducting the internship program. Those are:
• One major limitation was the time constraint as every department has many activities.
This report could have been prepared in a much broader and extensive manner with more
time and space availability.
• For the lack of our practical knowledge, some shortcoming may be available in the paper.
• The study also suffered from inadequacy of data provided by Bank Asia.
• Some essential data could not be gathered because of confidentiality concerns.

2. Company overview
2.1 History:
Bank Asia began its journey on the 27th of November 1999 with the inauguration of the bank’s
Corporate Office at the Rang’s Bhaban. The overwhelming public response has enabled the Bank
to keep up the plan of expanding its network. The opening of the Principal Office was the big
leap forward and successively the opening of Gulshan and Chittagong Branch expanded the
horizon of Bank Asia to bring its services to the valued clients more effectively.
Bank Asia has been launched by a group of successful entrepreneurs with recognized standing in
the society .The paid up capital of the bank is 1116million. The management of the bank consists
of team led by senior management team is ably supported but group of professional many of
whom have exposure in the international market.
In the year 2003, the bank came to limelight with over subscription of the initial public offering
of the shares of the bank, which was a record 55 times in our capital markets history and it shares
commands respectable premium.
2.2 Corporate Objectives
Bank Asia’s objectives are reflected in the following areas.
 Highly personalized service.

 Customer-driven focus.
 Total commitment to quality.
 Outstanding products.
 Contribute in the economy
 Quality of human resources
 Commitment to its clients at each level

2.3 Vision of Bank Asia
Bank Asia’s vision is to have a poverty free Bangladesh in course of generation in the new
millennium, reflecting the national dream. Our vision is to build a society where human dignity
and human rights receive the highest consideration along with reduction of poverty.
2.4 Mission of Bank Asia

• To assist in bringing high quality services to our customers and to participate in the
growth and expansion of our national economy.
• To set high standards of integrity and bring total satisfaction to our clients, shareholders
and employees.
• To become the most sought after bank in the county, rendering technology driven
innovative services by our dedicated team of professionals.

2.5 Organizational Hierarchy of Bank Asia Ltd.
CHAIRMAN
VICE CHAIRMAN
MANAGING DIRECTOR
SENIOR EXECUTIVE VICE

PRESIDENT NAGING DIRECTOR
EXECUTIVE VICE PRESIDENT
SENIOR VICE PRESIDENT
VICE PRESIDENT
FIRST EXECUTIVE VICE PRESIDENT
SENIOR EXECUTIVE OFFICER
EXECUTIVE OFFICER
SENIOR OFFICER
OFFICER
MANAGEMENT TRAINEE OFFICER
JUNIER OFFICER
ASSISTANT OFFICER
BANKING OFFICER
TELLER

2.6 MANAGEMENT HIRARCHY OF BANK ASIA LIMITED
AGRABAG BRANCH
SENIOR VICE -PRESIDENT &

MANAGER
SENIOR EXECUTIVE OFFICER
EXECUTIVE OFFICER
NAGING DIRECTOR
SENIOR OFFICER
OFFICER
ASSISTANT OFFICER
JUNIOUR OFFICER
BANKING OFFICER
TRAINEE OFFICER
TELLER

2.7 Product and service of bank Asia
• Mobile Banking
Customer and clients of bank Asia can access their bank account from mobile phone. New
moderate technology is used to support this system. Currently the users of Aktel can only use
this facility.
• ATM Service
Bank Asia customers have access to 57 ATMs as a member of Cash Link Bangladesh. It is now
setting up its own ATM network at every focused point in the city with a view of providing retail
banking services. Under the ATM network the Stellar Online Banking Software enables direct
linking of a client's accounts.
• Credit card
Bank Asia offers credit card facilities which are acceptable throughout the country. Bank Asia
Credit Card is accepted more than 3,500 merchant outlets around the country. Our wide range of
merchants include hotels, restaurants, airlines, & travel agents, shopping malls and departmental
stores, hospitals & diagnostic centers, jewelers, electronics & computer shops, leather goods
mobiles & internet service providers, petrol pumps and many more.
• Credit facilities
Bank Asia Credit Card offers free credit facility up-to 45 days & minimum 15 days without any
interest; you can also pay 8.33% of your billing amount or current dues every month and thus
have the flexibility to plan your payments.
• Internet Banking
Bank Asia provides ATM service, SMS banking, and online banking service in the country
through Internet banking. All branches under online banking system will be able to do banking
practices using a common server (which is centralized) from where only the branches will be
able to enter using a common password.

• SMS banking
Though SMS facility you can access your account using your mobile phone from anywhere,
anytime at your convenience to know the account position.
• Customized loan
One of the unique features of bank Asia is customized loan. Bank Asia introduced customized
loan for its valued customer according o customers convenience.
• SME banking
Bank Asia offers different typed of SME loan for the entrepreneur of small and medium
enterprise. It offers different loans and schemes with different tenure and interest rates.
Customers can get loan according to their convenience.
2.8 Different schemes of bank Asia
Banking industry is now becoming more intense and competitive. Banking needs become more
diverse and exotic than ever before. For this reason Bank Asia introduce different schemes for its
customers. Modern Banking is a result of evolutions driven by changing economic activities and
lifestyles. Bank Asia Ltd. is a new entrant in the private banking scenario of Bangladesh with a
promise to fulfill every possible customer need with high efficiency and satisfaction. The
schemes include:
 Deposit pension scheme
 Bonus saving scheme
 double benefit plus
 Triple benefit plus
 Monthly benefit plus
 conversable loan
 poverty alleviation

3. Literature review
3.1 Definition of Bank
Bank is the lifeblood of modern economy. It is an Establishment authorized by a government to

accept deposits, pay interest, clear checks, make loans, act as an intermediary in financial
transactions, and provide other financial services to its customers.
According to J.C. Wood “Bank is the trader of money and loan.”
According to H L. Hart “An institution which accept the cheque, of the person from its
collected money in current account called bank”.
A bank is an establishment which trades in money, an establishment from deposit, custody and
issue of money and also granting loan, discounting bills and fascinating transmission of
remittance from one place to another.
Imperial Dictionary:
Banks play 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. Although banks create no new wealth but
their borrowing, lending and related activities facilitate the process of production, distribution,
exchange and consumption of wealth.
3.2 Commercial bank
Commercial bank is an intermediary profit making organization.-prof. Ashutosh Nath
A commercial bank is a dealer of capital or more properly a dealer of money. He is the

intermediary party between the borrower and lender. He borrows from one party and lend to

another and the different between the terms at which he borrows and those at which he lends
from the source of his profit. -prof. Gilbert.
3.3 Foreign exchange
According to foreign Exchange Regulation Act 1947, “Anything that conveys a right to wealth
in another country is foreign exchange”.
Methods and instruments used to adjust the payment of debts between two nations that employ
different currency systems. A nation's balance of payments has an important effect on the
exchange rate of its currency. Bills of exchange, drafts, checks, and telegraphic orders are the
principal means of payment in international transactions. Foreign trade is one of the most
important segments of bank business. And bank plays an important role to regularize and to ease
the foreign trade. The bank which has authorized dealership (A.D) by Bangladesh bank only has
the right to do the foreign exchange business. As a modern bank, bank Asia also extended its
business arena to this sector
Almost countless thousands of separate import and export transactions occur every year, each
one creating a distinct debtor-creditor relationship. In its broader sense foreign commerce
includes much more than the of goods
- Book Title: Foreign Exchange Practice and Policy.

Contributors: Frank A. Southard Jr. - author, Philip F. Swart Jr. - author, A. N. Gentes -
author. Publisher: McGraw-Hill Book Company. Place of Publication: New York. Publication
Year: 1940. Page Number: 112.
3.4 Comparison between domestic and foreign trade
The domestic trader expects the money market to assist him in two ways: to provide the
instruments and the clearing facilities by which money payments may be transferred from buyer
to seller; and to provide credit if buyer or seller is unable or unwilling to "carry" the transaction

until the goods are sold to the ultimate consumer. The foreign trader calls on the foreign
exchange market to perform the same two services, transfer and credit.
“Ever-present difference between the functions of these two markets, of course, is to be found in
the fact that every foreign exchange transaction involves not only a transfer of funds from one
person to another and from one place to another but also from one currency to another. The
similarity of the services rendered by the two markets emphasizes the fact that the foreign
exchange market is simply a specialized section of the larger money market.”
- Book Title: Foreign Exchange Practice and Policy. Contributors: Frank A. Southard
Jr. - author, Philip F. Swart Jr. - author, A. N. Gentes - author. Publisher: McGraw-Hill
Book Company. Place of Publication: New York. Publication Year: 1940.
3.5 History of foreign exchange
For trade between primitive communities in modern times was conducted mostly in the form of
barter, so that it did not involve foreign exchange transactions. Even though in many known
instances the goods employed by one community as a primitive currency were imported from, or
exported to, some other community, the latter must have regarded them simply as goods given or
accepted in exchange for other goods. There was, therefore, no exchange of the money of one
community against that of the other.
The first Foreign Exchange markets consisted of meeting-places of money-changers functioning

in commercial centers. They were familiar figures in market places and harbors in the Ancient
Middle East and Greece.
Progress in Foreign Exchange practice and in theoretical knowledge during the 16th and 17th
centuries was accompanied by comparable progress in the sphere of Foreign Exchange policy.
This was a consequence of the growing importance of Foreign Exchange in the national and
international economy, of the increasing familiarity with the technique and theory of the subject,
as well as of the growing realization of its importance by princes and their advisers.
-Book Title: The History of Foreign Exchange. Contributors: Paul Einzig - author.
Publisher: St. Martin's Press. Place of Publication: New York. Publication Year: 1962

3.6 Foreign exchange market
The foreign exchange market is a worldwide decentralized over-the-counter financial market for
the trading of currencies. Financial centers around the world function as anchors of trading
between a wide range of different types of buyers and sellers around the clock, with the
exception of weekends. The foreign exchange market determines the relative values of different
currencies.
The Forex, and also known as "The Foreign Exchange" market exists wherever one currency is
traded for another. It's the largest financial market in the world. Simply if we compare the New
York Stock Exchange trades vs. changing hands in forex, we will discover Forex market is a lot
of times larger than both Equity and Treasury markets combined.
There is no central marketplace for currency exchange; trade is conducted over the counter. The
forex market is open 24 hours a day, five days a week and currencies are traded worldwide
among the major financial centers
The primary purpose of the foreign exchange is to assist international trade and investment, by
allowing businesses to convert one currency to another currency.
The purpose of foreign exchange market:
1. Foreign currency and financial instruments that can be used to make payments in foreign
countries.
2. The purchase or sale of foreign currencies.
- Book Title: Foreign Exchange Practice and Policy. Contributors: Frank A.

Southard Jr. - author, Philip F. Swart Jr. - author, A. N. Gentes

4. Finding and Analysis: OBJECTIVE ONE- Overview of overall banking
4.1Customer service department
In service oriented organization, customer service department is very important because it deals
directly with customers. Customer service department is the service provider of the bank. Bank
Asia Agrabad has a separated department as customer service so that it can perform its
responsibilities correctly and efficiently. The customer service department has to carry a lot of
function such as:
4.1.1 Account opening task:
There are different types of account and deposit and the procedure for run these account is
sometimes different. There is Current account, savings account, short term deposit account, fixed
deposit etc. the mechanism of opening various account is also slightly different from one
another. For opening an account the bank requires:
 Recent passport size photograph duly signed and attested by the introducer.
 an account opening for provided by bank
 National ID card/ certificate of chairman, Passport of the A/C holder.
 Nominee’s photograph must be attested.
 Account holder must have an introducer which should be a respectable person for the
bank

4.1.2 1Issue/payment
Customer service department have to perform various types of issue/ payment such as:
 Issue or payment of demand draft, pay order, TT

 Issuance of cherub book. Keeping cheque requisition form and custodian of cheque book.
 Issuance of credit card, ATM card etc
 Payment of corporate client salary
 Stop payment of cheque as per instruction
4.1.3 Paper works
There are many paper works that should be done here. The submission of account statement
required by client, transaction profile statement and other office order and statement, which are
required by corporate office, Bangladesh bank and income tax department.
4.1.4 Balancing daily transaction
Customer service daily balance the demand draft pay order fixed deposit rate, monthly benefits
plus, double benefit plus, bank Asia Sanchaya plus blocks etc.
It also has to balance the payment of Inter branch cash transactions.
4.1.5 Providing information to the customer
An important job of customer service department is giving information about product and service
of the bank to the customer. This department gives information about different products with
mentioning its different mechanism and benefit of the product. And it also gives the proper
advice which one will be convenient and beneficent
4.2 Accounts department

Account department is called as the nerve center of the bank. In banking business, many
transactions are everyday and these transactions are to be recorded properly and systematically
as the banks deal with the depositors’ money. Any deviation in proper recording may hamper
public confidence and the bank has to suffer a lot otherwise. Improper recording of transactions
will lead to the mismatch in the debit side and in the credit side.
4.2.1 Daily task of Accounts department
• Preparing the daily statement of affairs showing all the assets and liability of the branch
as per.
• Preparing the daily transaction of the branch
• Making payment of all the expenses of the branch
• Keeping and maintaining general ledger.
• Daily cash position must match will computer entries and checking authorized signature.
• Recording inter-branch fund transfer and providing accounting treatment in this regard.
• Other day to day activities of Accounts department.
4.3Credit department
Credit department is the most sensitive side of a bank’s activity. It needs long procedure to take
decision about giving loans and advance. So the task of this department needs more attention and
efficiency. The making of loans and advances has always been prominent profitable function of
bank. Sanctioning credit to customers and others out of the funds at bank made in different
forms, such as, loans, overdrafts, Cash Credits, bills purchased and discounted etc.
4.3.1 Loan

It is normally disbursed with or without security. There is no binding to obtain securities against
the loan. It is one time-disbursed loan. Customer cannot withdrawals the loan amount more than
one time after disbursement.
Type of Loan:
1. Personal Loan
2. Term Loan
3. Demand loan
4. Consumer durable Loan
5. Unsecured personal Loan
6. Staff loan
7. Shachyando
8. Continuous loan
4.3.2 Description of these loans
Personal Credit: This credit is given to customer for personal purpose. Such as Home loan,
Marriage loan, Car loan, land purchase loan etc. most of the time this are secured by collateral
Term Loan: A specific term is given this is below five years and above 5 years.
Demand Loan: There are many types of Demand loan .Such as
• Loan against trust receipt

• Pecking Credit
• Foreign document bill purchase
• Foreign document bill collection
• Payment against Document
Continuous loan: In the continuous loan, borrower can withdraw any amount of loan within a
specific limit. The limit is usually 90% f the collateral there are many types of continuous loan
.such as:
 Overdraft

 Secured Overdraft
Overdraft: Another name of overdraft is Cash credit (CC). Under this system, the banker
specifies a limit called the cash credit limit, for each customer, up to which the customer
permitted to borrow against the security of tangible assets or guarantees.
Secured overdraft: This is a special type S.O.D. If any client needs emergency money for a
short period of time he can takes S.O.D. general opportunity. But the client must be solvent,
faithful, reliable and familiar with the Bank to get S.O.D.
There is also SOD against F.D.R. before maturity if the depositor wants to without his F.D.R.
amount due to financial problem, he can get loan against F.D.R. up to 90% of the value of F.D.R.
4.3.3 THE APPLICATION FORM (REQUEST FOR CREDIT LIMIT) CONTAINS

FOLLOWING PARTICULARS
• Name of the borrower

• A/C number
• Business address
• Residential address
• Permanent Address
• Introducer’s name, A/C no.
• Letter of enlistment/Incorporation
• Trade License/Issue date,
• TIN Certificate
• Constitution Status- Sole Proprietorship/partnership/ company, mutual fund etc
• Full particulars of assets
• Detailed nature of business
• Detailed cause of loan required.
4.3.4 CIB

It means Credit Information Bureau. After receiving the loan application form the bank sends a
letter to Bangladesh bank for obtain a report from there. This report is called CIB. This report is
very essential if the loan amount exceeds the proposed amount by the Bangladesh bank above
1.00 cores and above. If it the loan amount is above the amount then it will be reported to
Bangladesh bank to every quarter end.
4.3.5 Procedure of Giving Loan
The customer at the branches of the bank place credit proposals. When a customer comes with a
credit proposal, the Credit Department of the branch makes an open discussion with the customer
on different issues of the proposal to judge the worthiness of the proposal and the customer. If
the proposal seems to be worthwhile in all respects then the proposal is placed to the Zonal office
or head office.
Chapter 5. OBJECTIVE TWO: Foreign exchange Mechanism

5.1 Introduction
Foreign Trade is one of the most important segments of Bank Business. With the changes of time
international trade is diversifying gradually. Modern banks are playing significant role in foreign
trade. Foreign trade comprises of Import & Export business. Foreign Exchange is that section of
economic science which deals with the means and method by which right to wealth in one
country’s currency are converted into rights to wealth in terms of another country’s currency
Foreign exchange dealing is one of the main functions of the bank and it generates a significant
portions a bank’s income.
5.2 Definition
The term foreign exchange has different connotations in different contexts. Sometimes it refers
to the transaction of one country to another, sometimes is referred to as the process of conversion
of one currency into another. In Bangladesh it has a legal definition too. in terms of section 2(d)
of the F.E.R Act,1947, as adapted in Bangladesh, 'foreign exchange' means foreign currency and

includes instruments expressed in foreign exchange , all deposits credits, and balances payable in
foreign currency as well as foreign currency instruments such as draft, tt, bills of exchange,
promissory note and letter of credit payable in any foreign currency.
5.3 Necessity of foreign exchange
The science of economy stands on two problems, one is limited resource and another is unlimited
needs. No people in this world are self sufficient, and also no country in this world is self-
sufficient. There is no country that has all types of resource such as land, labour, capital, money
Advises or confirms L/C

etc. So no country can produce all types of good and service which is necessary to survival for
BUYER/ is more or less dependent on another, for goods SELLER/
human. So everyone or services. Foreign
Present documents
INDENTOR
exchange department
IMPORTER plays significant roles through providing different services for the
EXPORTER/
Makes Payment
customer. Facilitating the trade with foreign country is the most important among those services
BENEFICIARY
Sales/ purchase Contract
the key instrument which facilitates this trade is L/C (Letter of Credit).
Application for opening L/C
Makes Payment against
Submits documents
documents
Issuing L/C
Forwards Documents ADVISING BANK

Pay or Reimburses
ISSUING BANK Makes CONFIRMING BANK

payment
L/C OPENNING BANK NEGOTIATING
BANK
Instructs to pay or Reimburse
PAYING / REIMBURSING BANK

5.4 Figure: Mechanism of foreign exchange
5.5 Activities of foreign exchange
There are three kinds of foreign exchange transactions:
• Import
• Export
• Remittance
5.6 Objective of Foreign exchange
• The main objective of foreign exchange department is to maintain international trade and
regulate international business.
• To settle the transaction of business related to import and export.
• To make the foreign investment more safe and trustworthy.
• To enhance the foreign investment.

• To help the people to remit money who are working in abroad or the foreigner who are
working in the home country.
• To help the own people in abroad to send their money.
• To contribute the country’s prosperity by making the foreign transaction more fast, easy,
reliable.
5.7 Functions of Foreign exchange Department of Bank Asia Ltd.

• L/C opening
• Sanctioning PAD, LIM, LTR, Packing Credit
• Foreign Currency Remitting
• Foreign document Bill Purchase
• Foreign document bill collection
• Local document Bill Purchase
• Local document bill collection
• Foreign Currency Account Maintaining
•
5.8 Foreign trade and foreign Exchange
Foreign trade refers to trade between the residents of two different countries. Each country
functions as a sovereign state with it’s of regulations and currency. The difference in the national
of the exporter and the importer presents certain peculiar problems in the conduct of international
trade and settlement of the transactions arising there from.
Important among such problems are:

a) Different countries have different monetary units.
b) Restrictions imposed by countries on import and export of goods.
c) Restrictions imposed by nations on payment from and into their countries.
d) Differences in legal practices in different countries.
5.9 Local regulation of Foreign Exchange

In Bangladesh foreign exchange transactions are being controlled by the some local rules. These
are:
• Foreign exchange regulation act 1947.

• Bangladesh Bank issues Foreign exchange circular from time to time to control the
export, import and remittance business.
• Ministries of commerce issues export and import policy giving basic formalities for
import and export business.
• Sometimes CCI and E issues public notice for any kind of change in foreign exchange
transaction
• Bangladesh bank published two volumes in 1996. This is compilation of the instruction to
be followed by the authorised dealers in transitions relation to foreign exchange.
5.10 International Regulation for foreign exchange
There are some international organizations influencing our foreign exchange transactions. These
are:
• International chamber of commerce (ICC) is a worldwide non-governmental organization
of thousands of companies. It was founded in 1919. ICC has issued some publications
like UCPDC, URC, and URR etc, which are being followed by all the member countries.
• There is also an international court of arbitration to solve the international business
disputes.
• World trade Organization (WTO) is another international trade organization established
in 1995.
• General agreement on Tariff and Trade (GATT) was established in 1948, after
completion of its 8th round the origination has been abolished and replaced by WTO.
This organization has role in international trade, through its 124 member countries.

5.11 Import Mechanism
Imports are foreign goods and services purchased by consumers, firms, & Governments in
Bangladesh. Government is sincerely committed to fostering a gradual development of free
market economy in the light of GATT agreement. In the interest of export promotion &
investment in the country it is necessary to have a long term, stable, facultative & liberal Import
Policy.
5.11.1 Objectives of the Import Policy
(a) To make the Import Policy Compatible with the changes in the world market that have
occurred as a result of the introduction of market economy and signing of the GATT
Agreement;
(b) To simplify the procedures for import of capital machinery and industrial raw materials with
a view to promoting export, and
(c) To ensure growth of the indigenous industry and availability of high quality goods to the
consumers at a reasonable price.
3. Achievement of the aforesaid objectives will depend on the help and cooperation of other
relevant Ministries, Divisions of the Government and the Trade Organizations in the private
Sector.
5.11.2 Regulation of Import
Import of goods under this Order shall be regulated as under
(a) Banned list: Unless otherwise specified, items included in this list cannot be imported. List
of import banned items has been attached in annexure - I;

(b) Restricted list: Any item included in this list shall be importable only on fulfillment of the
conditions (b) specified there in against the item. The list of restricted items has been attached
in annexure - I (b);
(c) Freely Importable Items: Unless otherwise specified, any item, which does not appear either
in banned or in restricted list shall be freely importable;
(d) In addition to the conditions mentioned in the Restricted and Banned Lists, the conditions,
restrictions and procedures for import of various items mentioned in the text portion of this
order, shall as usual apply in case of import of those items;
(e) If, while determining the import status of an item mentioned in the Restricted and Banned
Lists, the description of goods does not conform to the H. S. code mentioned against the item
or any discrepancy arises between the H. S. Code and the description of goods in that case the
description of good shall prevail;
(f) Conditions of Ban and Restriction: If the import of an item had been banned at any time
before the coming into effect of this Order or if such ban has been made effective by virtue of
the placement of the item in the control list annexed to this Order such (I) The concerned
sponsoring authority/Tariff commission shall strictly monitor production of the industrial unit
which is being afforded protection by the ban. The ban may be revoked on the recommendation
of the concerned sponsoring authority/Tariff Commission if the quality of products deteriorates
and the price of the product is not maintained at satisfactory level or if production level fails
leaving unutilized capacity. Such of the protected units as are now primarily engaged in
assembly type activities shall actively and expeditiously move towards progressive
manufacture.
(ii) The sponsoring authority concerned and Tariff Commission shall continuously monitor the
prices of the items covered by such ban to guard against undue increase of price. If the price of
any item is increased except for factors like rise in the price of raw materials or decline in the
rate of exchange or if the increase in the price of the item is disproportionately higher compared
to the rise in the price of the raw material, the ban may be revoked on the recommendation of
Tariff Commission/sponsoring authority.

(iii) Whoever feels aggrieved by any decision regarding ban or restriction on import of any
item can represent his case to the Tariff Commission. The Tariff Commission will duly
examine such a representation and furnish as early as possible its recommendation.
5.11.3 Steps of import business
Import business includes several steps:
1. Procuring import bulletin

2. Enquiry of information
3. Placing order
4. Procuring foreign Exchange.
5. Opening letter of credit
6. Fixation of the rate of foreign exchange
7. Receiving advice of shipment
8. Receiving bills, payment and collecting documents
9. Observing formalities regarding tariff
10. Delivery of goods from ship.
To import through BA, a customer requires-

(i) Bank account
(ii) Import Registration Certificate (IRC)
(iii) Tax Paying Identification Number
(iv) Performa Invoice Indent

(v) Membership Certificate
(vi) LCA (Letter of Credit Authorization) form duly attested

(vii) One set of IMP Form
(viii) Insurance Cover note with money receipt
Other import procedure can be shown by the following flow chart

5.11.4 Letter of credit
5.11.4.1 Definition
Letters of credit are often used in international transactions to ensure that payment will be
received. Due to the nature of international dealings including factors such as distance, differing
laws in each country and difficulty in knowing each party personally, the use of letters of credit
has become a very important aspect of international trade. The bank also acts on behalf of the
buyer (holder of letter of credit) by ensuring that the supplier will not be paid until the bank
receives a confirmation that the goods have been shipped.
A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and
for the correct amount. In the event that the buyer is unable to make payment on the purchase,
the bank will be required to cover the full or remaining amount of the purchase.
Any arrangement, however named or described, whereby a bank (the “issuing bank”), acting at
the request and on the instructions of a customer (the “Applicant”).
 Is to make a payment to or to the order of a third party (the beneficiary), or is to

accept and pay bills of exchange (Drafts) drawn by the Beneficiary, or
 Authorizes another bank to effect such payment, or to accept and pay such bills of
exchange (Drafts)
 Authorizes another bank to negotiate, against stipulated document(s), provided
That the terms and conditions are compiled with.
5.11.4.2 Parties involved in Letter of credit
1. The applicant: The applicant is the party who approaches a bank in order to issue the letter of
credit. Generally, the applicant is an importer who reaches an agreement with the exporter before
approaching the bank to issue the letter of credit. The applicant is also normally obligated to
reimburse the issuing bank for any payments made under the letter of credit.

2. Issuing Bank is the bank which opens / issues an L/C on behalf of the importer. It is also
called the importer’s / buyer’s bank.
3. Exporter/Beneficiary: beneficiary is the party in whose favor the L / C is advised to the

exporter. It is bank situated in the exporting country and it may be branch of the opening bank or
a correspondent bank.
4. Confirming bank: The confirming bank confirms that the issuing bank has issued a letter of
credit. The confirming bank becomes directly obligated on the credit to the extent of its
confirmation and by confirming, it acquires the rights and obligations of an issuer. Confirming
Bank is a bank, which adds its confirmation to the credit, and it is done at the request of the
issuing bank. The confirming bank may or may not be the advising bank.
5. Advising bank: The correspondent bank in the beneficiary’s country to which the issuing
bank sends the letter of credit is commonly referred to as the advising bank.
6. Negotiating Bank: The bank that agrees to examine the documents under the letter of credit
and pay the called the beneficiary is negotiating bank. It negotiates the bill and pays the amount
to the beneficiary. It has to carefully scrutinize the documentary credit before negotiation in
order to see whether the documents apparently are in order or not. The advising bank and the
negotiating bank may not or may not be one and the same. Sometimes it can also be the
confirming bank.
7. Reimbursing bank: The bank nominated by the issuing bank to provide reimbursement to
the negotiating bank or the payee bank is referred to as the reimbursing bank.
5.11.4.3 The L/C Application for import:
To open a L/C the application must submit an application to the bank's printed format called L/C
application form. The application form must be completed and filled in and signed by the
authorised person of the importer giving the following details.
• Full name and address of the importer and exporter

• L/C value for USD, which must not exceed the LCA value
• Brief description of the goods with its unit price, quantity, quality etc

• Origin of the goods, port of destination, port of loading etc
• Mode of advising L/C
• Opening of L/C under UCPDC published no 500 ICC revision 1993
• LCA number
• Mode of shipment
• insurance cover note
• Whether shipment/Transhipment allowed
• Last date of shipment and negotiation
• Special instruction if any
5.11.4.4 Documents needed for L/C
• Forwarding
Forwarding is the letter given by the advising bank to the issuing bank. Several copies are sent to
the issuing bank. All copies including original should be kept in the bank.
• Bill of exchange
According to the section 05, Negotiable Instruments (NI) Act-1881, A “bill of exchange” is an
instrument in writing containing an unconditional order signed by the maker, directing a certain
person to pay [on demand or at fixed or determinable future time] a certain sum of money only to
or to the order of a certain person or to the bearer of the instrument. It may be either at sight or
certain day sight. At sight means making payment whenever documents will reach in the issuing
bank.
• Invoice
An invoice or bill is a commercial document issued by a seller to the buyer, indicating the
products, quantities, and agreed prices for products or services the seller has provided the buyer.
An invoice indicates the buyer must pay the seller, according to the payment terms. The buyer
has a maximum amount of days to pay these goods and are sometimes offered a discount if paid
before. Invoice is the price list along with quantities. Several copies of invoice are given. Two

copies should be given to the client and the other copies should be kept in the bank. If there is
only one copy, then its photocopy should be kept in the bank and the original copy should be
given to the client. If any original invoice contains the custom’s seal, then it cannot be given to
the client.
• Packing List
Packing list is the letter describing the number of packets and there size. If there are several
copies, then two 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 lading
A bill of lading is a type of document that is used to acknowledge the receipt of a shipment of
goods. A transportation company or carrier issues this document to a shipper. In addition to
acknowledging the receipt of goods, a bill of lading indicates the particular vessel on which the
goods have been placed, their intended destination, and the terms for transporting the shipment to
its final destination.
• Certificate of Origin
A Certificate of Origin is a document used in international trade. It traditionally states from what
country the shipped goods originate, but "originate" in a CO does not mean the country the
goods are shipped from, but the country where their goods are actually made. One 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.
• NICO-Terms
Inco-Terms simply mean International Commercial Terms. These are also known as Contract
Terms or Trade Terms or Delivery Terms or Sales Terms or Purchase Terms. These are used in
the field of international trade or foreign trade.

• Nostro account
Foreign exchange account maintained by a non-local (correspondent) bank with a local bank in
local currency. For the local bank it is a vostro account. Nostro accounts are usually in the
currency of the foreign country. This allows for easy cash management because currency doesn't
need to be converted. All foreign exchange transactions are routed through nostro accounts.
Nostro Account means 'our account with you'.
• Vostro account
Local currency account maintained by a local bank for a foreign (correspondent) bank. For the
foreign bank it is a nostro account. Current Accounts of foreign banks with their correspondents
in the latter’s currency is called Vostro Accounts. Vostro account means 'your account with us'.
• Loro Account
An account serviced by a bank on behalf of an account owner bank. Loro Accounts are current
accounts which the banks maintain with banks abroad on behalf of their clients. Loro Accounts
means 'their account with you'.
• Swift technology
Swift Technologies is a leading business and technology consulting firm that enables companies
to achieve world-class business performance. Swift Technologist’s services are designed to
generate increased efficiency and business value in key functional areas such as finance, human
resources, information technology, supply chain management, and CRM.

Chart: Processing of Letter of Credit
5.11.4.5 Process of Letter of Credit
Applicant approaches Issuing/ Opening Bank with LC application form duly filled and requests
Issuing Bank to issue a Letter of Credit in favor of Beneficiary.
1. Issuing Bank issues a Letter of Credit as per the application submitted by an Applicant
and send it to the Advising Bank, which is located in Beneficiary’s country, to formally
advise the LC to the beneficiary.
2. Advising Bank advises the LC to the Beneficiary.
3. Once Beneficiary receives the LC and if it suits his/ her requirements, he/ she prepare the
goods and hands over them to the carrier for dispatching to the Applicant.
4. He/ She then hands over the documents along with the Transport Document as per LC to
the Negotiating Bank to be forwarded to the Issuing Bank.

5. Issuing Bank reimburses the Negotiating Bank with the amount of the LC post
Negotiating Bank’s confirmation that they have negotiated the documents in strict
conformity of the LC terms. Negotiating Bank makes the payment to the Beneficiary.
6. Simultaneously, the Negotiating Bank forwards the documents to the Issuing Bank to be
released to the Applicant to claim the goods from the carrier.
7. Applicant reimburses the Issuing Bank for the amount, which it had paid to the
Negotiating Bank.
8. Issuing Bank releases all documents along with the titled Transport Documents to the
Applicant.
5.11.4.6 Types of Letter of credit
Documentary credit may be two types:
1. Revocable
2. Irrevocable
• Revocable Letter of credit:

Revocable Letter of Credit means the payment against this L/C can be revoked by the issuing
bank. The buyer may either amend the Letter of Credit or cancel it without the approval of the
seller. The payment against Revocable Letter of Credit is not for sure and hence this type of
Letter of Credit is not commonly used. The Seller has meager chances to get loan against
Revocable Letter of Credit.
• Irrevocable Letter of Credit:

Irrevocable Letter of Credit cannot be cancelled. This seller is assured of payment for his supply
of goods/services provided all terms and conditions of L/C are conformed to. This mode of
payment is generally used in international trade transactions. As the payment against this
Irrevocable Letter of Credit is guaranteed by the issuing bank and the holder of this Irrevocable
Letter of Credit (seller) can borrow short term finance from any other bank or lending institution
at a very low rate of interest and within a very short time.
Other types of Documentary credit:

1) Revolving Letter of Credit
2) Transferable credit
3) Back to back credit
4) Anticipatory credit:
5) Red clause
• Revolving Letter of Credit
Revolving Letter of Credit is used when the delivery of goods is in form of partial/ multiple
shipments. Revolving Letter of Credit keeps on revolving and is not restricted to a single
transaction. Revolving Letter of Credit (LC) can be utilized for subsequent business transactions
over a period of time on a continuous basis to the extent of limit sanctioned.
• Transferable Letter of credit
A transferable documentary credit is a type of credit under which the first beneficiary which is
usually a middleman may request the nominated bank to transfer credit in whole or in part to the
second beneficiary.
The L/C does state clearly mentions the margins of the first beneficiary and unless it is specified
the L/C cannot be treated as transferable. It can only be used when the company is selling the
product of a third party and the proper care has to be taken about the exit policy for the money
transactions that take place.
This type of L/C is used in the companies that act as a middle man during the transaction but
don’t have large limit. In the transferable L/C there is a right to substitute the invoice and the
whole value can be transferred to a second beneficiary.
The first beneficiary or middleman has rights to change the following terms and conditions of the
letter of credit:
• Reduce the amount of the credit.

• Reduce unit price if it is stated
• Make shorter the expiry date of the letter of credit.
• Make shorter the last date for presentation of documents.
• Make shorter the period for shipment of goods.

• Increase the amount of the cover or percentage for which insurance cover must be
effected.
• Substitute the name of the applicant (the middleman) for that of the first beneficiary (the
buyer).
• Back to back letter of Credit
Back to Back Letter of Credit is also termed as Countervailing Credit. A credit is known as back
to back credit when an L/C is opened with security of another L/C.
A back to back credit which can also be referred as credit and counter credit is actually a method
of financing both sides of a transaction in which a middleman buys goods from one customer and
sells them to another.
The parties to a Back to Back Letter of Credit are:
1. The buyer and his bank as the issuer of the original Letter of Credit
2. The seller/manufacturer and his bank
3. The manufacturer's subcontractor and his bank
The practical use of this Credit is seen when L/C is opened by the ultimate buyer in favor of a
particular beneficiary, who may not be the actual supplier/ manufacturer offering the main credit
with near identical terms in favor as security and will be able to obtain reimbursement by
presenting the documents received under back to back credit under the main L/C.
The need for such credits arises mainly when:

1. The ultimate buyer not ready for a transferable credit
2. The Beneficiary does not want to disclose the source of supply to the openers.
3. The manufacturer demands on payment against documents for goods but the beneficiary
of credit is short of the funds
• Red clause

A documentary credit is to enable the beneficiary to obtain pre-shipment advances from the
advising or confirming bank, at the expense of the beneficiary, but under the responsibility of the
issuing bank. This red clause is so termed because it is usually printed in red on the credit to
draw attention to this special feature of the credit terms.
Risks involved in Letter of Credit.

1. Since all the parties involved in Letter of Credit deal with the documents and not with the
goods, the risk of Beneficiary not shipping goods as mentioned in the LC is still persists.
2. The Letter of Credit as a payment method is costlier than other methods of payment such
as Open Account or Collection
3. The Beneficiary’s documents must comply with the terms and conditions of the Letter of
Credit for Issuing Bank to make the payment.
4. The Beneficiary is exposed to the Commercial risk on Issuing Bank, Political risk on the
Issuing Bank’s country and Foreign Exchange Risk in case of Letter of Credits.
4.11.5 Post shipment finance
The finance extended after arrival of the goods is termed as “Post-Import” finance, which may
be in the form of
 Loan against Imported Merchandise (LIM)
 Cash Credit (CC) &
 Loan against Trust Receipt (LTR).
5.11.5.1 Loan against import merchandise

Loan against Imported Merchandise (LIM) is connected with import facilities. There is an
arrangement with the importer the commercial bank will provide finance against imported
merchandise with usual margin. As per pre-arrangement or under forced situation when the client
is unable torture the LC documents, bank then clear the imported goods from the customs and
store it in banks warehouse. LIM is given for maximum 60days within which customer has to
adjust liability and take delivery of the imported goods from the banks custody.
The sets of documents usually obtained are:
• DP Note
• Letter of Arrangement
• Letter of disbursement
• Letter of pledge
• Insurance policy covers.
5.11.5.2 Loan against trust receipt
This is a loan against a Trust Receipt provided to the client when the documents covering an
import shipment are given without payment. Under this system, the client will hold the goods of
their sale proceeds in trust for the bank, until the loan allowed against the Trust Receipt is fully
paid. In the trust receipt the importer specifies the goods and agrees that he is holding the goods
not as their owner but as an agent for the bank. Thus, the bank continues to have the rights of the
pledge. This type of facility is given to creditworthy and selective customer. It is allowed for a
period of 30 days to 90 days. In addition to the Trust Receipt the following documents are also to
be obtained
• DP Note
• Letter of Arrangement

• Letter of Disbursement
• Import letter of Credit (L/C) limit - on DP/DA basis.
• Inland L/C limits - on DP/DA basis
• Loan against merchandises (Pledge).
• Trust Receipt facility.

• Revolving inland L/C including back to back L/Cs / Transferable L/Cs.
5.11.5.3 Payment against Document (PAD)
PAD Loan is created upon Lodgment of import documents. This Loan is created for 21 days -the
time being the tolerance for taking documents for the importer. If after 21 days the documents
are not taken by the importer, the Bank may sell the imported goods to recover the given amount.
5.12 Export Mechanism
5.12.1 Definition
Bangladesh exports a large quantity of goods and services to foreign households. Readymade
textile garments (both knitted and woven), Jute, Jute-made products, frozen shrimps, tea are the
main goods that Bangladeshi exporters exports to foreign countries. Export brings the foreign
currency in the economy. Higher the export is higher the reserve of foreign currency. The export
section of bank Asia is engaged with various export-related activities for the encouraging the
exporter. The major function of this section is comprises with purchase, collection and negotiate
the export bill, provide the exporter in export financing and helps the exporter in different issues.
5.12.2 Objectives
The principal objectives of this policy are:

• To achieve optimum national growth through increase of export in regional and
international market
• To narrow down the gap between the country's export earning and import
payment through achievement of the export targets
• To undertake timely steps for production of exportable goods at a competitive

price with a view to exporting and strengthening existing export markets and
making dent in new markets
• To take the highest advantage of entering into the post Uruguay liberalized and
globalizes international market
• To make our exportable items more attractive to the market through product
diversification and quality improvement
• To establish backward linkage industries and services with a view to using more
indigenous raw materials, expand the product base and identify and export higher
value added products
• To simplify export procedures and to rationalize and solidify export incentives
• To develop and expand infrastructure
• To develop trained human resources in the export sector
• To raise the quality and grading of export products to internationally recognized

levels
5.12.3 Documents needed for export
1. Export Registration Certificate (ERC) from CCI & E

2. L C Documents
3. E X P from duly signed by the exporter
4. Certificate of origin
5. Shipping documents

6. Inspection Certificate
7. Packing List & Bill of Loading
8. Invoice & Certificate of export form by authorized dealer (Bank)
A person desired to export should make application to obtain ERC (Export Registration
Certificate) from CCI&E. Then the person should step in to a bank along with ERC to obtain
EXP from the bank. He must submit
• Trade license.
• ERC.
• Membership Certificate from chamber of commerce.
The things done in export department:

1. Obtaining Export Registration Certificate ERC
2. Securing the order
3. Obtaining EXP
4. Advising of Export L/Cs to the beneficiary
5. Authentication of L/C and Amendments from other Correspondent Bank
6. Recording of Export L/C particulars in Export L/C Transfer Register
7. Receiving the Letter of Credit
8. Scrutiny of Export Shipping Documents
9. Lodgment of Export Bills (FBP, FDBC, IBP & IBC)
10. Maintenance of all records related to FDBP, FDBC and Inland Bills
11. Preparation of statement and all returns to Bangladesh Bank and Head Office
(Weekly/ Monthly/ quarterly)
12. All Correspondence relating to Export Department
5.12.4 Formalities of export
There are a number of formalities, which an exporter has to fulfill before and after shipment of
goods. These formalities or procedures are enumerated as follows

1. Obtaining Export Registration Certificate ERC
The exports from Bangladesh are subject to export trade control exercised by the Ministry Of
Commerce through Chief Controller of Imports and Exports (CCIE). The exporter have to be
registered with CCI & E and holds valid Export Registration Certificate (ERC). The ERC is to be
renewed every year. ). After applying to the CCI&E in the prescribed from along with the
necessary papers, concerned offices of the Chief Controller of Imports and Exports issues ERC.
2. Securing the order

After getting ERC, the exporter may proceed to secure the export order. He can do this by
contracting the buyers directly through correspondence.
3. Obtaining EXP
The exporter will apply for exp with certain documents: those are:
• trade license
• Certificate from the concerned Government Organization
• Export Registration Certificate ERC
If the bank is satisfied, an EXP is issued to the exporter.
4. Signing the contract

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

After getting contract for sale, exporter should ask the buyer for Letter of Credit clearly stating
terms and conditions of export and payment.
The following points are to be looked for-
1. The terms of the L/C are in conformity with those of the contract
2. The L/C is an irrevocable one, preferably confirmed by the advising bank
3. The L/C allows sufficient time for shipment and a reasonable time for registration
4. If the exporter wants the L/C to be transferable, divisible and advisable, he should ensure
those stipulations are specially mentioned in the L/C

6. Procuring the materials
After making the deal and on having the L/C opened in his favor, the next step for the
Exporter is to set about the task of procuring or manufacturing the contracted merchandise.
7. Endorsement on EXP
Before the export forms are lodged by the exporters with the customs/postal authorities, they
should get all the copies endorsed by Bank Asia. Before shipment, exporter submits exp. form
with commercial invoice. Then Bank Asia officer checks it properly, if satisfied, certifies the
exp. Without it exporter he cannot make shipment. The customer must declare all exports goods
on the EXP issued by the authorized dealers.
Disposal of Export Forms

a. Original: customs authority reports first copy of EXP to Bangladesh Bank after
shipment of the goods.
b. Duplicate: Negotiating bank reports the Duplicate to Bangladesh Bank in or after
negotiation date but not later than 14 days from the date of shipment.
c. Triplicate: On realization of export proceeds Triplicate is reported by the same
bank to the same authority.
d. Quadruplicate: Finally, the negotiating bank as their office copy retains
Quadruplicate
8. Shipment of goods
Exporter makes shipment according to the terms and condition of L/C.
9. Export document presentation for negotiation

Exporter submits the following documents to Bank Asia for negotiation after shipment.
 Bill of Exchange or Draft
 Bill of Lading
 Invoice
 Insurance Policy/Certificate

 Certificate of origin
 Inspection Certificate
 Consular Invoice
 Packing List
 Quality Control Certificate
 G.S.P. certificate
5.12.5 In the Export section, two types of L/C s are opened
• Back to Back L/C

• Export L/C
• Back to back L/C
Like most LCs, back-to-back LCs is used primarily in international transactions, with the
first LC serving as collateral for the second documents required for submission for opening of
back-to-back L/C:
1. Master L/C
2. L/C application & LCA form duly filled in signed
3. Insurance Cover Note with money Receipt
4. Performa Invoice or Indent
5. IMP- form duly signed
6. Valid Import Registration Certificate (IRC) & Export Registration
Certificate (ERC)
Export L/C: After closing the deal, buyer will send an export L/C to seller. A bank will
receive the L/C for the seller. By asking the Bank to add its Confirmation to seller’s L/C, the
Confirmation Bank guarantees payment to seller when the Issuing Bank fails to pay on time. the
seller will have double protection in receiving your payment

5.12.6 Financing after shipment
5.12.6.1 Foreign document bill purchase (FDBP)
This is the terms used some Banks for their Foreign Bills Demand Purchase (FDBP) account. a
exporter send export bill with all documents through a Bank, with all necessary documents and if
the tenor of the bill is Payment against document in the buyers bank, it is called Demand Bill at
sight bankers classify it FDBP. A FDBP Register is maintained for recording all the particulars.
The salient contents of a FDBP register are Date, Ref. No. (FDBP), Name of the Party (Drawer),
Drawer, Name of collecting Bank, EXP Form no., Export L/C no and etc.
5.12.6.2 Foreign document bill collection
Foreign documentary bills for collection signify that the exporter will receive payment only
when the issuing bank gives payment. The exporter submits duplicate EXP Form and
Commercial Invoice. Bank Asia make regular follow-up with the L/C opening Bank in case of
any delay in getting payment.
5.12.7 Procedure for Payment
As per UCP 500, 1993 revision there are four types of credit. These are as follows:
a. Sight payment
b. Deferred payment
c. By acceptance
d. Negotiation
5. 13 Remittance
5.13.1 Introduction

A remittance is a transfer of money by a foreign worker to his or her home country. Foreign
remittance refers to the transfer of fund from one country to another either through the office
channel i.e. banking channel, Post office or the informal channel. Money sent home by migrants
constitutes the second largest financial inflow to many developing countries, exceeding
international aid. Remittance transfers can also promote access to financial services for the
sender and recipient, thereby increasing financial and social inclusion. Remittances also foster,
in the receiving countries, a further economic dependence on the global economy instead of
building sustainable local economies.
Remittances have emerged as a key driver of economic growth and poverty reduction in
Bangladesh, increasing at an average annual rate of 19 percent in the last 30 years
Foreign remittance has two wings i.e. inward and outward remittance. This can be shown below:
Foreign Remittance
Foreign Inward Remittance Foreign Outward Remittance
5.13.2 Foreign Inward remittance
Foreign inward remittance refers to the currency remitted from abroad to our country. Now I
shall describe inward remittance.
The remittance in foreign currency that receives from outside the country to our country is
known as foreign inward remittance. In case of inward remittance, TT/MT/Drafts etc. are drawn
in local bank by the foreign banks of exchange houses.

5.13.3 Outward remittance
Foreign outward remittance refers to the remittances in foreign currency made from this country
to abroad. Foreign outward remittance includes issuance of TT, MT, FDD issued by local banks
on foreign banks.
6. OBJECTIVE THREE: Problems of bank Asia
6.1 Lack of training and development
Any kind of service oriented organization needs skillful and well trained workforce. So the
employees of bank Asia needs more tyrannizing program. It is needed not only generic training
but also specific training so that they can be efficient in one particular task as well as overall
task. . Sustaining growth and leadership require trustworthy and dedicated workforce. And for
this purpose proper training has no alternatives to create more efficient employees for any
organization
6.2 Limited workforce
Bank Asia has very limited human resources compared to its financial activities. There are not
many people to perform most of the tasks. As a result many of the employees are burdened with
extra work loads and works late hours without any overtime facilities. This might cause high
employee turnover that will prove to be too costly to avoid.
6.3 Centralized decision making for loan granting

The process of loan sanction is very much centralized. A branch cannot sanction loan with its
own authority. It has the branch manager has to take permission before granting any amount of
loan or advances from Head Office or zonal office. It takes a lot of time to sanction any loan.
6.4 Poor telecommunication infrastructure

As previously mentioned, the world is advancing towards e-technology very fast. Though Bank
Asia has taken effort to join the stream, it is not possible to complete the mission due to the poor
technological infrastructure of our country.
Shortage of rural branch: The economy of Bangladesh is mainly depends on rural branch. No
economical development can be succeeding excluding rural area. Urban area and people
represent a small scenario of Bangladesh. So bank Asia should open branches in rural area.
6.5 Lengthy procedure to get loan
We all know than advance and loan department is very sensitive department. It needs well analysis before
taking decision of giving loan. It also needs many paperwork and formalities before giving any loan. But
loan giving procedure can be more prompt by proper management regularization.
6.6 Lack of ATM booth
Bank Asia has very small number of ATM booth relative to other leading commercial private banks,
which cause a great hassle for clients to withdraw the money with ATM card.
6.7 Lack of motivation
Bank Asia doesn’t have annual performance appraisal system. Only one branch in whole Chittagong city
is awarded as best branch of the year. But there is no personal motivation for any employee. It’s a
weakness point of the top level management.
6.8 Lack of Sales Executive

Bank Asia has no sales executive in their branch office. Sales executive plays a very important role for
growth of a bank. They can collect deposits as well as to lend money so easily. This is also a major
lacking.
7. Recommendation
• Decentralization of decision making to loan sanction
Loan sanction procedure should be decentralized and branch manger should be given some
power to sanction loan. It will be less time consuming and loan sanction procedure will be
speedier.
• Establish more rural branches
Bank Asia should establish more branches in rural area. It will be benefited for the
competitiveness for the bank and also our society and economy will be benefited with it.
• More training and development program

To motivate the employee, Bank Asia should arrange training program more frequently.
Sustaining growth and leadership require trustworthy and dedicated workforce. And for this

purpose proper training has no alternatives to create more efficient employees for any
organization.
• Renovation of Customer Service

Customer services must be made dynamic and prompt. Now a days, people especially business
people have very little time to waste.
• Providing More Industrial Loans

Bank Asia should provide more industrial loan to customer. It will help to make our country
economically sound. The new entrepreneur will be benefited and motivated. And it will help the
economy to solve unemployment problem of our country.
• Arrange award ceremony

Bank Asia should arrange award ceremony so that employee will be motivated to work. They
can achieve a prestigious award like “Best employee of the year”. And also can give bonus and
incentives according to performance.
• Increase Office space

Bank Asia Agrabad Branch should increase the office space as well as sitting arrangement for
the customers, so that customer can be relaxed.
• Increase workforce
Bank Asia has very limited human resources compared to its financial activities. There are not
many people to perform most of the tasks. Bank Asia should increase its workforce so that task
can be well divided and employee can be stress-free and give more attention to work.

8. Conclusion
Country’s future economic prosperity depends on the success of banking industry as it is the
most important financial intermediary. As long as the banking sector remains sick, the economy
won't achieve the growth necessary to eradicate poverty.
I can conclude that Bank has been found consistent with their operations in this competitive
banking industry. Bank should diversify its banking services and add new features in its services
so that it can attract customers from all groups of people. Financial Engineers of Bank Asia
should be innovative in developing new banking services, which will attract customers and
reduce costs. It can introduce customer loan scheme, provide bridge loan, or can engage in lease
financing. It can also underwrite shares of newly incorporated public companies.

9. Bibliography
Books:
Foreign Exchange Practice and Policy. Contributors: Frank A. Southard Jr. - author,
Philip F. Swart Jr. - author, A. N. Gentes - author. Publisher: McGraw-Hill Book
Company. Place of Publication: New York. Publication Year: 1940.
Foreign Exchange Regulation Act 1947
The History of Foreign Exchange. Contributors: Paul Einzig - author. Publisher: St.
Martin's Press. Place of Publication: New York. Publication Year: 1962

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1.

1.2 Origin f the study

1.3 Scope of the study

Foreign Exchange Mechanism- A study of Bank Asia Page 1

1. This internship report intends to cover a comprehensive analysis of banking activities of

1.5 About bank Asia

Foreign Exchange Mechanism- A study of Bank Asia Page 2

1. Primary data source

• Face to face conversation with the respective officers.

1.6 Limitations of the study

Foreign Exchange Mechanism- A study of Bank Asia Page 3

2.2 Corporate Objectives

Bank Asia’s objectives are reflected in the following areas.

 Highly personalized service.

Foreign Exchange Mechanism- A study of Bank Asia Page 4

2.4 Mission of Bank Asia

Foreign Exchange Mechanism- A study of Bank Asia Page 5

SENIOR EXECUTIVE VICE

SENIOR VICE PRESIDENT

FIRST EXECUTIVE VICE PRESIDENT

SENIOR EXECUTIVE OFFICER

MANAGEMENT TRAINEE OFFICER

Foreign Exchange Mechanism- A study of Bank Asia Page 6

SENIOR VICE -PRESIDENT &

Foreign Exchange Mechanism- A study of Bank Asia Page 7

Foreign Exchange Mechanism- A study of Bank Asia Page 8

2.8 Different schemes of bank Asia

Foreign Exchange Mechanism- A study of Bank Asia Page 9

3.1 Definition of Bank

Bank is the lifeblood of modern economy. It is an Establishment authorized by a government to

According to J.C. Wood “Bank is the trader of money and loan.”

3.2 Commercial bank

Commercial bank is an intermediary profit making organization.-prof. Ashutosh Nath

A commercial bank is a dealer of capital or more properly a dealer of money. He is the

Foreign Exchange Mechanism- A study of Bank Asia Page 10

3.3 Foreign exchange

- Book Title: Foreign Exchange Practice and Policy.

3.4 Comparison between domestic and foreign trade

Foreign Exchange Mechanism- A study of Bank Asia Page 11

3.5 History of foreign exchange

The first Foreign Exchange markets consisted of meeting-places of money-changers functioning

Foreign Exchange Mechanism- A study of Bank Asia Page 12

The purpose of foreign exchange market:

- Book Title: Foreign Exchange Practice and Policy. Contributors: Frank A.

Foreign Exchange Mechanism- A study of Bank Asia Page 13

4.1Customer service department

4.1.1 Account opening task:

Foreign Exchange Mechanism- A study of Bank Asia Page 14

 Issue or payment of demand draft, pay order, TT

4.1.3 Paper works

4.1.4 Balancing daily transaction

It also has to balance the payment of Inter branch cash transactions.

4.1.5 Providing information to the customer

4.2 Accounts department

Foreign Exchange Mechanism- A study of Bank Asia Page 15

4.2.1 Daily task of Accounts department

Foreign Exchange Mechanism- A study of Bank Asia Page 16

4.3.2 Description of these loans

Demand Loan: There are many types of Demand loan .Such as

• Loan against trust receipt

Foreign Exchange Mechanism- A study of Bank Asia Page 17

4.3.3 THE APPLICATION FORM (REQUEST FOR CREDIT LIMIT) CONTAINS