Foreign Exchange Operations of Agrani Bank Limited

Introduction:

Foreign trade can be easily defined as a business activity, which transcends national boundaries. These may be between parties or government ones. Trades among nationals are a common occurrence and normally benefit both the exporter and importer. In many countries, international trade accounts for more than 20% of their national incomes.

In every international trade transactions, there must be:

  • An agreed products or services
  • A sales contract
  • Delivery details
  • Shipping and delivery details
  • Terms of payment
  • Required documentation
  • Insurance cover

Foreign trade can usually be justified on the principle of comparative advantage. According to this economic principle, it is economic profitable for a country to specialized in the production of that commodity in which the producers has the greater comparative advantage and to allow the other country to produce that commodity in which it has the lesser comparative advantage. It includes the spectrum of goods, services, investment, technology transfer etc.

This trade among various countries causes for close linkage between the parties dealing in trade. The bank which provides such transactions is referred to as rendering international banking operations. International trade demands a flow of goods from seller to buyer and of payment from to seller. And this flow of goods and payment are done through letter of credit (L/C).

What is Foreign Exchange?

In a bank where people can do transaction in foreign currency is called foreign exchange. Any kinds of dollar transaction are done by this section. ABL’s foreign exchange section is working with the head office internal division. The full process is governed by Bangladesh bank. Any kind of transaction in foreign currency is a sensitive issued.

Definition of Foreign Exchange

Foreign exchange is a process which convert one national currency into another and transfer money from one country to other countries.

According to Mr.  H. E. Evit. 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 right to wealth in term of another country’s currency. it involves the investigation of the method by which the currency of one country is exchanged for that of another, the cause which rented such exchange necessary.

Foreign Exchange Services

ABL is rendering various kinds of services in international transaction of their clients. Some are described below: –

1.      L/C Opening:

Bangladesh is mainly an import oriented country. So, L/C is a very important import document which is issued by Bank. In international market two parties are not known to each other. The importers of Bangladesh give an L/C to exporters of foreign country to give the assurance of payment. ABL is opening L/C in favor of their clients.

2.      Export processing:
When exporter’s foreign document comes to ABL, ABL collect payment from foreign bank for its party. ABL purchase bill if their party need early cash.

3.      Back to Back and Local L/C:

In against of export L/C ABL give the facility to open Back to Back and Local L/C

4.      Dollar sale and purchase:

ABL sale dollar against passport. The rate of exchange is given by Bangladesh Bank which is changed every day.

5.      Loan facilities:
Loan facility is given to clients to help in foreign exchange. Different types of loan facility are given below-

  • CC
  • LTR
  • LIM
  • Sanction of L/C

Customers:

ABL is a well known bank is foreign exchange business. It is helping the business and people working abroad from the very beginning. The parties of ABL in foreign exchange are as follows,

Serial No.

Kinds of parties

1.

Importer’s of bicycle parts

2.

Importer’s of chemical

3.

Importer’s of fresh fruits

4.

Importer’s of parts & capital machinery

5.

Importer’s of garments accessories

6.

Exporter’s of garments items

7.

People working abroad

8.

Resident & Non – resident Bangladeshis

9.

Government parties working abroad

10.

People travelling from Bangladesh and to Bangladesh

Functions of Foreign exchange department:

Import:

Opening of letter of credit (L/C)

Advance bills

Bills for collection

Import loan and guarantees

Export:

Pre-shipment advances

Purchase of foreign bills

Negotiating of foreign bills

Export guarantees

Advising/ confirming letters-letter of credit

Advance for deferred payments exports

Advance against bills for collection

Remittances:

  • Issue of DD, MT, TT etc.
  • Payment of DD, MT,TT etc.
  • Issues and enhancement of traveler’s cheque.
  • Sale and enhancement of foreign currency notes.
  • Non-resident accounts.

Import: 

Definition of Import L/C

On behalf of the importer if the bank undertakes to make payment to the foreign bank is known as documentary credit.

A letter of credit is known as instrument issued by bank to a customer placing at the letters disposal such agreed sums in foreign currency as stipulated. An importer is a country requests his bank to open a credit in foreign currency in favor of his exporter at a bank in the letters country. The letter of credit is issued against payment of amount by the importer or against satisfactory security

ABL provides different services to the importer of Bangladesh. To get import facility the party must have following requirements-

  • Current deposit Account (CD)
  • IRC (Import registration certificate)
  • Mortgage
  • TIN Number.
  • Insurance policy

(TK. In million)

Content20072008200920102011
Import96175.1117900.14156434.57162604.61227966.60

Source: Annual Report of ABL 2011

Forms of Letter of Credit

A letter of credit (L/C) may be two forms. These as follows:

i) Revocable letter of credit.

ii) Irrevocable letter of credit.

i) Revocable L/C: If any letter of credit can be amendment or change of any clause or cancelled by consent of the exporter and importer is known as revocable letter of credit.

ii) Irrevocable L/C: If a letter of credit can not be changed or amendment without the consent of the importer and exporter is known as irrevocable letter of credit.

Types of letter of credit

Letters of Credit are classified into various types according to the method of settlement employed. All credits must clearly indicate in major categories.

  1. Sight payment credit
  2. Deferred payment credit
  3. Acceptance credit
  4. Negotiation credit
  5. Red close credit
  6. Revolving credit
  7. Stand by credit
  8. Transferable credit

Parties to a Letter of Credit

A letter of credit is issued by a bank at the request of an importer in favor of an exporter from whom he has contracted to purchases some commodity or commodities. The importer, the exporter and the issuing bank are parties to the latter of credit. There are one or more than one banks that are involved in various capacities and at various stages to play an important role in the total operation of the credit.

  1. The Opening Bank
  2. The Advising Bank
  3. The Buyer and the Beneficiary
  4. The Paying Bank
  5. The Negotiating Bank
  6. The Confirming Bank

Contents of the Letter of Credit Authorization (LCA)

Banks normally issued letter of credit Authorization   on forms which clearly indicate the banks name and extent of the banks obligation under the credit. The contents of the LCA are included following information:

i) Name of the buyer: Who is also known as the accounted since it is for his account that the credit has been opened?

ii) Name of the seller: Who is also known as the beneficiary of the credit?

iii) Moment of the credit: Which should be the value of the merchandise plus any shipping charges intent to be paid under the credit?

iv) Expiration date: Which is specified the latest date document may be presented. In this manner or by including additionally a latest date, the buyer may exercise control over the time of shipping.

v) Documents required: Which will normally include commercial invoice consular or customer invoice, insurance policies as certificate.

vi) General description of the merchandise: Which briefly and in a general manner duly describes the merchandise covered by a letter of credit?

Documentary Letter of Credit (Import / Export)

Documentary letter of credit is such kinds of commercial letter which a bank issue on behalf of foreign seller (exporter) according to the direction of the (importer) purchaser. The documents shown under are known as export documents form the importer’s side. These are:

Bill of exchange: The bill of exchange is that particular instrument through which payment is effected in trade internal and international. The payment for the goods is recovered by the seller through the medium of a bill of exchange drawn on the buyer for the amount depending on the contract. It is a negotiable instrument. There are five main parties involved in a bill of exchange. They are:-

(a)    Drawee

(b)   Drawer

(c)    Payee

(d)   Endorser

(e)    Endorsee

 Bill of lading: A bill lading is a document of title to goods entitling the holder to receiver the goods as beneficiary or endorsee and it is with the help of this document on receipt form the exporter that the importer takes possession of the goods form the carrying vessel at the port of destination.

 Airway bill / Railway receipt: When goods to be transported are small in bulk or requiring speedy delivery or those are perishable in nature on the deal is in between the neighboring countries then mode of transports other then shipping may be resorted to far the carriage of the goods Airways bill /Railway receipt take place of Bill of lading depending on the nature of the carrier.

Commercial invoice: It is the seller’s bill for the merchandise. It contains a description of goods, the price per unite at a particular location, total value of the goods, packing specifications, terms of sale, latter of credit bill of lading number etc. There is no standard form far a commercial invoice. The invoice is made out by the seller under his signature in the name of the buyer and must be submitted in a set of at least 3 copies.

Insurance policy:  In the international trade insurance policy is a must to cover the risk of loss on consignments while they are on seas, roads, and airways. The insurance is the responsibility of the buyer (consignee) under FAS, FOB and CF contracts and of the seller (consignor) under CIF contract. The policy must be of the type as specified in the relative /credit.

 Certificate of origin: This is a certificate issued by a recognized authority in exporting country certifying the country of origin of the goods. It is usually by the chambers of commerce. Some time, it is certified by local consul or Trade Representative of the importing country as per terms of the credit.

Packing list: The exporter must prepare an accurate packing list showing item by item, the contents of the consignment to enable the receiver of the shipment to check the contents of the goods, number and marks of the package, quality, per package net weight, gross weight, measurement etc.

Weighting and Measurement: Issued by recognized authority (like chambers of commerce and industry) in exporting country certifying correct weighting and measurement of the goods exported.

Bill of Entry: A bill of entry is a document which contains the particulars of the imported goods as well as the amount of customs duty payable.

Payment against Documents (PAD)

Banks deal in documents and not in goods. If the shipping document against the L/C is in order then the L/C opening bank must have to payment to the foreign bank within 3 days or 72 hours according as Uniform Customs and Practice for Documentary Credit (UCPDC) 500 of revision of ICC.

If the shipping documents have any discrepancy, then the L/C opening bank informed to the negotiating bank within 7. Otherwise, the shipping documents have not discrepancy. If the importer have not adequate funds in the bank account then the bank payment to the foreign bank against the shipping documents.

Export   

Export L/C is issued by a foreign bank favoring Bangladeshi exports through our banks having correspondent relationship with them.

ABL provides different services to the exporter of Bangladesh. To get export facility the party must have following requirements-

  1. Current deposit (CD)
  2. ERC (Export registration certificate)
  3. Mortgage
  4. TIN Number.
  5. Insurance policy.

ABL permit 50% to 70% loan against mortgage. Other loan facility are –

  1. Back to back- 75% of export L/C
  2. Cash credit-90% in FDBP
  3. Packing credit (PC)- 90% of export L/C

Export advance & loan facility is sanctioned by head office. According to the prospect of party they take the loan decision,

  (TK. In millions)

Content20072008200920102011
Export46234.655790.4276465.6276240.7795359.45

Source: Annual Report of ABL 2011

Service Provided by Bank against Export L/C

A.    Advising of export L/C: The advising bank getting the import L/C sent by the issuing bank located abroad will advise the L/C to the beneficiary without any engagement or responsibly on their part. It will see the following only:

a. Authenticity of L/C (Test agreed in case of Telex L/C and signature verified in case air mail L/C.

  1.  Merchandise specified in the L.C is permissible and clauses incorporated in the L/C are not against country’s regulations.
  2.   Add Confirmation of Export L/C: Bank may add additional confirmation to export L/C where there is specific instruction from the L/C issuing bank to do so. Additional confirmation of L/C gives the seller a double assurance of payment. Bank’s requirement of adding confirmation:

a.      Issuing Bank should be a reputed bank.
b.      Credit line/ Arrangement with the L/C issuing bank.
c.       L/C clause are to be acceptable to confirming bank
d.      Approval from the competent authority for adding confirmation of export L/C/
e.       Confirmation charges are to be recovered as per rules.
C.    Negotiating of Export L/C: Documents / papers to be submitted by exporter to bank for negotiation/ collection against export L/C. The exporters submit the documents to bank as per requirement of bank. List of export documents is as follows:
a.      Export L/C
b.      EXP Form
c.       Bill of exchange
d.      Invoice
e.       Bill of Lading
f.       Packing List
g.      Certificate of Origin
h.      Inspection Certificate
i.        Insurance Document
j.        Weight List
k.      Any other documents as per L/C
l.        ERC (Export registration certificate)
Bank must scrutinize all the documents stipulated in the credit with reasonable care to ascertain whether they confirm with the terms of the credit, the bank may negotiate and pay the value of export bill to the exporter at:

♠ OD buying rate (Sight Draft)

♠ Usage rate (For DA Bill)

♠ Appropriate rate (For DP Bill)

  1. FDBC: If the export document is not purchase by ABL it is called Foreign Documentary Bill Collection. At the maturation data of export bill ABL collect the payment for party. The collection process is same as LDBC. Only the postage charge is high. The postage charge is Tk. 800 within SAARC countries within Asia Tk.1500 and outside Asia is Tk. 2000.
  2. FDBP: If the exporter need money before that the maturation of export document. He/ She can sale it to ABL. It is called Foreign Documentary Bill Purchase. The steps of FDBP are discussed with an example. Let, Tanzim Enterprise is a party of ABL who export shirt to China at $20000/-. In AAA Ventures Ltd. buys it and their bank is Bank of China. The Steps are as follows:

a.      ABL is receiving a L/C of $ 20000 from Bank of China.

b.      ABL inform Tanzim Enterprise about L/C

c.       Tanzim Enterprise what the money right now. So they sale to ABL and get 90% of payment. ABL gives an FDBP No.

d.      When bill is purchased, ABL creates a FDBP $20000×90%=18,000 will be given to Tanzim Enterprise right now.

e.       When ABL receive payment from Bank of China, ABL charge Tanzim Enterprise the following cost-

Interest13%
Postage chargeTk.800 (SAARC), Tk.1500 (Asia),Tk. 2000 ( Outside Asia)
Expend chargeTk.250
Handling chargeTk.500

f.       After these cost is deducted from rest of 10% L/C amount. Tanzim Enterprise get the payment.

Back to Back L/C       

Back to back L/C is very popular in Bangladesh. What is back to back L/C? To define we can say Back to Back is the situation where the end user opens a L/C in favor of the importers, the importers than asks his / her bank for a companion L/C to be issued to the supplier. Therefore, the original L/C acts as the financial basis for the second L/C. Many banks do not look favorable upon this type of financing of other options are available.

Kinds of Back to Back L/C

Back to Back L/C can be divided into two types: Foreign and local.

Foreign Back to Back L/C:

ABL issue or advice this kind of L/C. It is opened against a master L/C to do business aboard. Payment is given in other country.

2. Local L/C:

Local back to back L/C is opened against a master L/C to pay the local businessman. Business within Bangladesh. Local L/C can be divided into two types-

a) Cash L/C:

It is the L/C normally open for a bank acceptance. No master L/C is needed. Sometime people want a bank guarantee. It is one of them. It can be at sight and may be defer.

b) Local back to back:

It is used to do business in Bangladesh. It is opened against a master L/C. ABL receive a big amount of profit from back to back L/C. ABL is not a mysterious entity. They are business people just like the importers & exporter. They are in the business of lending money for the purpose of financing attractive proposals. The suggestions they make can save considerable expense and Tim of international businessman. ABL can work as advising bank or issuing bank.

Service Provide by Bank against Back To Back L/C:

  • LDBC
  • LDBP

Is opened in favor of national’s party:

In back to back L/C following limit of loan facilities is given-

  • 90% loan against master L/C is given
  • 75%  can be received opening back to back L/C
  • Rest 15% is given when bank receive export document.

For example against $ 2,00,000 master L/C, $ 1,80,000 loan facilities is given. $1,50,000 is given when L/C is opened $ 30,000 is given after receiving documents.

LDBC:

Local documentary bill collection is a service of ABL to collect the bill of their party for payment. When ABL is advising bank they can collect payment against the document. When in back to back L/C ABL is advising bank. After the maturation period ABL collect they payment by LDBC.

Steps in LDBC:

The procedure is as following:

  1. Exporter presents the documents to ABL for collection from importer within 3 days of shipment. The document contains-

a)      Track receipt.

b)      Commercial invoice.

c)      Packing list.

d)     Delivery receipt.

e)      Country of origin.

f)        Bill of exchange.

  1. ABL sends the documents to issuing bank for collection.
  2. ABL use a controlling no or LDBC No.
  3. If back to back L/C is not on sight the issuing bank will not give the payment to ABL on receiving day. So an acceptance is sent to ABL, saying that the payment will be made after maturation period. It may be 90 days, 120 days etc.
  4. After that they ABL get payment by pay order.
  5. ABL will send the pay order for clearing.
  6. After payment is received by ABL through clearing ABL will collect change and give the money to party.

Charges

Advice chargeTk. 500
CommissionTk.  730- Tk. 1000
Postage chargeTk. 20

 

LDBP:

Local documentary bill purchase is a great source of profit for ABL. Here when the export documents comes the party want to get payment without waiting for the maturation date. So ABL, finance for that day and charge interest.

For example- Cat Textile Mills Ltd. Exports finished shirt to Sweden and buy clothes from M/S Sushi chemicals of Bangladesh. Here Cat Textile Mills Ltd’s bank is AB bank and M/S Sushi chemicals bank is ABL. So in this case the parties involved is as following:

Now if Sushi chemicals want to get payment before the bill maturation, ABL can purchase the bill. It is called LDBP.

Steps in LDBP:

At first a party brings a document of back to back L/C to ABL. The officer cheeks the documents. He/she emphasize on.

  • Name of two parties.
  • USD $ or other currency
  • L/C No.
  • Opening data.

Than a number is given (LDBP No) and as advice is sent to issuing bank.

Issuing bank sends an ‘advice of acceptance’ to ABL

Party makes following documents.

a)      Bill of exchange.

b)      Track receipt.

c)      Commercial invoice.

d)     Packing list.

e)      Delivery challan.

f)       Delivery receipt.

g)      Country of origin.

  1. Next party comes for selling the bill to ABL, with all documents.
  2. The party collect the voucher and receive payment, rest of the amount which was not purchased by ABL. ABL cut the cost of party from it.

Remittance:

The word Remittance comes from the word “remit” which means to transmit money/ fund. In banking terminology, the work remittance means transfer of fund one place to another. When money transferred from one country to another country is called Foreign Remittance.

(Tk. In millions)

Content20072008200920102011
Remittance343.8710.321428.482452.333036.42

Source: Annual Report of ABL 2011

Foreign Remittance:

Foreign remittance means the foreign currency coming into the country and going outside the country. Inward foreign remittance increase the country’s image and outward foreign remittance is not very good for country’s economy. The purpose of foreign remittance is to transfer foreign money. ABL plays an important role in foreign remittance transfer. It is the first bank which has contract with WESTERN UNION MONEY TRANSFER. ABL transfers foreign remittance to serve following purpose-

  • Family maintenance
  • Indenting commission
  • Realization of export process
  • Donation
  • Gift
  • Travel
  • Medical treatment
  • Educational purpose

Kinds of Remittance:

All kind of remittance comes to the head office server of ABL SWIFT is used to transfer money. When remittance comes to the head office it is sent to different branches for final payment. Remittance can become & go in following ways.

  • Foreign T/T
  • Mail Transfer (MT)
  • Foreign demand draft (FDD)
  • Import payment
  • Traveler’s cheque
  • Export cheque
  • Cash dollars
  • Credit card (International)

Money Transfer by Remittance Company:

ABL has contact with online money transfer companies. They have 50:50 profit sharing contracts.  The receiver need not to any give change to bank. The online company’s are-

  • Western Union
  • Samba
  • Moneygram
  • Xpress money payment
  • ABL quick pay etc.
  • Cash express
  • Express money.
  • Porobhu Express

Western Union money transfer is very popular in Bangladesh. ABL is first to contract with Western Union. As a result inward remittance can come to Bangladesh in a minuet from anywhere of the world. People can collect from any branch of ABL from Bangladesh. For it the receiver don’t need any bank account with ABL and they don’t need to pay money. With any branch of ASA the people can collect money which is very helpful for village people.

Steps for money collection:

People can send money from any Western Union agent of the world. They deposit the money and take a receipt and Money Transfer Controlling Number (MTCN)

The sender inform the receiver the follows:

  •       Amount of money
  •       Sender’s name
  •       Receivers name
  •       Country name
  •       MTCN

Receiver goes to any branch of ABL with national ID Card and take the money by filling a from.

Money Transfer by Exchange House:

In abroad Agrani Bank Ltd. owned exchange houses are:-

  • Bolaka Exchange Pvt. Ltd. Singapore.
  • Golf oversea’s Exchange Co. LLC. Oman.
  • ABL Money Transfer SDN,BHD Malaysia

Other bank and exchange house of ABL are as following:-

Serial No

CountryName
01AustraliaNational Australia Bank Ltd.
02SwitzerlandUnited Bank of Switzerland AG (UBS)
03GermanyCommerzbank A.G
04GermanyStandard Chartered Bank, GMBH
05ItalyUnicredito Italiano SPA
06U.KLloyds TSB Bank Plc
07U.K.HSBC Bank UK Plc
08JapanThe Bank of Tokyo-Mitsubishi Ltd
09JapanUnion De Banques Arabes Et Francaises (UBAF)
10U.S.ABank of America NA
11U.S.AJPMorgan Chase Bank
12USAHSBC Bank USA
13U.S.AStandard Chartered Bank
14U.S.AMashreqbank Psc
15U.S.ACitibank NA
16U.S.ACitibank NA
17U.S.AWachovia Bank NA
18CanadaBank of Nova Scotia
19SingaporeStandard Chartered Bank
20BhutanBank of Bhutan
21IndiaStandard Chartered Bank
22IndiaState Bank of India
 23IndiaSonali Bank Ltd
24IndiaAB Bank Ltd.
 25NepalNepal Arab Bank Ltd
26MyanmarMyanmar Foreign trade Bank
 27PakistanHSBC Bank
28PakistanUnited Bank Ltd.
29Sri LankaStandard Chartered Bank

Agrani Bank has remittance arrangements with different bank and exchange houses in various countries throughout the world. The bank has earned the confidence and reputation as a reliable organization of paying hard- earned money of the expertly Bangladesh to their beneficiaries in the country safely and quickly. With the passage of time, ABL earned the confidence and trust of the wage earners and successfully handling a sizeable volume of remittances, which is depicting a gradual increasing trend. In 2009, foreign remittance brought through BL was USD 2452.33 million showing an increase of USD 1023.85 million over the previous year, which registered an attractive growth of 11 percent.

Reporting & Monitoring of Bangladesh Bank:

To full control of foreign Exchange Bangladesh Bank, has many controlling form and information system for all commercial bank. ABL also has to follow it. ABL has many type of reporting form and one IT system to inform Bangladesh Bank about dollar transaction.

Declaration Form:

IMP form:

When import L/C is issued by a bank or ABL, IMP form is needed to keep a record and inform Bangladesh Bank.

LCA form:

It is 6 copy from 1st copy is used to report Bangladesh Bank. Second copy is to get the delivery of product. Third and fourth copy is for CCI. Now this record kept by Bangladesh Bank. Fifth and Sixth copy is kept in foreign exchange L/C file of ABL.

EXP Form:

Exp form is used in export like IMP form is used in import. To get Exp for party have to show L/C and contract like preformed invoice commercial invoice etc. Exp form has to be verified by customs and then exporter ships the goods.

MT Form:

TM form is used to sell cash dollar. When cash dollar is going out Bangladesh Bank need a reporting MT form?

C Form:

When remittance is coming in Bangladesh a C form given by ABL to Bangladesh Bank.

Reporting by Internet:

Foreign currency transaction system:

At the month end how much import, export, foreign remittance comes and goes out is reported by this software program. At first the officer will give the posting, then make schedule, checked by foreign exchange head that statement is created and sent to Bangladesh Bank with different colored pages. The month end statements should be submitted within date 5 of a month, wrong posting is punishable worth Tk. 5,00,000 for the Branch and Tk. 10,00,000 for the officer.

L/C Monitoring System:

It is a every day program governed by Bangladesh Bank. When L /C is opened foreign exchange officer give the posting in a 3 step L/C monitoring system by internet.

All the monitoring, reporting is governed by Bangladesh Bank because foreign has the precise impact on the economy.

SWOT Analysis/Finding

SWOT Analysis is the detailed strategy of an organization’s exposure and potential in perspective of its strength, weakness, opportunity and threat. This analysis used the organization to make their existing line of performance also foresee the future to improve their performance in comparison to their competitors.

By SWOT Analysis, an organization can also observe their current position. It can also be considered as an important tool for making changes in the strategic management of the organization.

The acronym SWOT stands for:

SWOT is an acronym for the internal strength and weakness of a firm and the environmental Opportunity and Threat facing that firm. So if we consider Sonali Bank as a business firm and analyze its strength, weakness, opportunity and threat the scenario will be as follows:

Strength:  

  • Energetic as well as smart team work
  • Good Management
  • Lending rate is relatively competitive
  • Cooperation with each other
  • Membership with SWIFT
  • Good banker-customer relationship
  • Strong Financial Position
  • Strong position in CAMEL rating
  • Huge business area
  • Service charges are comparatively reasonable.
  • Strong corporate identity
  • Young enthusiastic workforce

Empowered Work force

Weakness:  

  • Lack of proper motivation, training and job rotation
  • Lack of experienced employees in junior level management
  • Lack of own ATM services
  • Tendency to leave the bank in quest of flexible environment
  • Lack of proficient manpower in some department
  • Limited advertising and publicity of bank’s products and activities
  • Absence of strong marketing activities
  • Outdated Software and Hardware at ABL Shyamoli.
  • Office environment is not good as private bank environment

Diversification

High charges of L/C

Opportunity:  

Growth of sales volume

  • Change in political environment
  • Launching own ATM card services
  • Expansion of banking services into other different services
  • Expansion branches of online
  •  Experienced Managers
  • Different services of FCB’S (Phone Banking/Home Ban king)
  • Existing card services of Standard Chartered Bank  or other private Bank
  • Daily basis interest on deposit offered by HSBC
  • Entrance of new PCB’s
  • Government has been controlling industrial credit
  • Recession of global economy
  • Intensification of competition in the industry

Threats:  

·         Upcoming Banks/Branches

·         Similar products are offered by other banks

·         Default Loans

Recommendation:By identifying the above mentioned problems during my internship, I would like to recommend some way to overcome these problems. These are as follows:

On clearing & local remittance sections:

  • ABL should make a database to maintain their registry records in to the Computer. So by only giving a ‘search’ command they may find out their required clearing information.
  • ABL should open their branches in the business area like near EPZ, port etc to provide prompt services to importer and exporter.
  • Local L/C is not introduced in our society very much. ABL can give attention to attract local businessman for convincing them about local L/C.
  • Where computer leads every sphere of lives including banking activities most of the ABL’s employees are still not expert on computer literacy. So for it, the management should give computer training to their employees.
  • They may make a database or search for other solution to prepare their debit and credit voucher. As by adopting a better solution will make their work easier.
  • Prompt attention should be given to the FDR customers if the bank does not want to lose new customers.

Conclusion:

Many new commercial banks have been established in the last few years and these banks have made the banking sector very competitive. So, now the banks have to organize their operation and do their operations according to the need of the market. The major task for banks, to survive in this competitive environment is by managing its assets and liabilities in an efficient way.

As an internee student of Agrani Bank Ltd at Shyamoli Branch, I have truly enjoyed my internship from the side of learning to the side of experiences viewpoint. I am confident that three month internship program in ABL will definitely help me to realize career in the job market. But during my internee it was not much possible for me to go to the depth of branches’ sections thoroughly because of the time limitations.

Agrani Bank Limited (ABL) is one of the widely expanded Banks in Bangladesh. Due to the threat of deposit shortage, this Bank may minimize its different types of unnecessary expenditure and should maximize profit through launching new schemes and obtain different people’s belief.

Foreign Exchange