Foreign Exchange Exposure of IFIC Bank Ltd


A person living in Dhaka city can make payment to another in Chittagong with money or by Cheques on any bank of the country. Such payments do not present any problems. But things are different when the debtor and the creditor live in different country. When a trader from Dhaka city imports goods from New York, the payment involves certain complication. The Dhaka man can pay in taka but taka is of no use to New York exporter. There must be some means of changing taka into dollar. Obviously the intervention of a third party is required. So there is a need for a foreign exchange mechanism.

Foreign exchange refers to the process or mechanism by which the currency of one country is converted into the currency of another country. Foreign exchange is the means and methods by which rights to wealth in a country’s currency are converted into rights to wealth in another country’s currency.                  -L.R. CHOWDHURY

In terms of foreign exchange regulation Act 1947, as adapted in Bangladesh,

Foreign exchange means foreign currency and includes all deposits, credits and balances payable in foreign currency as well as all foreign currency instruments such as, drafts, travelers Cheques, and bills of exchange in any foreign country.

Administration of Foreign Exchange in Bangladesh

The statute for administration of foreign currency in Bangladesh is the foreign exchange regulation Act, 1947 as adapted in Bangladesh. Under this Act, the responsibility and authority of administration of foreign exchange is vested by the government with the Bangladesh bank.

While the Bangladesh bank has full authority to administer foreign exchange in Bangladesh, it cannot do so by itself. This is not possible for Bangladesh bank to deal with a large number of exporters and importers individually. Therefore, provision has been made in the act, enabling the Bangladesh bank to delegate its powers of functions to authorized dealers.

 Authorized Dealers (Ad)

In administering exchange control and foreign trade, Central Bank of the country (Bangladesh Bank) authorizes few branches of commercial banks to deal in foreign exchange. These branches are known as “Authorized Dealers”. They act as an agent of the Central Bank and work under the “Foreign Exchange Regulations Act-1947” and “Guidelines for Foreign Exchange Transactions-Volume 1 and 2” prescribed by Bangladesh Bank.

Foreign Exchange Exposure at IFIC Bank Ltd.

The IFIC Bank Ltd. deals with foreign exchange with goodwill for a long time. It is handling of foreign exchange closer to twenty (20) years. Nowadays 16 branches of this bank are authorized to deal foreign exchange by Bangladesh Bank.

IFIC BANK LTD. offers two types of credit facilities to its customers. Such as:

      a)   Funded Credit and

      b)   Non Funded Credit

a)      Funded Credit:

The credit facility in which the fund of the bank is directly invested is known as funded credit. Such as-Cash Credit, Secured Overdraft act.

b)     Non Funded Credit:

The credit facilities in which bank’s funds are not directly invested are known as non-funded credit. Such as-Letter of Credit (L/C), Guarantee etc.

Letter of Credit / Documentary Credit (“L/Cs”) is the key player in the foreign exchange business. With the globalization of economy. International trade has become quite competitive. Timely payment for exports and quicker delivery of goods is, therefore, a pre-requisite for successful international trade operation. Growing complexity of international trade, separation of commercial parties across the globe etc. underlined the need for evolving a system that balances between the expectations of the seller and the buyer. Documentary Credit has emerged as a vital system of trade payment, and fulfilled the requisite commercial need. This system substantially reduces payment-related risks for both exporter and importer. Thus the letter of credit is the classic form of international export payment, especially in trade between distant partners. Payment, acceptance or negotiation of the credit is made by the bank upon presentation by the seller of stipulated documents (e.g., bill of lading, invoice, inspection certificate).

 Documentary Credit / Letter of Credit (L/Cs)

Documentary Credit or letter of credit is nothing but an arrangement whereby a bank (issuing bank) acting at the request and on the instruction of a customer (the applicant) or on its own behalf undertakes to make payment to or to the order of a third party (the beneficiary) or to accept and pay bills of exchange (draft) drawn by the beneficiary, or authorize another bank to negotiate against stipulated documents provided the terms and conditions to the credit are complied. Thus, Documentary Credits are akin to bank guarantees. In popular language, they are known as Letters of credit (L/Cs). Bank guarantees are, however, issued to cover situation of non-performance whereas documentary credits are issued on behalf of the buyer to cover situation of performance, i.e., the issuing bank agrees to make payment to the beneficiary one he surrenders the requisite complying documents.

 Nature of Different types of L/C

Revocable Credits                   : A revocable credit is one which can be amended or cancelled by the issuing banker at any time without prior notice.

Irrevocable Credits                 : An irrevocable letter of credit contains an absolute undertaking on the part of the issuing bank to accept.

Transferable Credit                          : The main theme of this type of credit is transferable i.e. if the exporters cannot able to supply the goods then. They can transfer it to others.

Non-transferable Credit                   : These types of credit cannot be transferable.

Sight L/C                                 : In international business this types of credit is most preferable. The main theme of this credit is the payment is properly secured.

Deferred L/C                          : A maturity period specified there. The payment is made on between the maturity periods.

 Bank as a party of Documentary Credit

Parties to the documentary credit are-an issuing bank, an advising bank, a confirming bank, a reimbursing bank or a negotiating banks.

 Issuing Bank : The Issuing Bank or the Opening Bank is one which issues the credit, i.e., undertakes, independent of the undertaking of the applicant, to make payment provided the terms and conditions of the credit have been complied with. Especially the issuing bank should satisfy himself on the credit worthiness of the applicant. The credit application must be in accordance with the Uniform Customs and practices for Documentary Credit (UCPDC)- ICC publication no. 500 edition of 1993.

Advising Bank:

The Advising Bank advises the credit to the beneficiary authenticating the genuineness of the credit. The advising bank is generally situated in the country/place of the beneficiary.     

Confirming Bank:

A Confirming Bank is one which adds its guarantee to the credit opened by another bank, thereby undertaking the responsibility of payment / negotiation / acceptance under the credit in addition to that of the issuing bank. A confirming bank normally does so if requested by the issuing bank. When the creditworthiness of the issuing bank is in doubt, beneficiary’s bank may request the issuing bank to give additional confirmation by another bank. It is said, ‘Add Confirmation’ in practice.

Negotiating Bank:

A Negotiating Bank is the bank nominated or authorized by the issuing bank to pay, to incur a deferred payment liability, to accept drafts or to negotiate the credit.

Reimbursing Bank:

A Reimbursing Bank is the bank authorized to honor the reimbursement claims in settlement of negotiation / acceptance / payment lodged with it by the negotiating bank or accepting bank. It is normally the bank with which the issuing bank has account from which payment is to be made. Reimbursement claims in foreign exchange business is settled by the Uniform Rules for Reimbursement (URR)-ICC publication no. 525.

The Foreign Exchange Department is mainly divided into three sections. Such as:

            1.         Import Section

            2.         Export Section and

            3.         Remittance Section  

The import Section deals with L/C in the perspective of the importers and the Export Section deals with L/C in the perspective of the exporters.

 Import Section

Import is the flow of goods and services purchased from one country to another. Hence, import of merchandise essentially involves two things: bringing of goods physically into the country and remittance of foreign exchange towards the cost of the merchandise and services connected with this to the importer. In case of import, the importers are asked by their exporters to open letters of credit so that their payment against goods is ensured.

 Import Procedures

An importer is required to submit the following documents in order to get a license to import through IFIC BANK LTD. Nawabpur  Branch.

  • A bank account with the branch
  • Import Registration Certificate (IRC)
  • Tax Payer’s Identification Number (TIN)
  • Performa Invoice / Indent
  • Membership certificate from a recognized Chamber of Commerce and Industry or Town Association or registered Trade Association.
  • Letter of Credit Authorization (LAC) Form properly filled in quintuplicate signed by the importer.
  • L/C Application duly signed by the importer.
  • One set of IMP Form.
  • Insurance Cover Note with money receipt.
  • VAT Registration Certificate (for Commercial Importers)
  • In case of public Sector, attested photocopy of allocation letter issued by the allocation authority, Administrative Ministry or Division specifying the source, amount, purpose, validity and other terms and conditions against the imports.
  • Any such documents as may be required as per instruction issued/to are issued by the Chief Controller of Imports and Exports (CCIandE) from time to time.
  • On receipt of the LCA Form and the other documents, the branch officials carefully scrutinize the documents and lodge the same in their respective registration books and duly verify the signature of the importer put on the LCA Form.

To import, a person should be competent to be an ‘importer’. The office of the Chief Controller of Imports and Exports (CCIandE) provides the registration (IRC) to the importer. After obtaining the IRC, the person has to secure a “Letter of Credit Authorization” (LCA) registration from the Registration Unit of Bangladesh Bank. After getting the LCA registration, a person becomes a qualified importer. He is the person who requests or instructs the opening bank to open an L/C. He is also called the “Opener” or “Applicant” of the credit.

 Proposal for Opening of L/C    

In case of an L/C of a small amount only the prescribed application form, i.e., the LCA Form is enough to open an L/C. But when the L/C amount is reasonably high or where the party intends to avail a credit facility, then the importer needs to submit an application to the Foreign Exchange Department for getting a limit of the L/C amount.

The salient features of the application are:

  • Full particulars of the bank account
  • Nature of business
  • Required amount of limit
  • Payment terms and conditions
  • Goods to be imported
  • Offered security
  • Repayment schedule

 The L/C Application Form

L/C Application form is a sort of an agreement between customer and bank on the basis of which the letter of credit is opened. IFIC BANK LTD. Nawabpur  Branch provides a printed form for opening of L/C to the importer. A special adhesive stamp of value Tk. 150 is affixed on the form in accordance with Stamp Act in force. While opening, the stamp is cancelled. Usually the importer expresses his decision to open the L/C quoting the amount of margin in percentage (Some L/C’s are opened for 100% margin).                

 Requirements of L/C Opening

¨. Applicant must hold a current deposit (CD) account in the Bank.

¨ He must have a trade license of import

¨ Tax Identification number (TIN)

¨ Vat certificate.

¨ Membership certificate.

¨Import registration certificate (IRC) for industrial or commercial.

An importer must ensure the above requirements while he is going to issue a L/C with any bank to import something from another country.

 The Letter Of Credit Authorization Form (LCAF)

The Letter of Credit Authorization Form (LCAF) is the form prescribed for the authorization of opening letter of credit/payment against importer and used in lieu of import license. The authorized dealers are empowered to issue LCA Forms to the importers as per basis of licensing of the import Policy Order in force to allow import into Bangladesh. If foreign exchange is intended to be bought from the Bangladesh Bank against an LCAF, it has to be registered with Bangladesh Bank’s Registration Unit located in the concerned area office of CCIandE. The LCA Forms available with authorized dealers are issued in set of five (05) copies each. First Copy is exchange control copy, which is used for opening of LC and effecting remittance. Second Copy is the custom purpose copy, which is used for clearance of imported goods from custom authority. Triplicate and Quadruplicate Copy of LCAF are to be sent to concerned area of CCIandF office by authorized dealer/Registration Unit of Bangladesh Bank. Quintuplicate Copy is kept as office copy by authorized dealer/Registration Unit.

The Letter of Credit Authorization Form (LCAF) contains the following details-

      (1)  Name and address of the importer.

      (2)  IRC no. and year of renewal.

      (3)  Amount of L/C applied for (both in figure and in word).

      (4)  Description of item(s) to be imported.

            (5)  Import Trade Certificate (ITC) Number / Harmonized System of Code (HS      Code Number.

 The IMP (Import Permission) form:

 The IMP Form contains the followings –

  • Name and address of the Authorized Dealer.
  • Amount of remittance to be permitted (i.e., L/C amount).
  • LCA Form number, date, value in Tk.
  • Description of goods, quantity.
  • Invoice value in foreign currency (i.e., L/C amount)
  • Country of origin.
  • Port of shipment.
  • Name of steamer/airline (i.e., by road/by ship/by air etc.)
  • Port of importation.
  • Inventor’s name and address.
  • Inventor’s registration number with CCIandE and Bangladesh Bank.
  • Full name and address of the applicant.
  • Registration number of the applicant with CCIandE
  • Type of LCF i.e. Commercial or Industrial.

 Securitization of L/C application:

On receipt of L/C application, the branch officials scrutinize the same very carefully giving emphasis to the following points-

            1.   L/C application is stamped (as per Govt. Stamp Rule) as it is a guarantee of payment.

            2.   All information mentioned in different columns has been furnished;

            3.   The items to be imported are eligible according to import entitlement;

            4.   If L/C is opened against indent, Bangladesh Bank’s permission, valid registration, authority to issue indent by inventor are to be checked;

            5.   The terms and conditions stipulated in the L/C application are consistent with the Bangladesh Bank Foreign Exchange Guidelines, Import Trade Regulations, UCPDC etc;

            6.   The amount and description of merchandise are relevant to LCAF and proofread invoice/ indent / purchase order;

            7.   Survey Report or Certificate in case of old machinery;

            8.   Carrying vessel is not of Israel or Serbia, Montenegro, Iraq, Israel and Afghanistan;

            9.   Certificate declaring that the item is in operation not more than 5 years in case of car.

 Accounting Treatment in Case of L/C Opening

As soon as L/C is opened, the bank accepts a liability on behalf of the importer to make payment against the credit. Provided that the shipment is made within the period and other term, and conditions as per L/C are complied with, naturally, bank has to pass an entry in L/C liability ledger and also in the general ledger to show its actual liability accepted on L/C. A liability voucher in passed as under:

Contingent liability voucher:

 Customer’s liability on L/C     Dr.

Bank’s liability on L/C           Cr.

Margin and bank charge                                                   

Margin, Commission, Postage and Cable Charge are recovered from the party by passing entries as under:

Parties A/C                        Dr.

Margin A/C on L/C.          Cr.

All charges on LIC           Cr.

Transmission of L/C

In international trade, receipt of L/C by cable, telex, fax is preferred by all. In that case the whole text of L/C is to be transmitted to the advising bank.

Transmission Process of IFIC Bank

The transmission process of L/C of IFIC Bank Ltd. are much more advance. They are sending all foreign L/C to the advising bank through SWIFT.

SWIFT- Society for World Wide Inter Bank Tale Communication. This is a system of interbank transaction. Every bank or other financial institutions must get the membership of SWIFT to share the information. This is a system of communication where further confirmation will not require.

 Adding confirmation

Sometimes beneficiary or supplier of the goods insists the importer for adding confirmation to L/Cs or to issue L/Cs with add confirmation. In that case, at the request of the importer, the Issuing Bank requests the Advising Bank or any third bank to add their confirmation to the L/C. Normally, add confirmation charge is borne by the beneficiary and the confirmation charge differs from bank to bank.

 Export Section and Export Financing

In the Export Section, two (02) types of L/Cs are handled in this branch-

      1)   Back-to-Back L/C; and

      2)   Export L/C

Export financing can be done in two ways. These are:

            1)   Pre-shipment Financing;

            2)   Post-shipment Financing.

Pre-shipment financing can be done by opening of back-to-back L/C and Packing Cash Credit (PCC). In case of pre-shipment financing, about 90% is financed by the bank. Of that portion, about 75% is for back-to-back L/C and 10% is for packing cash credit. Financing in Back to Back L/C changes according to the products i.e. Normal fabric, Flannel fabric, Woven fabric etc. Example of post-shipment financing by bank is Foreign Documentary Bills for Purchase (FDBP).

 Back to Back L/C

In case of a “Back-to-Back” letter of credit, a new L/C (an import L/C) is opened on the basis of an original L/C (an export L/C). Under the “Back-to-Back” concept, the seller as the beneficiary it as a ‘security’ to the Advising Bank. The beneficiary of the back-to-back L/C may be located inside or outside the original beneficiary’s country. In case of a back-to-back L/C, no cash security (no margin) is taken by the bank; bank liens the first L/C (the master L/C). In case of a back-to-back L/C, the drawn bill is usage/time bill.

Papers/documents required for opening of back-to-back L/C are as follows:

  • Master L/C
  • Valid Import Registration Certificate (IRC) and Export Registration Certificate (ERC)
  • L/C Application and LCAF duly filled in and signed
  • Proforma Invoice or Indent
  • Insurance Cover Note with money receipt
  • IMP Form duly signed
  • In addition to the above documents, the following papers/documents are also required to export oriented garment industries while requesting for opening of back-to-back letter of credit –
  • Textile Permission
  • Valid Bonded Warehouse License
  • Quota Allocation Letter issued by the Export Promotion Bureau (EPB) in favor of the applicant for quota items.
  • A permission from Bangladesh Garments Manufacturer’s and Exporter’s Association (BGMEA).
  • In case the factory premises is a rented one, Letter of Disclaimer duly executed by the owners of the house / premises to be submitted. A checklist to open back-to-back L/C is as follows-
  • Applicant is registered with CCIandE and has bonded warehouse license.
  • The master L/C has adequate validity period and has no defective clause
  • L/C value shall not exceed the admissible percentage of net FOB value of relative Master L/C
  • Usage Period will be up to 180 days.

 Payment for back to back L/C

In case of back-to-back L/C for 30,60,90,120 and 180 days of maturity period, deferred payment is made. Payment is given after realizing export proceeds from the L/C Issuing Bank. For Garments Sector, the duration can be maximum 180 days. For importing machinery items or capital goods for 360 days Back to Back L/C can be opened.

 Export L/C

The other type of L/C facility offered by this Branch is Export L/C. Bangladesh exports a large quantity of goods and services to other countries. Readymade garments (both knitted and woven), jute, jute-made products, frozen shrimps, tea are the main goods that Bangladeshi exporters export to foreign countries. Garments Sector is the largest sector that exports the lion share of the country’s export. Bangladesh exports most of its readymade garments products of USA and European Community (EC) countries. Bangladesh exports about 40% of its readymade garments products to USA. Most of the exporters who export through this Branch are readymade garment exporters.

 Formalities for export L/C

The export trade of the country is regulated by the Imports and Exports (Control) Act, 1950. There are a number of formalities that an exporter has to fulfill before and after shipment of goods. These formalities or procedures are enumerated as follows –

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 (CCIandE). No exporter is allowed to export any commodity permissible for export from Bangladesh unless he is registered with CCIandE and holds valid ERC. The ERC is required to be renewed every year. The ERC number is to be incorporated on EXP Forms and others documents connected with exports.

The EXP Form:

After having the registration, the exporter applies to this Branch with the Trade License, ERC and the Certificate from the concerned Government Organization to get the EXP Form. If the branch is satisfied, an EXP Form is issued to the exporter.

Securing the Order :

Upon registration, the exporter may proceed to secure the export order. This can be done by contracting the buyers directly through correspondence.

Signing of the Contract :

While making a contract, the following points are to be mentioned: (a) description of the goods, (b) quantity of the commodity, (e) price of the commodity, (d) shipment, (e) insurance and marks,  (f) inspection, and (g) arbitration.

Procuring the Materials :

After making the deal and on having the L/C opened in this favor, the next step for the exporter is set about the task of procuring or manufacturing the contracted merchandise.

Registration of Sale :

This is needed when the proposed items to be exported are raw jute and jute-made goods.

Shipment of Goods :

The following documents are normally involved at the stage of shipment: (a) EXP From, (b) photocopy of registration certificate, (c) photocopy of contract, (d) photocopy of the L/C, (e) customs copy of ERF Form for shipment of jute-made goods and EPC Form for raw jute, (f) freight certificate from the bank in case of payment of the freight if the port of lading is involved, (g) railway receipt, berg receipt or truck receipt, (h) shipping instructions, and (i) insurance policy.

 The following points should be looked for –

  • The terms of the L/C are in conformity with those of the contract.
  • The L/C is an irrevocable one, preferably confirmed by the Advising Bank.
  • The L/C allows sufficient time for shipment and a reasonable time for registration.
  • If the exporter wants the L/C to be transferable, advisable, he should ensure those stipulations are specially mentioned in the L/C.

At last, the exporter submits all these documents along with a Letter of Indemnity to this branch for negotiation. An officer scrutinizes all the documents. If the documents are clean one, the branch purchases the documents on the basis of banker-customer relationship. This is known as “Foreign Documentary Bills for Purchase”.

 Procedure for FDBP:

After purchasing the documents the following entries are made –

FDBP A/C ————————————————- Dr.

            Liabilities A/C ————————————————- Cr.

            Charges A/C ————————————————— Cr.

            Exporter’s A/C ———————————————— Cr.

(Before realization of proceeds)

IFIC BANK LTD.General A/C (ID, Head Office) ——————————- Dr.

            FDBP A/C —————————————————– Cr.

            Charges A/C ————————————————— Cr.    

            Exporter’s A/C  ———————————————– Cr.

(Adjustment after realization of proceeds)

The FDBP Register is maintained for recording all the particulars.

 Settlement of local Bill

The settlement of local bills is done in the following ways: –

  • The customer submits the L/C to the branch along with the documents to negotiate.
  • The branch officials scrutinize the documents to ensure the conformity with the terms and conditions.
  • The documents are then forwarded to the L/C Opening Bank.
  • The L/C Issuing Bank gives the acceptance and forwards an acceptance letter.
  • Payment is given to the customer on either by collection basis or by purchasing the document.

The following accounting treatments are made for the purchasing of local bill –

      Local Bill Purchase —————————————————- Dr.

      Party’s A/C ————————————————————– Cr.

      Commission ————————————————————- Cr.

      Interest A/C ————————————————————- Cr.

A local bill purchase register is maintained to record the acceptance of the Issuing Bank. Until the acceptance is obtained, the record is dept in a Collection Register.

 Modes of Payment for Export Bills under L/C

The most common methods of payment under a L/C are as follows-

At Sight Payment: 

In At Sight Payment, the bank pays the stipulated sum immediately against the exporter’s presentation of the documents.

  Credit Deferred Payment:

In deferred payment, the bank agrees to pay on a specified future date or event, after presentation of the export documents. No bill of Exchange is involved. In this branch, the payment is given to the party at the rate of 30,60,90,180,360 days rate as the case may be. But the Head Office is paid under T.T. Clean Rate. The difference between the two rates is the exchange margin for the branch.

Negotiation Credit:

In Negotiation Credit, the export has to present a bill of exchange payable to him in addition to other documents that the bank negotiates.

Acceptance Credit:

In Acceptance Credit, the exporter presents a bill of exchange payable to him and drawn at the agreed tenor (that is, on a specified future date or event) on the bank that is to accept it. The bank signs its acceptance on the bill and returns it to the exporter. The exporter can then represent it for payment on maturity. Alternatively he can discount it in order to obtain immediate payment.

 Foreign Remittance

“Foreign remittance” means purchase and sale of freely convertible foreign currencies as admissible “Foreign Exchange Regulations Act-1947” and “Guidelines For Foreign Exchange Transaction-VOL. 1 and 2” of the country. Purchase of foreign currencies constitutes inward foreign remittance and sale of foreign currencies constitutes outward foreign remittance.

 So we see that there are two types of Foreign Remittance:

¨   Foreign Outward Remittance.

¨   Foreign Inward Remittance.

Mode of Outwards Remittance :

¨   Foreign Telegraphic Transfer (FTT).

¨   Foreign Mail Transfer (FMT).

¨   Foreign Demand Drafts (FDD).

¨   Travelers Cheque (TC).

¨   Foreign Currency Notes.

¨   Mode of Inward Remittance

¨   Telegraphic Transfer (TT).

¨   Mail Transfer (MT).

¨   Mail Transfer (MT).

¨   Foreign Demand Drafts (FDD).

¨   Payment Order (PO).

¨   Travelers Cheque (TC).

¨   Foreign Currency Notes.

 Telegraphic Transfer (TT)

Telegraphic Transfer refers to the payment instruction by tested telex/cable or authenticated fax by bank in abroad on an inland bank (local/foreign bank). Normally foreign banks, with which corresponding banking relationship / drawing prevails, send T.T.

 Foreign Demand Draft (FDD)

The foreign bank/exchange company on local bank usually issues Foreign Demand Draft. It is an order to pay a certain sum to a certain person or as his instruction, issued by the bank on its overseas branch or on its correspondent bank. The demand draft is handed over to the purchaser who sends it to the beneficiary. The beneficiary obtains payment on presentation to the bank on which the draft is drawn.

Encashment of FDD may take place in two ways-

  • Purchase,
  • Sending for collection.

Endorsements of us$ in passport:     

IFIC BANK LTD.endorses US Dollars (USD), Great Britain Pound (GBP) in passports. To endorse US Dollar, the client has to apply in the prescribed form (TM Form). The following entries are given in this regard, –

      Cash or Customer’ A/C          Dr.

            Foreign Currency on Hand                       Cr.

            (Dollar Special)

 Student File Open

As we know that Bangladesh – Taka is not fully convertible. Only current account not capital account of our currency is convertible. But in case of students who studied abroad can take any amount for their study cost. Thus IFIC BANK LTD.Nawabpur Branch opens student file to remit the costs to the respective institutes on behalf of the student subject to scrutinizing the appropriate documents issued from the registrar.


Findings  :    

During my Three months internship in the IFIC Bank Ltd,Nawabpur Branch, Dhaka    following positive things are found from my observation:

  • Branch Manager puts Conscious efforts to achieve the targets and knows how to motivate employees and how to represent the Bank well in the local community.
  • The controlling officers are effective in providing necessary guidance and support to the branch.
  • The strategy and policy of Branch Manager are effective. So in spite of cut throat competition, the bank has a sound position in the competitive environment
  • The Bank Introduce NRB (Non Resident Bangladeshi) branch, which is new idea in Bangladesh.


  • The authority should recruit more employees to serve the customers. They can recruit experienced employee as well as fresh graduate.
  • For customer’s convenience in Foreign Exchange Department of IFIC Bank Ltd. should provide more personnel to deliver faster services to their honorable customer.
  • IFIC Bank Ltd. should train up their branch personnel about all sort of information regarding SWIFT and its service.
  • In order to get competitive advantage and to deliver quality service, top management should try to modify the services.
  • The synergy of dedicated manpower, technology, and market opportunity can lead the organization to achieve the goal, a bank must establish and adhere to adequate of loan provision and reserve.
  • Due to lack of proper knowledge about the operation procedures and services provided to the customers by SWIFT, certain customers are facing problem, as they have to wait for certain time to get service. And sometimes personnel are not being able to operate SWIFT without any confusion. They are not fully independent of handling SWIFT. Official training is the solution to this problem.
  • IFIC Bank Ltd. continuously strives and tries to introduce new products and services as access card, with future improved quality services.

It seems to me that day-by-day customers operation is increasing; individual employee has to handle different types of job. But that is pocking a back for an employee. As a result it might be happen any big mistake by the employee and service is also timed consuming and customer has to suffer for this situation. May be it would be the reason for employee’s de-motivation as well as the customer’s dissatisfaction.

 IFIC Bank Ltd. should focus on their promotional activities.

They should also focus on the marketing aspects to let customers know about their products and offerings and more promotion should be given to attract new customer.

IFIC Bank Ltd. must develop electronic banking system to moderate the service. Technological advantage of a bank ensuring its competitive edge in the market place can only be achieved by efficient manpower. It is market share to reduce its operating cost and to generate new revenue. Electronic banking system also allows increased access to the financial system by its customers.


From the learning and experience point of view I can say that I really enjoyed my internship period in IFIC Bank Ltd. at Nawabpur Branch. From the very first day, I was confident that this 3 three months internship program will definitely help me to realize my further carrier in the job market.

Top management of IFIC Bank Ltd. should conduct a comprehensive study or survey on the branches’ performance, its management’s performance and the employees’ performance and their motivation as well. Few loyal committed customer bases, lack of modern and effective technology or facilities, not enough skilled employee in some sector, considering all of these very important factors. IFIC Bank Ltd. should always try to improve their service level in every term.

Performance analysis of a bank is not so sufficient to measure and express perfectly within this short time of my internship period. But it was a great opportunity for me to get used to with the operational environment of commercial banking of IFIC Bank Ltd. I have tried by soul to incorporate the necessary relevant information in my report.

The Foreign Exchange department should think freshly about their objectives and practices. Rapid changes can quickly make yesterday’s wining strategies out of date. As a developing private bank in Bangladesh, IFIC Bank Ltd. shouldn’t allow their client to get dissatisfied with their service. They have their competitors who actively striving to take the advantages in every side.

Bangladesh is a developing country. The Banking Industry is playing an important role to achieve its economic goals. There are vast Banking opportunity in our country as it is Exporting and importing country. MICR Cheque Book issue is a good initiative taken By Bangladesh Bank. By which Business man can solve their transaction rapidly through (ACU) Automated Clearing House. Already most of the Banks started to issue MICR cheque Book. IFIC Bank Ltd. is one of them. For this reasons it has started online Banking in its all Branches. By it is going to fulfill its motto “Your Satisfaction First”.


Foreign Exchange