Chapter One

INTRODUCTION
1.1 Origin of the Report
Although total B.B.A. program combines an excellent blend of theoretical and classroom
knowledge, but this internship program facilitates a student to bring light on their theoretical
knowledge to apply this in practical ground. I was assigned to Agrani Bank Limited, Foreign
Exchange Corporate Branch for my practical execution.

I am required to prepare an internship report under the supervision of our honorable teacher Ms.
Tasnima Aziza on Foreign Exchange Policy and Performance of Agrani Bank Limited to
conduct a precision analysis on the typical subject. Without any doubt Foreign exchange catches
the flash as it has great importance in the balance of trade in economy. Banks plays a vital role in
this discipline. I tried my best to reflect my experience of the practical incidence in this report.

1.2 Objectives of the Report

1.2.1 Broad Objective

The main purpose of the report is to get a clear idea about the Foreign Exchange Policy of Agrani
Bank Limited and a brief analysis of the foreign exchange performance of the bank.

1.2.2 Specific Objectives

To develop practical knowledge about foreign exchange policy.
To present an overview of foreign exchange division of Agrani Bank Limited.
To evaluate the Foreign Exchange performance of Agrani Bank Limited.

1.3 Scope of the Report

This report has covered analysis of Foreign Exchange Banking Services of Agrani Bank Limited.
It will give a wide view of the different stages of operational procedure of Agrani Bank Limited,
starting from the Import, Export and Remittance with total Foreign Exchange Procedures.

1.4 Importance of the Report

Bangladesh is considered as a developing country in the world. The economy of this country has a
lot left to go further and there are lots of scopes for massive improvement. In an economy like
Bangladesh, Foreign Exchange can play a major role to improve the economic condition of the
country. The banks play the role of an intermediary that can mobilize the excess fund from surplus
sectors to provide necessary financing, to those sectors, which need a proper go ahead for sound
development of the economy. This report is a total effort to reflect a clear idea about the activities
and performance of Agrani Bank regarding Foreign Exchange Business.

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1.5 Methodology
Both primary and secondary source of data were used to complete this study.

1.5.1 Primary Sources

Data have been collected directly from the officials of different sectors of Agrani Bank Limited.

1.5.2 Secondary Sources

The secondary data is collected from annual reports, websites and several published matter as
articles in different versions of printings.

Secondary sources are:

Annual Reports of different years of Agrani Bank Limited.

Annual Report of Bangladesh Bank
Other published documents of Agrani Bank Limited.

1.5.3 Time Frame:

Different data used to evaluate foreign exchange business performance of Agrani bank Limited
has been collected from 2001 to 2013.

1.6 Limitations
I have faced some limitations while preparing this report which is mentioned below.

Time limitation: It was one of the main constraints that affected covering all aspects of the study.

Lack of Secondary Information: The import export data of Bangladesh is not much available
over the net.

Limitation of the Scope: Much confidential information was not disclosed by respective
personnel of the department.

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 Chapter Two

ORGANIZATION PROFILE

Page 3 of 30
2.1 Historical Background of the Organization
Agrani Bank Limited, a leading commercial bank with 921 outlets strategically located in almost
all the commercial areas throughout Bangladesh, overseas Exchange houses and hundreds of
overseas correspondents, came into being as a Public Limited Company on May 17, 2007 with a
view to take over the business, assets, liabilities, rights and obligations of the Agrani Bank which
emerged as a nationalized commercial bank in 1972 immediately after the emergence of
Bangladesh as an independent state. Agrani Bank Limited started functioning as a going concern
basis through a Vendors Agreement signed between the ministry of finance, Government of the
People's Republic of Bangladesh on behalf of the former Agrani Bank and the Board of Directors
of Agrani Bank Limited on November 15, 2007 with retrospective effect from 01 July, 2007.

2.2 Corporate Profile (as of 2013)

Legal Status Public Limited Company

Shareholding Pattern 100 percent share owned by Government of the Peoples

Republic of Bangladesh
Registered Office 9/D Dilkusha, Dhaka 1000, Bangladesh
Authorized Capital Tk. 2,500.00 Crore
Paid up Capital Tk. 2,072.29 Crore
Total Deposits Tk. 34,867.52 Crore
Loans & Advances Tk. 20,296.54 Crore
Operating Profit Tk. 1,063.93 Crore
Total Equity Tk. 3,564 Crore
Total Equity Tk. 3,564 Crore
Vat Registration No. 19011031730
Tax Identification No. 0022001223
Employee 14,005 (officer 10,458, staff 3,547)
Branch 921
Circle Office 11
Authorized Dealer Branch 40

Number of Exchanges 56

Zonal Office 62

Corporate Branch 27

Foreign Correspondent 396

Subsidiary Companies Agrani Equity & Investment Limited

in Bangladesh Agrani SME Financing Company Limited

Subsidiary Companies Agrani SME Financing Company Limited

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in Overseas Agrani Remittance House Canada Inc.

Agrani Remittance House Sdn. Bhd., Malaysia (4 branches)

Agrani Exchange Company (Australia) Pty. Limited

SWIFT Code AGBKBDDH

Website www.agranibank.org

2.3 Mission
To operate ethically and fairly within the stringent framework set by our regulators and to
assimilate ideas and lessons from best practices to improve our business policies and procedures
to the benefit of our customers and employees.

2.4 Vision
To adopt and adapt modern approaches to stand supreme in the banking arena of Bangladesh with
global presence.

2.5 Values
The bank value in integrity, transparency, accountability, dignity, diversity, growth and
professionalism to provide high level of service to all our customers and stakeholders inside and
outside the country.

2.6 Services Offered by Agrani Bank

Beside regular banking operation, Agrani Bank Limited offers specialized services to different
walks of clients/agencies throughout the country. Under the network of utility services, customers
of different govt. organizations, corporate bodies, local bodies, educational institutions, students
are getting essential benefits from the Bank continuously. Some important services are mentioned
below:

2.6.1 Deposit

a) Taka Account
Current Deposit (CD)
Savings Deposit (SB)
Fixed Deposit (FDR)
Special Notice Time Deposit

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 (SNTD)
Non Resident Special Taka Account
(NRTA)
NR Investors Taka Account (NRIT)
Agrani Bank Pension Scheme
(APS)
Agrani Bank Bishesh Shanchay
Scheme
Monthly Deposit Scheme (MDS)
Monthly Income Scheme (MIS)
Students Savings A/C (School
Banking)
Small Life Insurance Policy
Holders A/C
Farmers A/C
Freedom Fighters A/C
Other Beneficiaries A/C under
Social Securitys Program

b) Foreign Currency Account

Foreign Currency (FC) A/C
Non Resident Foreign Currency Deposit (NFCD) A/C
Resident Foreign Currency Deposit (RFCD) A/C
Exporters Retention Quota (ERQ) A/C

2.6.2 Loan & Advance

Term Loan
Rural & Agro Credit
Small and Medium Enterprise Loan
Sme & Micro Credit Loan
Commercial Loan
Industrial Loan
Export Finance Loan
Import Finance Loan
Loan Against Current Deposit

2.6.3 Remittance
Internal Remittance
Foreign Inward Remittance
Foreign External Remittance

2.6.4 Payments Made on Behalf of the Government

Payment of non- Govt. teachers salaries.

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 Providing girl Students scholarship/stipend & Primary Student Stipend.
Provides army pension
Payment of widows, divorcees and destitute women allowances
Old-age Allowances

2.6.5 Collection of Bills

Collecting the gas bills of Titas, Bakhrabad and Jalalabad Gas Transmission and
Distribution Companies.
Regular collection of electricity bills of Dhaka Electricity Supply Authority,
Dhaka Electricity Company, Bangladesh Power Development Board and Rural
Electrification Board.
Regularly collects the telephone bills of Telegraph and Telephone Board.
Collects Water/Sewerage bills of Water and Sewerage Authority.

2.7 Service Areas

Agrani Bank Limited have 921 outlets strategically located in almost all the commercial areas
throughout Bangladesh. Besides Agrani Bank Limited have established contractual relationship
with 396 Overseas Correspondents and 30 Exchange Houses all over the world. Following table
shows some basic information about branches of Agrani Bank Limited.

Table 1. Offices & Branches of Agrani Bank Limited

Specifics Number
Total No. of Branches 921
Branches in Town Area 457
Branches in Rural Area 464
Corporate Branches 27
Zonal Office 62
Circle Office 11
Authorized Dealer Branches 40
Subsidiary Companies 6
Islami Windows 5
Source: www.agranibank.org

2.8 Organization Structure

Like every other business organization, the foremost duty of the top management is to makes all
the major decisions of Agrani Bank. The boards of directors are being at the topmost level of
organizational structure plays an important role in policy formulation and successful execution,
but it is not a direct concern of the day-day operations of the bank. The management consists of
one chairman, eleven directors, one CEO and MD and one company secretary. Mid and lower
level employees get the direction and instruction from the Board of Directors about the tasks they
have to meet. An organization monogram of Agrani Bank Limited is shown below.

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 OM ro g n a o n g i rz aa mt i
M o n o g ra m
O r g a n iz a t i
Figure 1: Organization Monogram

Chairman
Chairman
Managing
Director
Managing
Director
General
Manager
General
Manager
Deputy
General
Deputy
Manager
General
Assistant
Manager
General
Assistant
Manager
General
Senior
Manager
Principal
Senior
Officer
Principal
Officer
Principal
Officer
Principal
Officer
Senior Officer
Senior Officer
Officer
Officer
Sub
Accountant
Sub
Senior Clark
Accountant
Senior Clark

2.9 Participation and Contribution to the Nation in 2013-14

Some major contribution of Agrani Bank to our country in 2013-14 are stated below:

1. Deposit: Deposit is TK. 34868 crore which is 6% of total deposits of all banks in
Bangladesh.
2. Loans Advances: Loans Advances is TK. 20297 crore which is loans advances of all
banks in Bangladesh.
3. Remittance: TK. 12657 crore which is 11.76% total national remittance.
4. Import: TK. 15947 crore which is 5.96% of national figure.
5. Export: Tk 7845 crore which is 3.46% of national figure.
6. Contribution to National Exchequer: TK. 133.76 crore as advance tax. TK. 34.24 crore
as vat and 38.10 as excise duty.
7. CSR Activities: Agrani Bank Limited donated TK. 27.56 crore under CSR program.

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 Chapter Three

FOREIGN EXCHANGE POLICY

& PROCEDURES OF

AGRANI BANK LIMITED

3.1 What is Foreign Exchange?
Foreign exchange is a process which converts one national currency into another and transfer
money from one country to other countries. One of the most important businesses carried out by
the commercial bank is foreign trading. General focusing states that, the trade among various
countries falls for close link between the parties dealing in trade. The situation calls for expertise
in the field of foreign operations. The bank, is referred to as rending international banking
operation which provides such services. Transactions with overseas countries in respect of export,
import and foreign remittance dealings are under the preview of foreign exchange department.
International trade demands a flow of goods from seller to buyer and of payment from buyer to
seller. In this case the bank forms bridge between the buyer and seller.

3.2 Foreign Exchange Services

Among all departments Foreign Exchange Department of Agrani Bank Limited is one of the
most important. This department handles various types of activities. Among these main three are
as follows:

Export
Import
Foreign remittance

Following part contains basic discussion about Foreign Exchange (Export, Import, Remittance)
policy of Agrani Bank Limited. Additionally the global trends of money transfer method like
SWIFT and necessary information about Uniform Customs and Practice for Documentary
Credits are included.

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3.3 SWIFT
The Society for Worldwide Interbank Financial Telecommunication (SWIFT) provides a network
that enables financial institutions worldwide to send and receive information about financial
transactions in a secure, standardized and reliable environment. SWIFT linked more than 9,000
financial institutions in 209 countries and territories, who are exchanging an average of over 15
million messages per day. The majority of international interbank messages use the SWIFT
network. SWIFT transports financial messages in a highly secure way but does not hold accounts
for its members and does not perform any form of clearing or settlement. Agrani Bank also uses
SWIFT network as their primary communication medium for transporting financial messages
throughout the world.

3.4 Uniform Customs and Practice for Documentary Credits

The Uniform Customs and Practice for Documentary Credits (UCPDC) is a set of rules on the
issuance and use of letters of credit. The UCP is utilized by bankers and commercial parties in
more than 175 countries in trade finance. Historically, the commercial parties, particularly banks,
have developed the techniques and methods for handling letters of credit in international trade
finance. This practice has been standardized by the ICC (International Chamber of Commerce) by
publishing the UCP in 1933 and subsequently updating it throughout the years. The ICC has
developed the UCP by regular revisions, the current version being the UCP-600.

3.5 Documentary Credit or Letter of Credit (L/C)

Letter of Credit (or Documentary Credit) is an undertaking issued by a bank for the account of the
buyer or for its own account, to pay the seller against the value of the draft and/or other
documents provided that the terms and conditions of the credit are complied with. LC is usually
subject to the Uniform Customs and Practice for Documentary Credits, International Chamber of
Commerce Publication No. 600 (UCP-600).

In global business environment, buyers and sellers are often unknown to each other. So seller
generally demands guarantee of payment for his exported goods. In this situation bank has an
important role. Bank gives export guarantee that it will pay for the goods on behalf of the buyer.
This guarantee is called Letter of Credit or LC. Thus by letter of credit the contract between
importer and exporter find a legal sphere.

3.5.1 Parties in Letter of Credit Transaction

There are more than one individual or organization involve in various capacities and at various
stages to play an important role in the total operation of the credit. They are:

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LC Applicant: LC Applicant is normally the buyer under the sales contract and the party that
initiates the request to the Issuing Bank to issue an LC on its behalf. The LC Applicant normally
maintains banking facilities with the Issuing Bank.

LC Beneficiary: LC Beneficiary is normally the seller under the sales contract and the party
who will receive payment under the LC if it can fulfill all the terms and conditions of the credit.

Issuing Bank: An Issuing Bank (or LC opening bank) is the bank that issues the LC in favor of
a seller at the request of the LC applicant. The Issuing Bank is normally located in the applicants
country with established banking relationship with the applicant.

Advising Bank: An Advising Bank (or sometimes known as notifying bank) is the bank that
advises the LC beneficiary that there is an LC issued in his favor. Advising Bank is normally
located in the sellers country and is either appointed by the Issuing Bank or LC applicant.

Confirming Bank: A Confirming Bank (normally also the Advising Bank) is the bank that adds
its own undertaking to pay the LC beneficiary if all terms and conditions of the credit are
complied with.

Nominated Bank: A Nominated Bank is a bank authorized by the Issuing bank in the credit to
pay, negotiate, issue a deferred payment undertaking or accept drafts under the LC.

Negotiating Bank: A Negotiating Bank is the bank that examines the drafts and/or documents
presented by the LC beneficiary and gives values to such drafts and/or documents. Negotiation
could be in the form of purchasing or agreeing to purchase the drafts and/or documents presented.

Reimbursing Bank: A Reimbursing Bank is the paying agent appointed by the Issuing Bank to
honor claims submitted by the nominated or negotiating bank.

3.5.2 Types of Documentary Credit

In practice, letters of credit come in several varieties, and it is important for exporters to be aware
of exactly what kind of letter the importer has obtained.

Irrevocable/Revocable Letters of Credit

Confirmed/Unconfirmed Letters of Credit
Transferable Letters of Credit
Back-to-Back Letters of Credit
Standby Letters of Credit
Sight/Deferred Payment Letters of Credit

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3.5.3 Major Steps in an Letter of Credit Transaction
Letter of Credit is the documents of transaction mainly between Importer and Exporter. Important
steps in an LC transaction are mentioned below from the aspect of an Importer. From the exporter
side the process is vice versa.

The Sales Contract: The sales contract is the formal agreement between the buyer and seller
specifying the terms of sale that both parties have agreed upon.

Issue of L/C: After receiving the preform invoices from the exporter, by applying for the issue
of documentary credit, the importer requests his/her bank to make a promise of payment to the
supplier. Obviously, the bank will only agree to this request if bank can rely fully on
reimbursement by the applicant. The applicant must therefore have adequate fund in the bank
account or a credit line sufficient to cover the required amount.

The importer submit the following documents with the application for opening the L/C
Tax Identification Number (TIN)
Valid trade license
Import registration certificate (IRC)
The bank will supply the following documents before opening the L/C
LCA form
IMP form
Necessary charger documents for documentation

L/C Application Form: L/C Application Form is a sort of an agreement between customer and
bank on the basis of which letter of credit is opened. Bank provides a printed form for opening of
L/C to the importer. Usually the importer gives the following information:

1. Full name and address of the importer

2. Full name and address of the beneficiary
3. Draft amount
4. Availability of the credit by sight payment/ acceptance/ negotiation/ deferred payment
5. Time bar within which the documents should be presented
6. Sales type (CIF/FOB/C&F)
7. Brief specification of commodities, price, quantity, indent no. etc.
8. Country of origin
9. Bangladesh Bank registration no.
10. Import License/LCAF no.
11. IRC no.
12. Account no.
13. Documents no.
14. Insurance Cover Note/Policy no., date, amount
15. Name and address of Insurance Company
16. Whether the partial shipment is allowed or not
17. Whether the transshipment is allowed or not
18. Last date of shipment
19. Last date of negotiation
20. Other terms and conditions (if any)

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L/C Authorization Form: The Letter of Credit Authorization Form (LCAF) is the form
prescribed for the authorization of opening letter of credit/payment against import 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 Banks Registration Unit located in the concerned area office of the
CCI&E. 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 CCI&E 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 followings:

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. HS Code No.
6. Signature of the importer with seal
7. List of goods to be imported

Forwarding Documentary Credit by Advising or Confirming Bank: There are usually

two banks involved in a documentary credit operation. The issuing bank and the 2nd bank, the
advising bank, is usually a bank in the sellers country. The issuing bank asks another bank to
advise or confirm the credit.

If the 2nd bank is simply advising the credit, it will mention that when it forwards the credit to
seller, such a bank is under no commitment or obligation to pay the seller.

If the advising bank is also confirming the credit, this mention that the confirming bank,
regardless of any other consideration, must pay accept or negotiate without recourse to seller.
Then the bank is called confirming bank also.

Submission of Necessary Documents by Exporter to the Negotiating Bank: As soon

as the seller/exporter receives the credit and is satisfied that he can meet its terms and conditions,
he is in a position to load the goods and dispatch them. The seller then sends the documents
evidencing the shipment to the bank. Exporter will submit those documents in accordance with
the terms and conditions as mentioned in L/C. Generally the documents observed by the foreign
exchange department are:

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 1. Bill of exchange
2. Commercial invoice
3. Bill of lading / Air way bill / Truck receipt
4. Certificate of origin
5. Packing list
6. Clean Report of Finding (CRF)
7. Insurance cover note
8. Pre-shipment certificate

Sending Documents to the Issuing Bank: The negotiating bank carefully checks the
documents provided by the exporter against the credit, and if the documents meet all the
requirement of the credit, the bank will pay, accept, or negotiate in accordance with the terms and
conditions of the credit. Then the bank sends the documents to the L/C opening bank.

Making the Payment of Foreign Bill Through the Reimbursing Bank: The L/C issuing
bank getting the documents checks immediately and if they are in order and meet the credit
requirements; it will arrange to make payment against L/C through reimbursement bank and will
send the importer the document arrival notice.

Securities of L/C: Agrani Banks respective officials scrutinize the application in the following
manner:

The terms and conditions of the L/C must be complied with UCPDC-600 and Exchange
Control & Import Trade Regulation Act 1947.
Eligibility of the goods to be imported.
The L/C must not be opened in favor of the importer.
Radioactivity report in case of food item.
Survey report or certificate in case of old machinery
Carrying vessel is not of Israel.
Certificate declaring that the item is operation not more than 5 years in case of car.

3.6 Export Procedure Agrani Bank Limited

Agrani Bank Limited exports a large quantity of goods and services to many countries. Customers
open export L/Cs here to export their goods, which they open against the import L/Cs opened by
their foreign importers. There are a number of formalities, which an exporter has to fulfill before
and after shipment of goods. These formalities or procedures are enumerated in brief.

3.6.1 Obtaining Export Registration Certificate (ERC):

No exporter is allowed to export any commodity for export from Bangladesh unless he is
registered with Chief Controller of Imports and Exports (CCI&E) and holds valid Export
Registration Certificate (ERC). 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

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ERC. Once registered, exporters are to make renewal of ERC every year. Required documents for
obtaining ERC are:

Nationality and Assets Certificate;

Memorandum and Article of Association
Certificate of Incorporation
Bank Certificate
Income Tax Certificate
Trade License

3.6.2 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.

3.6.3 Issuing EXP:

After having the registration, the exporter applies to Agrani Bank Limited with the trade license,
ERC and the Certificate from the concerned Government Organization to get EXP. If the bank is
satisfied, an EXP is issued to the exporter.

3.6.4 Signing of 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.

3.6.5 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.

3.6.6 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.

3.6.7 Endorsement on EXP:

Before the exporter with the customs or postal authorities lodges the export forms, they should get
all the copies endorsed by Agrani Bank Limited. Before shipment, exporter submits EXP. form
with commercial invoice. Then Agrani Banks respective officers check it properly, if satisfied,
certified the EXP. Without EXP exporter cannot make shipment. The customer must declare all
export goods on the EXP issued by the authorized dealers.

3.7 Disposal of Export Procedure

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3.7.1 Reporting of EXP
Reporting of EXP form are done in the following manners by different parties:

Original: Customs authority reports first copy of EXP to Bangladesh Bank after shipment of the
goods.

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.

Triplicate: On realization of export proceeds the same bank to the same authority reports
Triplicate.

Quadruplicate: Finally, the negotiating bank as their office copy retains Quadruplicate.

3.7.2 Shipment of goods

Exporter makes shipment according to the terms and condition of L/C. After shipment, exporter
submits the following documents to Agrani Bank Limited for negotiation.

1. Bill of exchange or Draft

2. Bill of Lading
3. Invoice
4. Insurance Policy/Certificate
5. Certificate of origin
6. Inspection Certificate
7. Consular Invoice
8. Packing List
9. Quality Control Certificate
10. G.S.P. certificate
11. Photo

3.7.3 Settlement of Local Bills

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

1. The customer submits the L/C to Agrani Bank Limited along with the documents to
negotiate
2. Agrani Bank Limited officials scrutinize the documents to ensure the conformity with the
terms and conditions.
3. The documents are then forwarded to the L/C opening bank.
4. The L/C issuing banks gives the acceptance and forwards an acceptance letter.
5. Payment is given to the customer on either by collection basis or by purchasing the
document.

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3.8 Export Financing
Financing exports constitutes an important part of a bank's activities. Exporters require financial
services at four different stages of their export operation. During each of these phases exporters
need different types of financial assistance depending on the nature of the export contract. ABL
offers two types of financing:

Pre-Shipment Credit
Post Shipment Credit

3.8.1 Pre-shipment Credit

Pre-shipment credit, as the name suggests, is given to finance the activities of an exporter prior to
the actual shipment of the goods for export. The purpose of such credit is to meet working capital
needs starting from the point of purchasing of raw materials to final shipment of goods for export
to foreign country. Before allowing such credit to the exporters the bank takes into consideration
about the credit worthiness, export performance of the exporters, together with all other necessary
information required for sanctioning the credit in accordance with the existing rules and
regulations. An exporter can obtain following credit facilities against lien on the irrevocable,
confirmed and unrestricted export letter of credit.

1. Export Cash Credit (Hypothecation)

2. Export Cash Credit (Pledge)
3. Export Cash Credit against Trust Receipt
4. Packing Credit
5. Back to Back Letter of Credit (BTB)

3.8.2 Post-Shipment Credit

This type of credit refers to the credit facilities extended to the exporters by the banks after
shipment of the goods against export documents. Necessity for such credit arises as the exporter
cannot afford to wait for a long time for without paying manufacturers/suppliers. Before
extending such credit, it is necessary on the part of banks to look into carefully the financial
soundness of exporters and buyers as well as other relevant documents connected with the export
in accordance with the rules and regulations in force. ABL extend post shipment credit to the
exporters through following process.

1. Negotiation of documents under L/C

2. Foreign Documentary Bill Purchased (FDBP)
3. Advances against export bills surrendered for collection

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3.9 Import Procedures of Agrani Bank
Import means purchase of goods or services from abroad. Normally consumers, firms and
Government organizations import foreign goods or services to meet their various necessities.
Authorized Dealer banks are always committed to facilitate import of different goods into
Bangladesh from the foreign countries. Import Section, which is under Foreign Exchange
Department of Agrani Bank, is assigned to perform this job. And to serve its parties demand to
import goods, it always maintains required formalities that are collectively termed as Import
Procedure.

3.9.1 Registration of IRC

For engaging in international trade, every trader must be first registered with the Chief Controller
of Import and Export (CCI&E). The importer must obtain Import Registration Certificate (IRC)
from the CCI&E by submitting the following papers:

1. Up to date Trade License.

2. Nationality and Asset Certificate.
3. Income Tax Certificate.
4. In case of company, Memorandum & Articles of Association and Certificate of
Incorporation.
5. Bank Solvency Certificate etc.
6. Required amount of registration fee

3.9.2 Obtaining Proforma Invoice

Then the importer has to contact with the seller outside the country to obtain the Proforma
Invoice which contains description of the goods including quantity, unit price etc.

3.9.3 Purchase Contact

When the importer accepts the Proforma Invoice, he/she makes a purchase contract with the
exporter detailing the terms and conditions of the import. After making the purchase contract,
importer settles the means of payment with the seller.

3.10 Import Financing

An import procedure differs with different means of payment. The possible means are:

Cash in Advance
Open Account
Collection Method
Documentary Letter of Credit

In most cases, the Documentary Letter of Credit in our country makes import payment. Purchase
contract contains which payment procedure has to be applied.

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3.11 Foreign Remittance
Foreign remittance is the transfer of foreign currency from one country to another country.
Actually, foreign remittance is purchase and sale of freely convertible foreign currencies as
permissible under exchange control regulations of the country. Foreign remittance is very
important for the country as valuable foreign exchange is involved in the transfer mechanism.

3.12 Types of Remittance

There are two types of foreign remittance.

Foreign Inward Remittance

Foreign Outward Remittance

3.12.1 Foreign Inward Remittance

Remittance comes from foreign countries to our country is called inward remittance. To the
bankers inward remittance means purchase of foreign currency by authorized dealers. Generally,
inward remittances are received by draft, mail transfer, TT, purchase of foreign bills & travelers
cheque, export bills; basically, these are the formal channels of receiving inward remittance. A
local bank also receives indenting commission of local firm also comes under purview of inward
remittance.

3.12.2 Foreign Outward Remittance

Remittance from our country to foreign countries is called outward foreign remittance. Sales of
foreign currency by the authorized dealer or formal channels may be addressed as outward
remittance. The authorized dealers must utmost caution to ensure that foreign currencies remitted
or released by them are used only for the purposes for which they are released. Outward
remittance may be made by appropriate method to the country to which remittance is authorized.
Most outward remittance is approved by the authorized dealer on behalf of Bangladesh Bank.

3.13 Money Transfer Process

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
Travelers cheque
Export cheque

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 Cash dollars
Credit card (International)

3.14 Money Transfer by Remittance Company:

ABL has contact with online money transfer companies. They have 50:50 profit sharing contracts.
The online companies are:

Western Union
Samba
MoneyGram
Xpress Money Payment
ABL Quick Pay etc.
Cash Express
Express Money
Porobhu Express

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 Chapter Four

ANALYSIS OF FOREIGN
EXCHANGE PERFORMANCE
OF AGRANI BANK
4.1 Export Finance
Agrani Bank Limited has earned full confidence of importers and exporters of the country by
conducting its foreign trade related activities successfully through 40 authorized dealer branches
across the country. For performing the international trade related business skilfully, the bank has a
large network of 396 foreign correspondent in the several countries of the world. Besides this, the
bank is maintaining 41 nostro accounts with the world reputed banks.

4.2 Export Trend of Agrani Bank Limited

Agrani Bank is significantly contributing to countrys national export. ABLs total export income
(in TK Crore) by year starting from 2001 to 2013 is given in the following table.

Table 2: ABLs export

income for Year Export (TK Crore) different
years 2001 3743
2002 3458
2003 3575
2004 4197
2005 4171
2006 5171
2007 4892
2008 4954
2009 4461
2010 6443
2011 9310
2012 8838
2013 7845

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 Source: Agrani Banks Annual Report 2013

Export Comparison From 2009-2013

931088387845
6443
Export (TK Crore) 374334583575419741715171489249544461

Year

Export

Figure 1: Export Comparison from 2009-2013

From the graph it is seen that ABLs export income has increased mostly over the year. In 2011
export income was increased by TK 2867 crore with a total income of TK 9310 crore than the
previous year. However in 2012 & 2013 export performance degraded respectively. Figure: 2
shows the export trend of ABLs from 2001 to 2013.

Export Trend
Column2
10000
5000
Export (TK Crore) 0

Year

Figure 3: ABLs Export Trend

4.3 Sector Wise Export

Export earnings in 2013 increased in some sectors in comparison with the year 2012. However
some sectors income have decreased. In 2012-2013 by assessing the sector-wise position
classification of export, it was seen that export earnings in FY2012-13 mainly increased for
petroleum goods, foot wear, jute goods, leather, handicraft goods, readymade garments,
engineering products, knitwear and ceramic products.

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 Table 3: Increased percentage of export earnings in 2013 for different sectors

Sector Increase Percentage

Petroleum Goods 24.10
Foot Wear 19.40
Jute Goods 15.70
Leather 15.00
Handicraft Goods 14.60
Readymade Garments 13.80
Engineering Products 8.90
Knitwear 8.40
Ceramic Products 6.80
Source: Agrani Banks Annual Report 2013

On the other hand, export earnings decreased in FY2012-13 mainly for the following sector:

Table 4: Decreased percentage of export earnings in 2013 for different sectors

Sector Decrease Percentage

Tea 42.70
Frozen Foods 16.20
Chemical Goods 14.60
Raw Jute Goods 13.40
Agriculture Goods 11.10
Source: Agrani Bank Annual Report 2013

4.4 Country Wise Export

As per country wise export observation, USA is the main export product market of Bangladesh
and USA sustained the top position among the importing goods of Bangladesh during JulyMarch
of FY2012-13. During this period, Bangladesh exported US$ 3,952.74 million in USA, which was
20.06 percent of total export. After USA, European Union kept the second position in exporting
goods of Bangladesh, they are: Germany, UK and France.

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 Major Export Markets of ABL

20.06
14.75
% of total export
10.42
5.37
USA Germany UK France
Country

Major Export Country

Figure 3: Major Export Markets of ABL

Source: Agrani Banks Annual Report 2013

4.5 Comparison of ABLs Export Income with Janata Bank Limited

Janata Bank is another major state owned commercial bank of Bangladesh performing foreign
exchange business efficiently. Export income of Janata Bank Limited and Agrani Bank Limited
from the year 2009 to 2013 are shown below from which ABLs competitive position in export
business for five years can be analyzed briefly.

Table 5: Export Income of ABL & JBL from 2009-2013

Year JBLs Export ABLs Export

Income Income
(in TK Crore) (in TK Crore)
2009 8556 4461
2010 11851 6443
2011 15375 9310
2012 15652 8838
2013 15325 7845
Source: Agrani Banks Annual Report 2013 & Janata Banks Website

From 2009, Janata Banks export income have increased significantly up to 2013. Though last two
years growth was not significant, but Janata Bank is clearly ahead of Agrani Bank yielding a lot
more export earnings successfully in every year.

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4.6 Import Finance
Agrani Bank Ltd. is handling significant portion of countrys import business. The total volume of
import as on December 2013 was TK 15947 crore. Major import items are industrial raw
materials, chemicals, capital machineries, scraped vessels and petroleum etc.

4.7 Import Trend

Agrani Banks import Income by year from 2001-2013 is given below:

Table 6: Import Trend of Agrani Bank 2001-2013

YEAR IMPORT (TK in Crore)

2001 2634
2002 3122
2003 2897
2004 3591
2005 5119
2006 11592
2007 11343
2008 10952
2009 7753
2010 16792
2011 26877
YEAR IMPORT (TK in Crore)
2012 16963
2013 15947
Source: Agrani Banks Annual Report 2013

The total import earning stood at TK 15947 crore in 2013 as against TK 1016 crore decreased
from the previous year. Import growth was maximum in 2011 totaling TK 26877 crore which is
highest in ABLs history. Import growth for different years are shown in the following graphs.

Import Comparison From 2009-2013

26877
16792 16963
15947
Import (TK Crore) 11592
11343
109527753
26343122289735915119

Year

Import (in mill)

Figure 5: Import Comparison From 2001-2013

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Performance of last two years was slightly diminished. Besides there were some significant ups
and downs in 2006, 2009 and 2011. Overall import growth of Agrani Bank have not been very
much consistent over these years which is represented in figure 6.

Import Trend
Column2

Import (TK Crore)

Year

Figure 6: Import Trend from 2001-2013

4.8 Country Wise Import

Country wise import goods analysis of Agrani Bank Limited shows that, China stands at first
position in terms of import goods during FY2012-13. During the time, 18.98 percent out of total
import has been imported from China. Second and third positions are India 13.85 percent and
Malaysia 6.15 percent respectively.

Chart Title
80

% of Total Import

18.98 13.85
China India 6.15
Malaysia Others
Country

Column2

Figure 7: Country Wise Imports of ABL in2013

Page 28 of 30
4.9 Comparison of ABLs Import Income with Janata Bank Limited
Import income of Agrani Bank Limited and janata Bank Limited from the year 2009 to 2013 are
shown in the table 4.6.

Table 7: ABLs Import Income Comparison with JBLs Import Income

Year JBLs Import ABLs Import

Income Income
(in TK Crore) (in TK Crore)
2009 11852 7753
2010 12751 16792
2011 14880 26877
2012 17667 16963
2013 18828 15947
Source: Agrani Banks Annual Report 2013 & Janata Banks Website

Import performance of Janata Bank was very consistent over the years. Starting from 2009 up to
2013 Janata Banks imports have grown consecutively while Agrani Bank had ups and downs
over the years. ABLs import income grew significantly in 2010 and 2011, then again decreased in
the following years. But highest income among these years was TK 26877 crore which achieved
by Agrani Bank in 2011. In that year JBLs income was TK 14880 crore which means Agrani
Bank earned almost double of JBLs import income.

4.10 Remittance Business Performance of Agrani Bank

The remittances played a vital role in expediting economic development of the country including
reducing unemployment problem, poverty alleviation, boosting up the foreign currency reserve.
The lion share of the foreign remittance comes from the countries of Middle East. In this regard,
Saudi Arabia has been in top position for the last couple of years. Next come the UAE and the
USA. Recently, the inflow of remittance has increased from Malaysia, Singapore, UK, and some
other countries.

4.11 Contribution of ABL in National Remittance

Agrani Bank Limited has achieved positive growth in remittance business over the years. Agranis
contribution in context of national achievement in foreign remittance sector is given below.

Table 8: Agrani Banks Contribution in Remittance

Agrani Banks Contribution in Remittance

(in Million US$)
Year Global ABL %
2009 10743.03 813.34 7.57
2010 10739.95 989.33 9.21

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 2011 12168.09 1167.76 9.60
2012 14176.91 1427.33 10.07
2013 13831.65 1622.58 11.73
Source: Agrani Banks Annual Report 2013

Agranis contribution to the national figure of remittance business is 11.73 percent for the year
ended on 31 December 2013 and it is the highest in the last five years of ABL.

ABL's Contribution in National Remittance

14176.91 13831.65
15000 12168.09
10743.03 10739.95
10000

5000
989.33 1167.76 1427.33 1622.58
813.34

0
2009 2010 2011 2012 2013
Global %

Figure 9: ABL's Contribution in National Remittance

To keep the present growth rate up ABL has tied up with four new Foreign Exchange Houses in
2013. At present, the number of ABLs remittance business partners along with its own 3
subsidiaries stands at 56.

4.12 Comparison of Remittance with Other Banks

In 2009 Agrani Banks Position in remittance was last among state owned commercial banks with
a remittance of 813.34 million USD. But gradually over the years they were successful in
achieving the first position in 2012 with a remittance of 1427.33 million USD among state owned
commercial banks and second position overall. They continued this success in 2013 too. Bank
wise remittance positions for five years are given below.

Table 9: Bank Wise Position of Remittance

Bank Wise Position of Remittance

(in Million US$)
Name of The Year
2009 2010 2011 2012 2013
Banks
Islami Bank Ltd 2251.22 3012.00 3171.31 3913.07 3576.57
Agrani Bank Ltd 813.34 989.33 1167.76 1427.33 1622.58
Sonali Bank Ltd 1034.65 1264.42 1227.04 1426.07 1552.61
Janata Bank Ltd 818.02 760.30 950.37 1221.47 1326.84
Other Banks 5825.80 4713.90 5651.61 6188.97 5753.05
Total 10743.03 10739.95 12168.09 14176.91 13831.65
Source: Bangladesh Bank Website

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4.13 Country Wise Remittance
The amount of remittances received by Bangladesh in FY2012-13 was 9.50 percent of total GDP.
To keep remittance flow up, ABL sponsors different incentive programs for its valuable
customers. Most remittance are earned by ABL from Middle East countries. Saudi Arab holds the
first position earning TK 3255 crore in 2013 followed by UAE, Malaysia and Singapore. The
country wise remittance received by ABL in the year 2013:

Table 10: Country Wise Remittance of Agrani Bank in 2013

SL No. Country Name TAKA (in crore)

1 KSA 3255.56
2 UAE 1300.86
3 Malaysia 1196.46
SL No. Country Name TAKA (in crore)
4 Singapore 1133.13
5 Kuwait 955.51
6 Oman 207.30
7 Bahrain 193.17
8 Qatar 119.76
9 USA 67.68
10 Italy 36.00
11 Others 4191.87
TOTAL 12657.30
Source: Agrani Banks Annual Report 2013

4.14 Market Shares of ABL in Export, Import and Remittance

As on 31st December 2013, the Bank holds 5.96 percent of import and 3.46 percent of export of
all banks of Bangladesh. Foreign remittance is 11.76 percent of total national remittance figure.

Table 11: Market Shares of ABL in Export, Import and Remittance

Items of Business National Figure ABL Figure Market Share

(TK in Crore) (TK in Crore)
Import 267,384.06 15,947.38 5.96%
Export 226,386.10 7,845.15 3.46%
Remittance 107,554.91 12,657.30 11.76%
Source: Agrani Banks Annual Report 2013

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 Chapter Five

FINDINGS,
RECOMMENDATIONS,

CONCLUSION
5.1 Findings
One of the most important businesses carried out by the commercial bank is foreign trading. So
no doubt that foreign exchange business is very much important for the economic growth of our
country. This report has covered overall procedures of foreign exchange business in Agrani Bank
Limited. Besides Foreign Exchange performance of Agrani Bank are analyzed by representing
various data related to foreign exchange business. The findings of my study after evaluating
ABLs business performance as well as from my practical experiences in Agrani Bank Limited
during my internship are mentioned below:

Agrani Bank has secured 1st position in remittance business in 2012 and 2013
consecutively in remittance business among the state owned commercial banks and 2 nd
position among all the banks of Bangladesh.
We all know foreign remittance is one of the main source of our countrys budget. ABL
contributed 11.76% to total national remittance by earning 1622.58 million USD in 2013
and 10.07% in 2012.
Maximum remittance of Agrani Bank in 2013 came from Saudi Arab totaling TK 3255.56
crore. Middle East Asian countries contribute maximum in remittance income of ABL.
Last two years (2012-2013) overall export and import income of Agrani Bank Limited
have decreased respectively which indicates poor performance of ABL in both Export and
Import section. In 2011 ABLs Export and Import income was TK 9310 crore and TK
26877 crore respectively. In 2013 both the Export and Import income decreased to TK
7845 crore and TK 15947 respectively.
Export income of ABL in 2013 increased mostly by 24.10% and 19.40% for Petroleum
Goods and Footwear respectively than that of 2012.
Export earning of ABL decreased most in the Tea sector by 42.70% in 2013.

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 USA sustained the top position country wise in 2013 as 20.06% of total exports of Agrani
Bank was exported to USA. On the other hand maximum 18.98% of Import of the bank
has been imported from China.
ABL contributed only 5.96% and 3.46% in nations overall import and export business
respectively in 2013.
The number of Authorized Dealer (AD) branches of ABL are only 40 with respect to the
overall number of branches.
Foreign Exchange procedures includes a lot of activities. During my internship at this
department in Agrani bank I have observed that, sometimes overall banking process
slowed down due to the lack of proper management system.

5.2 Recommendations
It is clear that the Agrani Bank Limited Foreign Exchange department has ensured both quality
and services which helps to improve the overall status of the Bank. However the branch may have
scope to improve in some areas. On the basis of my observation following recommendations are
presented.

1. Offer more facilities to attract new Exporter & Importer: Agrani Bank need to
improve their Export and Import business performance to compete with the other banks.
Comparing ABLs performance with Janata Bank it is clear that the bank is struggling in
achieving Export and Import goals. Thats why Agrani bank should offer more facilities
to attract new clients as well as to retain their present clients.
2. Improve remittance facilities for Middle East countries: Remittance plays a vital role
in expediting economic development. The lion share of the foreign remittance of
Bangladesh comes from the countries of Middle East. Islami Bank Limited is the most
successful bank in remittance business mainly because of their strong remittance business
network with Middle East countries. Agrani Bank should emphasize more on improving
their remittance facilities in Middle East to attract more customers.
3. Proper Management and Distribution of tasks: Officials of Foreign exchange
department of Agrani Bank have to perform a lot of tasks. These task should be
distributed properly among the officials. Improper distribution slow the whole process
down which may results in unsatisfying customers.

5.3 Conclusion
In the international marketplace, knowledge not only means power, it means survival. If our
companies are going to succeed internationally, we must know as much or more than our
customers and our competitors. A single misstep may not only cost our company business, it can
lead to big delays and stiff fines. Unfortunately, most information about international trade is

Page 29 of 30
targeted at big companies with large logistics and legal staffs that know how to navigate the maze
of import-export rules and regulations. Small and midsize companies lack the resources - and
often the training - of larger corporations. The bank has the vision to be the best Commercial
Bank in Bangladesh in terms of efficiency, capital adequacy, asset quality, sound management etc.
it is now one of the top most profitable state owned commercial bank.

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