TABLE OF CONTENT

Serial No. Contents Page No.

Letter of Transmittal 3
Acknowledgement 4
Executive Summary 4
List of Acronyms 6
Part-1 Introduction Chapter 7
1.1 Introduction 8
1.2 Origin of the Report 8
1.3 Objectives of the Report 9
1.4 Scope of the Report 9
1.5 Methodology of the Report 9
1.6 Required Data
1.7 Analysis Techniques
1.8 Limitations of the Study 11
1.9 Flow Chart of the Study
Part-2 Company Profile 12

2.1 Historical of Janata Bank Limited 13

2.2 Corporate Profile of Janata Bank Limited – At a Glance 13
2.3 Organization Mission, Vision and Values 14
2.4 Corporate Slogan of Janata Bank Limited 14
2.5 Management Aspects of Janata Bank Ltd. 15
2.6 Management Organogram of Janata Bank Limited 16
2.7 Functions of Janata Bank Limited as a Commercial bank 19
2.8 Products and services of JBL 19
2.9 Number of Branches of Janata Bank Ltd. 20
2.10 Overseas Branches and Subsidiaries of JBL
2.11 Five years Comparative Financial and Operational 21
Performance of Janata Bank Ltd.
2.12 Achievements
2.13 International Banking 22
2.14 Future Plans of the Organization 22
Part-3 REMITTANCE INFLOW IN BANGLADESH 24

3.1 Foreign Remittance 25

3.2 Foreign Remittance in Everyday Life 25
3.3 The Role of Bank 25
3.4 Trends of Remittance Flow in Bangladesh 26
3.5 Labor Migration and Flow of Remittance 26
3.6 Usages of Foreign Remittance 28
3.7 Customers Foreign Currency Accounts 30
3.8 Financial Assistance Provided by the Bank 30

1
 3.9 Remittance Procedures Foreign Currency 32
3.10 Channel of Foreign Remittance
Serial No. Contents Page No.
Part-4 REMITTANCE INFLOW IN JBL 33
4.1 Remittance Systems of Janata Bank Limited 34
4.2 How JBL Perform Its Remittance Activities 34
4.3 Foreign Remittance Services In JBL 36
4.4 Present Status of Foreign Remittance Service of JBL
4.5 Types of Foreign Remittance Activities of JBL 36
4.6 SWOT Analysis 37
4.7 Country Wise Remittance of Janata Bank Limited 38
4.8 Problems of JBL Foreign Remittance Services 39
4.9 Findings
Part-5 Recommendation and Conclusion 75
5.1 Recommendation 76
5.2 Conclusion 79
Reference 80

2
Date:
28th February, 2014
Salman Salem Shinwary,
Assistant Professor,
School of Business,
Ahsanullah University of Science and Technology
Subject: Submission of Internship Report

Dear Sir,
I am hereby submitting you the Internship Report titled ““Foreign exchange remittance”
department of Janata Bank Limited” as you authorized me to prepare as a part of my MBA
internship program.The report has been prepared under your effective guidance and I
respectfully acknowledge your counsel & help that you so kindly accorded to me during the
course of internship program. Working for this report during my internship program has
definitely enriched my knowledge and experience. I am really thankful to you for providing
me such a splendid opportunity to give you the report. I appreciate the report topic by my
heart.

Sincerely yours
Md. Geash Uddin
MBA program (regular)
ID no. 12.02.51.097

3
 ACKNOWLEDGEMENT
At the very beginning I would like to express my deepest gratitude to the Almighty God for
giving me the strength and the composure to finish the task within scheduled time. I would
like to express my sincere gratitude and appreciation to my supervisor, Salman Salem
Shinwary, Assistant Professor,School of Business, Ahsanullah University of Science and
Technology; it would not have been possible for me to complete this report without his help,
advice and overall supervision. His constant encouragement and supervision throughout the
period of this study have been greatest inducement for me and directly contributed to the
accomplishment of the task.
I am also thankful to Mr. Md Aminul Islam (General Manager), Janata Bank Limited, local
office, Dilkusha C/A, Dhaka-1000, for giving me the opportunity to conduct my internship. I
am also grateful to Md. Maniruzzaman (Deputy General Manager) and Bidhan Chandra Nath
(Assistant General Manager) of this branch who not only helped me a lot to complete my
internship report by providing various information of the bank but also shared their
experience in banking sector with me and advised me about career.
Finally, I would also like to thank the authority of School of Business of Ahsanullah
University of Science and Technology, Bangladesh for their kind cooperation.

EXECUTIVE SUMMARY
Today, necessity of a Bank as a financial institution is undeniable. Banks perform various
fundamental factions, which are directly or indirectly contributory towards economic and
social development of countries. A country is financially rich when it has modern financial
institutions of its own. These institutions play a vital role in the field of financial stability of a
country. Especially a country like Bangladesh, our agricultural, industrial and economic
developments are very much depending on smooth operation of Banks. So we must ensure
the efficient and effective performance of this sector.
Janata Bank Ltd is one of the leading commercial Bank of Bangladesh. The main intention of
the Bank is to provide all of banking services at the doorsteps of the people. The Bank also
participates in various social and development programs and takes part in implementation of
various policies and promises made by the Government.
The bank plays a pioneering role in managing foreign exchange transactions. With wide
network of branches at home and abroad, the bank maintains the largest volume of export-
import business including homebound remittances. For this reason, Foreign Remittance
Activity of the Bank is very much essential.
This internship report is intended at providing a complete scenario to the areas of “Foreign
Remittance Activities” of Janata Bank Limited and a pinpoint analysis of the operations and
performances of the bank, also suggesting for possible way out of problems. The report is
based on primary and secondary data from different sources. In this report I have attempted to
show the involvement of JBL’s earnings considering export, import and remittance.

4
List of Acronyms

5
 PART: 1

Introduction Chapter

6
 1.1 INTRODUCTION
This report has a certain purpose to focus on the operations of “Remittance” of Janata Bank
Limited. Without any doubt Remittance catches the flash as it has great importance in the
balance of trade in economy. Banks plays a vital role in this discipline.

In the age of globalization, the importance of banking sector is beyond description. Banking
sector is going ahead with the improvement and invention of new services and offerings
together and retain more customers. Besides other banking activities “Remittance” has become
an essential part of a Banks daily activity to perform. In our daily life we usually use the tools
like DD, TT, MT etc. in order to send money from one place to another. Again, we know that
foreign remittance has a great impact on our national economy. Internship in Janata Bank Ltd
(Local Office, Dilkusha C/A, Dhaka) has brought me the opportunity to know details about
various tools of remittance. At the very beginning of the internee period, I was too much
interested about Loan and Advance system of a bank like Janata Bank Ltd but in a few days I
recognized that my branch deals with “remittance” more than any other banking activities
including loan and advance. Working with remittance system in daily banking day turns my
attention from loans to remittance which creates the background of the study.

1.2 ORIGIN OF THE REPORT

This report is an internship report prepared as a partial fulfillment of requirement for the
completion of the MBA (Masters in Business Administration) from School Business,
Ahasanullah University of Science and Technology. The primary goal of the internship was
to provide an ‘on the job’ exposure to the student and an opportunity for translation of
theoretical conceptions in real life situation. I as a student, was placed in an organization to
gather practical knowledge. In this connection, after the completion of the MBA’s all
theoretical subjects, I was assigned to the Janata Bank Ltd. for practical orientation. I chose
the topic ‘The Impact of Foreign Remittance in Bangladesh Economy’ - A Study on Janata
Bank Limited’. For my internship report under the supervision ofSalman Salem Shinwary,
Assistant Professor, School of Business,School of Business, Ahsanullah University of
Science and Technology

7
1.3 OBJECTIVES OF THE REPORT
There are two parts for the internship study-

1.3.1 General Objective

The main objective of the study is to analyze the foreign exchange business of Janata Bank
Limited through practical exposures about “Foreign Exchange Activities” a comprehensive
Study of Janata Bank Ltd. (considering Janata Bank Ltd, Local Office Branch).

1.3.2 Project Objective

The project objectives are:
 To identify the amount of regular inflow of foreign remittance in Bangladesh.
 To know about the usages of foreign remittance in our country as well as in economy.
 To analyze the relevant strength, weaknesses, opportunities and threats of the utilization
of foreign remittance.
Provide some fruitful recommendation about how “Foreign Remittance” will contribute to
our economic development.

1.4 SCOPE OF THE REPORT

This study would focus on the following areas of Janata Bank Limited.

 Actual Remittance activities of Janata Bank Limited.

 Overview the current procedure of remittance management.
 Overview the current procedure of inward and outward foreign remittance management.
 Organizational structures and responsibilities of management.
 Each of the above areas would be critically analyzed to determine the proper efficiency
ofJanata Bank’s Remittance Management System.

1.5 METHODOLOGY OF THE STUDY

While conducting the study, sources were explored for primary information and data. But
hardly any updated data could be found. In the absence of updated information or data
dependence on secondary data has been inevitable. However, whenever possible primary data
has been used. Data were also collected by interviewing the responsible officers and from
some documents & statements printed by the Janata Bank Ltd. Md. Maniruzzaman (Deputy
General Manager) also helped me in collecting data providing books and Bank’s annual
report.

8
 1.6 REQUIRED DATA
I have used primary & secondary data in preparing the report. Also I have used theoretical
portion as the demand of the report. Analyzing Remittance management of a bank, both
theoretical and technical knowledge are necessary for execution. Then everything with
accuracy, I have analyzed and made conclusion.

Sources of data
Primary:

 Personal interview-Face –to-face conversation and in depth interview with the respective
officer of the bank.
 Practical work exposures on different aspects of this field.

Secondary:

 Annual report of JBL of 2012.

 Relevant documents related to the study as provided by the officers.
 Different publications and relevant circulars.
 Official website of JBL
 Manuals of JBL

Study Design
This study is descriptive in nature and so was conducted using assessment of different
historical data along with other sources.

1.7 ANALYSIS TECHNIQUES

Both qualitative and quantitative methods were applied for preparing this report. The data
were analyzed and presented by Microsoft excel and shows percentage, graphical presentation
and different types of charts. Best effort was given to analyze the numerical findings.

1.8 LIMITATIONS OF THE STUDY

The sources of the report are collected from different desks, various documents of Janata Bank
Limited (JBL). Though the entire staff member remains busy all the time for their desk work
they helped a lot to manage and collect the data & information. But it was very difficult to
collect information on the client as it is very sensitive and secret issue for the Bank. Every task
has some limitations. So, there have also some limitations of the study. These are as follows-

 Shortage of time period

 Busy working environment:

 Secrecy of management
9
 1.9 FLOW CHART OF THE STUDY

PLANNING

DESIGNING THE
LAYOUT

THE APPROACH
The Literature Review
Theoretical Consideration

METHODOLOGY

PRIMARY SOURCES SECONDARY SOURCES

a) Face to face conversation a) Annual report
with Bankers b) Working papers
c) Office files
d) Selected Books

COLLECTING
INFORMATION

ANALYZING

PREPARING THE REPORT

SUBMISSION OF THE REPORT

10
 Part: 2

Company Profile

11
 2.1 HISTORY OF JANATA BANK LIMITED

Janata Bank Limited is the second largest commercial bank in terms of net worth with 872
branches. The mission of the bank is to actively participate in the socio-economic
development of the nation by operating a commercially sound banking organization.

Immediately after the independence of Bangladesh in 1971, the erstwhile United Bank
Limited and Union Bank Limited were nationalized and renamed as Janata Bank. Janata
Bank is a state owned commercial bank which was incorporated as a Public Limited
Company on 21 May 2007 as per Companies Act 1994 and took over the business of the then
Janata Bank with all of its assets, liabilities, right, power, privilege and obligation on a going
concern basis through a vendor agreement signed between the People’s Republic of
Bangladesh and Janata Bank Limited on 15 November 2007 with a retrospective effect from
1 July 2007. The Bank provides all kinds of commercial banking services to its customers
including accepting deposits, extending loan & advances, discounting & purchasing bills,
remittance, money transfer, foreign exchange transaction, guarantee, commitments etc.

The principal activities of its subsidiary are to carry on the remittance of hard-earned foreign
currency to Bangladesh. Janata Bank Ltd. has a plan to switch over to a multi-disciplinary
financial institution by conducting Merchant Banking business and Islamic Banking
operation.

12
 2.2 CORPORATE PROFILE OF JANATA BANK LIMITED – AT A GLANCE

Table 2.1: Corporate Profile - at a Glance

Name of theCompany Janata Bank Limited

Chairman Dr. Abul Barkat
CEO & MD S.M Aminur Rahman
Legal Status Public Limited Company
Date of Incorporation 21 May, 2007
Registered Address Janata Bhaban, 110 Motijheel C/A, Dhaka-1000, Bangladesh.
Authorized Capital Tk.20000 million
Paid up Capital Tk.5000 million
Face value per share Tk. 100 per share
Shareholding Pattern 100% share owned by the Government of Bangladesh
Numbers of Branch-879
Numbers of Divisional Office-08
Domestic Network
Numbers of Area Office-15
Numbers of Regional Office-29
Overseas Network Numbers of Branch-4 ( all branches located in United Arab Emirates)
Numbers of Employees 14989
Numbers of correspondent 1202
Corporate Tax 42.50%
As Govt. Owned Bank “AAA” in long run & ST-1 in short run
Telex 675840 JBDBJ, 671288 JBHOBJ
Phone PABX: 9560000, 9566020, 9556245-49, 9565041-45, 9560027-30
Fax 88-02-9564644, 9560869
E-mail md@janatabank-bd.com
Website www.janatabank-bd.com
Swift Code JANB BD DH
Source: www.janatabank-bd.com

2.3 ORGANIZATION MISSION, VISION AND VALUES

Mission
Janata Bank Limited will be an effective commercial bank by maintaining a stable growth
strategy, delivering high quality financial products, providing excellent customer service
through an experienced management team and ensuring good corporate governance in every
step of banking network.

Vision
To become the effective largest commercial bank in Bangladesh to support socio-economic
development of the country and to be a leading bank in south Asia.

13
 Figure 2.1: Values of Janata Bank Limited
Values

I. Professionalism,
II. Diversity,
III. Accountability,
IV. Integrity,
V. Dignity,
VI. Growth.

Source: www.janatabank-bd.com

2.4 CORPORATE SLOGAN OF JANATA BANK LIMITED

“A Committed Partner in Progress”

2.5 MANAGEMENT ASPECTS OF JANATA BANK LTD.

The Janata Bank Limited Management Team consists of a group of people and each them
comes with an international working background and is committed in leveraging their
experience to take Janata Bank Limited to greater heights by ensuring top line revenues with
dynamic capabilities.
Like any other business organization, all the major decisions in Janata Bank Limited are
made by the top management committee. The board mainly establishes the objectives and
policies of the bank. There are three committees of the board for different purpose. They are:-

 Executive Committee,
 Audit Committee,
 Management Committee.

Executive Committee
This committee is consists of one Chairman, twelve directors, one CEO & MD and one
company secretary.

Audit Committee
The main objective of this committee is to assist Board of Directors with regard to the audit
of financial reports, management reports by the external auditors, internal controls and
internal audits.

Management Committee
The main objective of this committee is to ensure business operations are in line with the
Bank’s policies, strategies and objectives, the bank has set up.
14
 2.6 MANAGEMENT ORGANOGRAM OF JANATA BANK LIMITED

Chairman

Managing Director

Deputy Managing Director

General Manager

Deputy General Manager

Assistant General Manager

Manager

Senior Executive Officer

Executive Officer

Assistant Executive Officer

Support Staff
Source: www.janatabank-bd.com

15
 2.7FUNCTONS OF JBL AS A COMMERCIAL BANK
Collecting deposit,lending loan,
Honoring cheque, Creation of
General medium of exchange, discount-
Function ing bill, money transfer etc.

Creation of savings & formation

Function of Janata
Representative of capital, helps export & import
Bank Limited business, investment in develop-
Function ment sector, HR development etc

Development
Function Receive & payment as the
representative of clients, selling
of shares & securities etc.

Source: www.janatabank-bd.com

2.8PRODUCTS AND SERVICE

a. Deposit Products
 Current Deposit Account
 Short Term Deposit
 Saving deposit Acc
 Fixed deposit
 Foreign Currency Deposit
 Monthly Saving Scheme
 Monthly Profit Based Saving Scheme
 Double scheme

b.Credit Products
 Term loan
 Tread Finance
 Import Finance

16
  Export Finance
 SME Finance
 Micro Credit
 Agricultural & Rural Credit
 Consumer Credit
 Home Lone
 Margin Loan

c. E-service
 Speedy Remittance
 Spot Cash Payment
 Bangladesh Fund Transfer Network
 Internet Banking
 ATM Banking

2.9 NUMBER OF BRANCHES OF JANATA BANK LTD

Table 2.2: Number of JBL Branches
Branches No.
Branches in Bangladesh 900
Rural Branches 442
Urban Branches 458
Overseas Branches 4
Total Branches 904
Branches in Bangladesh 900
Source: Website of Janata Bank Ltd.

Table2.3: Grade or Category Wise JBL Branch

SL Name No.
1 Local Office 2
2 Corporate -1 Branches 22
3 Corporate -2 Branches 71
4 Overseas Branches 4
5 Grade - 1 Branches 201
6 Grade - 2 Branches 223
7 Grade - 3 Branches 271
8 Grade - 4 Branches 110
Total 904
Source: Website of Janata Bank Ltd.

17
 2.10OVERSEAS BRANCHES AND SUBSIDIARY OF JBL
(i) Janata Bank Limited, Abu Dhabi Branch
(ii) Janata Bank Limited, Dubai Branch
(iii) Janata Bank Limited, Al Ain Branch
(iv) Janata Bank Limited, Sharjah Branch

2.11 FIVE YEARS COMPARATIVE FINANCIAL &

OPERATIONAL PERFORMANCE
Table 2.4: Five Years Comparative Financial and Operational Performance

(TK In millions)
Particulars 2007 2008 2009 2010 2011
Authorized Capital 8,000 8,000 8,000 20,000 20,000
Paid up Capital 2,595 2,595 2,595 5,000 5,000
Reserve Fund 1,727 3,224 4,183 8,207 10,224
Deposits 182,947 198,636 221,336 246,175 286,567
Advance 138493 121200 144678 166359 225732
Investment 24,785 55,862 57,824 72,533 57,514
Revenue 16,272 18,522 20,922 24,074 30,614
Cost 12,059 13,559 13,919 15,496 18,577
Operating Profit 4,213 4,963 7,003 8,578 12,037
Provisions for Loan/Assets 10707 11698 9051 8748 8975
Net Profit - 1,681 3,145 2,982 4,907
Export 70,897 71,855 85,418 88,653 118,515
Import 128,809 84,065 129,413 118,525 183,744
Total Number of Employees 14,772 13,860 13,379 13,122 12,826
No.of foreign Correspondent 1,198 1,198 1,202 1,208 1,215
No. of Branches (including 4
848 848 849 851 861
foreign branches)
Source: Janata Bank Ltd, Annual Report-2012

18
 2.12ACHIEVEMENTS

 World's Best Bank- Janata Bank Awarded ‘World's Best

Bank’-2009 by 'Global Finance', a New York based
magazine. Among the best banks of 123 countries in the
world, Janata Bank, being the fourth in Asia and the only
bank of Bangladesh has achieved this rarely gotten prestige.
 International Award- Janata Bank Limited has been
awarded ‘The Bank of the Year2011 in Bangladesh’ by the
London based Financial Magazine ‘The Banker of the
Financial Times Group’. This is for the sixth time the bank
has been awarded ‘The Bank of the Year’.
 ICMAB Best Corporate Award-2011- Janata Bank Limited
has been awarded 'ICMAB Best Corporate Award-2011' by
the Institute of Cost and Management Accountants of
Bangladesh.
 This Bank secured the first position among the state owned
Commercial Banks in Bangladesh.
 Before that, Janata Bank has been awarded 'The Bankers
Award', 'Asian Banking Award' and ‘World's best bank
award’2 at 2010 and before.

19
 PART: 3

REMITTANCE INFLOW IN
BANGLADESH THORW JANATA
BANK LIMITED

20
 3.0FOREIGN REMITTANCE
Make fund transfers abroad through an integrated Banking System. This system allows for
quick and efficient payments to ensure that the funds reach the destination fast and safe.
Foreign remittance can be defined as ‘the purchase and sale of freely convertible foreign
currencies as admissible under Exchange Control Regulations of the country’ The Foreign
Exchange Regulation Act, refer that foreign exchange means foreign currency and includes
any instrument drawn accepted, made or accepted, made or issued under clause (13) of article
16 of the Bangladesh Bank order, 1972 all deposit, Credits and balances payable in any
foreign currency and any draft, travelers cheque, letter of credit and bill of exchange
expressed or drawn in Bangladesh currency but payable in any foreign currency.

3.1FOREIGN REMITTANCE IN EVERYDAY LIFE

In a world, which is metaphorically speaking, getting smaller every day, foreign exchange too
is becoming a part of everyday life. As the interdependence of the international community
for goods and services grows, so does the reach of foreign exchange into the homes of every
citizen, or nearly every citizen. An old poor women who don’t have any income who depend
on the money of his son who send money from a long distance like Saudi Arab is becoming
possible due to remittance operation of Bank. Foreign Remittance use in following purpose-

1. Export proceeds
2. Indenting and recruiting agent’s commission
3. Export brokerage and Import Payment
4. Insurance premium/claim
5. Education expenses/ Treatment/Medical
6. Bangladesh Mission maintenance
7. Training/Seminar/Workshop/fair (commodity/culture)

3.3THE ROLE OF BANK IN FOREIGN REMITTANCE

The Banks and financial houses, which maintain foreign exchange departments, are the
channel through which international payments are made. Such Banks have branches in
different countries and at very branch they have substantial balance in the currency of that
country. If the Bank has no branch at a particular branch at a particular center, it keeps a
balance with some other Banks, which act as its agent of other Banks is called
correspondents. Through their branches and correspondents the service of such Banks are
available at all important centers of the world.

3.4 TRENDS OF REMITTANCES FLOW IN BANGLADESH

21
Bangladesh has a long history of migration and overseas remittances. It is reported that as far
back as in 1942 Bangladeshi nationals had migrated to the port cities of London and
Liverpool in the UK. The British had a scheme of issuance of employment voucher to
overseas workers seeking work abroad. The scheme, during the British regime, opened up a
great opportunity for Bangladeshi workers to migrate to United Kingdom (UK). It is believed
that thousands of Bangladeshis, especially from Sylhet, took the opportunity and created a
flow of migration towards UK. For certain reasons, however, this flow had weakened by the
1960s and the direction of the migration flow changed in the 1970s. After the birth of
Bangladesh, most Bangladeshi Migrants sought to look job to Middle East countries as well
as selected EU destinations (mainly Germany). A tendency to find employment in developed
countries like USA, Canada, Italy and in some Asian countries like Japan, Malaysia and
Singapore was observed in the 1990s and onward. The remittance income of Bangladesh for
several years has shown below:

Year
Particulars
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Remittance 2847.79 3177.63 3565.31 4289.87 5484.08 6562.71 8979 10717.7 11004.7 12171.8

This remittance flow has shown also in the followings:

Graph-3.1: Flow of Remittance

14000

12000

10000
2012
8000 2011
2010
6000
2009
2008
4000

2000

0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Source: Annual report of JBL of 2012

22
The source of remittances to Bangladesh are changing over time. The increase in remittances,
the second biggest overseas currency earning sector after exports, gives a much needed
cushion to the government to face a rising pressure on the country's balance of payments
(BoP). The rate of labor migration from Bangladesh after 2008 has witnessed a comparatively
lower growth rate which has also affected the flow of remittance in the country. In FY 2001-
02, 46 percent (USD 1,147.95 million) of total remittance receipt in the country came from
Saudi Arabia, which fell to only 29 per cent (USD 3,290.03 million) in FY 2010-11. The flow
of remittance from most of the Middle Eastern counties has seen a downward trend in FY
2010-11. However, the flow of remittance from Non-Middle Eastern countries has witnessed
significant growth over the same period. Receipt of remittance from UK and USA has
increased by significant percentage of 761.08 and 418.89 respectively in FY 2010-11. The
contribution of Malaysia and Singapore in receipt of remittance has increased by the highest
percentage of 1,402.09 and 1,318.79 respectively in FY 2010-11 than that of FY 2001-02.
Countries from which most of our wage earners remittance comes are as follows:
Graph-3.2: Country Wise Remittance Flow

Source: Janata Bank Ltd, Annual Report-2012

In recent past, most of the remittance came to the country from the contribution of expatriates
working in Middle Eastern countries. The global economic recession and Middle Eastern
political unrest has changed the scenario a lot. In FY 2010-11, the amount of remittance from
Middle Eastern country totals USD 7,215.53 million which is 0.10 per cent less than that of
FY 2009-10. However, remittance from non-Middle Eastern countries in FY 2010-11 totals
USD 4,434.79 million, which is 17.80 per cent more than that of the previous fiscal year. The
contribution of remittance from Middle Eastern and Non-Middle Eastern countries has
increased by 93.2 and 97.66 respectively in FY 2010-11 than that of FY 2006-07.

23
 3.5 LABOR MIGRATION AND FLOW OF REMITTANCE
3.5.1 Flow of Labor Migration
In FY 2010-11, a total of 0.45 million people have migrated from the country which was 6.04
per cent more than that of FY 2009- 10 but 116.66 per cent less than FY 2007-08 while the
number of migrated people totals 0.98 million. With the increase in employment of skilled
manpower and creation of manpower facilities for remittance, worker’s migration flow shows
a significant growth in the fiscal year 2007-2008. However, it is evident that the percentage
of labor migration has dropped down in the recent years due to the recent economic
recession, Middle Eastern political unrest and squeeze in the demand of labor markets.
However, the data from the Bureau of Manpower Employment and Training (BMET) reveals
that the number of labor migration is increasing over the year at a diminishing rate.

Graph 3.3: Country-wise Overseas Employment in 2012

Source: Janata Bank Ltd, Annual Report-2012

Under the optimistic scenario, labor migration in FY 2014-15 may increase to 0.55 million
with an average growth rate of around only 4 per cent which might drop down further. In
addition, the rate of labor migration might decrease in the forthcoming years, if new markets
of labor are not found immediately.

3.6CUSTOMERS’ FOREIGN CURRENCY ACCOUNTS

In the present day context, keeping in views the tightening of exchange control regulation by
many underdeveloped and developing countries, personal foreign accounts of private
individuals are rarely permitted.

The Bangladesh foreign exchange control also has issued a directive that no private foreign
currency accounts in personal names or joint names can be maintained outside of Bangladesh
24
without prior approval of the Bangladesh Bank. But in west European countries, customer’s
foreign currency accounts do not exist whereby the customers operate these accounts by
means of cheque book or letters requesting transfer of funds from a center in one country to a
center in another country.

3.7REMITTANCE PROCEDURES OF FOREIGN CURRENCY

There are two types of remittance:
i. Inward remittance
ii. Outward remittance

i. Inward remittance: Inward remittance covers purchase of foreign currency in the form of
Foreign T.T, D.D and bills, T.C etc. sent from abroad favoring a beneficiary in Bangladesh.
Purchase of foreign exchange is to be reported to Exchange Control Department of
Bangladesh Bank on Form-C.

ii. Outward Remittance: Outward remittance covers sales of foreign currency through
issuing foreign T.T, Drafts, Travelers Check etc. as well as sell of foreign exchange under
L/C and against import bills retired.

3.8CHANNEL OF FOREIGN REMITTANCE

There have two types of channel to transfer money to Bangladesh from different countries.
Those are:

3.10.1 Official and Unofficial Sectors in Remittance Transfer

(Official Channel)

There are several Sectors involved in the area of Remittance Transfer. Among them, Ministry
of Finance (MOF) and Bangladesh Bank (BB) are the two most important institutions.
Besides these, Ministry of Foreign Affairs (MOFA); Ministry of Commerce (MOC); Bureau
of Manpower Employment and Training (BMET); National Savings Bureau (NSB);
Privatization Commission (PC) and Board of Investment (BOI) are other relevant ministries
and agencies in the public sector. Nationalized Commercial Banks (NCB), Private
Commercial Banks (PCBs), and exchange houses holding drawing arrangements with public
and private banks operating in Bangladesh are the other public and private actors.

• Ministry of Finance
Ministry of Finance (MOF) is the prime policy making body regarding Banking and
Remittance. Macro-economic policies that affect exchange rate, monetary and fiscal
mechanisms, foreign exchange reserve etc. are regulated by this ministry. The Internal
Resources Division (IRD) of the MOF floats savings instruments in market, frame rules and
identify purchase procedures.

25
• Bangladesh Bank
Bangladesh Bank (BB) is the central bank of Bangladesh. Among other powers and
functions, BB regulates scheduled bank activities, acts as a clearing-house, maintains foreign
exchange reserves and monitors floating exchange rate mechanism in the current accounts.

• Nationalized Commercial Banks

Five NCBs are deeply involved in remittance transfer. These are Sonali Bank Ltd, Janata
Bank, Agrani Bank, Rupali Bank Ltd. and Bangladesh Krishi Bank (BKB). NCBs have
opened exchange houses in joint collaboration with different banks and financial institutions
in different countries of the world.

• Private Commercial Banks

Private Commercial Banks (PCBs) are also involved in remittance transfer. Of the PCBs,
Islami Bank of Bangladesh Ltd. has been found to be most proactive in the area of migrants’
remittance. National Bank, International Finance and Investment Corporation (IFIC), Prime
Bank and Uttara Bank are other private banks involved in remittance transfer

• Other official channels

There have some other official channel to transfer remittance. Those are as follows:
 Account to account transfer
 Electronic transfer
 Automatic teller machine (ATM) facilities

3.10.2 Unofficial channel

 Hundi system
 Relatives and friends

3.9REMITTANCE SYSTEMS OF JANATA BANK LIMITED

To speed up the distribution of remittance send by various foreign banks and exchange
companies. Speedy Foreign Remittance Payment System has been introduced in phases since
May 2009. Currently, 879 branches of JBL are on lined with Speedy Foreign Remittance
Payment System, through which remittances from Foreign Banks/Exchange Companies are
being paid/credited to beneficiaries account on the same day.

Inward foreign remittance through Janata Bank Ltd. up to November 2011 is Tk. 51508.55
million. Foreign remittance from NBRs reached record high of Tk. 45924 million in 2010
against Tk.36788 million in 2009 and continues to play an important supporting role in
strengthening the economy of the county JBL.

As mentioned above JBL has a wide network operates 879 branches in national and
international territory, remittance services are available at all branches and foreign
remittances may be sent to any branch by the remitters favoring their beneficiaries.

26
Janata Bank Limited has correspondent banking relationship with all major banks &
exchange houses located in almost all the cities. Expatriate Bangladeshis may send their hard
earned foreign currencies through those banks & exchange houses or may contact any
renowned banks nearby (where they reside/work) to send their money to their dear ones in
Bangladesh.

Janata bank Ltd. has signed an agreement with Western Union Network to facilitate wide
range of remittance of the globe. Both the organizations make it possible to receive the
money from about 300,000 locations of 200 countries instantly with prevailing mutual
mechanism and workforce.

Source: Annual report of JBL of 2012

3.10HOW JBL PERFORM ITS REMITTANCE ACTIVITIES

We can easily understand the remittance activities of JBL by the following-
Figure 4.1: How a bank perform its remittance activities

Source: www.jbl.com

27
 3.11FOREIGN REMITTANCE SERVICES IN JBL
On the aera of globalization and free economy, business has changed its shape and
has spreadall over world. Now a day, banking business has not been limited only within the
commercialbanking; it spread with different types of money and finance related business.
Investmentbanking, merchant banking as a brokerage house, syndicated business,
correspondentbanking, foreign trade, currency dealing etc. There is no national or geographic
limitation forthe business. As the Bangladeshi citizens/ nationals are migrating all over the
world, createdscope/ opportunity for money transfer business as a global phenomenon. In the
post 9/11 era,national and international regulators are more vigilant against Anti Money
Laundering(AML) and Anti Terrorist Financing, resulting appreciation for fund transfer
through Bankand registered Financial Institutions.
Previously, the educated and well-off class of the remitters (Expatriate Bangladeshis)
used tosend money through banking as well as illegal channels, but the uneducated and so
calledunder-privileged class of the remitters generally does not have access to banking
channel andused to send money through illegal channel. Due to high service charges, the
underprivilegeddo not maintain account with schedule banks and cannot use the money
transfer facility of thebanks. This unique characteristic of the remitters creates the scope of
operation for FinancialIntermediates basically Exchange House Operations.

3.12TYPES OF FOREIGN REMITTANCEACTIVITIES OF JBL

1. Inward Foreign Remittance.
2. Outward Foreign Remittance.
Janata Bank Ltd. is performed both inward and outward foreign remittance activities.

3.12.1 INWARD FOREIGN REMITTANCE

In the case of in-ward foreign remittance the foreign currency is entered in
Bangladesh.Previously for transfer foreign currency the customer was must have an Account
in Bank like- Janata Bank Ltd. But in the present time a customer can get foreign currency
without havingan Account in the respective branch or any Bank like- Janata Bank Ltd.

The achievement of Janata Bank Ltd. in attracting foreign remittance as compared to

country’s performance is given below:-

Table4.1: National Inward Remittance of Janata Bank Limited

Janata Bank Ltd National Percentage

2010 52,640 Million 802,270 Million 6.56%
2009 56,190 Million 738,773 Million 7.60%
2008 45924 Million 616442 Million 7.45%
2007 36788 Million 451890 Million 8.12%

Source: Janata Bank Ltd.; Annual Report 2010; Directors’ Report-Foreign Remittance; page-78

28
 Fig.: National Inward Remittance of JBL in graph

900000
800000
700000
600000
500000
400000
300000
200000
100000
0
2008 2009 2010 2011
JBL Remittance 52640 56190 45924 36788
Natinal Remittance 802270 738773 616442 451890
Source: Janata Bank Ltd. ; Annual Report 2012; Directors’ Report-Foreign Remittance; page-78

Graph : National Inward Remittance of Janata Bank Limited

9.00%

8.00%

7.00%

6.00%

5.00%

4.00%

3.00%

2.00%

1.00%

0.00%
2008 2009 2010 2011
Percentage 6.56% 7.60% 7.45% 8.12%
Source: Janata Bank Ltd.; Annual Report 2012; Directors’ Report-Foreign Remittance; page-78

Graph 4.3: National Inward Foreign Remittance of Janata Bank Limited

The above Figuresshows that, Inward National Foreign Remittance up to December 2010
was 802,270 Million and Inward Foreign Remittance through Janata Bank Ltd. was 52640
Million, which was 6.56% of total country’s remittance. In 2009, Inward National Foreign
Remittance was 738773 Million where Inward Foreign Remittance through Janata Bank Ltd.

29
was 56190 Million, which was 6.56% of total country’s remittance. In 2008 and 2007 Inward
National Foreign Remittance were 616442 Million and 451890 Million respectably where
Inward Foreign Remittance through Janata Bank Ltd. were 45924 Million and 36788 Million
which was 7.45% and 8.12% of total country’s remittance respectively.
After analyzing the above chart, we find that the achievement of JBL in attracting foreign
remittance is increased year by year except 2009 and 2010 due to economic crises. But on the
contrary, the percentage of foreign remittance through JBL is decreased year by year as
compared to country’s foreign remittance.
Table 4.2: National Inward Foreign Remittance of Janata Bank Limited (Last 3 months of
2011)
Contribution to National Inward Foreign Remittance of Janata Bank Limited (3 months)
National earning Janata bank
Percentage
Months (Millions U.S. $) (Millions U.S. $)

6.85%
October 1039.48 71.20
6.45%
November 908.79 58.62

1144.38 82.520
December 7.21%

Graph: Comparison national earning with JBL earning (last 3 months) also in
percentage in the next graph

1200

1000

800
Million U.S. $

600

400
Fig.: Remittance of JBL (Last 3 months of 2011)
200

0
October Novenber December
National earning 1039.48 908.79 1144.38
Janata bank 71.2 58.62 82.52

30
 Percentage
7.40%

7.20%

7.00%

6.80%

6.60%

6.40%

6.20%

6.00%
October Novenber December
Percentage 6.85% 6.45% 7.21%

Source: Janata Bank Ltd.; Annual Report 2012; Directors’ Report-Foreign Remittance; page-78

The figuresshow the comparison between inward foreign remittancethrough Janata bank Ltd.
and inward national foreign remittance of last three months[October, November, and
December] in 2011.After analyzing the above charts and tables, we find that the achievement
of JBL inattracting foreign remittance is increased month by month in 2011. And on
thecontrary, the percentage of foreign remittance through JBL is also increasing month
bymonth as compared to country’s foreign remittance.

Both the organizations make it possible to receive the money from about 300,000 locations
of200 countries instantly with prevailing mutual mechanism and workforce.The Foreign
Remittance department of Janata Bank Ltd. is equipped with a number offoreign remittance
facilities.Following are the types of foreign remittance facilities offered by Janata Bank Ltd.

1. Collection of Foreign Demand Draft (F.D.D)

2. Issuance of travelers Cheques (T.C.)
3. Issuance of foreign T.T (Telegraphic Transfer)
4. Disbursement of the cash of incoming F.T.T.
5. SRC [Speedy Remittance cell]
a) SRC- to Account
b) SRC- to Instant/Spot cash.
c) SRC- TTR/ Payment Order (P.O.)
6. Janata bank Ltd. has signed an agreement with
a) Western Union Network
b) IME Spot Cash
c) Placid Express Spot Cash
d) NBL pay out
e) Xpress money etc.

31
FDD [Foreign Demand Draft]
FDD means “Foreign Demand Draft”. FDD is used for both Inward and Outward
foreignremittance transfer. These types of inward FDD was issued in past when no
onlinetransaction remained. Presently this is not popular due to its difficult procedure and
moretime consuming.
In the foreign country, there are several agents who receive money on behalf of Janata
BankLtd. and send this money in Bangladesh (Janata Bank Ltd.) via FDD.Some agents are
a)BEC- Baharain Export Company.
b) Dollarco
c) Janata Export etc.

Figure 4.2: Sample of FDD

Source: JBL’s website

When this type of FDD is collected by the Janata Bank Ltd. Local office, Dhaka then banker
will verify the genuineness of the Advice by way of verifying the number and signature. If the
copy of FDD is verified successfully then the money is transferred to the customers‟ Accounts.

32
 Graph 4.6: Total F.D.D. payable at JBL in 2011 and 2012

F.D.D. Payable

800000
700000
600000
500000
400000
300000
200000
100000
0

2010
2011

2010 2011
F.D.D. Payable 728779 601894

Source: Janata Bank Ltd.; Annual Report 2012

The Figure 1shows that, total F.D.D. payable through Janata Bank Ltd. up toDecember 2010
is Tk.601894 which is lower than F.D.D. Payable is Tk. 728779 in 2009.

Travelers Cheques (T.C.)

It is an instrument issued by the Banks/Company’s payable to the purchaser on presentation.
A traveler's cheque is a preprinted, fixed-amount cheque designed to allow the person
signing it to make an unconditional payment to someone else as a result of having paid the
issuer for that privilege.

T.T (Telegraphic Transfer)

A Telegraphic Transfer is a method of remittance, which is effected by the banker through a
coded telegram attested by secret cheek signal, on receipt of which, the paying office pay the
amount to the payee by crediting his account.

SRC [Speedy Remittance cell]

SRC means “Speedy Remittance Cell” which is now most popular transaction system due
toless time consumption. This type of transaction make with the help of internet. It’s also
calledon-line banking system.Janata Bank Limited has a network of 872 domestic branches in
Bangladesh covering theentire country including the rural areas. Remittance services are
available at all branches andforeign remittances may be sent to any branch by the remitters
favoring their beneficiaries.

33
Remittances are credited to the account of beneficiaries instantly or within shortest
possibletime with the help of SRC “Speedy Remittance Cell’.Janata Bank Limited has
correspondentbanking relationship with all major banks located in almost all the
countries/cities. ExpatriateBangladeshis may send their hard earned foreign currencies
through those banks or maycontact any renowned banks nearby (where they reside/work) to
send their money to theirdear one in Bangladesh.
In this case, the foreign agent or Bank’s or Janata Bank’s foreign branch collect
remittanceand send remittance to the Head Office (H/O) of Janata Bank Ltd. 110 Motijheel
C/ADhaka-1000 via internet. They send an E-mail report with some information.
Some Common Information are-
1. Name of Issuer or customer.
2. Name of Beneficiary.
3. Name of Branch. (Where beneficiary collect money)
4. Amount of Currency (Taka).
5. Date of Issue.
6. MTCN – Money Transfer Controlling Number.
After receiving the E-mail report from responding foreign agents the Head Office
verify thisreport and then send this report to the beneficiary branch of Janata Bank Ltd.

Financial Data Regarding Inward Foreign Remittance of JBL Local office,

Dhaka.Contribution of JBL local office Dhaka in Inward Foreign Remittance earning
from 2008 to 2011:

Table 8: JBL Local office Dhaka in Inward Foreign Remittance

2008 2009 2010 2011
No. of Transaction 1961 2096 2490 2691
Amount (Tk.) 996,650 10,25,250 11,56,960 13,18,510
Graph 4.7: JBL Local Office Dhaka in Inward Foreign Remittance earning

1400000

1200000

1000000

800000

600000

400000

200000

0
2008 2009 2010 2011
No. of Transection 1961 2096 2490 2691
Amount 996650 1025250 1156960 1318510

Souce: www.jbl.com

34
The figure-shows that, Inward foreign remittance through Janata Bank Ltd. Local Office up
to December 2012 is Tk.1318510 which is lower then inward foreign remittance is Tk.
1156960 in 2011. Foreign remittances from JBL Local Office reached record high of Tk.
10252520 in 2010against Tk.996650 in 2009 and continue to play an important supporting
role in strengthening the economy of the county Janata Bank ltd.

Table 4.3: JBL Local Office Dhaka in Inward Foreign Remittance

Contribution of JBL Local Office Dhaka in Inward Foreign Remittance earning in 2012
Activities Percentage (%) Taka
SRC- Account 18% 237,332
SRC [Speedy SRC- to Instant/Spot
23% 303,257
Remittance cell] of JBL cash.
SRC- TTR/ Payment
03% 39,555
Order (P.O.)
Western Union
40% 527,404
Network
IME Spot Cash 07% 92,296
From Other company
Placid Express Spot
(JBL as an Agent) 05% 65,926
Cash
NBL pay out 1.5% 19,778
Xpress money etc. 2.5% 32,962
Total 100% 13,18,510
Graph 4.8: JBL Local Office Dhaka in Inward Local Remittance

Inward Foreign Remittance earning

600000
500000
400000
300000
200000
100000
0
SrC-to Western Placid
SRCAccoun ARCTTR/Pa IME Spot Xpress
Instant/Spo Union Express NBL payout
t yment Cash money etc.
t cash Network Spot Cash
Taka 237332 303257 39555 527404 92296 65926 19778 32962
Souce: www.jbl.com

ThisTable&Figure shown that, the inward foreign remittances come to LO of JBL

from Western Union Network that is 40% and from the system of SRC (to instant spot cash)
is in the second position in this regard which is 23%. Then the others come chronologically.

35
 3.12.2 OUTWARD FOREIGN REMITTANCE

When remittance is sending from Bangladesh to abroad like London then it is called
OutwardForeign Remittance. But Outward Foreign Remittance is highly restricted by the
BangladeshGovernment. Only some especial branch of all Banks can send money from
Bangladesh toabroad under Bangladesh Bank‟s rules& regulation.In Janata Bank Ltd.
following branches are only responsible and involved with outwardforeign remittance
activities.
a. Local Office Dhaka.
b. Foreign Exchange Branch, Bitul-Mukaram Dhaka.
c. JanataBovon Corporate Dhaka.

The Foreign Remittance department of Janata Bank Ltd. is equipped with a number offoreign
remittance facilities. Following are the types of outward foreign remittance facilitiesoffered
by Janata Bank Ltd. -
1. Issuance of Foreign Demand Draft (F.D.D)
2. Issuance of travelers Cheques (T.C.)
3. Issuance of foreign T.T (Telegraphic Transfer)
4. Disbursement of the cash of incoming F.T.T.

3.13SWOT ANALYSIS
At the corporate level, the strategic Management process of an organization involves
theenvironmental. This environmental scanning is done both on the internal
environment:Strength and weaknesses and external environment: opportunities and threats of
theorganization.
In internal environment strengths are those factor that influence the organization to do
betterare weaknesses are those factors that lack the organization form its optimum
performance. Onthe other hand external environment at analysis shows the opportunities or
scope ofdevelopment and external coming there at for the business.
After doing my report on the foreign remittance activities of the JBL. I have found both better
performance insome sectors of the bank and also weak services as well that occur lacking to
do better. Thereare also some eternal factors which height has business.A particular SWOT
analysis discloses the following issues for an organization that anorganization achieved over
the time of its operation by analyzing its both internal andexternal environment: The SWOT
analysis of Janata Bank Ltd. is shown below:
 “S”- Strengths
 “W”-Weakness
 “O”-Opportunities
 “T”-Threats

Objective of SWOT analysis:

 To asses overall strong competitive position.

36
  To decide whether to continue current strategy or not.
 To determine possible course of actions.
 Development of functional strategy.

Strengths:

JBL is a modern public Bank. It has more capacity to adopt new technology when
theenvironment will be changed. This JBL Rajanigondha Super Market Branch, Dhaka as
wellas Janata Bank Ltd. has various types of strength elements. Such kind of strength
arerepresenting below:
 Second largest bank of the country.
 Wide network of 879 branches including four overseas branches.
 Healthy correspondent relationships with foreign banks.
 Linked with most number of foreign correspondents.
 Strong financial position and sustainable growth.
 Largest portfolio among public banks.
 Hold a sound reputation in the banking industries.
 Well-connected distribution channel from head office to all branches.
 Provide a record business in international trade and remittance.
 Membership with SWIFT
 Sound Import and Export operation.
 In 2010, Janata Bank Ltd. has gone through an agreement with Western Union Money
Transfer to provide quick and more authentic remittance service to its clients.

Weaknesses:
A weakness is a limitation or deficiency in resources, Skills and capabilities that
seriouslyimpedes effective performance.When I study in JBL Rajanigondha Super Market
Branch, Dhaka some problem surface tome those internal problems mention in the below:

Discouraging small entrepreneurs

JBL provides clean Import Loan to most of its solvent clients. But they usually do notwant to
finance small entrepreneurs whose financial standing is not clean to them.

Absence of strong marketing activities

JBL currently don't have any strong marketing activities through mass media e.g.Television.
TV ads play vital role in awareness building. JBL has no such TV adcampaign. Although
they do a lot of CSR activities compared to other banks.

Not enough innovative products

In order to be more competitive in the market, JBL should come up with more newattractive
and innovative products. This is one of the weaknesses that JBL is currentlypassing through
but plans to get rid of by 2010.

Lack of Proper Motivation

The salary at JBL is very decent, but it lacks other sorts of motivation. Incentives suchas
bonuses are given for acquiring a particular figure, but all in all these are the
onlymotivational factors.

37
Outdated Software and Hardware at JBL Local Office

Some of the PCs in this branch have very outdated hardware which is very slow andaffects
the customers and hence the performance of the bank as a whole. The softwarethemselves are
pretty old – Flexcube is from 2003, Microsoft Office XP is used. Allof these prevent smooth
operations.Lack of formal promotional activity in this sector.

Other Weaknesses
o Service environment is not so much good for customers.
o Shortage of trained manpower and logistic support.
o There is no help centre for the customers for their problems and inquiry.
o Technology is used by a small number of workers which cost more times.
o Lack of online banking service in all over the Bangladesh.
o Lack of ATM Booths from where customer can withdraw their money.
o The important thing is that the bank has no clear strategic plan. The path of the
future should be determined with a strong feasible strategic plan.

Opportunities
 The bank will come under complete computerization very soon.
 The bank is going to launch new software to run banking transactions faster and
smooth.
 The bank tries to cope with the newer trends of foreign exchange as soon as possible.
 JBL should approach more attractive facilities with clear go ahead.
 Expanding the areas of loan disbursement.
 Business expansions in the capital market.
 Online banking should be introduced fluently in all branches to compete with
multinational banks.
 JBL should intensify personal banking in order to attract foreign wage earners making
inward remittance through JBL.
 New investment sector is booming rapidly. JBL should identified those untapped
areas of business and invest in those sector such as Gas plant, ship breaking etc.

Threats
 Upcoming banks.
 Overall liquidity crisis in money market.
 Frequent fluctuation of domestic currency worth against US Dollar.
 Political crisis and decaying country image as exporter.

38
  Rapid advance in computers and management information system.
 Lack of E-Banking facilities.
 Top management of giant.
 Complex organizations cannot be authoritarian in the traditional sense and
beeffective.

From the above discuss we can say that Janata Bank Limited is one of the largest
privatizedBank of the country. Overall Performance of Janata Bank Limited is satisfactory.
But to facechallenges of Globalization, Janata Bank Ltd. should to restructure its operation to
improveas a first generation bank.

60000 Remittance of JBL

50000
Tk. In million

40000
30000
20000
10000
0
2006 2006 2007 2008 2009 2010 2011
Year
Source: Annual Report of JBL 2012

The contribution to National to National Inward Remittance of Janta Bank Limited aim 2011
is shown in the followings:

Table 4.5: Contribution to National Inward Remittance of Janata Bank Limited at 2011

Months National earning Janata Bank Percentage

(Millions U.S. $) (Millions U.S. $) (%)
October 1039.48 71.20 6.85
November 308.79 58.62 6.45
December 1144.38 82.52 7.21
Source: Annual Report of JBL 2012

3.14PROBLEMS OF JBL FOREIGN REMITTANCE SERVICES

There are some problems in JBL Foreign Remittance Services which are the barriers to
provide a quality service as a National Bank than the Private Banks. For these problems the


At thr time of internship period in JBL (3mounths)

39
beneficiary gets the amount at a delay period. Following problems are seen in JBL foreign
remittance service.

 Wrong debit- Wrong debit mainly occurs in FDD processing. Some exchange
houses has same name with a little variation. Sometime the debit posting goes to
wrong name so the adjustment has faced problems. Sometimes the problems cannot
find out, whereas some can trace after some years.
 Wrong posting- Bangladesh has some areas with same name. So it is difficult to
separate them without branch code. But there is no way for the remitter to send
amount with branch code. For that the remittance amount goes to wrong branch which
known as wrong posting.
 Software problem- Some branches change their names for various reason, but
there is no scope to rename of branch name.

3.15Findings

Remittance is playing a significant role for the economic development of developing and
Least Develop Countries (LDCs). Day by day global competition for exporting manpower is
increasing. Moreover, the demand for skilled and professional personnel is increasing day by
day. Bangladesh is still far behind to export skilled and professional personnel than some
other top remittance earning countries. The major future challenges that are identified for
Bangladesh for harnessing remittance for economic development of the country as below:

• Lack of Skilled and Professional Personnel:

Although the number of skilled and professional personnel is increasing, but it is still 46
percent of total manpower exported. The government has established some new science and
technological universities, polytechnic and vocational institutes for increasing the number of
skilled and professional personnel. But still the number is very small than the actual demand.
Moreover, the qualities of education of these institutes are not up to the mark in comparison
with the institutes of other top manpower exporting countries.

• Government Foreign Policy:

The Government foreign policy and diplomatic relationship and promotional activities are
important to increase manpower export. Although the government has undertaken different
strategies to boost manpower export, but still Bangladesh is far behind in establishing
diplomatic relationship and promotional activities than the other countries.

• Utilization of Remittance in Non-productive investment:

This is another crucial challenge for Bangladesh. In Bangladesh, only 4.76% of remittances
are utilized for productive investment and a significant portion of remittances are utilized for
nonproductive investment. So the remittances cannot be utilized for economic development
and industrialization that are necessary for the socioeconomic development of the country.

40
• General risks in the home country:
Political instability, including low levels of law and order and risks of expropriation, may
discourage remittance inflows.

Part: 4

41
 Recommendation&Conclusion

4.1 RECOMMENDATION
Remittance inflows seem to have a rather limited impact on growth and development at the
macro-level, despite their impressive contributions to foreign exchange earnings and national
income in quite a number of countries and their other positive features. Hardly have they
proved to be the prime mover for an economic take-off or sustained growth for the economy
as a whole. Even high emigration and remittance-receiving areas or regions within a country
have not always been able to use remittances as a means to launch a process of dynamic
economic growth. But remittance can use the flows to raise additional funds in the world
capital market. The government and also donor communities have given proper emphasis for
boosting remittances flow. Recently Department for International Development (DFID) of
UK government has proposed for funding a project to increase the official channels of
remittances flow in Bangladesh. Although the government has undertaken several initiatives
to increase remittances flow, but still something more to do. Moreover, Bangladesh is role
model and considered as pioneer in Microfinance. Many Microfinance Institutes (MFIs) and
Non-Government Organizations (NGOs) are operating in Bangladesh. But still this
remittance sector is untapped by them. The following recommendations can be helpful for
harnessing remittances for the economic development of Bangladesh:

• Establish more technical institutes: The government as well as private

sector can establish
more high quality technical, polytechnics and vocational institutes that can supply skilled and
professional personnel.

• Develop new foreign policy: The government should develop new foreign
policy and assigned a professional person at each diplomatic mission office abroad to explore
the potentials of manpower export in that country and properly lobby with different
concerned persons of that country. At present although the government has a post of labor
attach in diplomatic mission of some countries, but still it is insignificant.

• Utilization of Remittances in productive investment: The

government as well as private sectors specially the MFIs/NGOs can come forward in this
regard. At present one NGO is playing role of transferring remittances. But the MFIs/NGOs
need to do more beyond transfer. The government should eliminate regulatory constraint of
transferring remittance for MFIs/NGOs. The government as well as MFIs/NGOs can provide
Business Development Services to the remittances recipient families to start and operate an
enterprise. The Government can also establish Investment Company to channel more capital
through MFIs/NGOs to the remittance recipient families which are operating enterprise.
42
• Creating Enabling environment to invest Remittances in
Capital Market: Moreover, the government can make easy access to the capital market
for the remittance recipient families. Although at present there is a provision for quota of
foreign investors or nonresident Bangladeshis during Initial Public Offering(IPO) of issuing
shares, but this process is so critical that most of the time this quota doesn’t fulfilled. The
government should make this

quota system of issuing IPO also applicable for the families of the non-resident Bangladeshis,
so that they can invest in the capital market.

• Encouraging Migrant Workers to Use Official Channels: The

volume of remittance receipts by Bangladesh usually coming through official channels. But
the unofficial channels are still playing a major part in transferring the remittance, thereby
depriving the government of a huge sum of foreign currencies every year. In this situation,
the government needs to give a closer look at the performance of the formal vehicles of
money transfer including the banks already in operation. Financial Institutions should be
more actively involved in encouraging Migrant workers to us.

• Improve Migration Management Policy: A Migration management policy

should be present centrally, to look into the matters in a systematic and coordinated manner.
Remittances are very important for the Bangladesh national economy. In addition, Labor
Migration is seen as a strategy to combat unemployment in Bangladesh. Therefore, to utilize
Remittances and take the nation forward, it is required to encourage Labor migration and
increase the level of remittances.

4.2 CONCLUSION
Over the last decade workers’ Remittance played a crucial role in the Economic Development
of the country and is expected to remain so over the coming years. However, it is hard to
trace any paper exploring the impact of macroeconomic variables on the workers’ remittances
in the context of Bangladesh.

The success of Bangladesh in maintaining the rising trend in Remittances even in the face of
reduced wages in the labor importing countries is really remarkable. This is a welcome
support to the balance of payment position of the countries, particularly in period when
securing foreign assistance has become much more competitive.

The Financial System should look carefully at the prospects of attracting Remittances from
The workers. An appropriate incentive package would go a long way in attracting their
savings home. The much publicized product is Bangladesh Banks ‘Wage Earners
Development Bond’. Similar products need to be carefully reviewed because at the end of the
day it must be emphasized that the overwhelming bulk of the Remittance market is composed
of low wage-earner workers whose first motivation in sending back money home is to repay

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his debts incurred in getting abroad and improving the consumption standard of his family in
Bangladesh.

Remittances have a very positive impact on the overall economy. This can be further
improved by attracting more Remittances through the official channels. So the Government
should encourage the expatriates to use formal channels.

References

o Lanata Bank’s annual report- 2012

o Janata Bank Ltd, website: www.janatabank-bd.com
o www.wikipedia.org
o Janata Bank Ltd. General Banking Manual (1992)
o Circulars issued by JBL time to time
o Different ledger books of the branch.
o www.bbs.gov.bdWebsite: www.janatabank-bd.com
o Data given at period of internship.

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