FOREIGN EXCHANGE ACTIVITIES

OF
AGRANI BANK LIMITED

(Conducted on behalf of AGRANI Bank, Hatkhola branch,Dhaka)

EXPORT IMPORT BANK OF BANGLADESH LIMITED

STAMFORD UNIVERSITY BANGLADESH

INTERNSHIP REPORT TITLE:

Foreign Exchange Activities of AGRANI BANK Limited

SUPERVISED BY:
Nigar Sultana
Senior Lecturer
Stamford University Bangladesh
Department of Business Administration

SUBMITTED BY:
Abrar Amin
ID: BBA-05015664
Batch: 50(D)
Major: Accounting

Date of Submission: 30-09-2016

LETTER OF TRANSMITTAL

Date: September 30, 2016

To,
Nigar Sultana
Senior Lecturer
Department of Business Administration
Stamford University Bangladesh
Subject: Submission of Internship report

Dear Madam,
It is my pleasure to submit my internship report titled as Foreign exchange
Activities of Agrani Bank Limited which I was assigned by you as a part of
Internship program for the completeness of Bachelor degree of BBA Department
in Stamford University Bangladesh. It is a pleasure to work at Agrani Bank for the
period of three months I was placed in the Sales and service department from
August1st 2016 at Hatkhola Branch, Dhaka.
It is a worthwhile experience and learning area for me to build up my career in the
banking sector. This experience will help me to develop professionalism and has
given me the chance to know about the overall banking activities as well as
created a positive attitude towards the business world. I have tried my level best to
gather information that according to my belief is relevant and resourceful. It was a
great opportunity for me to apply some theoretical knowledge in the practical
purpose. I have also tried my best to give some suggestions for the betterment of
the sales and service centre in the customer service department and I hope that I
was being able to satisfy their needs through my work.
It will be a pleasure to clarify if anything is necessary regarding this report and I
thank you for allowing me the opportunity to undertake this task with your sincere
guidance and cooperation. I express my acknowledgement and gratitude for
assigning me to such a special study.
Your most obedient student,
.............
Abrar Amin
ID: BBA-05015664
Department of Business Administration
Stamford University Bangladesh.

Certificate

This is certified that the Internship report on the Foreign exchange Activities
of Agrani Bank Limited is submitted for the award of the degree of Bachelor
of Business Administration in Accounting to the Stamford University
Bangladesh is an authentic research carried out by Abrar Amin under my
supervision.

He is permitted to submit the Internship report & I wish him every success in
life.

.
Nigar Sultana
(Internship Supervisor)
Senior Lecturer
Department of Business Administration
Stamford University Bangladesh.

Declaration

I am a student of Business Adminidtration , Stamford University

Bangladesh, hereby declare that, the report entitled to me is an original
work done by me under the supervision of Nigar Sultana, Senior Lecturer of
the Department of Business Administration of Stamford University
Bangladesh.

No part of this report has been submitted by me for any degree, diploma, title
or recognition before.

.
Name: Abrar Amin
ID No: BBA-05015664
Batch No: 50(D)
Major: Accounting
Department of Business Administration
Stamford University Bangladesh

PREFACE

Internship is the integral and basic requirement of all business study programs.
Because it is the practical implication of theoretical knowledge which we have
been taught in our business subjects to gain further knowledge and experience
about professional business activities.
It equips us with the necessary knowledge, skills and values of business culture
which are basic requirement of the business professional and which also helps
new graduates students to perform professionally as they get first step in their
professional life.
For this reason I was placed at Agrani Bank Limited, Hatkhola Branch Dhaka
where I have done my three months Internship. During my three months
Internship period I have gained a lot of knowledge about banking operations under
the supervision and guidance of my Internship supervisors.
During my whole duration I was rotated in all the different areas of the branch and
was thoroughly briefed about the procedure of all the banking operations by the
concerned staff. This report that I have prepared on the Foreign exchange
Activities of Agrani Bank Limited was initiated as part of the Internship Program.
My Internship report contains all the knowledge which I have learnt there.

ACKNOWLEDGEMENT

A report book of thesis paper requires a lot of information from various sources
and to make such kind of report needs a lot of assistance. So to prepare a report by
collecting data of various kinds has to be done by depending upon many people.
So, I did also depend upon others to collect all the relevant information and data
on the performance of relative fields.
First of all I would like to put across my gratitude to MR. Khalekur Jaman
Managing Director of Agrani Bank Limited, for authorizing me to complete the
task and let me know all those information for which I was being able to prepare
this report according to the requirement. I have also talked to the concerned
officers of Agrani Bank Limited, Hatkhola Branch who kindly provide me
information relating to the task. Mr. X SVP,Mr. X AVP,MR.x AVP,MD Md.
SEO.Azizur Rahman,E.O,Mr X E.O MR Ahsan Ahmed Officer, MR X Hatkhola
Branch Manager they all helped in a productive manner from all aspects. I am
also thankful to the Manager, General Manager, and Assistant General Manager
for their limitless cooperation and supervision. I also express a deep debt of
appreciation to the employees of Agrani Bank Limited, Hatkhola Branch.
I uttered a wholehearted thankfulness to my supervisor Nigar Sultana (Senior
Lecture), Department of Business Administration, Stamford University
Bangladesh who has given me the opportunity and directions to prepare such a
meaningful thesis paper. I am also satisfied to work under her supervision and
care.
Also it would be rather incomplete without expressing thanks to the internal and
external supervisors again and again.
Then I also would like to thank x an senior student of our Stamford University in
the Department of BBA of the 43rd batch who also helped me a lot by providing
me with accurate and resourceful Information according to my topic which was
greatly needed in preparing this report.
Lastly, and most importantly I express my immense gratefulness to Almighty
Allah, the creator and merciful who has given me the strength, wisdom patience,
courage and endurance to complete this report successfully in time.

EXECUTIVE SUMMARY

Acronyms
1)
2)
3)
4)

A/C : Account
AD : Authorized Dealer
BB : Bangladesh Bank
B/L : Bill of Lading

5) BOE : Bill of Exchange

6) CCI&E : Cash Credit : Chief Controller of Import & Export
7) DD : Demand Draft
8) DP Note : Demand Promissory Note
9) ERC : Export Registration Certificate
10) EXP : Export Form
11) FC : Foreign Currency
12) FDD : Foreign Demand Draft
13) FDR : Fixed Deposit Receipt
14) IBCA : Inter Branch Credit Advice
15) IBCT : Inter Branch Credit Transaction
16) IBDA : Inter Branch Debit Advice
17) IMP : Import Form
18) IRC : Import Registration Certificate
19) L/C : Letter of Credit
20) LCA : Letter of Credit Authorization
21) LIM : Lone Against Import Merchandise
22) LTR : Lone Against Trust Receipt
23) LBC : Local Bill Collection
24) OBC : Outward Bill for Collection
25) PAD : Payment Against Document
26) PO : Payment Order
27) PSI : Pre Shipment Inspection
28) SOD : Secured Overdraft
29) STD : Short Term Deposit
30) SWIFT : Society for Worldwide Interbank Financial Telecommunication
31) TC : Travelers Cheque
32) TIN : Tax Identification Number
33) TR : Truck Receipt
34) TT: Telegraphic Transfer
35) MT : Mail Transfer
36) LDBC : Local documentary bill collection
37) LDBP : Local documentary bill purchase

LIST OF TABLES
SERIAL NO.

TITLE OF TABLES

PAGE NO

II

LIST OF GRAPHICAL PRESENTATION

SERIAL NO.

TITLE OF GRAPHS

PAGE NO

III
TITLE OF THE TOPIC: FOREIGN EXCHANGE ACTIVITIES
OF
AGRANI BANK LIMITED

TABLE OF CONTENTS
CHAPTERS

PAGES

CHAPTER-1
INTRODUCTION (GENERAL OVERVIEW):
1.1 Background of the study
1.2 Objectives of the study .
1.3 Mythology of the study
1.3.1:Primary Sources..
1.3.2: Secondary sources .
1.4 Scope of the Study .
1.5 Limitations of the Study
1.6 Management and Organizational structure of Agrani Bank Ltd
1.7 Agrani Bank at a glance

CHAPTER-2
(AN OVERVIEW OF BANKING SECTOR IN BANGLADESH):
2.1 Definition of Bank.
2.2 Objective of Bank.
2.3 Historical Background of Banking Institution of Bangladesh..
(According to World Banking Perspective of Bangladesh-1972)
A list of Banking Institutions of Bangladesh.
2.4 Banking Operation in Bangladesh
2.5 Foreign Exchange operations of Banking in Bangladesh.
CHAPTERS

PAGES
CHAPTER-3
(LITERATURE REVIEW):

3.1What is meant by Foreign Exchange?................................................................

3.2 Foreign Exchange Operations of Agrani Bank Ltd

3.3 Different Foreign Exchange Services of ABL

3.4 Functions of Foreign Exchange Department of ABL
(Examples of Foreign Exchange Transactions):
3.5(A) Import:
3.5.1: Forms of Letter of credit
3.5.2: Types of Letter of Credit
3.5.3: Parties of Letter of Credit
3.5.4: Contents of Letter of Credit
3.5.5: Documentary of Letter of Credit
3.5.6: Payment against Document (PAD)
3.6(B) Export:
3.6.2: Service provided by Bank against Export L/C..
3.6.2: Export Registration Certificate (ERC).
3.6.3: Back to back L/C..
3.6.4: Kinds of Back to back L/C
3.6.5:Service provided by Agrani bank against Back to back L/C
3.6.6: Local Document Bill Collection (LDBC)
3.6.7:Steps in LDBC.
3.6.8: Local Document Bill Payment (LDPC)..
3.6.9: Steps in LDPC
3.7(C) Remittance:
3.7.1: Foreign Remittance
3.7.2: Kinds of Remittance
3.7.3: Money Transfer by Remittance Company
3.7.4: Money transfer by Exchange house
3.8 Reporting System of Foreign Exchange Transactions:
3.8.1: Reporting and monitoring of Bangladesh Bank
3.8.2: Reporting by the Internet

CHAPTERS

PAGES

CHAPTER-4
(AN OVERVIEW OF AGRANI BANK LIMITED):
4.1 Historical Background of Agrani Bank Ltd
4.2 Board of Directors of Agrani Bank Ltd

4.3 Vision of Agrani Bank Ltd..

4.4 Mission of Agrani Bank Ltd
4.5 Objective of Agrani Bank Ltd
4.6 Product and Services of ABL
4.7 Bank Operational Area of ABL..
4.8 Achievement and Milestones of ABL
4.8.1: Commitments of ABL..
4.8.2: Core Values of ABL
4.8.3: Other Values and Features of ABL
4.9 List of Branches of ABL
4.10 Capital and reserves of ABL
4.11 Organizational Structure of ABL
(According to the Hierarchy of the Organization)
4.12 Profitability Position of Agrani Bank: For the last 5 years
[With Graphical Presentation] (2011, 2012, 2013, 2014 & 2015)
4.13 Total Assets Position of Agrani Bank: For the last 5 years
[With Graphical presentation] (2011, 2012, 2013, 2014 & 2015)
4.14 Total Liability & Shareholders equity Position of ABL:
For the last 5 years
[With Graphical Presentation] (2011, 2012, 2013, 2014 & 2015)
4.15 Agrani Bank Limited at a glance

Content 2011 2012 2013 2014 2015

Export 46234.6 55790.42 Import76465.62 76240.77 95359.45
(Source: Annual Report of ABL 2014-2015)
CHAPTERS

PAGES

CHAPTER-5
AN FOCUS ON FOREIGN EXCHANGE ACTIVITIES OF AGRANI BANK:
(ASSESSMENT OF THE REPORT & LEARNINGS THROUGH TASK)
5.1 Definition of Foreign of Foreign Exchange
5.2 Contents of Foreign Exchange
5.3 Objectives of Foreign Exchange
5.4 processes of Foreign Exchange Operations

(Areas of Interest and Assessment of the Report): ..

5.5 Overall Foreign Exchange Operations undertaken by Agrani Bank Ltd..
5.6 Foreign Exchange Operations of ABL from the last 5 years.
(2011, 2012, 2013, 2014, 2015)
5.7 Total Foreign Exchange scheme of Agrani Bank at a glance.
5.8 Assessment of the Report
5.9 Learnings through tasks.

CHAPTER-6
PERFORMANCE EVALUATION OF AGRANI BANK LIMITED:
(THROUGH ANALYSIS & FINDINGS)
6.1 Analysis of Foreign Exchange activities of Agrani Bank
6.2 Different Analysis to evaluate Agrani Banks Performance: .
o SOWT Analysis
o Ratio Analysis
o BCG Growth Matrix
(With Graphical Presentation)
6.3 Findings and Discussion from Learning

CHAPTER-7
RECOMMENDATION AND CONCLUSION:
7.1 Recommendations to Improve Overall Banks Performance
and Foreign Exchange Operations of ABL
7.2 Conclusion
Bibliographies and References:

CHAPTER-1
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
This report is prepared in order to complete the bachelor degree of BBA in the
Department of Business Administration of Stamford University Bangladesh.
In this report, I have tried to furnish all sorts of practical dealings that are conducted in
case of handling various types of activities in Foreign Exchange Operation, the theoretical
aspects, that is what should be the procedures and requirements maintained from first to

last, and actual practices as well as the ultimate gain for the bank in conducting financial
activities are mainly discussed here to assess overall dealings of the Agrani Bank Limited.
So the purpose and objective of this report can be summarized as follows:
1)
2)
3)
4)
5)

To know how the risk reducing system in general banking,

To examine banks performance,
To examine foreign remittance of the selected Bank,
To identify problems regarding transaction,
To suggest probable measures in order to solve problems.

1.2 OBJECTIVES OF THE STUDY

The report titled as Foreign Exchange Activities of Agrani Bank Ltd. is prepared to fulfill
the requirement of the internship program of the BBA degree in Department of Business
Administration in Stamford University Bangladesh.
This report is a partial requirement of BBA program. Before preparation this report three
months organizational attachment period has been completed successfully. The Banks
provide different types of product and services to its counter parts like, Foreign Exchange
services or finance or investing that results Transaction of currency.
To do this, they also need the following:
Capital, assets and other resources. These elements of business results, changes in their
capital, assets and other factors which effects directly in the banks performance. This
report will be helpful to understand the performance of the Agrani Bank Limited,
compare to some other local Banks and as well their strengths and weaknesses. As a result
we can easily rank the Banks position which will give us the idea of Banks capabilities.

1.3 MYTHOLODGY OF THE STUDY

Data sources:
Collections of facts are generally treated as data. There are two types of data from which I
have collected information to prepare this report.
Data collected by two ways that is,
1.3.1. Primary Sources:
The primary Data are those which are collected for the first time and this happen to be
original in character.
Sources of Primary Data:
o
o
o
o
o

Executives, officers, stuffs of the branch & head offices.

Customers or clients of the branch.
Practical Deskwork
Statements of branch.
And lastly conduction survey and personal interview method through
questionnaire.

1.3.2. Secondary sources:

Secondary source on the other hand are those which are already been collected by
someone else and which have already been passed through the statistical process.
Sources of Secondary Data:
Secondary source for this particular study was collected from:
o
o
o
o
o
o
o
o

Administration Department of ABL

Website of ABL
Annual reports of ABL
Bangladesh Bank import export control acts and policies.
Guideline for foreign exchange transaction-by Bangladesh government.
Manual books and Magazines
Different directories and periodicals
Bankers guide. Etc.

1.4 SCOPE OF THE STUDY

The main scope of the study is to obtain a clear idea about foreign exchange business of
our banking operation, of Arani Bank Ltd. that is- How L/C is opened and how the import
export is done. The following are some the list of Foreign Exchange Department
operations of ABL:
o Import:
Import loan and guarantees
Pre-shipment advances
o Export: Different service provided by bank against export L/C (i.e.)
Current deposit Account (C/D)
IRC (Import registration certificate)
Mortgage
TIN Number.
Bill of exchange
Bill of Lading
Packing List
Certificate of Origin
Inspection Certificate
Insurance Document
Weight List
Any other documents as per L/C
Insurance policy.etc
L/C Opening
o Remit-age :Different kinds of remit-ageProvided by ABL(i.e.)
Foreign Remittance T/T
Mail Transfer (MT)
Foreign demand draft (FDD)
Import payment
Travelers cheque
Export cheque
Cash dollars
Credit card (International)
Selling and Purchasing of Dollars
Loan Facilities [described in details in the Sanction of L/C]
Opening of letter of credit (L/C)
Advance bills
Bills for collection
Purchase of foreign bills
Negotiating of foreign bills,etc.
More ever this report is prepared to know how Agrani Bank Ltd. Carries out their Foreign
Exchange Activities which is explained in detail in the later part of the report.
The other scopes are as follows-

a) To fulfill the requirement of other B.B.A program of Stamford University

Bangladesh.
b) To evaluate the performance of the Agroni Bank limited according to its foreign
exchange activities and its import & export.
c) Business areas like remit-age, etc.
d) To recommend about foreign exchange business of the Agroni Bank limited.
e) And lastly to understand a clear idea of the Foreign exchange operations of
Agrani Bank Ltd.

1.5 LIMITATION OF THE STUDY

Every project has some limitations. I faced some usual constraints during the course of
my internship. The experienced problems that have, to some extent affected the
presentation of this report are presented below:
As I have completed my internship in Agrani Bank Limited, Hatkhola Branch, I have
enjoyed a very well decorated environment and comfortable place. The officers were very
co-operative but they are too busy to give me time to get knowledge about practical
activities. Moreover they have to deal in a very competitive environment based on money
related activities. Any mistake from me may hamper their performance and goodwill in
the banking Sector. For these reasons I was deprive of having practical knowledge. Short
time duration and lack of practical knowledge are the main limitations of the study.
The other limitations are as follows:
1. Busyness of The Administration - Since the representatives of the ABL are very busy,
in some case I could not communicate with them properly.
2. Fears to Disclosure - The administration also feared to disclose the confidential data
related to the party and various forms and documents. Lack of Experience - Experience
makes a man efficient. I am not experienced enough to complete the study because I am a
person of new hand on such study. That is why inexperience creates obstacles to follow
the systemic approach and logical research methodology.
3. Lack of personnel - Lack of personnel in the foreign exchange division of the branch.
So they are always busy about their own work. And it is very difficult to take information
from them as they area. Banks officials, for security reasons, declined the request for providing information in
some crucial issues as in some of the fields of banking are still not covered by our
courses, there was difficulty in understanding some of their activities.
b. Another limitation of this report is Banks policy of not disclosing some data and
information for confidential reason, which could be very much useful.

CHAPTER-2

AN OVERVIEW OF BANKING SECTOR IN BANGLADESH

2.1 Definition of Bank:
A bank is a financial institution licensed to receive deposits and make loans.
Banks may also provide financial services, such as wealth management,
currency exchange and safe deposit boxes. There are two types of banks:
commercial/retail banks and investment banks. In most countries, banks are
regulated by the national government or central bank.
An establishment authorized by a government to accept deposits, pay
interest, clear checks, make loans, act as an intermediary in financial
transactions, and provide other financial services to its customers.

2.2 Objectives of Bank:

Aims and objectives of Bak are as follows:
A core feature of a stable financial system is that firms must be able to fail in an orderly
fashion that is without excessive disruption to the financial system, without avoidable
interruption to the critical economic functions that these firms provide, and without
exposing taxpayers to losses. This principle underpins the Financial Stability Boards
international standard for effective resolution regimes (the Key Attributes), agreed by
G20 leaders in 2011. The arrangements for the resolution of failing banks, building
societies and investment firms in the United Kingdom are designed to comply with the
Key Attributes.
If a firm within scope of the resolution regime fails, the Bank will aim to ensure that the
adverse effects of that failure are minimised, for example so that:
access to deposits protected by the Financial Services Compensation Scheme (FSCS) is
maintained: around 1.1trn of retail deposits are held by individuals at banks and building
societies, the majority of which are likely to be protected by FSCS;
customer payments continue to flow: in the UK, payments of around 300bn are
transferred each day through banks on behalf of retail and business customers, for
example to complete house purchases and to pay salaries and bills;
credit and other critical functions continue to be provided to the wider economy; and
the risk of disorderly fire-sales of the firms assets, or termination of its derivatives
contracts, is minimised.

Because the resolution regime grants the Bank powers to affect the property rights of
shareholders, creditors and counterparties, the Act sets out the objectives which the Bank must
have regard to when resolving a firm. These are to:

ensure the continuity of banking services in the United Kingdom and of critical functions;

protect and enhance the stability of the financial system of the United Kingdom;

protect and enhance public confidence in the stability of the financial system of the
United Kingdom;

protect public funds, including by minimising reliance on extraordinary public financial

support;

protect depositors and investors covered by the UK financial services compensation

scheme (FSCS);

protect, where relevant, client assets; and

avoid interfering in property rights, in contravention of the European Court of Human

Rights.

The Bank must consider each of these objectives when choosing which tools to use and in
resolving a firm, but they are not ranked in any particular order.

2.3 Historical Background of Banking Institution of Bangladesh

(According to World Banking Perspective of Bangladesh-1972)
After the Liberation War and the eventual independence of Bangladesh, the Government
of Bangladesh reorganized the Dhaka branch of the State Bank of Pakistan as the central
bank of the country, naming it Bangladesh Bank. This reorganization was done pursuant
to Bangladesh Bank Order, 1972, and the Bangladesh Bank came into existence
retroactively from 16 December 1971.
The 1971 Mujib regime pursued a pro-socialist agenda. In 1972, the government decided
to nationalize all banks in order to channel funds to the public sector and to prioritize
credit to those sectors that sought to reconstruct the war-torn country mainly industry
and agriculture. However, government control of the wrong sectors prevented these banks
from functioning well. This was compounded by the fact that loans were handed out to
the public sector without commercial considerations; banks had poor capital lease,
provided poor customer service and lacked all market-based monetary instruments.
Because loans were given out without commercial considerations, and because they took
a long time to call a loan non-performing, and once they did, recovery under the erstwhile
judicial system was so expensive, loan recovery was abysmally poor.[4][5] While the
government made a point of intervening everywhere, it didnt set up a proper regulatory
system to diagnose such problems and correct them. Hence, banking concepts like
profitability and liquidity were alien to bank managers, and capital adequacy took a
backseat.
In 1982, the first reform program was initiated, wherein the government denationalized
two of the six nationalized commercial banks and permitted private local banks to
compete in the banking sector. In 1986, a National Commission on Money, Banking and
Credit was appointed[5] to deal with the problems of the banking sector, and a number of
steps were taken for the recovery targets for the nationalized commercial banks and
development financial institutions and prohibiting defaulters from getting new loans. Yet
the efficiency of the banking sector could not be improved.[4]
The Financial Sector Adjustment Credit (FSAC) and Financial Sector Reform Programme
(FSRP) were formed in 1990, upon contracts with the World Bank. These programs
sought to remove government distortions and lessen the financial repression.[5] Policies
made use of the McKinnon-Shaw hypothesis, which stated that removing distortions
augments efficiency in the credit market and increases competition.[4] The policies
therefore involved banks providing loans on a commercial basis, enhancing bank
efficiency and limiting government control to monetary policy only. FSRP forced banks

to have a minimum capital adequacy, to systematically classify loans and to implement

modern computerized systems, including those that handle accounting. It forced the
central bank to free up interest rates, revise financial laws and increase supervision in the
credit market. The government also developed the capital market, which was also
performing poorly.
FSRP expired in 1996. Afterwards, the Government of Bangladesh formed a Bank
Reform Committee (BRC), whose recommendations were largely unaddressed by the
then-government.

Defination and List of Banking Institutions of Bangladesh are as follows:

1.Central Bank (Bangladesh Bank):
Pursuant to Bangladesh Bank order,1972 the Government of Bangladesh recognized the
Dhaka branch of the state bank of the country and named it Bangldesh Bank with
retrospective effect from 16,December 1971.
2.State-Owned Commercial Bank:
The Banking system of Bangladesh is dominated by the 3 nationalised commercial bank
which together controled more than 54% of the deposits and operated 3388 branches
(34% of the total) as of December 31,2004.The list of Nationalised commercial banks are
shown below along with other banks in the chart.
3.Private Commercial Banks:
Private banks are the highest growth sector due to the dismal performances of
government banks (above). They tend to offer better service and products.
4.Specialized Development Banks:
Out of the specialized banks, two (Bangladesh Krishi Bank and Rajshahi Krishi Unnayan
Bank) were created to meet the credit needs of the agricultural sector while the other two
(Bangladesh Shilpa Bank (BSB) & Bangladesh Shilpa Rin Sangtha (BSRS) are for
extending term loans to the industrial sector.The Specialized banks are listed below in the
chart:

S.L. NO.
1.

Private Commercial
Banks
Brack Bank Limited

Foreign Commercial
Banks
Citi Bank

Specialised
Development Banks
Karmashanstan Bank

2.
3.
4.

Eastern Bank Limited

Dutch Bangla Bank Ltd.
Dhaka Bank Ltd.

Bangladesh Krishi Bank

Sonali Bank
Janata Bank

5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.

Islami Bank Ltd.

Pubali Bank Ltd.
Uttara Bank Ltd.
IFIC Bank Ltd.
National Bank Ltd.
The City Bank Ltd.
United Commercial Bank
NCC Bank Ltd.
Prime Bank Ltd.
Southeast Bank Ltd.
One Bank Ltd.
Exim Bank Ltd.
Mercantile Bank Ltd.
BD Commercial Bank
Mutual Trust Bank Ltd.
First Security Islami Bank
The Premier Bank Ltd.
Bank Asia Ltd.
Trust Bank Ltd.
Shajalal Islami Bank Ltd.
Jamuna Bank Ltd.
ICB Islami Bank Ltd.
AB Bank Ltd.

HSBC Bank
Standard Chartered Bank
Commercial Bank of
(Ceylon)
State Bank of India
Habib Bank
National Bank of Pakistan
Woori Bank
Bank Alfalah

Rupali Bank
Agrani Bank

Table: A list of Banking Institutions of Bangladesh (since 1972)

2.4 Banking Operation in Bangladesh:
Different Banking Operations performed by Banks of Bangladesh are as follows:
1. Capital Adequacy Management:

Commercial banks have to make decisions about the amount of capital they need to hold
for three reasons. First, bank capital helps bank failure, a situation in which the bank
cannot satisfy its obligations to pay its depositors and other creditors and so goes out of
business. Second the amount of capital affects returns for the owners of the bank.. And
third, a minimum amount of bank capital(bank capital requirements)is required by
regulatory authorities.
2. Asset and liability Management:
Asset management involves a commercial bank in acquisition of assets that have a low
rate of default and diversification of asset holdings to increase profit. On the other hand,
liability management means acquisition of funds at low cost to increase profits. Prudent
management of funds has been the underlying principle of Bank Asias operations. This
bank is almost balanced in managing asset and liability portfolios. The bank has increased
its deposits to tk.18, 500 million in 2005 from tk.13,471 million in the previous year. The
Loans and advances during the period increased to tk.17,870 million in 2005 from
tk.11,861 in the previous year.
3. Liquidity Management:
A commercial bank makes decision to maintain sufficient liquid assets to meet the banks/
obligation to depositors. The Bank has an Asset Liability Committee (ALCO) which is
responsible for managing short-term and long-term liquidity and ensuring that the Bank
has adequate liquidity at all times at optimal funding cost. ALCO reviews liquidity
requirement of the Bank, the maturity of assets and liabilities, deposit and lending pricing
strategy and the liquidity contingency plan. The Asset Liability Committee also monitors
Balance Sheet risk. The Balance Sheet risk is defined as potential changes in earnings due
to change in rate of interest, exchange rates, which are not of trading nature.

4. Treasury Operations:
Bank of Bangladesh has been participating in the local money market as well as foreign
currency market in a prudent way. The Banks investment treasury bills and other
securities is tk.2257 million. An amount of tk.1104 million was placed at call and short
notice as of end 2005 against previous years 990 million.
5. Internal Control:
The internal control system of the bank is designed to ensure that all the units operate
within rules set by the regulatory authorities and Banks own policies and regulations.
Measures are taken to ensure that ethical standards are maintained, accounting rules and
procedures are observed, and efficiency in business process and safeguarding of assets are
ensured. the Stelar Banking Software sets the periphery within which department heads
and branch managers can operate. In line with our objective towards prevention of money
laundering all the relevant departments are instructed to be vigilant, to prevent such
activities, and regular workshops are held in this regard.
6. Risk management:
Bangladesh Bank believes that risk is an integral part of its business and the main role of
their risk management principle is to find the optimal balance between risk and return.
Bangladesh Bank has undertaken a project to install a Core Risk Management System in
every bank. They are in the process of installing the same in respect to Asset liability
Management, Credit Risk management, Foreign exchange risk management, internal
control and compliance and Anti money laundering. The Bank also controls asset
allocation through limiting exposure to industry sector and setting client limit. Maturity
grouping of asset and liability is also monitored to ensure that the banks portfolio remain
within acceptable risk. The business intelligence reports generated by Stelar Software
allow better and more effective monitoring of loan portfolio than before.
Types of risks associated with banking operations are shown below:
A) Credit Risk:
Credit risk is one of the major risks faced by the Bank. This can be described as potential
loss arising from the failure of a counter party to perform with agreed terms with the

Bank. To assess and to mitigate the credit risk, the management has implemented CRM
manual, which is considered an important tool for retaining the assets quality performing.
Therefore, Banks credit risk management functions have been designed to address all
these issues including risk arises from global changes. The Bank has segregated duties of
the officers/ executives engaged in the credit related activities. A separate department has
been formed at Corporate Office which is entrusted with the tasks of maintaining
effective relationship with the customers, marketing of credit products, exploring new
business opportunities, etc. Moreover, credit approval, administration, monitoring and
recovery functions have been segregated. For this purpose, three separate units have been
formed within the Credit Department. These are (i) Credit Risk Management Unit, (ii)
Credit Administration Unit and (iii) Credit Monitoring and Recovery Unit.
B) Foreign Exchange Risk:
Foreign exchange risk is defined as the potential change in earnings arising due to
unfavorable change in exchange rates. The foreign exchange risk of the Bank is minimal
as all the transactions are carried out on behalf of the customers against L/C commitments
and other remittance requirements. No speculative dealing on Banks account was
conducted during the year. Treasury front office conducts deal for commercial purpose
and back office of treasury keeps record and pass entries in books of account. The main
risks in treasury and foreign exchange are exchange rates risk, fund management and
liquidity risk. As per Bangladesh Banks guidelines, the Treasury Department was
operationally and physically divided into front office and back office to mitigate the risk.
Separate telephone and fax lines were installed at the dealing room to meet Bangladesh
Banks guidelines.
C) Money Laundering Risk:
Money laundering risk is defined as the loss of reputation and expenses incurred as
penalty for being negligent in prevention of money laundering. For mitigating the risks,
the Bank has nominated a Chief Compliance Officer at Corporate Office and Branch
Compliance Officers at branches, who independently review the transactions in the
accounts to verify suspicious transactions. Know Your Customer (KYC) policy and
Transaction Profile (TP) format has been introduced. The regulatory requirements are
being complied with and the guidelines in respect of KYC are followed for opening of

new accounts. Training has been providing continuously to all the category of officers and
executives for developing awareness and skill for identifying suspicious activities.
In addition, the President & Managing Director has provided a Message on Anti Money
Laundering (AML) policy. The management has circulated a Customer Acceptance Policy
to the members of the staff for guidance.
Internal Control and Compliance Risk:
Operational loss may arise from errors and omissions, fraud and forgeries due to lack of
proper internal control and compliance culture. Management through the Internal Control
and Compliance Department ensures controls in all operational areas of the Bank. Internal
Control and Compliance Department undertakes periodical and special audit and
inspection of the branches and departments at Corporate Office for identifying and
reviewing the operational lapses and compliance of statutory requirements as well as
Banks own guidelines. The Audit Committee of the Board also reviews the Audit and
Inspection reports of the Internal Control and Compliance Department. The Bank has
introduced Risk Based Internal Audit (RBIA) and audit rating over its branches from
2006 and prepared comprehensive audit manual which have been approved by the Board
of Directors.

Current Structure of banking institution in Bangladesh:

Establishment
Bangladesh Bank, the central bank and apex regulatory body for the country's monetary
and financial system, was established in Dhaka as a body corporate vide the Bangladesh
Bank Order, 1972 (P.O. No. 127 of 1972) with effect from 16 December 1971. At present
it has ten offices located at Motijheel, Sadarghat, Chittagong, Khulna, Bogra, Rajshahi,
Sylhet, Barisal, Rangpur and Mymensingh in Bangladesh; total manpower stood at 5807
(officials 3981, subordinate staff 1826) as of 31 March 2015.
Bangladesh Bank (BB) has been working as the central bank since the countrys
independence. Its prime jobs include issuing of currency, maintaining foreign exchange
reserve and providing transaction facilities of all public monetary matters. BB is also
responsible for planning the Governments monetary policy and implementing it
thereby. The BB has a governing body comprising of nine members with the Governor as
its chief. Apart from the head office in Dhaka, it has nine more branches, of which two in
Dhaka and one each in Chittagong, Rajshahi, Khulna, Bogra, Sylhet, Rangpur and
Barisal.
Bangladesh Bank, the central bank and apex regulatory body for the country's monetary
and financial system, was established in Dhaka as a body corporate vide the Bangladesh
Bank Order, 1972 (P.O. No. 127 of 1972) with effect from 16 December 1971. At present
it has ten offices located at Motijheel, Sadarghat, Chittagong, Khulna, Bogra, Rajshahi,
Sylhet, Barisal, Rangpur and Mymensingh in Bangladesh; total manpower stood at 5807
(officials 3981, subordinate staff 1826) as of 31 March 2015.
Functions
The Bangladesh Bank performs all the functions that a central bank in any country is
expected to perform. Such functions include maintaining price stability through economic
and monetary policy measures, managing the countrys foreign exchange and gold
reserve, and regulating the banking sector of the country. Like all other central banks,
Bangladesh Bank is both the governments banker and the bankers bank, a lender of last
resort. Bangladesh Bank, like most other central banks, exercises a monopoly over the
issue of currency and banknotes. Except for the one- and two-taka notes, it issues all other
denominations of Bangladeshi taka.
The major functional areas include :

Formulation and implementation of monetary and credit policies.

Regulation and supervision of banks and non-bank financial institutions,

promotion and development of domestic financial markets.

Management of the country's international reserves.

Issuance of currency notes.

Regulation and supervision of the payment system.

Acting as banker to the government .

Money laundering prevention.

Collection and furnishing of credit information.

Implementation of the Foreign Exchange Regulation Act.

Managing a deposit insurance scheme .

CHAPTER 3
LITERATURE REVIEW
Agrani Bank Limited (ABL) is established in 1972. It is a state owned bank. It is formed
by the composition of ex-Habib Bank ltd and ex-Commerce Bank ltd. There are six
section of ABL (Senpara branch) in GB- Cash, computer, account opening, clearing,
Accounts and local remittance.
The report indicates depth ratio analysis and financial performance of the year 2009,
2008, 2007 of Agrani Bank Limited. Here also calculate financial ratios like Liquidity,
Asset Management, debt Management, Profitability, Market Value. Calculate these ratios
for strong analysis and try to give a current and essential recommendation.

3.1. What is meant by Foreign Exchange?

In a bank where people can do transaction in foreign currency is called foreign exchange.
Any kinds of dollar transaction are done by this section. ABLs foreign exchange section
is working with the head office internal division. The full process is governed by
Bangladesh bank. Any kind of transaction in foreign currency is a sensitive issued.
3.2. Foreign Exchange Operations of Agrani Bank Ltd:
Foreign trade can be easily defined as a business activity, which transcends national
boundaries. These may be between parties or government ones. Trades among nationals
are a common occurrence and normally benefit both the exporter and importer. In many
countries international trade, accounts for more than (20%) of their national incomes.
In every international trade transactions, there must be:

An agreed products or services.

A sales contract.
Delivery details.
Shipping and delivery details.
Terms of payment.
Required documentation.
Insurance cover.

Foreign trade can usually be justified on the principle of comparative advantage.

According to this economic principle, it is economic profitable for a country to

specialized in the production of that commodity in which the producers has the greater
comparative advantage and to allow the other country to produce that commodity in
which it has the lesser comparative advantage. It includes the spectrum of goods, services,
investment, technology transfer etc.
This trade among various countries causes for close linkage between the parties dealing in
trade. The bank which provides such transactions is referred to as rendering international
banking operations. International trade demands a flow of goods from seller to buyer and
of payment from buyer to seller. And this flow of goods and payment are done through
letter of credit (L/C).
3.3. Foreign Exchange Services of Arani Bank Ltd.
ABL is rendering various kinds of services in international transaction of their clients.
Some are described below: 1. L/C Opening: Bangladesh is mainly an import oriented country. So, L/C is a very
important import document which is issued by Bank. In international market two parties
are not known to each other. The importers of Bangladesh give an L/C to exporters of
foreign country to give the assurance of payment. ABL is opening L/C in favor of their
clients.
2. Export processing: When exporters foreign document comes to ABL, ABL collect
payment from foreign bank for its party. ABL purchase bill if their party need early cash.
3. Back to Back and Local L/C: In against of export L/C ABL give the facility to open
Back to Back and Local L/C.
4. Dollar sale and purchase: ABL sales dollar against passport. The rate of exchange is
given by Bangladesh Bank which is changing every day.
(A) Loan facilities:
Loan facility is given to clients to help in foreign exchange. Different types of loan
facility are given below:
Sanction of L/C:
(B) Customers:
ABL is a well known bank is foreign exchange business. It is helping the business and
people working abroad from the very beginning. The kinds of parties of ABL in foreign
exchange are as follows:
1)
2)
3)
4)
5)
6)

Importers of bicycle parts

Importers of chemical
Importers of fresh fruits
Importers of parts & capital machinery
Importers of garments accessories
Exporters of garments items

7) People working abroad

8) Resident & Non-resident Bangladeshi People
9) Government parties working abroad
10) People travelling from Bangladesh and to Bangladesh
3.4. Functions of Foreign Exchange Department:
a) Import:

Opening of letter of credit (L/C).

Advance bills.
Bills for collection.
Import loan and guarantees.

b) Export:

Pre-shipment advances.
Purchase of foreign bills.
Negotiating of foreign bills.
Export guarantees.
Advising/ confirming letters-letter of credit.
Advance for deferred payments exports.
Advance against bills for collection.

c) Remittances:
Foreign Remittances
Issue of DD, MT, TT etc.

Payment of DD, MT, TT etc.

Issues and enhancement of travelers cheque.

Sale and enhancement of foreign currency notes.

Non-resident accounts.
Some other functions of Foreign Exchange Department of ABL are listed below:
1) Opening of letter of credit (L/C)
2) Advance bills
3) Bills for collection
4) Import loan and guarantees
5) Pre-shipment advances
6) Purchase of foreign bills
7) Negotiating of foreign bills
8) Export guarantees
9) Advising/ confirming letters-letter of credit
10) Advance for deferred payments exports

11) Advance against bills for collection

12) Issue of DD, MT, TT etc.
13) Payment of DD, MT, TT etc.
14) Issues and enhancement of traveler & cheque.
15) Sale and enhancement of foreign currency notes.
16) Non-resident accounts.
(Examples of Foreign Exchange Transactions):
3.5(A) IMPORT
4.1.2 Import Business
For the very beginning the bank has embarked on extensive foreign exchange business
with a view to facilitating international trade transactions of the country. The bank has
BDT 15947 crore import financing as of December 31, 2013 which is 5.96% of national
figure. Here from 2009 to 2011, the amount of it is increasing, but next two years these
are decreeing. Import mainly confined to consumer goods, capital machineries and
industrial raw materials, machineries and industrial raw materials.
Year

Amount of Import (BDT in core)

2009
2010
2011
2012
2013

7753
16792
26877
16963
15947

Table: 10 Imports

Import

2009

2010

15947 7753
201116792

2012

2013

16963
26877

Graph: 4.1.2 Import Business

Here the amount of import was increasing from 2009 to 2011 the next two years were
lower due to some unavoidable reasons. Foreign exchange can perform better, if import
would make in greater.

3.5.1: Import Procedures:

Performa Invoice / Indent.
Membership certificate from a recognized Chamber of Commerce and Industry or
Town Association or registered Trade Association.
Letter of Credit Authorization (LAC) Form properly filled in quintuplicate signed by
the importer.
L/C application duly signed by the importer.
One set of IMP Form.
Insurance Cover Note with money receipt.
A bank account with the branch.

Import Registration Certificate (IRC).

Tax Payers Identification Number (TIN).

VAT Registration Certificate (for Commercial Importers).

In case of public sector, attested photocopy of allocation letter issued by the

allocation authority, Administrative Ministry or Division specifying the source, amount,
purpose, validity and other terms and conditions against the imports.

Any such documents as may be required as per instruction issued/to are issued by the
Chief Controller of Imports & Exports (CCI&E) from time to time.

Importer

Public Sector
(Govt. Organs. &
Corporation)

Private
Sector

Commercial
(finished
Products)

Industrial (raw
materials &
machinery)

Actual
Users

Source: Export and Import Section of ABL.

Table: 5 Types of Importers
Definition of Import L/C:
On behalf of the importer if the bank undertakes to make payment to the foreign bank is
known as documentary credit. A letter of credit is known as instrument issued by bank to
a customer placing at the letters disposal such agreed sums in foreign currency as
stipulated. An importer is a country requests his bank to open a credit in foreign currency
in favor of his exporter at a bank in the letters country.
The letter of credit is issued against payment of amount by the importer or against
satisfactory. ABL provides different services to the importer of Bangladesh. To get import
facility the party must have following requirementsCurrent deposit Account (CD):
IRC (Import registration certificate)
Mortgage
TIN Number.

3.5.2: Forms of Letter of Credit:

A letter of credit (L/C) may be two forms. These as follows: Insurance policy.(TK.)In
millions)
Revocable letter of credit
Irrevocable letter of credit
Revocable L/C: If any letter of credit can be amendment or change of any clause
or cancelled by consent of the exporter and importer is known as revocable letter
of credit. Irrecoverable L/C: If a letter of credit cannot be changed or amendment
without the consent of the importer and exporter is known as irrevocable letter of
credit.
Content 2011 2012 2013 2014 2015
Import 96175.1 117900.14 156434.57 162604.61 227966.60

(Source: Annual Report of Agrani Bank Ltd. 2014-2015)

3.5.3: Types of letter of credit:
Letters of Credit are classified into various types according to the method of settlement
employed. All credits must clearly indicate in major categories.
1)
2)
3)
4)
5)
6)
7)
8)

Sight payment credit

Deferred payment credit
Acceptance credit
Negotiation credit
Red close credit
Revolving credit
Standby credit
Transferable credit

3.5.4: Parties to a Letter of Credit:

A letter of credit is issued by a bank at the request of an importer in favor of an exporter
from whom he has contracted to purchases some commodity or commodities. The
importer, the exporter and the issuing bank are parties to the latter of credit. There are one
or more than one banks that are involved in various capacities and at various stages to
play an important role in the total operation of the credit mentioned below:
1)
2)
3)
4)
5)
6)

The Opening Bank

The Advising Bank
The Buyer and the Beneficiary
The Paying Bank
The Negotiating Bank
The Confirming Bank
3.5.5: Contents of the Letter of Credit Authorization (LCA):

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

v.

Name of the buyer: Who is also known as the accounted since it is for his account
that the credit has been opened?
Name of the seller: Who is also known as the beneficiary of the credit?
Moment of the credit: Which should be the value of the merchandise plus any
shipping charges intent to be paid under the credit?
Expiration date: Which is specified the latest date document may be presented. In
this manner or by including additionally a latest date, the buyer may exercise
control over the time of shipping.
Documents required: Which will normally include commercial invoice consular
or customer invoice, insurance policies as certificate.

vi.

General description of the merchandise: Which briefly and in a general manner

duly describes the merchandise covered by a letter of credit?

3.5.6: Documentary Letter of Credit (Import / Export):

Documentary letter of credit is such kinds of commercial letter which a bank issue on
behalf of foreign seller (exporter) according to the direction of the (importer) purchaser.
The documents shown under are known as export documents from the importers side:
1) Bill of exchange: The bill of exchange is that particular instrument through
which payment is effected in trade internal and international. The payment for
the goods is recovered by the seller through the medium of a bill of exchange
drawn on the buyer for the amount depending on the contract. It is a
negotiable instrument.
2) Bill of lading: A bill lading is a document of title to goods entitling the holder
to receive the goods as beneficiary or endorsee and it is with the help of this
document on receipt from the exporter that the importer takes possession of
the goods form the carrying vessel at the port of the holder.
Airway bill / Railway receipt: When goods to be transported are small in bulk or
requiring speedy delivery or those are perishable in nature on the deal is in
between the neighboring countries then mode of transports other then shipping
may be resorted to far the carriage of the goods Airways bill /Railway receipt take
place of Bill of lading depending on the nature of the goods.
Commercial invoice: It is the sellers bill for the merchandise. It
contains a description of goods, the price per unit at a particular
location, total value of the goods, packing specifications, terms of
sale, latter of credit bill of lading number etc. There is no standard
form for a commercial invoice. The invoice is made out by the
seller under his signature in the name of the buyer and must be
submitted in a set of at least 3 copies.
Insurance policy: In the international trade insurance policy is a
must to cover the risk of loss on consignments while they are on
seas, roads, and airways. The insurance is the responsibility of the
buyer (consignee) under FAS FOB and CF contracts and of the
Seller (consignor) under CIF contract. The policy must be of the
type as specified in the relative /credit.
3) Certificate of origin: This is a certificate issued by a recognized authority in
exporting country certifying the country of origin of the goods. It is usually by
the chambers of commerce. Some time, it is certified by local consul or Trade
Representative of the importing country as per terms.
a) Packing list: The exporter must prepare an accurate packing list showing item
by item, the contents of the consignment to enable the receiver of the

shipment to check the contents of the goods, number and marks of the
package, quality, per package net weight, gross weight, measurement etc.
b) Weighting and Measurement: Issued by recognized authority (like chambers
of commerce and industry) in exporting country certifying correct weighting
and measurement of the goods. Bill of Entry: A bill of entry is a document
which contains the particulars of the imported goods as well as the amount of
customs duty payable.

3.5.7: Payment against Documents (PAD):

Banks deal in documents and not in goods. If the shipping document against the L/C is in
order then the L/C opening bank must have to payment to the foreign bank within 3 days
or 72 hours according as Uniform Customs and Practice for Documentary Credit
(UCPDC) 500 of revision If the shipping documents have any discrepancy, then the L/C
opening bank informed to the negotiating bank within 7. Otherwise, the shipping
documents have not discrepancy. If the importer have not adequate funds in the bank
account then the bank payment to the foreign bank against the shipping documents.

3.6(B) EXPORT:
4.1.3 Export Business
The total export business handled by the bank amounted to tk. 7845 crore as of December
31, 2013 which is 3.46% of national figure. From 2012 to 2013, export is decreasing than
others previous years. Major export items were readymade garments, shrimps, tea & nontraditional items.
Year
2009
2010
2011
2012
2013

Amount of Export (core in BDT.)

4461
6443
9310
8838
7845
Table: 11 Exports

10000
9000
8000
7000
6000
5000
4000
3000
2000
1000
0

4461
2009

6443
2010

9310
2011

8838
2012

7845
2013

Graph: 4. 1.3 Exports

Here the condition of export is same to import business. So both export and import are
flowing in the same trend. The above graph shows the similar performance in that
business. Export business is more important to sustain better foreign exchange
performance.
Export L/C is issued by a foreign bank favoring Bangladeshi exports through our banks
having correspondent relationship with them.
ABL provides different services to the exporter of Bangladesh. To get export facility the
party must have following requirements-

Current deposit (CD)

ERC (Export registration certificate Mortgage
TIN Number.
Insurance policy.
back to back- (75% of export L/C)
Cash credit-90% in (FDBP)
Packing credit (PC) - 90% of export L/C

Export advance & loan facility is sanctioned by head office. According to the prospect of
party they take the loan decision (TK. In millions)

Content 2007 2008 2009 2010 2011

Export 46234.6 55790.42 76465.62 76240.77 95359.45
(Source: Annual Report of ABL 2014-2015)
3.6.1: Service Provided by Bank against Export L/C:
A. Advising of export L/C: The advising bank getting the import L/C sent by the issuing
bank located abroad will advise the L/C to the beneficiary without any engagement or
responsibly on their part. It will see the following only:

Authenticity of L/C (Test agreed in case of Telex L/C and signature verified in
case air
Merchandise specified in the L.C is permissible and clauses incorporated in the
L/C are not against countrys regulations.

B. Add Confirmation of Export L/C: Bank may add additional confirmation to export L/C
where there is specific instruction from the L/C issuing bank to do so. Additional
confirmation of L/C gives the seller a double assurance of payment. Banks requirement
of adding confirmation:
i.
ii.
iii.
iv.
v.

Issuing Bank should be a reputed bank.

Credit line/ Arrangement with the L/C issuing bank.
L/C clause is to be acceptable to confirming bank
Approval from the competent authority for adding confirmation of export L/C
Confirmation charges are to be recovered as per rules.

C. Negotiating of Export L/C: Documents / papers to be submitted by exporter to bank for

negotiation/ collection against export L/C. The exporters submit the documents to bank as
per requirement of bank. List of export documents is as follows:

Bill of exchange
Bill of Lading
Packing List
Certificate of Origin
Inspection Certificate.
Insurance Document
Weight List
Any other documents as per L/C

3.6.2: ERC (Export registration certificate):

Bank must scrutinize all the documents stipulated in the credit with reasonable care to
ascertain whether they confirm with the terms of the credit, the bank may negotiate and
pay the value of export bill to the exporter at:

 OD buying rate (Sight Draft)

Usage rate (For DA Bill)
Appropriate rate (For DP Bill)
A. FDBC: If the export document is not purchase by ABL it is called Foreign
Documentary Bill Collection. At the maturation data of export bill ABL collect the
payment for party. The collection process is same as LDBC. Only the postage charge is
high. The postage charge is Tk. 800 within SAARC countries within Asia Tk.1500 and
outside Asia is Tk. 2000.
B. FDBP: If the exporter need money before that the maturation of export document. He/
She can sale it to ABL. It is called Foreign Documentary Bill Purchase. The steps of
FDBP are discussed with an example. Let, Tanzim Enterprise is a party of ABL who
export shirt to China at $20000/-. In AAA Ventures Ltd. buys it and their bank is Bank of
China. The Steps are as:
a) ABL is receiving a L/C of $ 20000 from Bank of China.
b) ABL inform Tanzim Enterprise about L/C.
c) Tanzim Enterprise what the money right now. So they sale to ABL and get 90% of
payment. ABL gives an FDBP No.
d) When ABL receive payment from Bank of China, ABL charge Tanzim Enterprise:
Interest 13% Postage charge (Tk.800 (SAARC), Tk.1500 Asia), Tk. 2000 (Outside Asia)
Expend charge Tk.250 Handling charge Tk.500.
C) MONEY BACK: After these cost is deducted from rest of 10% L/C amount. Tanzim
Enterprise gets money back against their bill.
When bill is purchased, ABL creates a FDBP ($20000x90%=18,000) will be given to
Tanzim Enterprise right now.

3.6.3: Back to Back Local L/C:

In against of export L/C, ABL give the facility to open back to back and local L/C. If the
exporter exports the garments products as shirt, then he has to also purchase the bottom,
logo, tag, yearn etc. for the shirt. And in this case, if the exporter has not enough money
to purchase that, then the bank would help the exporter to purchase the accessories by lien
of the L/C. There are four parties in back to back L/C or local L/C:

Beneficiary

Applicant

Back to Back
and Local L/C

Opening/
Issuing Bank
(ABL

Negotia

Table: 7 Parties of Back to Back L/C or Local L/C

Back to back L/C is very popular in Bangladesh. What is back to back L/C? To define we
can say Back to Back is the situation where the end user opens a L/C in favor of the
importers, the importers than asks his / her bank for a companion L/C to be issued to the
supplier. Therefore, the original L/C acts as the financial basis for the second L/C. Many
banks do not look favorable upon this type of financing of other options are available.
The diagram says that the applicant gives order to purchase accessories to the beneficiary
through Agrani Bank, and ABL opens the L/C and sends it to the beneficiary's negotiating
bank. After receiving the raw materials, applicant makes payment to the negotiate bank
through opening bank. The beneficiary receives the payment from the negotiate bank.
The total process of Back to Back L/C from opening to purchasing is given below:

AFPEL
o/und C e r sv c wu i hc r a e ae r
teict n hh o g ee m t h t L e he / s Ce
LPAf r /u c o C rc m c e w h p t i a th
renb e ce l e ne
afi
nc
ev
Da
m
e
rc y u
t

s d
hse e
it
n

Table: 8 Total Process of Back to Back L/C from opening to purchasing

3.6.4: Kinds of Back to Back L/C:
Back to Back L/C can be divided into the following two types:
1) Foreign Back to Back: ABL issue or advice this kind of L/C. It is opened
against a master L/C to do business aboard. Payment is given in other country.
2) Local back to back L/C: is opened against a master L/C to pay the local
businessman within Bangladesh. Local L/C can be divided into two typesIt is the L/C normally open for a bank acceptance. No master L/C is needed.
Sometime people want a bank guarantee. It is one of them. It can be at sight and
may be defer.
It is used to do business in Bangladesh. It is opened against a master L/C. ABL receive a
big amount of profit from back to back L/C. ABL is not a mysterious entity. They are
business people just like the importers & exporter. They are in the business of
lending money for the purpose of financing attractive proposals. The suggestions they
make can save considerable expense and Tim of international businessman. ABL can
work as advising bank or issuing bank.

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

1) LDBC (Local Documentary Bill Collection)

2) LDBP (Local Documentary Purchased)

These are used in opened in favor of nationals party:
In back to back L/C following limit of loan facilities is given

90% loan against master L/C is given

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

For example against $ 2, 00,000 masters L/C, $ 1, 80,000 loan facilities is given. $1,
50,000 is given when L/C is opened $ 30,000 is given after receiving documents.
3.6.6: LDBC: (Local Documentary Bill Collection):
Local documentary bill collection is a service of ABL to collect the bill of their party for
payment. When ABL is advising bank they can collect payment against the document.
When in back to back L/C ABL is advising bank. After the maturation period ABL collect
they Payment by LDBC.

3.6.7: STEPS IN LOCAL DOCUMENTARY BILL COLLECTION :( LDBC)

The procedure is as following:
1) Exporter presents the documents to ABL for collection from importer within 3 days
of shipment. The document containsa) Track receipt.
b) Commercial invoice.
c) Packing list.
d) Delivery receipt
e) Country of origin.
2) Bill of exchange. ABL sends the documents to issuing bank for collection.
3) ABL uses a controlling no or LDBC No.
If back to back L/C is not on sight the issuing bank will not give the payment to ABL on
receiving day. So an acceptance is sent to ABL, saying that the payment will be made
after maturation period. It may be 90 days, 120 days etc. After that they ABL get payment
by pay order.
4) ABL will send the pay order for clearing.
5) After payment is received by ABL through clearing ABL will collect change and give
the money to party which is opened in favor of nationals party. Example:

Charges
Advice charge
Commission

Tk. 500
Tk. 730- Tk. 1000

Postage charge

Tk. 20

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

90% loan against master L/C is given

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

For example against $ 2, 00,000 masters L/C, $ 1, 80,000 loan facilities is given. $1,
50,000 is given when L/C is opened $ 30,000 is given after receiving documents. Local
documentary bill collection is a service of ABL to collect the bill of their party for
payment.
3.6.8: LDBP: (Local Documentary Bill Payment):
When ABL is advising bank they can collect payment against the document. When in
back to back L/C ABL is advising bank. After the maturation period ABL collect their
payment. The procedure is as following:
1. Exporter presents the documents to ABL for collection from importer within 3 days of
shipment. The document contains the following procedures:
a)
b)
c)
d)
e)
f)

Track receipt.
Commercial invoice.
Packing list.
Delivery receipt.
Country of origin.
Bill of exchange

2. ABL sends the documents to issuing bank for collection.

3. ABL uses a controlling no or LDBC No.
4. If back to back L/C is not on sight the issuing bank will not give the payment to ABL
on receiving day. So an acceptance is sent to ABL, saying that the payment will be made
after maturation period. It may be 90 days, 120 days etc.
5. After that they ABL get payment by pay order clearing.
6. ABL will send the pay order for payment.
7. After payment is received by ABL through clearing ABL will collect change and give
the money to party.
(Charges: Advice charge Tk. 500, Commission Tk. 730- Tk. 1000, Postage charge Tk. 20)
Local documentary bill purchase is a great source of profit for ABL. Here when the
export documents comes the party want to get payment without waiting for the
maturation date. So ABL, finance for that day and charge interest.
For example- Cat Textile Mills Ltd. Exports finished shirt to Sweden and buy clothes
from M/S Sushi chemicals of Bangladesh. Here Cat Textile Mills Ltds bank is AB bank

and M/S Sushi chemicals bank is ABL. So in this case the parties involved are as if Sushi
chemicals want to get payment before the bill maturation, ABL can purchase the bill. It is
called LDBP.
3.6.9: Steps in LDBP:
1) At first a party brings a document of back to back L/C to ABL. The officer checks
the documents. He/she emphasize on which contains the following:
Name of two parties.
USD $ or other currency
Opening data.
2) Issuing bank sends an advice of acceptance to ABL.
3) Party makes following documents:
a) Bill of exchange.
b) Track receipt.
c) Commercial invoice.
d) Packing list.
e) Delivery challan.
f) Delivery receipt.
g) Country of origin.
4) Next party comes for selling the bill to ABL, with all documents.
5) The party collects the voucher and receives payment; rest of. the amount which
was not purchased by ABL. ABL cut the cost of party from it.

3.7(C) REMMITANCE:
The word Remittance comes from the word remit which means to transmit money or
fund. In banking terminology, the work remittance means transfer of fund one place to
another. When money transferred from one country to another country is called Foreign
Remittance (T.K) in millions.
Content
Remittance

2011
343.8

2012
710.32

2013
1428.48

2014
2452.33

2015
3036.42

Content 2011 2012 2013 2014 2015

Export 46234.6 55790.42 76465.62 76240.77 95359.45
(Source: Annual Report of ABL 2014-2015

3.7.1: Kinds of Remittance:

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

Foreign (T/T).
Mail Transfer (MT).
Foreign demand draft (FDD).
Import payment.
Travelers cheque.
Export cheque.
Cash dollars.
Credit card (International).

3.7.2: Foreign Remittance:

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

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

Issue of DD, MT, TT etc.

Payment of DD, MT, TT etc.

Issues and enhancement of travelers cheque.

Sale and enhancement of foreign currency notes.

Non-resident accounts.

ABL has achieved positive growth in remittance business though remittance inflow in our
country slowed down last year because of continuous recession in our world. We received

foreign remittance for USD 1,622.58 million in the year 2013 with a growth rate of 13.68
percent out of USD 1,427.33 million of year 2012. Like year 2012, also in 2013 Agrani
Bank Limited has been secured as the first among the State Owned Commercial Banks
and stood second among the banks of Bangladesh. Our 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. ABLs easy but instant online remittance
distribution system has enabled to achieve this development in this portfolio. Agranis
contribution in perspective of global achievement in foreign remittance sector is given
below:
Year

Global

ABL

Change in Percentage

2009

10743.03

813.34

7.57

2010

10739.95

989.33

9.21

2011
2012
2013

12168.09
14176.91
13831.65

1167.33
1427.33
1622.58

9.60
10.07
11.73

Table: 12 Global Foreign Remittance of ABL

16000
14000
12000 10743.03

12168.09
10739.95

10000

Global

8000

ABL

6000

% Change

4000
2000

813.34

989.33

1167.76

2009

2010

2011

1427.33
14176.91
2012

1622.58
13831.65
2013

Graph: 4. 1.4 Foreign Remittances

Foreign remittance was increasing year to year due to better performance of foreign
corresponds. In the global perspective, it positioned better based on last five years
performances.

Agrani Bank Ltd.

Foreign Exchange
Department

Import
Department

Export
Department

Remittance
Department

Table: 4 Foreign Exchange Department

3.7.3: Money Transfer by Remittance Company:
ABL has contact with online money transfer companies. They have (50:50) Profit sharing
Contracts. The receiver need not to any give change to bank. The online Companies are

Western Union.
Money gram.
Xpress money payment.
Cash express.
Express money.
Porobhu Express.
ABL quick pay etc.

Western Union money transfer is very popular in Bangladesh. ABL is first to contract
with Western Union. As a result inward remittance can come to Bangladesh in a minuet
from anywhere of the world. People can collect from any branch of ABL from
Bangladesh. For it the receiver dont need any bank account with ABL and they dont
need to pay money. With any branch of ASA the people can collect money which is very
helpful for village people.
Steps for money collection: People can send money from any Western Union agent of the
world. They deposit the money and take a receipt and Money Transfer Controlling
Number (MTCN).
The sender informs the receiver the follows:

a.
b.
c.
d.

Amount of money
Senders name
Receivers name
Countrys name

3.7.4: Money Transfer by Exchange House:

Agrani Bank Limited maintains a strong network with the Overseas Exchange Companies
and Banks in different parts of the world ensuring better remittance services for its
customers. Agrani Bank has remittance arrangements with different bank and exchange
houses in various countries throughout the world. The bank has earned the confidence and
reputation as a reliable organization of paying hard earned money of the expertly
Bangladesh to their beneficiaries in the country safely and quickly.
3.7.4 Outward Remittance
The term "Outward remittances" include not only remittance i.e. sale of foreign currency
by TT. MT, Drafts, Travelers Cheque, but also includes payment against imports into
Bangladesh and local currency credited to Non-resident Taka Accounts of foreign banks
or Convertible Taka Account.
Two forms are used for Outward Remittance of foreign Currency such as:
IMP Form: All outward remittance on account of imports is done by form IMP.
T.M. Form: For all other outward remittances from T.M. is used.
3.7.5 Inward Remittance
The term" Inward Remittance" includes not only purchase of Foreign Currency by TT,
MT, Drafts etc. but also purchases of bills, purchases of Traveler's cheque.
Two forms as prescribed by Bangladesh Bank are used for purchase of Foreign
Currencies such as.
EXP Form: Remittances received against exports of goods from Bangladesh are done
by form EXP.
Form C: Inward remittances equivalent to US$2000/- and above are done by Form"
C". However, declaration in Form C is not required in case of remittances by
Bangladesh Nationals working abroad.
So we can see that there are two types of foreign remittance:

Mode of Foreign Outward Remittance Mode of Foreign Inward Remittance

Foreign Telegraphic Transfer
(FTT).
Foreign Mail Transfer (FMT).
Foreign Demand Drafts (FDD).
Travelers Cheque (TC).
Foreign Currency Notes

Telegraphic Transfer (TT).

Mail Transfer (MT).
Foreign Demand Drafts (FDD).
Payment Order (PO).
Travelers Cheque (TC).
Foreign Currency Notes.

Table: 6 Types of Foreign Remittance

In abroad Agrani Bank Ltd. owned exchange houses are:

Boaka Exchange Pvt. Ltd. Singapore.

Golf over seas Exchange Co. LLC. Oman.
ABL Money Transfer SDN, BHD Malaysia.

Other bank and exchange house of Agrani Bank Limited are as following:Serial No & Country names are listed in the following:
1. Australia National Australia Bank Ltd.
2. Switzerland United Bank of Switzerland AG (UBS).
3. Germany Commerce bank A.G.
4. Germany Standard Chartered Bank, GMBH.
5. Italy Unaccredited Italian SPA.
6. U.K Lloyds TSB Bank Plc.
7. U.K. HSBC Bank UK Plc.
8. Japan the Bank of Tokyo-Mitsubishi Ltd.
9. Japan Union De Banquets Arabs ET Franoises (UBAF).
10. U.S.A Bank of America NA.
11. U.S.A JPMorgan Chase Bank.
12. USA HSBC Bank USA.
13. U.S.A Standard Chartered Bank.
14. 15 U.S.A Citibank NA.
15. U.S.A Citibank NA.
16. U.S.A Wachovia Bank NA.
17. Canada Bank of Nova Scotia.
18. Singapore Standard Chartered Bank.
19. Bhutan Bank of Bhutan.
20. India Standard Chartered Bank.
21. India State Bank of India.
22. India Sonali Bank Ltd.
23. India AB Bank Ltd.
24. Nepal Nepal Arab Bank Ltd.

25. Myanmar Myanmar Foreign trade Bank.

26. Pakistan HSBC Bank.
27. 28 Pakistan United Bank Ltd.
28. Sri Lanka Standard Chartered Bank Ltd.
Agrani Bank has remittance arrangements with different bank and exchange houses in
various organization of paying hard- earned money of the expertly Bangladesh to their
beneficiaries in the country safely and quickly. With the passage of time, ABL earned the
confidence and trust of the wage earners and successfully handling a sizeable volume of
remittances, which is depicting a gradual increasing trend. In 2009, foreign remittance
brought through BL was USD 2452.33 million showing an increase of USD 1023.85
million over the previous year, which registered an attractive growth of 11% percent.

3.8 (REPORTING SYSTEM OF FOREIGN EXCHANGE)

3.8.1: Reporting & Monitoring of Bangladesh Bank:
To full control of foreign Exchange Bangladesh Bank, has many controlling form and
information system for all commercial bank. ABL also has to follow it. ABL has many
type of reporting form and one IT system to inform Bangladesh Bank about dollar
transaction. Declaration forms are listed in the following:
1) IMP form: When import L/C is issued by a bank or ABL, IMP form is needed to
keep a record and inform to Bangladesh Bank.
2) LCA form: It is 6 copies from 1st copy are used to report Bangladesh Bank.
Second copy is to get the delivery of product.
3) CCI form: Third copy is for CC form is now this record kept by Bangladesh
Bank. Fifth and Sixth copy is kept in foreign exchange L/C file of ABL.
4) EXP Form: Exp form is used in export like IMP form is used in import. To get
Exp for party have to show L/C and contract like preformed invoice commercial
invoice etc. Exp form has to be verified by customs and then exporter ships the
goods. TM form is used to sell cash dollar. In case of cash dollar is going out
Bangladesh Bank need a reporting MT form. When remittance is coming in
Bangladesh a contract form given by ABL to Bangladesh Bank.

3.8.2: Reporting by the Internet:

1. Foreign currency transaction system: At the month end how much import, export,
foreign remittance comes and goes out is reported by this software program. At first the
officer will give the posting, then make schedule, checked by foreign exchange head that
statement is created and sent to Bangladesh Bank with different colored pages. The month
end statements should be submitted within date 5 of a month, wrong posting is punishable
worth Tk. 5, 00,000 for the Branch and Tk. 10, 00,000 for the officer.
2. L/C Monitoring System: It is an everyday program governed by Bangladesh Bank.
When L /C is opened foreign exchange officer give the posting in a 3 step L/C monitoring
system by internet. All the monitoring, reporting is governed by Bangladesh Bank
because foreign has the precise impact on the economy.

CHAPTER 4

AN OVERVIEW OF AGRANI BANK LIMITED

4.1 Historical Background of the Agrani Bank Ltd:
Agrani Bank (Bengali: ) is a state-owned commercial bank of Bangladesh
established in 1972. Its headquarter is situated at Motijheel in Dhaka, the capital city of
Bangladesh. It started functioning as nationalized commercial bank taking over assets and
liabilities of the erstwhile Habib Bank Ltd and commerce BankLltd. function in the East
Pakistan. It has been privatized on 15th November 2007 and emerged as Agrani Bank
Limited (ABL) taking over assets, liability and goodwill of Agrani Bank.
Agrani Bank Limited has been incorporated as a Public Limited Company on May 17,
2007 vide Joint Stock Companies Agrani Bank Limited, a leading commercial bank with
907 outlets strategically located in almost all the commercial areas throughout
Bangladesh, overseas exchange houses and hundreds of overseas Correspondents, came
into being in 1972 immediately after the emergence of Bangladesh as an independent
state. It started functioning as nationalized commercial bank taking over assets and
liabilities of the interest while Habib Bank ltd. and commerce Bank ltd. functioning in
the East Pakistan. Agrani Bank Limited is governed by the board of directors consisting
of 11(eleven) members headed by a chairman. The bank has 7 circle offices, 30 divisions
in head office, 52 zonal offices and 867 branches including 10 corporate and 40 AD
(authorized dealer) branches. The corporate and AD branches are authorized to deal in
foreign exchange business.
The authorized capital of the Bank is Tk. 800,000,000. Agrani Bank Limited, a leading
commercial bank with 867 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 &
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. Agrani Bank Limited is governed by a Board of Directors consisting of 13(thirteen)
members headed by a chairman. The Bank is headed by the Managing Director &
Assistant Managing Director; and Chief Executive Officer. Managing Director is assisted
by Deputy Managing Directors and General Managers. The bank has 10 Circle offices, 30
Divisions in head office, 53 zonal offices and 868 branches including 27 corporate and 40
AD( authorized dealer) branches.

2.2 Business Performance

2.2.1 Assets Quality

For improving the quality of our assets, the bank management has prioritized financing
in trade and commerce by providing working capital. However, some pragmatic steps
have been taken to reduce non-performing loans.
2.2.2 Import-Export Business
The banks foreign trade related activities are well run by our skilled manpower to
earn confidence of importers, exporters and others. For smooth conduct of
international trade, Agrani Bank Limited has as many as 416 foreign correspondents
throughout the world.
2.2.3 Treasury Operation
As in 2011 and 2012, the fund management division also performed as a major market
maker and market leader in 2013.The good news for the year under review was that
the division achieved a remarkable success in providing a lion share to the banks total
income. Through prudent treasury operation, it became the banks top profit centre.
2.3 SWIFT
The Society for Worldwide Interbank Financial Telecommunication ("SWIFT") operates
a worldwide financial messaging network which exchanges messages between banks
and other financial institutions. Agrani Bank Limited is a member of SWIFT. SWIFT
code is AGBKBDDH. Different 35 branches of the bank are connected with SWIFT
through SAP (SWIFT Access Point). SWIFT is operated via dial up connection and
receives and sends messages from central server. With a view to ensuring better services
to the customers especially to the importers, exporters and remitters, Agrani Bank
Limited has, in the meantime, set up 14 SWIFT stations in the near future. Customers
will soon be brought online to meet their banking needs through use of their computers
and phones.

2.4 Financial Performance at a Glance

Taka in crore

Particulars
Deposits
Total Assets
Total Equity
Total Operating Income
Total
Operating
Expenditure
Import
Export
Remittance
Paid- up Capital

2011
16628
21406
1144
1636
992

2012
20633
26485
1572
2402
1316

2013
25221
34882
2594
3301
1827

2014
29243
37872
717
3700
2693

2015
34868
44416
3564
4113
3049

7753
16792
26877
16963
4461
6443
9310
8838
5587
7097
8682
11681
497
547
901
991
(Source: Annual Report of ABL-2014-2015)
Table: 7 Financial Performance at a Glance

15947
7845
12657
2072

4.2. Board of Directors of Agrani Bank Ltd.

Board of Directors of Agrani Bank Ltd (ABL) is given below1) Dr. Kondokar Bazlul Haque Chairman
2) Mr. Ranjit Kumar Chakraborty Director
3) Mr. Shekhar Dutta Director
4) Mr.Nagibul Islam Dipu Director
5) Mr. Abduz Jahir Chowdhury Director
6) Mr. K.M.N. Manjurul Hoque Director
7) Mr. A.K. Gulam Kibria Director
8) Luna Shamsuddoha Director
9) Mr. Syed Bazlul Karim Director
10) Mr. Syed Abdul Hamid Managing Director & Executive Officer (CEO).
4.3 Vision of Agrani Bank Ltd.
By assuring satisfaction to the customers, through a proper training of its most selected
group of employees, it plans to pursue its mission. Also it plans to accomplish its mission
through the constant innovation of its product line establishing constant network with
prospective corporate client.
4.4 Mission Agrani Bank Ltd.
Provide excellent quality customer services
Provide expert workers and professionalism
Maintenance of business ethics
Become trusted: repository (place where things are stored) of customers money
and their financial advisor.
Sound capital base

ABL mission is to provide Banking services to their valued clientele with utmost
proficiency and sincerity reinforced by an efficient workforce and the latest state of
technology

4.5 Organizational Structure of Agrani Bank

(ACCORDING TO THE LIST OF HIERARCHY OF THE ORGANIZATION)

Board of Directors

Managing Director & CEO

Deputy Managing Directors

General Managers

Deputy General Managers

Assistant General Managers

Senior Principal Officers

Principal Officers

Senior Officers

Officers

Staff Members

Table: 1 Hierarchy of Agrani Bank Limited

4.5. Objective of Agrani Bank Ltd:

 To facilitate and handle all kinds of commercial banking services to its customer
authorized by Bangladesh Bank.
To handle the export and import trade of Bangladesh.
To take part in international banking etc.
The Bank renders commercial banking services to all types of customers. The range of
services offered by the Bank includes- accepting deposit, making loans and advances,
discounting bills, conducting domestic and international money transfers, carrying out
foreign Exchange transactions in addition to international money transfers, and offering
other Customer services such as safe keeping, collections and issuing guarantees,
acceptances and letters of credit. Core business of the Bank includes- deposit,
mobilization and lending activities comprising short- term, long- term, import and export
financing. Financing activities are extended to different sectors of the economy that could
be grouped in to several sectors including Rural & agriculture, Garments & Textiles, Jute,
Cement & Bricks, Tannery, Steel & Engineering, Food & Beverage, Chemical &
Pharmaceuticals, Printing & Packing, Glass & Ceramics and Miscellaneous.

4.6 Products and Services of Agrani Bank Ltd.

Deposits:

Current deposit

Foreign currency
Account:

i. Foreign Currency (FC)

A/C

ii. Saving deposit

iii. Fixed deposit

ii.Non-Resident Foreign
CurrencyDeposit (NFCD)
A/C
iii. Resident Foreign
CurrencyDeposit (NFCD)
A/C

iv. Special Notice Time iv. Exporters Retention

Deposit (SNTD)
Quota (ERQ) A/C
v. Non- Resident Special
Taka Account (NRTA

Loan and Advance:

Foreign
Exchange
Market:

Cash Credit

i.Preparation of
Exchange Rate

ii.Secured Overdraft

ii.Swap

iii.InlandBillPurchase

iii.Term
Placement

iv.Export Cash Credit

vi.Letter of credit

v.Industrial Credit(IC)

v.Letter of
Credit-Sight

vi.Housing Loan and

Consumer Credit

vi.Back to Back
L/C

Table: 2 Products and Services of Agrani Bank Limited

(Source: Annual Report of ABL-2014-2015)

The followings are the detail list of Products and Services of Agrani Bank Ltd:
4.6.1 Accounts & Deposits:
Savings Deposits and Fixed Deposits:
Fixed Deposit Receipt (FDR)
Savings Bank Account: (SBA) - Savings Bank Account can be opened in any branch of
Agrani Bank Limited Bank by any Bangladeshi citizen in the name of an individual or a
group of individuals which can be operated singly or jointly:
Fixed Deposit Receipt: (FDR) - Opening a Fixed Deposit Account for different terms
with any Branch of Agrani Bank is very simple. Any individual or a group of individuals
can step in to any Branch of Agrani Bank, fills Out a prescribed form, hand out over the
counter cash or easily cashable instrument of any amount and leave the Branch with a
Fixed Deposit Receipt.
Agrani Bank Pension Sanchay scheme.
Agrani Bank Bishesh Sanchay scheme.

4.6.2 Loan Scheme

1. Term Loan The Bank takes collateral against giving any Term Loan to a firm. Bank
prefer short- term loan (like- current assets, accounts receivable and inventory) which can
be transferred in to cash much sooner than fixes assets.
2. Loan (General) Bank does not take any collateral. For a specific purpose this short
period loans are taken. Only a note is used by the Bank which is signed by the borrower
where states the conditions and length of taking this loan including interest rate.
3. Secured Overdraft (SOD) In it, Bank takes security of customers FDR or balance
in DPS/ SDPS/ MDS/ SDS/ EDS A/Cs are marked as lien.
4. Transport Loan To buy any type of transport, the borrower apply for this loan. Here,
the collateral is only that transport which the borrower will buy by this Transport Loan.
House Building Loan For giving this house loan the Banks takes collateral of that
houses land and building.
5. Payment against Document (PAD) Suppose customers documents are alright but
importer is willing to retire the documents- In this case, Bank is obligated to pay price of
exported goods. Since importer did not pay for bill of exchange, this payment by bank is
one kind of credit to the importer and this credit in banking is known as PAD.

6. Loan against Imported Merchandise (LIM) - Everything is O.K. but importer fails
to clear goods from the port and request bank to clear.
In this case, Banks clear the goods and takes delivery like same, by paying customs duty
and sales tax etc. So, this expenditure is debited to the importers account and in banking
it is called LIM.
7. Loan against Trust Receipts (LTR) Advance (Loan) against a Trust Receipt
obtained from the Customers, which are allowed only to the first class tested parties,
when the documents are covering an import shipment or other goods pledged to the Bank
as security are given without payment. However, for such advances prior
permission/sanction from Head Office must be obtained. The customer holds the goods or
their sale-proceeds in trust for the Bank, till such time, the loan allowed against the Trust
Receipts is fully paid off.
8. Consumer Finance Scheme There are branches and finance centers under this
division which have qualitative workforce of employees.
Some of the services provided by this division are unsecured personal loans, credit cards,
and vehicle related lease etc.
9. Hire-Purchase Scheme As Bank make their own investment in Government
securities (like- Government treasury bills, prize bonds, Bangladesh Bank bills, special
treasury bonds& reverses repo) and in other investment which sometime borrower wants
to hire as a loan from the Bank. That is why this loan is known as hire of Banks purchase
scheme.
10. ATM Banking - Agrani Bank Ltd. has implemented successfully Automated Teller
Machine. (ATM) /DEBIT card transaction from June 25, 2008. Through Automated Teller
Machine (ATM) /Debit card, customer can avail the facilities like withdrawal money,
balance inquiry and purchase goods.
11. SMS Banking - Agrani Bank Ltd. has officially launched SMS banking service from
December 2011.
12. Lockers - For safekeeping of customers valuables like important documents and
goods like jewelries and gold ornaments, ABL Locker Service is available in most of the
Branches in urban areas. Their nature of service is like custody of locker/ safe and nature
of charge is like rent.
13. Education Remittance Students who are desirous (wishing or wanting) to study
abroad for them this Bank is giving education remittance service. In this service, this
Bank assures their remittance of funds in abroad for study.

4.7 Bank Operational Area of ABL:

4.8 Achievements & Milestones of ABL:

Type: Public Limited Company

Industry: Banking
Financial services
Founded: March 26, 1972
Headquarters: Dilkusha commercial area, Dhaka, Bangladesh
Area served: Bangladesh
Key people: Dr. Khondoker Bazlul Hoque (Chairman)
Products: Finance and Insurance, Consumer Banking, Corporate Banking,
Investment Banking.
Net income: Tk.264.6 chore (US$ 38.35 million) 2011
Employees: 14,269
4.8.1: Commitments of Agrani Bank Ltd:

1) In Carrying Ourselves at Work:

Discipline: Honesty & Integrity, Sincerity;
Creativity: In Serving the Bank:
Loyalty: Total commitment & dedication; Excellence through teamwork
2) In Serving Customers:
Customer first
Quality focuses Credibility & secrecy.etc.

4.8.2: Core Values of Agrani Bank Limited

Integrity

Open communication
Teamwork

Core
Values
Performance driven

Quality
Continuous self
Improvement

ABLs core values consist of 6 elements. These values bind our people together with an
emphasis that our people are essential to everything being done in the Bank.

ABL protects and safeguards all customer information.

ABL treats everyone in an equitable and consistent manner.
ABL creates an environment, which earns and maintains customer trust.

Open Communication:

ABL builds customer relationships based on integrity and respect.

ABL offers a full line of products and excellent service.
ABL is committed to the prosperity of the customers and shareholders.

Performance Driven:

In ABL, customers and employees are judged in terms of their performance.

Continuous Self Improvement:

Continuous learning, self- challenge and make ways for self improvement of
workforce at Agrani Bank Limited.
ABL offers hassle free better service timely.
ABL builds-up assets in the portfolio.
Interaction, open communication, and maintaining a positive attitude reflect
ABLs commitment to a supportive environment based on teamwork.

4.8.3: Other Features and Values

1. Credit management:
ABL has already adopted the Credit risk management Guidelines issued by the
Bangladesh Bank for improving the risk management culture, establishing minimum
standards for segregation of duties and responsibilities, and promoting the ongoing
process for improvement of the Banking Sector in Bangladesh in the context of
globalization. This puts in place a robust process for proactive management of loan
portfolios in order to minimize Loss and enhance return to shareholders. The Bank has
introduced credit policy guidelines for CRM.
2. Human Resources Division:
In ABL has a separate Human Resources Division (HRD) to manage the employee
policies and practices. In 2011 total human resources strength of ABL was 14,209. Bank
follows a standardized human resources policy. The Bank has defined HR policies
including recruitment, training & development, promotion, leave, transfer, and
disciplinary action policy. Usually internal recruitment procedures are considered to fill
up the mid and top management positions, while entry-level positions are filled with
regularly through competitive recruitment exams. The Bank established fully equipped
training centre.
3. Corporate Governance:
To assess Banks corporate governance practices CRAB evaluates the quality of financial
reporting and disclosures, strength of internal control system and internal audit function;
induction of professionally competent, independent non-executive directors on corporate
Board, formation of audit committee; delegation of power to executives and staff;
protection of shareholder rights etc. ABL has addressed most of the issues of corporate
governance for strengthening organizational strength. But the Bank has not yet appointed
independent director which is required by SEC.

4.9 List of Branches of Agrani Bank Ltd.

There are total 921 branches of Agrani Bank Limited situated in 64 districts in
Bangladesh. You may browse the branches by districts or pick your nearby branch
directly from the list below. Following table of all Agrani Bank branches will help you to
have any particular branch address with location, telephone number, routing number,
SWIFT code and other related information. Clicking any district names will provide you

another list of branches in that particular district and so on any branch names will show
you total branch information directly. We have arranged the list firstly by district names
and secondly by branch names alphabetically.
List of On-Line Branches of Agrani Bank Limited under Wide-Area Network(WAN):
SL No
1
2
3
4
5
6
7
8
9

Name of the Branches

Principal Branch, Motijheel, Dhaka
Ramna Corporate Branch, Dhaka
Amin court Corporate Branch, Dhaka
Foreign Exchange Corporate Branch, Dhaka
Purana Paltan Corporate Branch, Dhaka
Jatiya Press Club Branch, Dhaka
BAF Branch, Dhaka Cantonment
Kamlapur Branch, Dhaka
Agrabad Jahan Building Branch, Chittagong
Table:10 On-Line Branches of Agrani Bank Limited.

4.10 Capital and Reserves of Agrani Bank Ltd.

4.1.5 Investment:
The bank has always given emphasis on high yielding investments and maintains
Statutory Liquidity Requirement (SLR) as fixed by Bangladesh Bank. The investment
may be Govt. securities or Non-govt. securities. The investment portfolio of the bank at
the end of the year 2013 stood at Tk. 14,992.86 crore as against Tk. 9,241.98 crore in the

previous year, registering a growth of 62.22 percent. The portfolio of investment of the
bank as on 31 December 2013 is shown below:
Table: 13 Types of Investment
Types

2014

Govt. securities
Non-Govt. securities
Total

12825.24
2167.62
14992.86

2015
7118.17
2123.81
9241.98

Here both govt. and non-govt. securities were increasing from one year to another year.
The more investment can show better contribution in SLR.
Year

Amount of Investment (in crore)

2011

4095

2012

4264

2013

8376

2014

9242

2015

14993
Table: 14 Investments

16000
14000
12000
10000
8000
6000
4095
4000
2000
0
2011

14993

8376

9242

4264

2012

2013

2014

2015

Graph: 4.1.5 Investment

The previous five years of investment show the upward sloping and this investment do
better business performance. So the overall portfolio of investment can do the most
performance.
4.2. Financial Performance Analysis

4.2.1 Operating Income

The operating income of the bank stood to tk. 4113 crore as on December, 2015. The
operating income of the bank is increasing from year to year compared to previous five
years. In 2014, total operating income was 3700 crore. Net operating income involves in
total operating income.

Taka in crore
Year

2011

2012

2013

2014

2015

Operating Income

1636

2402

3301

3700

4113

Table: 15 Operating Income

992
3094

1316
2011
1827
2693

2012
2013
2014
2015

Graph: 4. 2.2 Operating Expenditure

From the above graph, we can see that the total operating expenditure is increasing in
every year. This increasing situation continues in line with operating income. So this
result would assist to increase the operating priofit of ABL.
4.12 Profitability Position of Agrani Bank for last 5 years [With Graphical
Presentation]
(2011, 2012, 2013, 2014 & 2015)

1. Capital Surplus increased to Tk. 73 chore in 2010 from deficit of Tk. 67 chore in 2011.
2. Classified Loan reduced to Tk. 2,374 chore in 2010 from Tk. 2,549 chore in 2012.
3. Paid-up capital increased to Tk. 497 chore in 2010 from Tk. 248 chore in 2013.
4. Net Interest Margin (NIM) improved by 0.31% in 2010 to 0.37% in 2014.
5. Capital Adequacy Ratio increased from 9.16% in 2010 to 10.80% in 2015.
6. Liquidity ratios increased significantly. Current ratio increased from 0.51% in 2011 to
1.36% in 2015.

3000
2500
2000
1500
1000
Series 1

500

Column1

2011

2012

2014

2015

(Figure 1.1 Profitability Position of Agrani Bank limited at a glance since 2015)
(According To the Annual Report of ABL 2014, 2015)

Here operating income is growing every year. A graph on operating income is presented in

below-

4500

4113

4000
3500
3000
2500
2000
1500
1000
500
0

1636
2009

2402
2010

3301
2011

3700
2012

2013

From the above graph, I can see total operating income is increasing in every year. This
increasing situation continues in line with operating profit. So this result would assist to
increase the net operating profit of ABL.

4.2.2 Operating Expenditure

An expenditure that a business incurs as a result of normal business operations; a
challenge faced by a company's management is to determine how much operating
expenses can be reduced without significantly affecting the firm's ability to compete with
its competitors. The operating expenditure of the bank stood at tk. 3049 crore in 2013 as
against tk. 2693 crore in 2012. It indicates an increase of 13.22 % over the last year. This
expenditure can rise due to increasing staff payment in line with the govt. policy and new
recruitment of officers.

2011
2012
2013
2014
2015

4.2.3 Operating Profit:

Operating Expenditure
992
1316
1827
2693
3094

The banks total operating profit before amortization, provision and tax stood at Tk.
1,063.93 crore in 2015.The operating profit was increasing from 2011 to 2013, but it
decreased more in 2014 and somewhat it rose in 2014 comparing with 2015.
Year
2011
2012
2013
2014
2015

Total Operating Profit (in crore)

644.05
1086.67
1474.52
1007.95
1063.93
Table: 17 Total Operating Profits

Operating Profit
2000
1500
1000
500
0

644
2011

1086
2012

1474.4
2013

1007
2014

Graph: 4.2.3 Operating Profit

Profitability:
During the year 2007, the Bank has incurred an operating loss of Tk.75.21 crore and the
net loss stands at Tk.2172.11 crore owing to charging of cumulative provision shortfall
against loans & advances and super annotation fund since 1972 in order to comply with
IAS-30 which has been adopted in Bangladesh as BAS-30 and implemented by
Bangladesh Bank vide BRPD Circular, No.14 dated 25 June 2003 and as such the
auditors certified the accounts without any qualification. In spite of huge volume of
accumulated loss in 2004, the Bank is on the path of recovery and takes steps in
consolidating its position resulting in an operating profit of aboutTk.1 09.00 crore attend
of June 2005.

4.13 Total Assets Position of Agrani Bank for the last 5 years [with Graphical
presentation] (2011, 2012, 2013, 2014 & 2015)

120000
100000
80000
60000
40000
20000
0
2011

2012

2013

2014

2015

4.3 Impact on Global Economy of Foreign Exchange Performance

Economy of Bangladesh is in the group of worlds most underdeveloped economies. One
of the reasons may be its underdeveloped banking system. Government as well as
different international organizations have also identified that underdeveloped banking
system causes some obstacles to the process of economic development. Foreign exchange
identifies the process of converting domestic currency into international banknotes at
particular exchange rates. These transactions present distinct ramifications for the global
economy. Foreign exchange rates affect international trade, capital flows and political
sentiment. The export position of Bangladesh has reached in a very strong position during
2010-15 where export growth increased by 41.47 percent as compared to the previous
year. The export earnings of Bangladesh stood at USD 19,704 million which was 10.20
percent higher than the export earnings in 2015. Significant contributions of knitwear and
readymade garments were still continuing to increase the export earnings of Bangladesh.

Sector of export earnings in FY 2014-15

Petroleum Goods

Export
Earnings
increased
24.10 %

Foot wear

19.40 %

Frozen foods

16.20 %

jute Goods

15.70 %

Chemical goods

14.60 %

leather

15.00 %

Raw jute goods

13.40 %

Handicraft Goods

14.60 %

Agriculture
goods

11.10 %

Readymade Garments

13.80 %

Engineering Products

8.90 %

knitwear

8.40 %

Ceramic Products

6.80 %

Sectors

Sectors

Export Earnings
Decreased

Tea

42.70 %

Table: 18 Sector earnings of 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 the 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
(14.75 percent), UK (10.42 percent) and France (5.37 percent).
4.3 Impact on Global Economy of Foreign Exchange Performance:
Economy of Bangladesh is in the group of worlds most underdeveloped economies. One
of the reasons may be its underdeveloped banking system. Government as well as
different international organizations have also identified that underdeveloped banking
system causes some obstacles to the process of economic development. Foreign exchange
identifies the process of converting domestic currency into international banknotes at
particular exchange rates. These transactions present distinct ramifications for the global
economy. Foreign exchange rates affect international trade, capital flows and political
sentiment. The export position of Bangladesh has reached in a very strong position during
2010-11 where export growth increased by 41.47 percent as compared to the previous
year. The export earnings of Bangladesh stood at USD 19,704 million which was 10.20
percent higher than the export earnings in 2011. Significant contributions of knitwear and
readymade garments were still continuing to increase the export earnings of Bangladesh.
Sector of export earnings in FY 2014-15

Petroleum Goods

Export
Earnings
increased
24.10 %

Foot wear

19.40 %

Frozen foods

16.20 %

jute Goods

15.70 %

Chemical goods

14.60 %

leather

15.00 %

Raw jute goods

13.40 %

Handicraft Goods

14.60 %

Agriculture
goods

11.10 %

Readymade Garments

13.80 %

Engineering Products

8.90 %

knitwear

8.40 %

Ceramic Products

6.80 %

Sectors

Sectors

Export Earnings
Decreased

Tea

42.70 %

Table: 18 Sector earnings of 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 the 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
(14.75 percent), UK (10.42 percent) and France (5.37 percent).

Export Earnings increased

Petroleum goods

handicraft goods

Foot wear
7%
7%

5%

11%
Readymade garments
12%
12%

Ceramic products

jute goods

leather

19%

15%products
Engineering
12%

knitwear

The total import payment stood at US$ 26,944.50 million by increasing 11.22 percent
during FY2011-12. Import growth slowed down recently as import of unimportant goods
was discouraged.
Country wise Import Goods
Countries
China
India
Malaysia

Percentage
Percent out of Total Imported Goods
18.98 %
13.85 %
6.15 %
Table: 19 Total Imported Goods

Country wise import goods analysis shows that, China stands at first position in terms of
import goods. 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.
Analyzing the category of imported goods, it is observed that, import payment of capital
machinery, industrial raw materials decreased by 38.75 percent, 35.52 percent
respectively and the major import payment of consumer goods decreased by 36.27
percent. 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. Yet, recently, the inflow of remittance has increased from Malaysia,
Singapore, UK, and some other countries. To explore new manpower export markets, the
government has undertaken several steps through diplomatic initiatives alongside
establishing new labor wings in several countries. There is also an attempt to impart
training on various trades to create skilled labor force to meet the demand of labor
markets abroad.

The amount of remittances by the Bangladeshi expatriates in FY 2010-11 was 10.55

percent to the total GDP and 50.64 percent of total export earnings which was increased
by 11.11 percent of total GDP and 52.92 percent of total export earnings. The amount of
remittances received by Bangladesh in FY2012-13 was 9.50 percent of total GDP.
3.6 BUSINESS PERFORMANCES:
During the year 2006, the amount of deposits increased by Taka 128.92 Billion and the
total deposits stood at Taka 135.92 Billion at the end of 2007 as against 130.84 Billion in
2005. The deposits growth rate was 6.78% during 2006. To make the net interest margin
favorable, the Bank gave more emphasis on tapping low cost deposits. The deposits are as
follows:
(Taka in crore)

Type

As on 31-12-2014
Amount
% of Total

Current deposits
STD
Savings deposits
Fixed deposits
DPS
APS
Others
Total

As on 31-12-2015
Amount
% of Total

Deposits
724.60
6.17%
1359.93
974.00
8.29%
1054.81
4373.82
37.25%
4769.84
2690.79
22.91%
2627.80
381.07
3.25%
127.72
1923.95
16.38%
2318.6
674.48
5.75%
280.80
11742.71
100.00%
13538.96
Exibit 14 : Business Performance

Deposits
10.85%
8.41%
38.04%
20.96%
1.02%
18.48%
2.24%
100%

Asset Quality
The new management has placed utmost importance to improve the quality of assets and
as such an amount of Tk.240.41 crore was recovered in cash from the classified loans and
advances in 2007 as against Tk. 162.80 crore of 2006. Moreover, the classified loans
reduced to 28.07% in 2007 as against 29.57% of 2006. The performing loans in 2007
increased by Tk. 609.90 crore to Tk. 6900.02 crore from Tk. 6290.12 crore in 2006.

4.14 Total Liability & Shareholder equity Position of Agrani Bank Ltd.for last 5
years [With Graphical Presentation] (2011, 2012, 2013, 2014 & 2015)

Charges
Advice charge
Commission
Postage charge
Content
Remittance

2011
343.8

Tk. 500
Tk. 730- Tk. 1000
Tk. 20
2012
710.32

2013
1428.48

2014
2452.33

2015
3036.42

3500
3000
2500
2000
Column2

1500
1000
500
0
2011

2012

2013

2014

2015

4.1 Business Performance Analysis to find out total liability:

This will help to find out the toatal liabliity and shareholder,s equity position of the bank
from the below analysis:
4.1.1 Deposits
Total deposit of the bank as on 31 December, 2013 is tk.34867.52 Core which shows an
increase of tk. 29242.92 core over that of the previous year. The rate increase in deposit
was 19.24%. Total deposit comprises demand deposit tk. 12974.6 crore and time deposit
tk.21892.92 core. The types of deposits are presented in the following table shown in the
next page:

Year

2009

2010

2011

2012

2013

Deposits

16628

20633

25221

29243

34868

Table: 9 Deposits

40000
30000
20000

20633

10000
0
16628

25221
29243
34868

Graph: 4.1.1 Deposits

Here total deposits are increasing from year to year. So I can say that overall function of
deposit collection is better. In the prevailing situation, mobilization of deposits became
highly competitive and hence cost of fund would increase compared to the previous year.
3.7 Loans and Advances
General Credit
The amount of loans and advances of the Bank as at the close of 2007 was Tk. 118.49
billion as compared to Tk.105.87 billion in the previous year: advances increased by
12.62 billions with a growth rate of 11.92 per cent.
The outstanding loans and advances as on 31 December, 2007 are shown in the chart
below:
The outstanding loans and advances as on 31.12 2007
(Taka in billion)
Tk. 25.87

Tk. 22.54

Tk. 21.63

Tk 0.61

Tk 5.65

Tk 7.61

Tk 6.95

Tk. 12.27

Tk. 5.55

Tk. 9.82

Exibit 16 : outstanding loans and advances as on 31.12 2007

Trade, Commerce and industry

Agrani Bank Limited, in the greater national interest, continues to finance trade,
commerce and industry by providing short-term, mid and long-term loans for major
sectors like: ready-made garments, raw jute and jute goods, chemicals and
pharmaceuticals, iron and steel, fertiliser, food, tea and leather. The Bank also helps
stabilise food price and its supply by providing advances for procurement and
preservation of food grains internally on a priority basis.
Industrial Credit
Agrani Bank Limited has been playing a significant role in supporting the Government
policy of rapid industrilisation. The Bank continues its specialised services for financing
medium and long-term capital finance as well as short-term working capital finance to
industrial projects. The total outstanding against industrial project loan, excluding
working capital loan as on 31 December 2007, stands at Tk. 21.54 billion which is 18.18
per cent of the Banks total loan portfolio. Agrani Bank Ltd has extended credit facilities
to all- important sub- sectors of the economy.
Sector-wise position of industrial credit excluding working capital loan as on 31
December 2007 is given in the pie chart below:

Sector wise Percentage of Industrial Credit excluding

Working capital as on 31.12.2007
6%

Engineering & Electronic

7%

Food & Allied

7%

Chemicals

7%

Agro-based

10

Service

3%

Pharmaceuticals

%
1%

Hide, Skin & Leather

50%

Textile

&

Ready-mad

Goods
4%

Garments

Cement

0.38

Others

%
7%

Cold Storage

Exibit 17 : Sector wise Percentage of Industrial Credit

Credit Lines
Agrani Bank Limited has utilised IDA Credit, Exim Credit, ADB Credit and OPEC credit
lines for onward lending in addition to Banks own sources. The balance outstanding
against the loans and the number of project funded are appended Below:
(Taka in billion)
Number of Project

Amount Outstanding

a. Foreign Fund

262

0.62

b. Banks own Fund

2476

21.54

SME Credit
Beyond conventional banking, the Bank has also been participating in several SME
programmers through its own efforts and in collaboration with different national and
international agencies like Bureau of Manpower Employment and Training (BMET),
Bangladesh Small and Cottage industries Corporation (BSCIC), NGOs (Bangladesh Rural
Advancement Committee-BRAC, Association for Social Advancement- ASA, Grameen
Uddag), international Fund for Agricultural Development (IFAD), United States Agencies
for International Development (USAID), Asian Development Bank (ADB), Norwegian
Agency for Development Co-operation (NORAD), Swedish International Development
Agencies (SIDA) etc. These are aimed at reinforcing efforts of the Government to meet
strategic objectives of alleviating poverty of the rural poor, supporting small and micro

enterprises/ entrepreneurs, increasing output, easing unemployment problem and

strengthening the rural financial market.
So far, the beneficiaries under the 14 programmers implemented by the SME and Micro
Credit Division include 514868 small entrepreneurs of different sectors.
Agri and Rural Credit
The Bank kept financing one of the countrys priority sectors-agriculture. It started
accommodating millions of the rural poor with the mainstream development activities in
areas of livestock, fishery, poultry, nursery as well as many off-farm projects and the like
in line with the government policies. Poverty alleviation through income generating
activities is one of the strategic priorities that the Bank has kept pursuing to make the
institutional help available to marginal farmers, small entrepreneurs, distressed and
destitute women as well as unemployed youths.
A number of targeted programmes with loan limits of Tk.5000 and above haven been
continuing. In 2007 the Bank implemented 54 programmes among 3705642 borrowers,
involving Tk. 35.54 billion.
Loan Classification and provisioning
Reduction in the number and value of classified loans and advances has been a major
priority of the Bank, along with maintaining a commensurate provision. Various
initiatives were taken and adequate measures adopted to achieve the optimum result. The
main focus was on the intensive and strict follow-up in respect of recovery of previous
classified and overdue loans along with new ones.
Recovery of Non-performing Loan
The Bank has geared up its efforts to reduce Classified and overdue loans and take
appropriate for converting non-performing loans into performing ones. With this end in
view, intensive monitoring both at the field and Head Office level was carried out. A Debt
Collection Unit was also set up inside the Bank for effective follow-up and recovery of
loans. 3 private Debt Collection Agents were appointed to recover non-performing and
written-off loans.
Recovery position of classified and overdue loans during 2007 is shown below:

Recovery position of Classified and overdue loans during 2007:

Outstandi
ng
Amount
as on
31.12.200
6

Annual
Target of
Recovery
(2007)

Classified
Loan

27.82

Overdue
Loan

Type of
Loans

Tota
l

Amount Recovered in 2007

Percentage of
target
Accomplishme
nt

Others
*
1.23

Writeoff
2.70

Total

10.00

Cash
Recover
y
2.19

6.12

61%

4.40

4.40

2.32

1.80

0.00

4.12

94%

32.22

14.40

4.51

3.03

2.70

10.2
4

71%

* Other recovery consists of rescheduling, renewal waiver of interest.

Recovery Position of Classified and overdue loans during-2007

Classified
Loans

Overdue
Loans

Total

Exibit 18 : Recovery Position of Classified and overdue loans during-2007

3.8 Financial Result

Total income

The Banks total income after corporatisation was Tk. 7.08 billion while total income
earned in 2007 stood at Tk. 13.68 billion as against total income of Tk. 12.33 billion in
2006, registering an increase of Tk. 1.35 billion which was 10.95 per cent higher over the
last year.

Total Expenditure
After corporatisation, total expenditure stood at Tk.4.30 billion whereas during 2007 total
expenditure was Tk. 8.42 billion. In 2006, total expenditure was Tk.8.75 billion.

Net Profit
After corporatisation, the Banks after-tax net income stood at Tk.0.86 billon. However,
during 2007, the Banks total net profit stood at Tk.3.16 billion as against Tk. 1.94 billion
of 2006, showing an increase of 62.88 cent the net profit of 2006.
Shareholders Equity
As per venders agreement dated 15 November, 2007 the Agrani Bank Limited has paid
Tk.2.48 billion by issuing shares to the Government. The equity of the Bank stood at Tk.
3.34 billion on 31 December, 2007 along with reserve and undistributed profit of Tk.0.86
billion.

Appropriation of Profit
Out of the net profit of Tk.0.86 billion (after tax) earned after corporatisation, the Board
of Directors proposed to transfer an amount of Tk.0.16 billion to Statutory Reserve
Account and the rest balance amount of Tk. 0.70 billion to Retained Surplus Account. No
dividend for the year 2007 has been recommended by the Board.
Letters of guarantee

1,050,604,255

Letters of credit

42,568,362,821

Bills for collection

11,069,872,267

Other contingent liabilities

2,132,659,069

Claims against the Bank not acknowledged as debt

11,139,987,000

Exibit 19 : Balance Sheet Balance Sheet

As at December 31, 2007

PROPERTY AND ASSETS

Cash:

December 31,
2007
Taka
8,584,441, 263

Cash in hand (including foreign currencies)

1,728,481,748

Balance with Bangladesh Bank and its agent bank (including foreign
currencies)

6,855,959,515

Balance with other banks and financial institutions:

3,360,727,185

In Bangladesh

1,111,786.077

Outside Bangladesh

2,248,941,108

Money at call and short notice:

1,110,000,000

Investments:

21,902,263,978

Government

19,714,838,500

Other

2,187,425,478

Loans and advances:

118,493,857,283

Loans, cash credit & over draft etc.

115,597,766,338

Bills discounted and purchased

2,896,090,945

Fixed assets including land, building, furniture and fixtures

2,481,337,763

Other assets:

30,347,758,101

Non-banking assets:
Total assets

186,280,385,573

LIABILITIES & CAPITAL:

Liabilities:
Borrowings from other banks, financial intuitions and agents

9,422,761,235

Deposit and other accounts:

135,921,381,916

Current deposits & other accounts

21,164, 487,330

Bills payable

3,066,541,752

Savings bank deposits

60,011,825,052

Fixed deposits

51,678,527,782

Other liabilities:

37,593,533,139

Total liabilities :

182,937,676,290

Capital / Shareholders equity :

Paid- up Capital

2,484,200,000

Reserve:

159,728,906

Statutory reserve

159,728,906

Retrained surplus/ deficit) from profit and loss account

698,780,377

Total shareholders equity:

Total liabilities and shareholders equity:

3,342,709,283
186,280,385,573

Off Balance Sheet items:

December 31,
2007
Taka

Contingent Liabilities:

Acceptances and Endorsements

67,961,485,412

Profit and Loss Account

For the year ended December 31, 2007
Operating Income

Taka

Interest income

4,380,233,235

Interest paid on deposits, borrowings etc.

2,619,649,994

Net interest income

1,760,583,241

Investment income
Commission, exchange earnings and brokerage
Other operating income
Total operating income (A)

949,921,751
1,424,781,198
328,922,154
4,464,208,344

Operating expenses
Salary and allowances
Rent, taxes, telecommunication etc.
Legal expenses
Postage, stamp, telecommunication etc.
Stationery, printing, advertisement etc.
Managing Directors Salary and allowances
Directors fees
Auditors fees
Depreciation and repair of banks assets

1,348,606,092
122,771,951
6,569,702
38,368,267
45,346,073
549,040
2,013,680
53,980,314

Sale from dealing with non banking assets

Other expenses

65,505,068

Total operating expenses (B)

1,683,710,187

Profit / (Loss) before provision (C) = (A B)

2,780,498,157

Provision for loans and advances

1,618,001,212

Other provision
Total provision (D)

363,852,417
1,981,853,629

Total profit / (Loss) before tax (C D)

798, 644, 528

Provision for tax

Current tax

Deferred tax

(59,864,755)
(59,864,755)

Net profit / (Loss) after tax

Add. Retained surplus/ (deficit) for the previous period

858,509,283
858,509,283

Appropriation :
Statutory reserve

159,728,906

General reserve

Dividends payable to Govt.

Retained surplus

698,780,377

Earning Per Share (EPS)

Exibit 20 : Profit and Loss Account

34.56

Cash Flow Statement

For the year 2007
Taka
A. Cash flows from operating activities
Interest receipts in cash
Interest payments
Dividend receipts
Fees and commission receipts
Recovery on loans previously written off
Operating profit/ (loss) before changing in operating assets
andbiabilities
Increase)/ decrease in operating assets
Statutory deposit
Treasury bills
Repo
Fund advance to customers
Other assets

5,023,538,840
(2,862,463
080)
3,730,156
497,497,986
71,645,564
1,457,458,672

6,394,910,242
2,100,00,000
(13,872,630,8
25)
(2,692,518,91
2)
(8,070,239,49
5)

Increase/ (decrease) in operating liabilities

Deposit from customers

(142,623,775)

Other liabilities

1,382,964,482
)
1,240,340,707

Net cash from operating activities A

B.

Cash flows from investing activities

(5,372,440,116)

Other bond

(2,852,356,000
)

Debenture

15,000,001

Purchase of securities
Purchase/ sale of properties, plants & equipment
Proceeds from sale of properties, plant & equipment

(24,000)
(21,735,908)
-

Net cash from investing activities B

C. Cash flows from financing activities

(2,859,115,907)

Payments of long term borrowings

(408,743 828)

Receipts from other borrowings

6,845,845,817

Net cash from financing activities C

Net increase in cash and cash equivalents (A+B+C)=D
Effect of exchange rate change on cash and cash equivalent

6,437,101,989
(1,794,454,034

Cash and Cash equivalents at beginning of the period

13,978,579,920

Cash and cash equivalents at end of the period

13,063,987,948

Exibit 21 : Cash Flow Statement

879,862,062

Statement of Changes in Equity

For the year 2007
Statutory
Reserve

Other
Reserv
e

profit and
Loss
Account

Total

Capital

Assets
Revaluatio
n Reserve

Taka

Taka

Taka

Taka

Taka

Taka

2, 484, 200,
000

2,484, 200,
000

Paid-up
Particulars

Balance as at 01-01- 2007

Changes in accounting policy

-

Restated balance
2,484, 200,
000
Surplus/ deficit on account of
revaluation of investments
Currency transaction
differences

Net gains and losses not

recognized

2,
485,200,000

in the income statement

Balance as at December 31,
2007

2,484, 200,
000

159, 728,
906

Exibit 22 : Statement of Changes in Equity

698,780,377

3,342,709,283

Glimpses Of Five Years Financial: Condition:

(Taka in billion)

Agrani Bank

Total

Agrani Bank
Limited
2007 ( 01
July to
31 Dec.)

(01 Jan.
2007 to 31
Dce.
2007)`

2007
2003

2004

2005

2006

(01 Jan.
to 30
June)

Paid-up Capital

2.48

2.48

2.48

2.48

2.48

2.48

2.48

Reserve Fund

0.34

0.34

.34

0.29

0.16

0.16

Retained Profit (Loss)

(21.72 (20.08 (18.10)

)
)

0.70

0.70

Total Equity

2.82

(18.90 (17.26 (15.33)

)
)

2.48

3.34

3.34

Total Deposits

117.4 125.39 130.8 128.92

3
4

136.06

135.92

135.92

Total Loans and Advances

89.31

95.92

99.40 105.87

104.56

118.49

118.49

Net Loans and Advances

79.67

71.32

75.41

83.58

83.63

95.09

95.09

Investments

31.50

26.85

24.33

22.31

27.46

21.90

21.90

i. Imports:

28.97

35.91

51.19

115.92

63.05

50.38

113.43

ii. Exports:

35.75

41.97

41.71

51.71

24.93

23.99

48.92

iii. Remittances:

27.43

36.84

34.57

39.30

20.22

22.59

42.81

Total:

92.14 114.72 127.4 206.93

7

108.20

96.96

205.16

Guarantee Business

1.38

1.21

1.18

1.08

1.03

1.05

1.05

Total income

9.40

9.02

10.60

12.33

6.60

7.08

13.68

Total Expenditure

9.13

9.77

8.46

8.75

4.12

4.30

8.42

Provision

0.26

20.97

3.74

0.29

0.24

1.98

2.22

Interests Suspense

8.50

11.24

9.59

8.92

7.98

9.50

9.50

Fixed Assets

0.48

0.48

0.44

0.41

.39

2.48

2.48

Forex Business

Total Assets

141.4 151.38 155.5 154.08

4
3

Operating Profit

0.26

(0.75)

2.14

Net Profit (Loss) after provision and

tax

0.001 (21.72
4
)

1.63

Cost of Fund

7.51 8.51% 6.95% 6.84%

%

Number of Branches

872

Number of Employees

870

864

12514 12208 11938

160.49

186.28

186.28

3.58

2.48

2.78

5.26

1.94

2.30

0.86

0.86*

6.52%

6.68%

6.68%

866

866

866

866

11793

11568

11345

11345

Number of Correspondent Banks

with NOSTRO A/c.

37

41

41

38

38

39

39

Number of Foreign Correspondents

391

399

410

416

416

416

416

Return on Equity

7.78
%

29.55%

29.55%

Return on Assets

0.19% (0.50% 1.05% 1.26%

)

1.43%

0.92%

0.92%

Net Interest Margin

0.89% (0.45% 1.73% 2.96%

)

3.56%

3.69%

3.69%

Average Yield on Loan

9.93% 7.59% 7.94%

9.53%

10.68%

10.35%

10.35%

Loans as percentage of Deposit (A.D.

Ratio)

76.06 76.50% 75.98 82.12%

%
%

76.85%

87.18%

87.18%

Gross Classified Loans to Total

loans

29.57 28.07% 28.31 26.27%

%
%

26.94%

26.83%

26.83%

Net Classified loans to Net loans

21.05 3.25% 5.51% 6.61%

%

8.23%

8.82%

8.82%

* Total net profit after tax of the former Agrani Bank and the Agrani Bank Limited for
the year 2007 stood at Tk. 2.30+0.86) =3.16 billion. However, net profit of Agrani Bank
up to 30 June 2007 amounting to Tk. 2.30 billion has been squared off against valuation
adjustment.

Table 22 : Glimpses Of Five Years Financial Condition

4.15 Agrani Bank Limited at a Glance

Taka inBillion

Statement of Affairs

2004

2005

2006

2007

Authorized Capital

8.00

8.00

8.00

8.00

Paid-up Capital

2.48

2.48

2.48

2.48

Reserve fund

0.34

0.34

0.29

0.57

Total Deposit

125.39

130.84

128.92

135.92

Total Loans & Advances

95.92

99.40

105.87

118.49

Net Loans & Advances

71.32

75.41

83.58

85.75

Investment

26.85

24.33

22.31

22.19

i) Imports

35.91

51.19

115.92

125.38

ii)Exports

41.97

41.71

51.71

53.99

iii)Remittances

36.84

34.57

39.30

41.29

Total:

114.72

127.47

206.93

220.66

Guarantee Business

1.21

1.18

1.08

1.22

Total Income

9.02

10.60

12.33

15.73

Total Expenditure

9.77

8.46

8.75

10.47

Provision

20.97

3.74

0.29

0.37

Fixed Assets

0.48

0.44

0.41

0.43

Total Assets

151.38

155.53

154.08

156.22

Operating Profit

(-)0.75

2.14

3.58

5.26

Net Profit/Loss

*(-)21.72

1.63

1.94

2.89

Cost of fund

8.51%

6.95%

6.84%

6.55%

Number of Branches

870

864

866

866

Number of Employee

12208

11938

11793

11345

Forex Business:

Number of Foreign

399

410

416

416

Return on Assets

(-) 0.50%

1.38%

2.32%

2.37%

Net Interest on Mergin

(-)0.45%

1.73%

2.96%

3.04%

Average yield Loan

7.59%

7.94%

9.53%

10.06%

Loans to Deposit

76.50%

75.98%

82.12%

87.17%

Gross Classified Loan

28.07%

28.31%

26.27%

26.02%

Net Classified Loan

3.25%

5.51%

6.61%

6.36%

Correspondence

Table : 6 Agrani Bank Limited at a Glance

CHAPTER-5

AN FOCUS ON DIFFERENT KINDS OF FOREIGN EXCHANGE

OPERATIONS UNDERTAKEN BY AGRANI BANK LIMITED
5.1 Definition of Foreign Exchange:
Foreign exchange is a process which converts one national currency into another and
transfer money from one country to other countries. According to Mr. H. E. Evit,
Foreign exchange is that section of economic science which deals with the means and
method by which right to wealth in one countrys currency are converted into right to
wealth in term of another countrys currency. It involves the investigation of the method
by which the currency of one country is exchanged for that of another, the cause which
rented such exchange necessary.
5.2 Contents Foreign Exchange Accounts of ABL:
5.2.1 Nostro Account
Nostro account means our account with you. A nostro account is a foreign currency
account of Agrani Bank maintained by its foreign correspondents abroad.
5.2.2 Vostro Account
Vostro account means your account with us. The account maintained with foreign
correspondent in Agrani Bank of a particular country is known as vostro account.
5.3.3 Loro Account
Loro account means their account with you. Account maintained by third party is
known as Loro account.
5.3.11. Service Provided by Agrani Bank against Export L/C
5.3.4 Foreign Exchange Services
OD buying rate (Sight Draft)
Usage rate (For DA Bill)
Appropriate rate (For DP Bill)

I.FDBC: If the export document is not purchase by ABL, it is called foreign documentary
bill collection. At the maturation data of export bill, ABL collects the payment for party.
The collection process is same as LDBC. Only the postage charge is high. The postage
charge is Tk. 800 within SAARC countries within Asia Tk.1500 and outside Asia is Tk.
2000.
II. FDBP: If the exporter need money before that the maturation of export document. He/
She can sale it to ABL. It is called foreign documentary bill purchase.

A detail section of Foreign Exchange operations of agrani bank is provided in the later
part of the report.

5.3 Objectives of Foreign Exchange:

ABL is rendering various kinds of services in international transaction of their clients.
Some are described below:
5.3.5 L /C Opening:
Bangladesh is mainly an import oriented country. So, L/C is a very important import
document which is issued by ABL. In international market, two parties are not known to
each other. The importers of Bangladesh give an L/C to exporters of foreign country to
give the assurance of payment. ABL is opening L/C in favor of their clients.
5.3.6. Export Processing:
When exporters foreign document comes to ABL, ABL collects payment from foreign
bank for its party. ABL purchase bill if their party will need early cash.
5.3.7. Advising of Export L/C:
The advising bank getting the import L/C sent by the issuing bank located abroad will
advise the L/C to the beneficiary without any engagement or responsibility on their part.
It will see the following only:
Issuing bank should be a reputed bank.
Credit line/ Arrangement with the L/C issuing bank.
L/C clause is to be acceptable to confirming bank.
Approval from the competent authority for adding confirmation of export L/C
Confirmation charges are to be recovered as per rules.

5.3.8 Negotiating of Export L/C:

Documents / papers to be submitted by exporter to bank for negotiation/ collection
against export L/C. The exporters submit the documents to bank as per requirement of
bank. Agrani Bank must scrutinize all the documents stipulated in the credit with

reasonable care to ascertain whether they confirm with the terms of the credit, the bank
may negotiate and pay the value of export bill to the exporter.

5.3.9 Loan facilities:

Loan facility is given to clients to help in foreign exchange. Different types of loan
facilities are - (i) CC (ii) LTR (iii) LIM (iv) Sanction of L/C.
5.3.10. Dollar sale and purchase:
ABL sells dollar against passport. The rate of exchange is given by Bangladesh Bank
which is changed every day.

2.5 Process of Foreign Exchange Operations of Agrani Bank:

Foreign exchange means foreign currency and includes all deposits. Foreign trade can be
easily defined as a business activity, which transcends national boundaries. Foreign trade
can usually be justified on the principle of comparative advantage. It is economic
profitable for a country to specialized in the production of that commodity in which the
producers has the greater comparative advantage and to allow the other country to
produce that commodity in which it has the lesser comparative advantage. In order to
conduct foreign exchange operation systematically and methodically the Foreign
Exchange Regulation (FER) Act, 1947 enacted on the 11th march 1947 for regulating
receipts and payments and dealings in the foreign exchange and securities. Basic
regulations for conducting foreign exchange operation are issued by the Government as
well as by the Bangladesh Bank.

5.5 Overall of Foreign Exchange Operations undertaken by Agrani Bank:

1.3.1 Foreign Exchange Business Activities:
Foreign exchange business during the year 2006 stood at Tk.9248.93 crore as against
Tk.8868.67crore during the year 2007 showing an increase of Tk.380.26 crore i.e. 4%
during year. Import transaction increased by Tk.20.85crore which is 8% over the
transaction of the previous year. During 2007, the bank achieved Tk.3521.10crore being
export business showing an increase of Tk.1. 53crore compared to the preceding year.
However, remittances received by the bank during the year shows a considerable increase
to the tune of Tk.157 .88crore i.e. 6% of the total of Tk.2674.43crore over the level of the
previous year.

1.3.2 Credit recovery activities:

As per management's decision LOAN CERTIFICATION DIVISION started
functioning since December 1, 2007. The function of this division comprises operating
and monitoring of self classification of loans and advances on yearly basis, monitoring of
recovery, progress of classified loans and advances, preparing of credit investigation
reports, collecting various information, data etc. for regular as well as onward submission
to Bangladesh Bank. The Bangladesh Bank task force, Ministers, Government Agencies
as per their requisition and monitoring the implementation of Managing Director's Annual
goals and Action plans for recovery and reduction of classified advances up to the
predetermined level. Credit Recovery Division (CRD) performs all these functions.

1.3.3 Audit & Inspection Activities:

The activities of Audit & Inspection Division (AID) are to do audit over the branches and
to detect any loss by way of less recovery of interest on advances, excess payment.
Interest on time deposits and less recovery of commission (L.C.D.D.T.T.) various
services. During the year2007, 448 branches were audited besides; this Division by the
same period inspected 13 branches. The auditors detected income loss of Tk.157.51lacs.
Out of Tk.157.51lacs Tk.120.01lacs was recovered on the spot by crediting income
account and the concerned branches and zonal offices were being closely followed up for
recovery of the rest amount.

1.3.4 Computerization Activities:

Agrani Bank Limited is one of the pioneers in the use of computers in Bangladesh. A
lot of important jobs of the bank are performed through computers. In Banking sector
computer was first used of the then Habib Bank Limited (the parent organization of
Agrani Bank Limited) in 1957. The function of Information Technology
Division(ITD) is to maintain a database of the entire banking activities of Agrani
Bank Limited . This division is well equipped with IBM Midrange Computer and is
staffed with highly trained and experienced personnel. The division is now processing
different jobs using its IBM AS/400.

1.3.5

Administrative Activities:
The administrative activities of the bank are comprised with Personnel & Human
Resources Division (PHRD). The functions of this division is to maintain the number

of present manpower in the bank; placing the officials according to their promotion or
demotion; recruiting new personnel; providing training programs for them and release
personnel according to their age of retirement.

1.3.6 Other Activities:

Planning Research & Statistics Division (PRSD) of the bank accomplishes the work of
publishing English Quarterly "Economic News Letter" and Bangla Quarterly "Agrani
Darpan" and drafts "Resume of Financial Sector Activities" of the bank and " Annual
Report" of the bank of the year under review.
CIB report is also prepared and submitted to Bangladesh Bank through computer diskette
by PRSD. This division collects CIB reports from almost 866 branches of the bank under
which about 20,000 borrowers are included. This division also collects SBS-l& 3
statements from 866 branches and complies them and sends SBS-2 & 3 through computer
diskette. This division maintains a library which is the largest one in scheduled banks, in
which the no. of books is approximately 8937 presently.

5.6 Total Foreign Exchange scheme at a Glance:

Foreign Exchange Business
(Imports, Exports & Remittances)
Agrani Bank Limited has glorious history in mobilizing Foreign Exchange Business with
a few exceptions made in some years before. In 1994, its Foreign Exchange Business was
a record high among all banks in Bangladesh. The Bank has a wide network of 40
Authorized Dealers throughout the country. Out of these branches, 15 are in Dhaka,8 in
Chittagong and the remaining 17 branches are in other parts of the country. Equipped
with skilled manpower, the Bank is confident of running Foreign Exchange Business
efficiently to the satisfaction of the importers, exporters and Bangladeshi expatriates
working abroad.
The Foreign Exchange Business witnessed a much better performance in 2007 than the
previous year. The volume Foreign Exchange Business of imports increased substantially
by Tk. 9.36 Billion to as on 31.12.2006 Tk. 115.92 Billion in 2007 against imports of Tk.

125.38 Billion in 2006. Similarly, the export earnings also increased to Tk.4, 2.28 in 2006
from Tk.51.71 Billion, which was higher by Tk.53.99 Billion compared to 2006.
The Foreign Exchange Remittances from Bangladeshi nationals working abroad
increased remarkably by Tk.1.99 Billion to Tk. 41.29 Billion in 2007 from Tk 39.30
Billion in 2006. This increase was 34% higher than the previous year.

The summarized position of imports, exports and inward remittances are furnished in the
following:

Foreign Exchange Business

As on 31.12.2007
Chart Title

Imports

Exports

Remittances

(Taka in Billion)
Sl No Item
1.
Imports
2.
Exports
3.
Remittances
Grand Total

2006
2007
Increase
115.92
125.38
9.36
51.71
53.99
2.28
39.30
41.29
1.99
206.93
220.66
13.63
Table 15 : Foreign Exchange Business

Growth rate
24%
17%
34%
24%

Agrani Bank Limited has as many as 399 foreign correspondents throughout the world
for smooth conduct of International Trade and settlement thereof. In addition to this. The

Bank is maintaining 40 NOSTRO Accounts in US Dollar. Euro and some other currencies
with those first class banks. Which are located in important financial center of the world.
In order to increase the inflow of foreign remittances from the Bangladesh expatriates
working abroad, the Bank has Taka Draft/Electronic Fund Transfer arrangement with 19
Exchange Houses and 4 banks of the Middle East and the Gulf States. The Bank's
constant endeavor and commitment to send the remittances within the shortest possible
time to the beneficiaries have also encouraged the remitters to send more money through
the Agrani banking channel.
4th Board meeting of Agrani Exchange House Pte. Ltd. Singapore Treasury Operation
Foreign exchange dealing, money market operation. Investment in Treasury Bills, Shares
& other Capital market operations, maintenance of Cash Reserve Requirement (CRR) and
Statutory Liquidity Requirement (SLR) are the major functions of the Treasury. The
foreign exchange operations were conducted taking into consideration of the L/C.
commitment. Foreign remittance inflow and export performances.

1.3.7 Special Activities of Agrani Bank Limited

There are some special activities which falls under the foreign exchange opprations of
Agrani Bank Limited highlighted below:
Without the above activities, there are three special activities that were conducted by the
bank during the year 2007. Those are as follows:
The gross and net amount of loans and advances of the bank by the end of 2007 stood at
Tk.83.58 Billion. The bank gave loans to public and private sectors amounting to gross
loans and advances at the end of 2007 Tk.995.16crore and Tk.5750.91crore respectively.
The advance under small and cottage industries sector by the end of 2007 stood at
Tk.373.81crore as against Tk.368.01crore.
The bank had a considerable involvement in the jute sector under jute trade and jute
industries. Total advances in the jute sector stood at Tk.718.61crore in 2007. The
investment in this sector was 11% of the total loan and advances.

a. Trade & Commerce Credit Activities:

Side by side with the industrial sectors, the bank had been financing in trade and
commerce to develop export sectors. The bank generally invests short-term loans in these
sectors. The bank finances on the major goods items. Like raw jute, fertilizer, food grains,

iron & steel, hatchery, sugar, cement, medicine & chemical, frozen food, tea, ready-made
garments, leather etc. Agrani Bank Limited helps to keep the price of food grains stable
to meet the shortfall of the same providing advances for internal procurement of food
grains. As a nationalized commercial bank, Agrani Bank Limited has been sharing the
vital role in all economic activities of the country and these efforts will also be continuing
in future.

b. Industrial Development Finance Activities:

Agrani Bank Limited as one of the leading nationalized commercial bank of the country
maintained its active role in implementing the Government policy of rapid industrial
sector through providing and channeling medium & long-term capital finance as well as
short-term working capital finance to industrial projects.
The credit programs under which Agrani Bank Limited had so far financed were namely
IDA credit, OPEC credit, Exim Bank credit, ADB credit, Banks own sources of finance,
SPL credit program, BSCIC consortium, Credit guarantee scheme, Entrepreneur
Development Program, Financing of small scale engineering project and Micro enterprise
loan scheme.
Up to December 31, 2007 Agrani Bank Limited had sanctioned a total number of 5252
industrial projects with Tk.1052.39crore as term loan. The total outstanding industrial
loan was Tk.1043.40crore. Among the sanctioned projects, the numbers of large and
medium scale industries were 90 and the number of small and cottage industries were
5162. The ratio of large & medium and small & cottage industries was 67:33.

1.3.8 Rural Credit Activities:

Agricultural/ Rural credit plays an important role in national economy. For this, extension
of credit to agricultural/rural sector by the bank had been receiving constant attention of'
the bank in line with the credit policy of the Government and cumulative amount of credit
extended to this sector under various credit programs stood at Tk.1171.57crore at the end
of 2007. During 2007 an amount of Tk.198.40crore had been disbursed under
agricultural/rural sector. Credit was also provided to the unemployed educated native
youths in order to engage them in productive activities.

Liquidity Position
Agrani Bank Limited

is a major participant in the financial/economic market of

Bangladesh and enjoys confidence of the depositors and other clients. Joint venture
partners and foreign creditors. The Bank, at present, is a net moneylender in money
market and is investing a daily average of Tk 849.00 crore in local currency and also
selling excess foreign .currency to other banks equivalent to Tk 8.02 crore on an average
per day. The ratio of loans & advances to deposits was increased by 0.44% over the last
year & stood at 76.50% at the close of 2007 which was 76.04% at the end of 2006.

1.3.9 Credit Portfolio

General credit
The loans and advances of the Bank as at the close of 2007 was Tk. 118.49 Billion as
compared to Tk. 105.87 Billion in the previous year i.e. advances increased by 12.62
Billion with a growth rate of 7.40%,
Tirade and Commerce
The Bank continues to finance Trade and Commerce by investing short-term loans for
major items like raw jute, fertilizer, food grains, iron and steel, hatchery, sugar, cement,
medicine, chemicals, frozen food, tea, ready-made garments, leather etc: Agrani Bank
Limited In the greater national Interest, continues to support different sectors via, jute,
tea, leather production. The Bank also helps stabilized the price and supply by providing
advances for procurement and preservation of food grains internally on a priority basis as
and when needed.

Industrial Credit
Agrani Bank Limited has been playing a pivotal role in supporting the Government
policy of rapid industrializations. The Bank continues to provide its specialized services
for financing medium and long-term capital finance as well as short-term working capital
finance to industrial projects. The total outstanding against industrial project loan as on
31stecember 2007 stands at Tk. 1812.55 crore which is 19% of the Bank's total loan
portfolio. Agrani Bank Limited has extended credit facilities to all-important sub-sectors
of the economy.

Credit Lines
The Agrani Bank Limited has utilized the following credit lines for onward lending.
1.3.10 Investment Portfolio
The amount of investment decreased by Tk. 465.47crose and stood at Tk. 2684.77crore in
2007 as against Tk. 3150.24crore in 2006. The principal reason for decrease of
investment was due to diversion o fund by encashment of short-term Treasury Bills to call
money, balance with other banks and advances to in creases to increase income.
5.7 Other Activities of the Bank :
Agrani Bank Limited Shilpa Unnayan Bond sale programme:
Agrani Bank Limited in order to create a fund of Tk.500 crore to finance the industrial
sector, has introduced Agrani Bank Limited Shilpa Unnayan Bond. The time period of
the Bond consists of 5 and 7 years with the face value of Tk. 50,000, Tk. I, 00,000 and
Tk. 5, 00,000. The rate of interest for 5-year term bond is 10% while for 7 year it is 11 %.
The purchaser's fund so invested is tax-free. But, if the interest earned exceeds Tk.
25,000, a taskbar at the rate of 10% will be levied. The Bank invests sales proceeds of the
Bond in developing industries of the country. The Industrial Credit Division is responsible
for monitoring sale of the Bond. Up to December 2007, the Bank sold Bonds worth
Tk.282.85 crore and invested Tk. 27.11 crore.
Female Secondary School Assistance Project II (FSSAP-II):
The Bank has been entrusted with the task of disbursing stipend to 8.50 lac female
students at 119 Upazilas under supervision of the world Bank. In 2007, Tk. 28.00 crore
has been disbursed.
Female Secondary Stipend Project (FSSP):
In order to speed up literacy in women, Bangladesh Government has initiated this
programme to provide stipend to female students. The Bank has been entrusted with the
disbursement for Dhaka Division. The Bank, through its 90 branches, disbursed Tk.9.00
crore among 2.87 lac female students of 62 Upazillas under this scheme in 2007.
Female Education Stipend Project(FESP):
Funded by NORAD, this programme has been started to increase literacy in women in 19
upazilas. The Bank disbursed as stipend and tuition fees of Tk. 4.18 Crore to 0.62 lac
female students in 2007.
Primary Education Stipend Project (PESP):

The government has undertaken this programme from its own finance to increase the rate
of literacy as well as to prevent the dropout rate at primary level across the country.
Agrani Bank Limited , through its 49 branches, disbursed Tk 39.00 crore among 5.14 lac
students under 49 upazillas of Sylhet and Barisal divisions.

Higher Secondary Female Stipend Project (HSFSP)

Similarly, for the advancement of female education across the country, the government
has embarked on this programme. In 2007, Tk. 4.51 crore has been allocated for
disbursement.
Bayasko Bhata & Bidhaba Swami Parittakta Dustha Mohila Bhata.
In 2007, the Bank has distributed Tk.28.00 crore to 1.88 Lac beneficiaries through its 484
designated branches throughout the country under the programme of the Government.
Payment of Retirement Benefit:
In 2007, an amount of Tk. 34.00 crore has been paid to the Bank by the Government to
pay retirement benefits to the retired Govt. employees.
Salary and allowance payment to the non-govt. Teachers.
In 2007, the Government as Salary & Allowances has paid an amount of Tk 400.00 crore
to the Bank for the non-govt. teachers.
Food Procurement.
In 2007, an amount of Tk. 384.00 crore has been allocated to the Bank to pay bills against
Food Procurement drive undertaken by the government.
Payment of Honorarium and Allowance to Freedom Fighters.
An amount of Tk 4.00 crore has been paid to our Bank for payment of Honorarium and
Allowances to Freedom Fighters.

5.8.ASSESMENT OF THE REPORT

Analysis Techniques & Report Writing:
To prepare the Report here theoretical Concepts is used first & hence forth the practical
requirements & priorities of Recruitment, Motivation, Training & Development,
Compensation Administration, and performance appraisal in Agrani Bank Limited is
reported. The Collected were tabulated on the computer and the final analysis was
performed on statistical software two types of analysis were primarily carried out:
I. Factors Analysis:
To check if the scale items included in the organizational commitment questionnaire
constituted in a single variable in the specific context of Agrani Bank Limited.
II. Co-relations and regression analysis:
To find out if and to what extent the power bases explained employees organizational
commitment.

III. Factor Analysis with Varimax Rotation:

Dependent Variable; Organizational Commitment is shown by the under mentioned
Table:

Scale items

Factor organizational
Commitment

I would take any type of job assignment in order to

0.786

keep working for this organization

I Find that my values and organizations values are

0.782

similar
This organization really inspires that very best in

0.756

me in the way of job performance

I Talk up this organization to my friends as a great

0.753

organization to work for

I am willing to put in a great deal of effort what I

0.690

normally expected in order to help this organization

to be successful
The amount of job security I have is very
satisfactory
Eigen value=3.176,% of variance =52.94

Table 8, Factors Analysis with Varian Rotation

5.9 Learnings through task:

0.577

During my three months period of internee I have learnt about different foreign exchange
operations which are carried out by ABL.A short focus area of my learning is highlighted
below:

CHAPTER-6
ANALYSIS AND FINDINGS
6.1. Analysis related with Foreign Exchange Operations of Agrani Bank:

6.2. SWOT ANALYSIS/ FINDING:

SWOT Analysis is the detailed strategy of an organizations exposure and potential in
perspective of its strength, weakness, opportunity and threat. This analysis used the
organization to make their existing line of performance also foresee the future to improve
their performance in comparison to their competitors.
By SWOT Analysis, an organization can also observe their current position. It can also
be considered as an important tool for making changes in the strategic management of the
Organization. The acronym SWOT stands for:
o Strengths
o Weaknesses

o Opportunities ando Threats.

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

Energetic as well as smart team work

Good Management
Lending rate is relatively competitive
Cooperation with each other
Membership with SWIFT
Good banker-customer relationship
Strong Financial Position
Strong position in CAMEL rating
Huge business area
Service charges are comparatively reasonable.
Strong corporate identity
Young enthusiastic workforce
Empowered Work force

2. Weaknesses:

Lack of proper motivation, training and job rotation.

Lack of experienced employees in junior level management.
Lack of own ATM services.
Tendency to leave the bank in quest of flexible environment.
Lack of proficient manpower in some department.
Limited advertising and publicity of banks products and activities.
Absence of strong marketing activities.
Diversification..
Outdated Software and Hardware at ABL Hatkhola Branch.
Office environment is not good as private bank environment.
High charges of L/C.

3. Opportunities:

Change in political environment.

Launching own ATM card services.
Expansion of banking services into other different services.
Expansion branches of online.

Experienced Managers.
Growth of sales volume.

4. Threats:

Upcoming Banks/Branches.
Different services of FCBS (Phone Banking/Home Banking).
Similar products are offered by other banks.
Default Loans.
Financial Crisis.
Existing card services of Standard Chartered Bank or other private Bank.
Daily basis interest on deposit offered by HSBC.
Entrance of new PCBs.
Government has been controlling industrial credit.
Recession of global economy.
Intensification of competition in the industry.

6.2.1: BCG GROWTH MATRIX

"The concept of BCG's growth-share matrix, central now a day to business schools'
curriculum on strategy ... provided companies with a disciplined and systematic tool for
portfolio management," Martin told Business News Daily. "Recently, Harvard Business
Review named BCG's matrix one of five 'frameworks that changed the world.'"
Understanding the matrix:
In order to understand the financial position and which product is in which position of
Agrani Bank we can calculate and determine with the help of this Portfolio known as
BCG Growth Matrix:
To create a BCG matrix, businesses gather market-share and growth-rate data on their
business units or products. One large square is drawn and is divided into four equal
quadrants. Along the top of the box, a market share or cash generation is written, and a
growth rate or cash use is written down the left side. On the top left is high market share,
and low market share is on the left. On the left-hand side, high cash use is at the top and
low cash use or growth rate is at the bottom.
Within the diagram, "stars" go in the upper-left quadrant, and "question marks" are put in
the upper-right square. At the bottom, "cash cows" go on the left, and "dogs" are placed

on the right. The diagram visually shows that stars have high market share and a high
growth rate, while question marks have low market share and a high growth rate. On the
bottom, cash cows have a low growth rate but a high market share, and dogs have a low
market share and a low growth rate.

Graph: BCG Growth Matrix

The following ideas apply to each quadrant of the matrix:

Stars: The business units or products that have the best market share and generate the
most cash are considered stars. Monopolies and first-to-market products are frequently
termed stars. However, because of their high growth rate, stars also consume large
amounts of cash. This generally results in the same amount of money coming in that is
going out. Stars can eventually become cash cows if they sustain their success until a time
when the market growth rate declines. Companies are advised to invest in stars.
Cash cows: Cash cows are the leaders in the marketplace and generate more cash than
they consume. These are business units or products that have a high market share, but low
growth prospects. According to Net MBA, cash cows provide the cash required to turn
question marks into market leaders, to cover the administrative costs of the company, to
fund research and development, to service the corporate debt, and to pay dividends to
shareholders. Companies are advised to invest in cash cows to maintain the current level
of productivity, or to "milk" the gains passively.
Dogs: Also known as pets, dogs are units or products that have both a low market share
and a low growth rate. They frequently break even, neither earning nor consuming a great
deal of cash. Dogs are generally considered cash traps because businesses have money

tied up in them, even though they are bringing back basically nothing in return. These
business units are prime candidates for divestiture.
Question marks: These parts of a business have high growth prospects but a low market
share. They are consuming a lot of cash but are bringing little in return. In the end,
question marks, also known as problem children, lose money. However, since these
business units are growing rapidly, they do have the potential to turn into stars.
Companies are advised to invest in question marks if the product has potential for growth,
or to sell if it does not.
As BCG founder Bruce Henderson wrote in 1968, "all products eventually become either
cash cows or pets [dogs]. The value of a product is completely dependent upon obtaining
a leading share of its market before the growth slows."
Once a company plots out its matrix, it can begin to further analyze its products potential.
Understanding cash flow:
To understand the elements of the Agrani Bank Ltd., companies should be mindful of the
sources of cash flow. Henderson wrote that four rules are responsible for product cash
flow:

Margins and cash generated are a function of market share. High margins and high
market share go together.

Growth requires cash input to finance added assets. The added cash required to
hold share is a function of growth rates.

High market share must be earned or bought. Buying market share requires an
additional increment or investment.

No product market can grow indefinitely. The payoff from growth must come
when the growth slows, or it never will. The payoff is cash that cannot be
reinvested in that product.

6.2.2: Ratio Analysis

Figure-1
Current Ratio:
The current ratio is a liquidity ratio that measures a company's ability to pay short-term
and long-term obligations. To gauge this ability, the current ratio considers the current
total assets of a company (both liquid and illiquid) relative to that companys current total
liabilities.
The formula for calculating a companys current ratio, then, is:
Current Ratio = Current Assets / Current Liabilities
The current ratio is called current because, unlike some other liquidity ratios, it
incorporates all current assets and liabilities.

The current ratio is also known as the working capital ratio.

Interpretation:
Here current ratio is 0.11163 in 2009, 0.17023 in 2008, and 0.08942 in 2007.But the
Industry average is 4.1 x s. So it is the poor performance of Agrani Bank.

Figure-2
Fixed Asset Turnover:
The fixed-asset turnover ratio is, in general, used by analysts to measure operating
performance. It is a ratio of net sales to fixed assets. This ratio specifically measures how
able a company is to generate net sales from fixed-asset investments, namely property,
plant and equipment (PP&E), net of depreciation. In a general sense, a higher fixed-asset
turnover ratio indicates that a company has more effectively utilized investment in fixed
assets to generate revenue.
The fixed-asset turnover ratio is calculated as:

Interpretation:
Here fixed asset turnover ratio is 57.73 in 2009, 58.02 in 2008 and 54.68 in 2007. The
industry average is 4.0 xs so it is the high performance of agrani bank

Figure-3
Total Asset Turnover:
Total Asset turnover ratio is the ratio of the value of a companys sales or revenues
generated relative to the value of its assets. The Asset Turnover ratio can often be used as
an indicator of the efficiency with which a company is deploying its assets in generating
revenue. This Ratio is calculated byAsset Turnover = Sales or Revenues / Total Assets

Interpretation:
Here total asset turnover is 0.78 in 2009, 0.78 in 2008, and 0.72 in 2007.And the industry
average is 2.1 xs so the performance of this sector is low.

Figure-4
A financial ratio that measures the extent of a company or consumers leverage. The debt
ratio is defined as the ratio of total long-term and short-term debt to total assets,
expressed as a decimal or percentage. It can be interpreted as the proportion of a
companys assets that are financed by debt.

Also referred to as the debt-to-asset ratio.

Interpretation:
Here Debt Ratio is 1.87 in 2009, 1.97 in 2008, and 1.80 in 2007. Here debt ratio is
decrease in 2009.And it under controlled. Because the industry average is 4.50 percent.

Figure-5
Times interest Earned
Times interest earned (TIE) is a metric used to measure a company's ability to meet its
debt obligations. The formula is calculated by taking a company's earnings before interest
and taxes (EBIT) and dividing it by the total interest payable on bonds and other
contractual debt. TIE indicates how many times a company can cover its interest charges
on a pretax earnings basis.
BREAKING DOWN 'Times Interest Earned - TIE'
Failing to meet these obligations could force a company into bankruptcy. TIE is also
referred to as the interest coverage ratio.

(Amount in chore taka)

Interpretation:
In times interest earned they earned 4293.3 in 2009, 4220 in 2008. And 3506.6 in
2007.Their time interest earned increase every year. So here there performance is quite
satisfied.

Figure-6
Profit Margin Ratio:
Profit margin is part of a category of profitability ratios calculated as net income divided
by revenue, or net profits divided by sales. Net income or net profit may be determined by
subtracting all of a companys expenses, including operating costs, material costs
(including raw materials) and tax costs, from its total revenue. Profit margins are
expressed as a percentage and, in effect, measure how much out of every dollar of sales a
company actually keeps in earnings. A 20% profit margin, then, means the company has a
net income of $0.20 for each dollar of total revenue earned. While there are a few
different kinds of profit margins, including gross profit margin, operating margin, (or
"operating profit margin") pretax profit margin and net margin (or "net profit
margin") the term profit margin is also often used simply to refer to net margin. The
method of calculating profit margin when the term is used in this way can be represented
with the following formula:

Profit Margin = Net Income / Net Sales (revenue)

Interpretation:
In 2009 there profit margin was 3.57 percent, 4.31percent in 2008, and 3.86 percent in
2007.In three years their profit margin on deposits was higher in 2008 but the industry
average is 4.7 percent so here their performance is low.

Figure-7
Return on Assets:
Return on assets (ROA) is an indicator of how profitable a company is relative to its total
assets. ROA gives an idea as to how efficient management is at using its assets to
generate earnings. Calculated by dividing a company's annual earnings by its total assets,
ROA is displayed as a percentage. Sometimes this is referred to as "return on investment".
The formula for return on assets (ROA) is:

Interpretation:
Here Return on total asset for Agrani Bank was 3.04 percent in 2009, 3.37 percent
in2008, 2.82 percent in2007. So in 2008 there performance is high. The industry average
is 12.6%. The performance is ok. If their return on total asset is higher than 12.6% so
there performance is low.

Figure-8
MARKET/BOOK:
The book-to-market ratio is a ratio used to find the value of a company by comparing the
book value of a firm to its market value. Book value is calculated by looking at the firm's
historical cost, or accounting value. Market value is determined in the stock market
through its market capitalization.
Formula:

Interpretation:
Here a small different in 2009 and 2008. 2008 and 2007 was some ratio. Here the
industry average is 2.0xs. So in this section the performance of ABL was low. This ratio
is smaller than the industry average.

Financial Ratios:
1.
Liquidity ratios- A liquid asset is one that can be easily converted to cash
without significant loss of its original value.
Current RatioThe ratio is calculated by dividing current assets by current liabilities.
Current ratio=current assets/ current liabilities

Fixed Asset Turnover

2. Asset Management- A set of ratios that measure how effectively a firm is
managing its assets.
Fixed asset turnoverThe ratio of sales to net fixed assets.
Total deposits / net fixed assets

Total assets turnover ratioThe ratio calculated by dividing total deposits by total assets
Total deposits / total assets

3. Debt management Debt ratio =the ratio of total debt divided by total assets.
Debt ratio = total debt / total assets

Times interest earning ratio= Earnings before income tax divided by

interest charges.

4. Profitability A group of ratios showing the effect of liquidity, asset

management and debt management on operating results.

Profit margin of sales= Net income divided by total deposits

Return on the total asset= net income divided by the total assets

5. Market Value-A set of ratio that relates the firms stock price to its
earning and book value per share.

Price/Earning= Market price per share divided by earning per

share
Market/Book= Market price per share divided by Book value
per share.

Details Analysis & findings

Perf
ormance Analysis of Agrani
Bank Limited
f

(Am
ount
in
crore
taka)

inancial ratio

20
09

Industry Average

Liqui
dity

1.Current
ratio=current
assets/current

2008

Comment

0.11

4.1x

Low

0.17

Industry
average
comme
nt

4.1x

Low

200
7

0.08

Industry
Average
com
men
t
4.1x

Low

liabilities

Asset
Management
1.fixed assets
turnover=Total
deposits/Net
fixed assets
2.Total assets
turnover=total
deposits/total
assets

57.73

4.0x

High

58.02

4.0x

High

54.80

4.0x

High

0.78

2.1x

Low

0.78

2.1x

Low

0.72

2.1x

Low

Debt
Management
1.De
bt
ratio

Totald
ebt/tot
al
assets

1.87

4.50%

High/
ok

1.97

4.50
%

High
/Ok

1.80

4.50
%

high/
ok

0.038

4.70%

Low

0.043

4.70
%

Low

0.038

4.70
%

Low

0.030

12.60%

Low

0.03

12.6
0%

Low

0.028

12.6
0%

Low

Profit margin
on deposits
1.Profitability
margin on
deposits=Net
income/deposit
s
2.Return on
total asset=Net
income/total
asset

Mar
ket
Valu
e
1.Price/Earnin
gs=Market
price per
share/earnings
2.Market/Book
=Market price
per share/Book
value

70.84(ta
ka)

13.0x

High/
ok

14.26(
taka)

13.0
x

High
/ok

41.84(t
aka)

13.0
x

High/
ok

1.012

2.0x

Low

1.013

2.0x

Low

1.013

2.0x

Low

(Here x means time)

(Industry average rate is collected from Essential of Financial Management book.)

6.3: Findings and Discussion:

Fund Crisis: ABL have not enough fund. They have many deposits offers likes ABDS
deposits, a special deposits is MIS. ABL gives the MIS deposits holders 10% interest in
every month. As 10% of interest rate, if any account holders deposit 10,00000 T.K. than
ABL will give him 10 thousand taka monthly. And they have many MIS holders. So they
think that it is the main reason of crisis of fund, and they face shortage of fund. The share
market value is
Biased decision regarding loans: In loan section they have not maintain the rules and
regulation of Bangladesh Bank. General people face many problems to get loan but the
officials get the loan easily. Some officials do politics so their relatives get loan easily. So
it creates many problems for fund.
Violations of regulations: They do not follow the rules and regulations, some officers are
absence in two or three days in a week. It creates bad effect to other employee.
Poor management and job culture: ABL have a big problem like recently hey add online
system but some branches have not this system. They have manual system, so many
people cannot like this bank because in Bangladesh there are many private bank and they

have online system. It is the poor management system of ABL. In IT section they have no
IT manager so IT performance is very poor, many employee have no skill about IT
section. So this is the reason that people cannot open account in ABL.

CHAPTER-7:
Recommendations and Conclusion:
7.1 Recommendation:
By identifying few of the previously mentioned problems during my internship, from the
SWOT analysis and Ratio analysis I would like to recommend some way to overcome
those problems. These are as follows:
7.1.1 On clearing & cleaning up the local remittance sections:
ABL should make a database to maintain their registry records in to the
Computer. So by only giving a search command they may find out their required
clearing information.

 ABL should open their branches in the business area like near EPZ, port etc to
provide prompt services to importer and exporter.
Local L/C is not introduced in our society very much. ABL can give attention to
attract
local businessman for convincing them about local L/C.
Where computer leads every sphere of lives including banking activities most of
the
ABLs employees are still not expert on computer literacy. So for it, the
management
should give computer training to their employees.
They may make a database or search for other solution to prepare their debit and
credit voucher. As by adopting a better solution will make their work easier.
Prompt attention should be given to the FDR customers if the bank does not want
to lose new customers.
7.1.2

Recommendations by analyzing different ratios:

In ratio analysis the bank indicates some poor and some good performance .So
ABL should improve some sectors to overcome some poor situation. They should
improve their fund and quality management to get ride for some poor
performance situation. They should improve their fund by utilizing their money.
Like they offer some scam and they give loan in high interest rate (house loans).
They should change some rules of scam like MIS. They motivate people by their
new scam. They should maintain and follow some rules and regulation of loans of
Bangladesh Bank. They give the SME to the people for low interest rate for
motivates people. They give any kind of loan and they take care of the client who
takes the loan. They should improve their quality management like IT system.
They must train this people who have no knowledge about IT or online system;
they change the manual system and give online system in all branches. They
should recruit some people in IT sectors. They also avoid politics. They must
follow the rules and regulations. So they overcome this situation.

7.1.3 Some recommendations on enhancing foreign exchange performance by facilitating

Import Export sectors are mentioned in below:
Since the import-export business have the highest contribution to the profitability of
the bank, it should take special attention.
Skilled manpower in the line of import-export business must be accomplished through
proper training, remuneration and job satisfaction.
Performance measurement programs can be introduced to measure the performance of
the officers involved in foreign exchange process.

 Agrani Bank should always monitor the performance of its competitors in the field of
foreign trade.
For customer's convenience in Foreign Exchange Department of Agrani Bank Ltd.
should provide more personnel to deliver faster services to their honorable customer.
To deliver quality service, top management should try to mitigate the gap between
customer's expectation and employee's perception.
The number of exporter and importer who operate through this bank is not enough to
achieve the goal. So ABL should offer more facilities to attract them to be their client.
Foreign exchange department should be fully computerized that the exchange process
would be convenient for both the bankers and the clients.
The Bank should give more concentration of foreign remittance to increase profit from
the remittance. Though the remittance performance of ABL for the last year (2012)
was very bad so the performance and profit should increase year by year.
Though the import and export business increased year by year, but the banks income
growth rate very much fluctuated during the last five years except year of 2012. So the
bank should try to sustain a constant growth rate.
The export business of the bank is on an increasing trend. So the bank should try to
keep the pace of growth.
Bank should try to increase earning from export. It should concentrate more effort to
improve export earnings and remittance earnings for our economy.
The import performance is little bit lower in the year of 2012 compared to others years,
so the bank should try to put more concentration for the amount of import.
The export earnings growth rate and import earning growth rate were very much
fluctuated during the last five years. So bank should try to keep a constant growth rate.
The number of human resources in the remittance department is really insufficient to
give services to huge volume of work. So, number of staff should be increased in this
department.

7.2 Conclusion:
Agrani Bank Limited is a leading Public bank in Bangladesh with superior customer
bases that are loyal, faithful, worthy towards the bank. The service provided by the young
energetic officials of the Agrani Bank Limited is very satisfactory. Form the learning and
experience point of view I can say that I really enjoyed my internship period in Agrani
Bank Ltd. at Jatiya Jadughar Branch from the very first day. I am confident that this 3

(three) months internship program will definitely help me to realize my further carrier in
the job market. During the course of my practical orientation, I have tried to learn the
practical banking to relate it with my theoretical knowledge, what I have gathered and
going to acquire from various courses.
Many new commercial banks have been established in the last few years and these banks
have made the banking sector very competitive. So, now the banks have to organize their
operation and do their operations according to the need of the market.
The major task for banks, to survive in this competitive environment is by managing its
assets and liabilities in an efficient way. As an internee student of Agrani Bank Ltd at
Hatkhola Branch, I have truly enjoyed my internship from the side of learning to the side
of experiences viewpoint. I am confident that three month internship program in Agrani
Bank Limited will definitely help me to realize career in the job market. But during my
intern period it was not much possible for me to go to the depth of branches sections
thoroughly because of the time limitations. Agrani Bank Limited (ABL) is one of the
widely expanded Banks in Bangladesh. Due to the threat of deposit shortage, this Bank
may minimize its different types of unnecessary expenditure and should maximize profit
through launching new schemes and obtain different peoples belief. I do also believe
that all of these will assist me further in my career build-up in the future.
ABL is committed to provide high quality financial service to contribute to the growth of
G.D.P. of the country through simulation trade and commerce, accelerating the pace of
industrialization, boosting up export, creating employment opportunity for the educated
youth, poverty alleviation, raising standard of living of limited income group and overall
sustainable socio-economic development of the country.
I also think that there is bright future waiting for the Agrani Bank Ltd. Near future ABL
will be a position to go as a catalyst for this development in the banking sector of
Bangladesh. Another thing I have to mention here that ABL is going through the path in
which they need to go as like today and it will bring more new and welfare oriented
activities in the banking sector in years to come.
Performance analysis of foreign exchange of a bank is not so sufficient to measure and
express perfectly within this short time of my internship period. But it is a great
opportunity for me to get used to with the operational environment of foreign exchange
business of ABL. I have tried by soul to incorporate the necessary relevant information in
my report.
At last I would like to conclude that as a student of BBA I had to undertake this training
program to fulfill the partial requirement of the BBA program. I have tried to the best of
my capacity to prepare and submit this report within a very short period of time. I am
highly pleased being able to make a report on this kind of program. If there is any kind of
error kind consideration is requested.

Bibliographies and References:

END NOTE: