B

Chapter 1 INTRODUCTION Generally by the word Bank we can easily understand that the financial institution deals with money. But there are different types of banks like; Central Banks, Commercial Banks, Savings Banks, Investment Banks, Industrial Banks, Cooperative Banks etc. But when we use the term Bank without any prefix, or qualification, it refers to the Commercial banks. Commercial banks are the primary contributors to the economy of a country. So we can say Commercial bank is a profitmaking institution that holds the deposits of individuals & business in checking & savings accounts and then uses these funds to make loans. For these people and the government is very much dependent on these banks as the financial intermediary. As, banks are profit -earning concern; they collect deposit at the lowest possible cost and provide loans and advances at higher cost. The differences between two are the profit for the bank. Banking sector is expanding its hand in different financial events every day. At the same time the banking process is becoming faster, easier and the banking arena is becoming wider. As the demand for better service increases day by day, they are coming with different innovative ideas & products. In order to survive in the competitive field of the banking sector, all banking organizations are looking for better service opportunities to provide their fellow clients. As a result, it has become essential for every person to have some idea on the bank and banking procedure. Internship program is essential for every student, especially for the students of Business Administration, which helps them to know the real life situation. For this reason a student takes the internship program at the last stage of the bachelors degree, to launch a career with some practical experience

ORIGIN OF THE REPORT: The report entitled General Banking System of Export Import Bank of Bangladesh Limited has been prepared as a partial fulfillment of BBA program authorized by the Department of Business Administration, International Islamic University Chittagong (Dhaka Campus).

BACKGROUND OF THE REPORT: After completing my graduation as a student of BBA from International Islamic University Chittagong (Dhaka Campus). I wanted to do Internship in a reputed Bank which would be helpful for my future professional career. I got the opportunity to perform my internship in the EXIM Bank Ltd. I was sent to Motijheel Branch. It was a three months long practical orientation program. This report is originated as the requirement of EXIM Bank Ltd.

OBJECTIVE OF THE REPORT:

The primary objective of this report is to comply with the requirement of the EXIM Bank Ltd. But the objective behind this study is something broader. Objectives of the study are summarized in the following manner: To apply theoretical knowledge in the practical field. To make a bridge between the theories and practical procedures of banking day-to-day operations. To gain practical knowledge by working in different desks of Motijheel branch of EXIM Bank To observe the working environment in commercial banks. To study existing banker-customer relationship. To know the overall functioning of EXIM Bank Limited. To have some practical exposures that will be helpful for my future career.

METHODOLOGY: This report has been prepared on the basis of experience gathered during the period of internship from April 10, 2007 to July 10, 2007. For preparing this report, I have undergone group discussion, collected data and sent some questionnaires to the selected Officers and interviewed with some of them. I also studied different circulars and files of the bank. I hope these criteria will be enough to find out different picture of financial performance of the selected bank (EXIM Bank).

SCOPE OF THE REPORT: As I was sent to EXIM Bank, Motijheel Branch, the scope of the study is only limited to this branch. The report covers its overall department wise function, structure and performance. The report also covers details about EXIM Bank.

JOB ROTATION: Departments General Banking Foreign Exchange Advances Duration From April 10 to May 15. From May 16 to June 25. From June 27 to July 10

SOURCES OF DATA: In order to make the report more meaningful and presentable, two sources of data and information have been used widely.

The Primary Sources are as follows: Face-to-face conversation with the respective officers and staffs of the Branch. Informal conversation with the clients. Practical work exposures from the different desks of the departments of the Branch covered. Relevant file study as provided by the officers concerned.

The Secondary Sources of data and information are: Annual Report of EXIM Bank Ltd. Various books, articles, compilations etc. regarding general banking functions, foreign exchange operations and credit policies. Different Procedure Manual, published by EXIM bank. Different circular sent by Head Office of EXIM Bank and Bangladesh Bank.

LIMITATIONS:

1. The time, 78 working days, is insufficient to know all activities of the branch and prepare the report. 2. It was very difficult to collect the information from various personnel for their job constraint. 3. As some of the fields of banking are still not covered by our courses, there was difficulty in understanding some activities. 4. Another limitation of this report is Banks policy of not disclosing some data and information for obvious reason, which could be very much useful. 5. Because of the limitation of information, some assumption was made. So there may be some personal mistake in the report 6. I carried out such a study for the first time, so inexperience is one of the constraints of the study. main

ORGANIZATION OF THE REPORT:

This is a short report covering all that I experienced while working at bank. The report has seven parts. The first part is the introductory chapter. The second part contains information about EXIM Bank. The third part gives information about Motijheel branch where I have worked. General Banking is described in forth part. In fifth part named conclusions ends the report.

Chapter 2 Historical Background of EXIM Bank Limited: Export Import Bank of Bangladesh Limited is a third-generation private commercial bank in the country with commendable operating performance. Directed by the mission to provide, prompt and efficient services to clients, EXIM Bank has successfully celebrated its eight year of operation. It provides a wide range of commercial banking services. Bank has achieved success among its peer group within a short span of time with its professional and dedicated team of management having long experience, commendable knowledge and expertise in convention with modern banking. Export Import Bank of Bangladesh Limited started its operation on 3rd august, 1999 as a scheduled commercial bank as per rules and regulations of Bangladesh Bank. At present the bank has 32 branches across the country. It renders all types of commercial banking operations to its customers within the purview of the Bank Companies Act, 1991 and in line with the directives and policy guidelines laid down by Bangladesh Bank.

In its 8th year of operation, 2007, EXIM Bank has made substantial headway in terms of business growth, profitability and establishing its image as one of the leading private sector Bank. Its march towards reaching greater heights in operation continues with full vigor and enthusiasm. The sponsors of the Bank are renowned group of industrialists and businessmen with a proven track record. They represent reputed industrial and business houses of the country. Mr. Md. Nazrul Islam Mazumder is the present chairman of the Bank. The board of Directors comprises 17 members including the Managing Director Mr. Md. Mashiur Rahman The bank conducts all types of commercial banking operations. The core business of the bank comprises of trade finance, term finance, working capital finance and corporate finance. The Bank is also providing personal credit, services related to local and foreign remittances and several product related services. The scheme of the Bank, which is designed to help the fixed income group in raising standard of living is competitively priced and has been widely appreciated by the customers.

The Bank has achieved success in all sectors and ended up with a great operating profit. The achievement has been possible because of the able leadership, dedicated and committed services provided by all levels of management and staff and above all the trust and confidence that the valued client had reposed in the Bank. For EXIM Bank, the days ahead will see this institution to achieve greater heights of glory.

EXIM Bank Limited was established under the leadership of Late Mr. Shahjahan Caber, founder chairman who had a long dream of floating a commercial bank which would contribute to the socio-economic development of our country. He had a long experience as a good banker. A group of highly qualified and successful entrepreneurs joined their hands with the founder chairman to materialize his dream. In deed, all of them proved themselves in their respective business as most successful star with their endeavor, intelligence, hard working and talent entrepreneurship. Among them, Mr. Nazrul Islam Mazumder became the honorable chairman after the demise of the honorable founder chairman. This bank starts functioning from 3rd August, 1999 with Mr. Alamgir Kabir, FCA as the advisor and Mr. Md. Mashiur Rahman as the Managing Director. Both of them have long experience in the financial sector of our country. By their pragmatic decision and management directives in the operational activities, this bank has earned a secured and distinctive position in the banking industry in terms of performance, growth, and excellent management. The total capital and paid up capital of the bank are Tk.3467.37 million and Tk.1713.76 million respectively.

Corporate Mission

To provide high quality financial services in export and import trade. To provide excellent quality Customer service. To maintain Corporate and business ethics. To become a trusted repository of customers' money and their financial advisor. To make our stock superior and rewarding to the customers/share holders. To display team spirit and professionalism. To have a Sound Capital Base.

Corporate Culture This bank is one of the most disciplined Banks with a distinctive corporate culture. Here we believe in shared meaning, shared understanding and shared sense making. Our people can see and understand events, activities, objects and situation in a distinctive way. They mould their manners and etiquette, character individually to suit the purpose of the Bank and the needs of the customers who are of paramount importance to us. The people in the Bank see themselves as a tight knit team/family that believes in working together for growth. The corporate culture we belong has not been imposed; it has rather been achieved through our corporate conduct.

Islamic banking:
An Islamic bank is based on the Islamic faith and must stay within the limits of Islamic Law or the sharia in all of its actions and deeds. The original meaning of the Arabic word sharia was 'the way to the source of life' and it is now used to refer to legal system in keeping with the code of behaviour called for by the Holly Qur'an (Koran). Four rules govern investment behaviour:
a. the absence of interest-based (riba) transactions; b. the avoidance of economic activities involving speculation (ghirar); c.

the introduction of an Islamic tax, zakat; the value pattern of Islamic (haram)

d. the discouragement of the production of goods and services which contradict

In the following part I explain these four elements give Islamic banking its distinctive religious identity. Riba Perhaps the most far reaching of these is the prohibition of interest (riba). The payment of riba and the taking as occurs in a conventional banking system is explicitly prohibited by the Holy Qur'an, and thus investors must be compensated by other means. Technically, riba refers to the addition in the amount of the principal of a loan according to the time for which it is loaned and the amount of the loan. While earlier there was a debate as to whether riba relates to interest or usury, there now appears to be consensus of opinion among Islamic scholars that the term extends to all forms of interest. In banning riba, Islamic seeks to establish a society based upon fairness and justice (Qur'an 2.239). A loan provides the lender with a fixed return irrespective of the outcome of the borrower's venture. It is much fairer to have a sharing of the profits and losses. Fairness in this context has two dimensions: the supplier of capital possesses a right to reward, but this reward should be commensurate with the risk and effort involved and thus be governed by the return on the individual project for which funds are supplied. Hence, what is forbidden in Islamic is a predetermined return. The sharing of profit is legitimate and that practice has provided the foundation for Islamic banking.

Ghirar Another feature condemned by Islamic is economic transactions involving elements of speculation, ghirar. Buying goods or shares at low and selling them for higher price in the future is considered to be illicit. Similarly an immediate sale in order to a void a loss in the future is condemned. The reason is that speculators generate their private gains at the expense of society at large. Zakat A mechanism for the redistribution of income and wealth is inherent is Islam, so that every Muslim is guaranteed a fair standard of living, nisab. An Islamic tax, Zakat (a term derived from the Arabic zaka, meaning "pure") is the most important instrument for the redistribution of wealth. This tax is a compulsory levy, one of the five basic tenets of Islam and the generally accepted amount of the zakat is one fortieth (2.5 per cent) of Muslim's annual income in cash or kind from all forms of assessed wealth exceeding nisab. Every Islamic bank has to establish a zakat fund for collecting the tax and distributing it exclusively to the poor directly or through other religious institutions. This tax is imposed on the initial capital of the bank, on the reserves, and on the profits as described in the Handbook of Islamic Banking. Haram A strict code of 'ethical investment' operates. Hence it is forbidden for Islamic banks to finance activities or items forbidden in Islam, haram, such as trade of alcoholic beverage and pork meat. Furthermore, as the fulfilment or materials needs assures a religious freedom for Muslims, Islamic banks are required to give priority to the production of essential goods which satisfy the needs of the majority of the Muslim community, while the production and marketing of luxury activities, israf wa traf is considered as unacceptable from a religious viewpoint. In order to ensure that the practices and activities of Islamic banks do not contradict the Islamic ethical standards, Islamic banks are expected to establish a Sharia Supervisory Board, consisting of Muslim jurisprudence, who acts as advisers to the banks. Profit-sharing agreements Although the restriction against the use of interest might seem to be a binding constraint upon expansion, Islamic banks and financial institutions have in fact grown rapidly. If the paying and receiving of interest is prohibited, how do Islamic banks operates? It is necessary to distinguish between the expressions 'rate of interest' and 'rate of return'. Whereas Islam clearly forbids the former, it not only permits, but rather encourages, trade. In the interest-free system sought by adherents to Muslim principles, people are able to earn a return on their money only by subjecting themselves to the risk involved in profit sharing. As the use of interest rates in financial transactions is prevented, Islamic banks are expected to undertake operations only on the basis of Profit and Loss Sharing (PLS) arrangements or other acceptable modes of financing. Mudaraba and musharaka are the two profit-sharing arrangements preferred under Islamic law.

Mudaraba A mudaraba can be defined as contract between at least two parties whereby one party, the financier (sahib al-mal), entrusts funds to another party, the entrepreneur (mudarib), to undertake an activity or venture. This type of contract is in contrast with musharaka. In arrangements based on musharaks there is also profit-sharing, but all parties have the right to participate in managerial decisions. In mudaraba, the financier is not allowed a role in management of the enterprise. Consequently, mudaraba represents a PLS contract where the return to lenders is a specified share in the profit/loss outcome of the project in which they have a stake, but no voice. In interest lending, the loan is not contingent on the profit or loss outcome, and is usually secured, so that the debtor has to repay the borrowed capital plus the fixed interest amount regardless of the resulting yield of the capital. Under mudaraba, the yield is not guaranteed in profit-sharing and financial losses are borne completely by the lender. The entrepreneur as such losses only the time and effort invested in the enterprise. This distribution effectively treats human capital with equally financial capital. Musharaka Under musharaka, the entrepreneur adds some of his own to that supplied by the investors, so exposing him to the risk of capital loss. Profits and losses are shared according to pre-fixed proportions, but these proportions need not coincide with the ratio of financing input. The bank sometimes participates in the execution of the projects in which it has subscribed, perhaps by providing managerial expertise. Figure 3 illustrates the elements. Mudaraba and musharaka constitute, at least in principle if not always in practice, the twin pillars of Islamic banking. The two methods conform fully to Islamic principles, in that under both arrangements lenders share in the profits and losses of the enterprises for which funds are provided and shirkah (partnership) is involved. The musharaka principle in invoked in the equity structure of Islamic banks and is similar to the modern concepts of partnership and joint stock ownership. Two-tiered mudabara For banking operations, the mudaraba concept has been extended to include three parties: the depositors as financiers, the bank as an intermediary, and the entrepreneur who requires funds. The bank acts as an entrepreneur when it receives funds from depositors and as financier when it provides the funds to entrepreneurs. In other words, the bank operates a two-tier mudaraba system in which it acts both as the mudarib on the saving side of the equation and as the rubbul-mal (owner of capital) on the investment portfolio side. Insofar as the depositors are concerned, an Islamic bank acts as a mudarib which manages the funds of the depositors to generate profits subject to the rules of mudaraba. The bank may in turn use the depositors' funds on a mudaraba basis in addition to other lawful (but less preferable) modes of financing, including mark up or deferred sales, lease purchase and beneficence loans. The funding and investment avenues are now listed.

Sources of funds: Besides their own capital and equity, Islamic banks rely on two main sources of funds, a) transaction deposits, which are risk free but yield no return and, b) investment deposits, which carry the risks of capital loss for the promise of variable. In all, there are four main types of accounts: Current accounts: Current accounts are based on the principle of al-wadiah, whereby the depositors are guaranteed repayment of their funds. At the same time, the depositor does not receive remuneration for depositing funds in a current account, because the guaranteed funds will not be used for PLS ventures. Rather, the funds accumulating in these accounts can only be used to balance the liquidity needs of the bank and for short-term transactions on the bank's responsibility. Savings accounts: Savings accounts also operate under the al-wadiah principle. Savings accounts differ from current deposits in that they earn the depositors income: depending upon financial results, the Islamic bank may decide to pay a premium, hiba, at its discretion, to the holders of savings accounts. Investment accounts: An investment account operates under the mudaraba al-mutlaqa principle, in which the mudarib (active partner) must have absolute freedom in the management of the investment of the subscribed capital. The conditions of this account differ from those of the savings accounts by virtue of: a) a higher fixed minimum amount, b) a longer duration of deposits, and c) most importantly, the depositor may lose some of or all his funds in the event of the bank making losses. Special investment accounts: Special investment accounts also operate under the mudaraba principle, and usually are directed towards larger investors and institutions. The difference between these accounts and the investment account is that the special investment account is related to a specified project, and the investor has the choice to invest directly in a preferred project carried out by the bank. Uses of funds: The mudaraba and musharaka modes, referred to earlier, are supposedly the main conduits for the outflow of funds from banks. In practice, however, other important methods applied by Islamic banks include: Murabaha (mark up)- The most commonly used mode of financing seems to be the 'mark-up' device. In murabaha transactions, the bank finances the purchase of a good or assets by buying it on behalf of its client and adding a mark-up before reselling it to the client on a 'cost-plus' basis profit contract. Figure 4 illustrates the sequence. Bai' muajjal (deferred payment) - Islamic banks have also been resorting to purchase and resale of properties on a deferred payment basis. It is considered lawful in fiqh (jurisprudence) to charge a higher price for a good if payments are to be made at a later date. According to fiqh this does not amount to charging interest, since it is not a lending transaction but a trading one.

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Bai'salam (prepaid purchase) - This method is really the opposite of the murabaha. There the bank gives the commodity first, and receives the money later. Here the bank pays the money first and receives the commodity later, and is normally used to finance agricultural products. Istissanaa (manufacturing) - This is a contract to acquire goods on behalf of a third party where the price is paid to the manufacturer in advance and the goods produced and delivered at a later date. Ijara and ijara wa iqtina (leasing) - Under this mode, the banks buy the equipment or machinery and lease it out to their clients who may opt to buy the items eventually, in which case the monthly payments will consist of two components, i.e. rental for the use of the equipment and instalment towards the purchases price. Qard hasan (beneficence loans) - This is the zero return type of loan that the Holly Qura'n urges Muslims to make available to those who need them. The borrower is obliged to repay only the principal amount of the loan, but is permitted to add a margin at his own discretion. Islamic securities- Islamic financial institutions often maintain an international Islamic equity portfolio where the underlying assets comprise ordinary shares in well run businesses, the productive activities of which exclude those on the prohibited list (alcohol, pork, armaments) and financial service based on interest income.

SWIFT service:
The SWIFT services helped the bank in sending and receiving the messages and instructions related to our NOSTRO account operations and L/C related matters. We have brought 6 of our Branches under SWIFT network. Other Branches will come under the network hopefully by the year 2004. Besides we have BKE arrangements with 430 Bank Branches in 100 countries.

Functions of EXIM Bank limited: To maintain all types of deposit A/Cs. To make investment. To conduct foreign exchange business. To conduct other Banking services. To conduct social welfare activities.

Values of EXIM Bank limited: To be one EXIM by holding and guiding the following values: To have a strong customer focus and to build relationship based on integrity, superior service and mutual benefit. To strive for private and sound growth. To work as a team to serve the best interests of the organization.

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To work for continues business innovation and improvements. To value and respect people and make decisions based on merit. To provide recognition and reward on performance. To value open and honest communication.

Efficacy of Customer Services of EXIM Bank

The most important asset of any organization is its customers. An organizations success depends on how many customers it has, how much they buy, and how often they buy. Customers that are satisfied will increase in number, buy more, and buy more frequently. Satisfied customers also pay their bills promptly, which greatly improves cash flow-the lifeblood of any organization. The organizational diagram in Figure-1 best exemplifies just how important the customer is to any organization.

Customers Front-line representatives Functional operational areas

Senior Managers CEO

Figure-1 Customer Satisfaction Organizational Diagram A company is a device for transforming inputs into outputs. The simplest measure of efficiency is the quantity of inputs that it takes to produce a given output; that is, Efficiency = outputs/inputs. A company can increase efficiency through a number of steps. These include exploiting economies of scale and learning effects, adopting flexible manufacturing technologies, reducing customer defection rates, getting R&D function to design

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products that are easy to manufacture, upgrading the skills of employees through training, introducing self-managing teams, linking pay to performance building a companywide commitment to efficiency through strong leadership, and designing structures that facilitate cooperation among different functions in pursuit of efficiency goals. To achieve superior customer responsiveness often requires that the company achieve superior efficiency, quality, and innovation. To achieve superior customer responsiveness, a company needs to give customers what they want when they want it. It must ensure a strong customer focus, which can be attained through leadership; training employees to think like customers; bringing customers into the company through superior market research; customizing the product to the unique needs of individual customers or customer groups; and responding quickly to customers demands. Customers satisfaction depends on Efficacy of customer service. If customers of the bank are satisfy on the banking service then the efficacy will be positive. On the other hand, if customers are dissatisfy then the efficacy will be negative. Efficacy of customer service is related with progression of operation. We can identify the efficacy of customer service by studying the progress of EXIM Bank from starting to at present. The progress of EXIM Bank limited is very rapid with the concern of its profit making and growth of its operation within the country towards the countrys economy.

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Factors to measure the efficacy of customer services

1. Deposit 2. Equity 3. Loans and Advances 4. Investment 5. Import Business 6. Export Business 7.Profit (After Tax)

8. Paid-up Capital 9. Total Capital 10. Branches

From the following information heads we can clearly understand the progress of EXIM Bank limited. 1. Deposit: Table-10

Year Tk. In million Rate of increase

1999 2000 30.24 3934.47 ---12910.80%

2001 2002 7389.54 9945.23 87.81% 34.58%

2003 2004 2005 2006 15242.97 19078.18 28319.21 35032.02 53.27% 25.16% 48.44% 28.70%

Figure-1

40000 30000 20000 10000 0 1999 2000 2001 2002 2003 2004 2005 2006 Tk. in m illion

From the above deposit figure we can clearly understand that customers are mostly interested towards the EXIM Bank Ltd. As of December 2006 total deposits of the Bank stood at TK. 35032.02 million as against TK. 28319.21 million as of the

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previous year which is an increase of 28.70%. This growth rate might be termed as a remarkable achievement for the Bank. The present strategy is to increase the deposit base through maintaining competitive interest rates and having low cost of funds that would ensure a better spread with a moderate lending rate.

DEPOSIT MIX OF EXIM BANK LIMITED

Current & Others(9.89% ) Savings Deposits (4.81% ) Term Deposits (84.15% ) Bills Payable (0.90% ) FC deposits (0.25% )
Figure - 2

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2. Shareholders Equity:

Table-11 Year Tk. in million Rate of increase 1999 227.9 0 ---2000 296.75 30.21% 2001 461.97 55.68% 2002 551.33 19.34% 2003 748.27 35.72% 2004 1400 87.09% 2005 1912.42 36.60% 2006 3111.69 62.71%

Figure-3

3500 3000 2500 2000 1500 1000 500 0 Tk. in million 2006 2005 2004 2003 2002 2001 2000 1999

The above data shows the progress of EXIM Bank in their operations which reflex proper customer efficiency for owners / investors.

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3. Investment (Loans and Advances):

Table-12 Year Tk. in million Rate of increase 1999 233.7 8 ---2000 2170.53 828.44% 2001 5131.55 136.42 % 2002 2003 2004 7954.36 12289.12 19332.4 3 55.00% 54.49% 57.31% 2005 26046.3 4 34.73% 2006 32641.27 25.32%

Figure-4
35000 30000 25000 20000 15000 10000 5000 0 1999 2000 2001 2002 2003 2004 2005 2006 Tk. in m illion

From the above table and figure we can say that, customers have a good response to the loans & advances department of EXIM Bank. So the position of this department is very good. Loans and Advances of the Bank stood at Tk.32641.27 million as on 31st December, 2006. Loans and Advances are the core asset of a Bank. The Bank gives emphasis to acquire quality assets and does appropriate lending risk analysis while improving commercial and trade loans to clients.

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4. Investment (Shares and Bonds):

Table-13

Year Tk. in million Rate of increase

1999 2000 71.27 321.59 ---351.22%

2001 829.06 157.80%

2002 1419 71.16%

2003 2377.07 67.52%

2004 1542.99 (35.00% )

2005 1633.03 5.83%

2006 2233.25 36.75%

Figure-5

2500 2000 1500 1000 500 0 1999 2000 2001 2002 2003 2004 2005 2006 Tk. in m illion

The size of the investment portfolio in 200 is at Tk.2233.25 million. So this rapid increase of investment shows the proper efficacy of customer services.

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5. Import Business: Import Business is an important segment of Foreign exchange business. The significant items of Import are Industrial Raw Materials, Consumer Goods, Machinery, Fabrics, and Accessories etc. EXIM Bank helps its customers to import these types of goods from other countries and the bank also gives the financial help to the customer. Table-14

Year Tk. in million Rate of increas e

1999 330.6 0 ----

2000 4199.70 1200.57 %

2001 8519.70 102.80%

2002 2003 13152.50 19260.10 54.38% 46.44%

2004 2005 26781.80 41432.1 0 39.05% 54.70%

2006 49596.73 %

Figure-6

50000 40000 30000 20000 10000 0 Tk. in million 2006 2005 2004 2003 2002 2001 2000 1999

From the above table and figure we can clearly understand that the volume of import is increasing gradually. During the year 2006 the Bank opened 35475 imports letter of credit and volume stood at TK. 62190.26 million with a growth of 50.10% comparison with previous year. This growth rate indicates the curiosity of customers towards the EXIM Bank.

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6. Export Business: From the very beginning the Bank has embarked on extensive Foreign Exchange Business with a view to facilitating international trade transaction of the country. Bangladesh exports a large quantity of goods and services to foreign households. Readymade textile garments (both knitted and woven), Jute, Jute-made products, frozen shrimps, tea are the main goods that Bangladeshi exporters exports to foreign countries. Table-15

Year 1999 2000 Tk. in 57.8 2797.3 million Rate of --- 4739.61 increase %

2001 7442.2 166.00%

2002 2003 2004 10088.30 15124.60 22418.40 35.56% 49.92% 48.22%

2005 31285.3 7 39.55%

2006 46234.59 %

Figure-7

50000 40000 30000 20000 10000 0 1999 2000 2001 2002 2003 2004 2005 2006 Tk. in m illion

From the above table and figure we can say that the position of export business of EXIM Bank is good. The export business during the year 2006 reached TK. 42162.16 million against TK. 31285.37 million of the previous year. The growth in export business was 34.77%. So the above data will make the customer more interested to make himself client of EXIM Bank Ltd.

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7. Profit (after tax) Table -16

Year Tk. in million Rate of Increase

1999 -------

2000 48.14 ----

2001 158.05 228.31%

2002 201.42 27.44 %

2003 254.79 26.50%

2004 381.79 49.84%

2005 555.33 45.45%

2006 605.29 9.00%

Figure-8

700 600 500 400 300 200 100 0 1999 2000 2001 2002 2003 2004 2005 2006 Tk. in million

The above table and figure are showing the progress of EXIM Bank. The profit of this bank is increasing year by year. The profit in 2006 is at TK.605.29 million. So the above data will make the customer interested to make himself client of EXIM Bank.

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8. Paid-up capital:

Table-17 Year Tk. in million 2002 253.12 2003 313.88 2004 627.75 2005 878.85 2006 1713.76

Figure-9

2000 1500 1000 500 0 2002 2003 2004 2005 2006 Tk. in m illion

Paid-up capital at the end of the year 2006 is 1713.76 Tk. which is almost double than the previous year.

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9. Total Capital:

Table-18

Year Tk. in million

2002 551.33

2003 748.27

2004 1400.00

2005 2179.81

2006 3467.37

Figure-10

3500 3000 2500 2000 1500 1000 500 0 Tk. in million 2006 2005 2004 2003 2002

EXIM Bank Ltd. has a healthy total capital of 3467.37 million Tk. at the end of the year 2006.

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10. Earning Per Share:

Table-19

Year EPS in Tk.

2002 79.14

2003 69.20

2004 60.82

2005 63.19

2006 43.48

Figure-11

80 70 60 50 40 30 20 10 0 2002 2003 2004 2005 2006 Am ount in Tk.

Earning per Share at the end of 2006 is Tk. 43.48 which was Tk. 63.19 at 2005. Tk.43.48 is quite satisfactory as EPS.

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11. Branches:

Table-20 Year No. of branche s 1999 3 2000 7 2001 10 2002 16 2003 19 2004 23 2005 28 2006 30 2007 32

Figure-12

35 30 25 20 15 10 5 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 Year

EXIM Bank started with 3 branches in 1999. Presently the number of branches of EXIM Bank Limited is 32. This increase indicates the progress of EXIM Bank. The Bank plans to gradually open more branches covering important commercial places both in urban and rural areas.

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Organizational structure of EXIM Bank: The Sponsors of the Bank are leading business personalities and industrialists. The chairman of the Bored of Directors, Md, and Najrul Islam Majumdar is a leading business personality and a social worker. Alamgir Kabir, the Advisor of the Bank is a reputed senior Chartered Accountant having thirty years vast experience in A/Cs, Audit, Finance and Banking at home and abroad. Mr. Lakiotullah, the Managing Director of the Bank, is widely trained at home and abroad, having three decades of long experience in banking profession within and outside the country.

Board of Directors: Boards of Directors consist of nineteen Directors, Chairman, Advisor and Managing Director. Chairman: Md. Nazrul Islam Majhumder Directors:

Mr.Md. Nazrul Islam Swapan Mr. Mohammad Abdullah Mr.Md. Altaf Hossain Mr.Md. Faiz Ullah Mr.Md. Mazakat Harun Mr.Md. Fahim Zaman Pathan Mrs. Nasima Akhter Engr.Mr.Md. Aminur Rahman Khan Mr. A.K.M. Nurul Fazal Bulbul Mr.Md. Zubayer Kabir Mrs. Rizwana K. Riza Mr.Md. Habibullah Mr.Md. Nur Hussain Mr. Anjan Kumar Saha Mr. Md. Abdul Mannan

Advisor Alamgir Kabir, FCA Managing Director Md. Mashiur Rahman

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Hierarchy of the management of this Bank Chairman Managing Director Senior Executive Vice President Executive Vice President Senior Vice President Vice President Senior Asst. Vice President Asst. Vice President Senior Principal Officer Principal Officer Executive Officer Officer Asst. Officer Junior Officer Computer Operator Sub- Staff

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Management of EXIM Bank: For any financial and non-financial organization, Management is the most valuable and important resources of any kind of organization. And, a well-organize management provides the organization to reach its ultimate goal. Management means planning, organizing, staffing, directing and controlling of all financial and nonfinancial resources of an organization. Different aspects of management practice in EXIM Bank are discussed below. Planning: EXIM Bank has done its planning within the purview of the corporate plan. The overall planning approach in EXIM Bank is top-down. Each branch can plan according to the goal imposed by the corporate level. It doesnt plan independently. And, EXIM Bank has a planning division. This department is mainly responsible for the overall planning. Organizing: EXIM Bank is organized as per the existing business locations. It has nineteen branches, each of which is a separate entity. Each unit is responsible for its own performance and a Senior Vice President (SVP) followed by Manager heads each. He is directly responsible for the performance of their unit. Within each branch it is organized functionally. Staffing: The recruitment in EXIM Bank is done in two ways. One as a Probationary Officer for the management program and it has a probation period of one year. Another one is non- management level as Trainee Officers. Probationary Officer is recruited in officer category and their career path is headed towards different managerial jobs. Directing and controlling: The management approach in EXIM Bank is top-down or authoritative. Information just seeks through lower management layer. Works are designed in such a way that one cannot leave without clearing the tasks as he is assigned for a day. Sitting arrangement in all office is done in a way that the superior can monitor the subordinate all time. Budgeting, rewarding, punishing, etc. are also practiced as control mechanism.

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Human Resources Practices in EXIM Bank: Employees are the core resources of any organization. Without them, one cannot run their organization. And, human resources approach is concerned with the growth and development of people toward higher level of competency, creativity and fulfillment. It helps employees become better, more responsible persons, and then it tries to create a climate in which they may contribute to the limits of their improved abilities. It assumes that expanded capabilities and opportunities for people will lead directly to improvements in operating effectiveness. Essentially, the human resources approach means that better people achieve better results.

Recruitment: The set-vice rule of EXIM Bank states the recruitment policy of the bank. In, general the board of directors determines the recruitment policy of the bank from time to time. The minimum entry-level qualification for any official position other than supportive management is a Bachelors degree. However, informally the management prefers a minimum masters degree for the appointed of probationary officers in the Executive Officer position. The recruitment for entry level positions begin with a formal written test which is conducted and supervised by the Institute of Business Administration, University of Dhaka. After successful completion of the written test, a personal interview is conducted for the successful candidates by a panel of experts comprising of renowned bureaucrats and prominent bankers of the country.

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EXIM Bank at a Glance : Name: Essence: Nature of Business: Registered office: Export Import Bank of Bangladesh Limited Local Bank Global Network Banking service and Profit oriented Printers building (5th Floor) 5, Rajuk Avenue Motijheel Dhaka-1000. Phone # 9566764, 9566418, 9553872, 9561604 Telex: 642527 EXIMHO BJ Fax: 880-2-9556988 E-mail: eximho@bdonline.com Date of Incorporate: Inauguration of first branch: Chairman: Secretary: Advisor: Managing Director: Number of Branch : Total Manpower: Authorized Capital: Paid up Capital: Reserve Fund: June 02, 1999 August 03, 1999. Muhammad Mubrak Hussaein Alamgir Kabir, FCA Md. Mashiur Rahman 32 600 Taka 3467.37 million Taka 1713.76 million Taka 353.10 million Md. Nazrul Islam Mazumder

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Chapter 3 Motijheel Branch: Motijheel Branch of EXIM Bank is the first or main branch opened in June10, 2001. It is situated at Sharif Mansion, 56-57MotijheelC/A, Dhaka. The name of the present branch Manager is Shariful Haque Miah (EVP).Motijheel branch work as the Local Office, Corporate Branch and as well as Main Branch. Organogram of Motijheel Branch: Motijheel Branch

General Banking

Advance

Foreign Exchange

Import

Export

Foreign Remittance

General Banking The main activities of general banking division are as follows; a) Accounts Opening. b) Issuing check books and account closing. c) Remittance. d) Clearing Department. e) General Enquiries. f) Customer complaints. g) ITS Department.

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Credit/ Loan and Advance EXIM bank provides various types of loan to individual and organizations. The main three types loans are; a) Cash credit, b) Consumer credit, and c) Security overcomes. Foreign Exchange The department deals with export and Import activities are called foreign Exchange department. At the beginning of my internship work the Rajuk branch doesnt have foreign exchange license, so in that time they use the license of Motijheel branch gets the foreign exchange license. And they start the work from 1st June, 04. The widely used terms in this division are described briefly following: Export When any organization/company want to sale any goods or services to the buyer in live in another country, is called export the goods/services. In this regard, the seller needs a Latter of Credit (L/C) from the buyer for the confirmation of payment. Import When any organization/company want to buy any goods or services from the seller live on other country, is called import the goods/services. In this regard the buyer needs to open a Letter of Credit (L/C) to the name of sellers company for the confirmation of payment.

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Letter of Credit (L/C) The documentary credit is a commitment on the banks part to place an agreement at the sellers disposal on behalf of the buyer under precisely defined conditions. The terms Documentary Credit In actual practice, a number of different expressions have emerged for this type of business, all of which basically mean the same thing Documentary Letter of Credit, Commercial Letter of Credit, Letter of Credit, L/C. The main parties to documentary credit 1. Buyer (Importer). 2. Seller (Exporter). 3. L/C Issuing Bank (Buyers Bank). 4. Advising Bank (Issuing bank correspondent at sellers place). 5. Negotiating Bank (Sellers Bank). (Some time the advising bank and the negotiating bank become the same bank)

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Other operations
The bank does all traditional banking business including Islamic Banking services in selective branches.

1. Deposits, which are the lifeblood for the bank, among the other modes, are mobilized through a variety of saving scheme. The bank also handles Traveler checks, Credit cards. Consumer credit facilities, Inland and foreign remittance of the fund and operates in the money market. 2. In capital market operations, it engages itself in share and securities business, mutual fund management and brokerage house activities. 3. Bank is poised to extend L/C facilities to its importer/exporter. 4. Customers through establishment of correspondent relations and Nostro Accounts with leading Banks all over the world. 5. The bank trades and commerce with added emphasis on foreign exchange. The bank also adopts Micro-credit and Agro-credit schemes.

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Chapter 4 General Banking General banking department is the heart of all banking activities. This is the busiest and important department of a branch, because funds are mobilized, cash transactions are made; clearing, remittance and accounting activities are done here. Since bank is confined to provide the services everyday, general banking is also known as retail banking. In EXIM Bank LTD Principal Branch, the following departments are under general banking section:

1) 2) 3) 4) 5) 6)

Account opening section Deposit section Cash section Remittance section Clearing section Accounts section

ACCOUNT OPENING SECTION: Account opening is the gateway for clients to enter into business with bank. It is the foundation of banker customer relationship. This is one of the most important sections of a branch, because by opening accounts bank mobilizes funds for investment. Various rules and regulations are maintained and various documents are taken while opening an account. A customer can open different types of accounts through this department. Such as: 1. Al Wadia (Current) account. 2. Mudaraba Savings (SB) account. 3. Mudaraba Short Term Deposit (MSTD Types Of Accounts With Terms And Conditions Al- Wadia (Current) Account: Current account is purely a demand deposit account. There is no restriction on withdrawing money from the account. It is basically justified when funds are to be collected and money is to be paid at frequent interval. Some Important Points are as follows Minimum opening deposit of TK.1000/- is required; There is no withdrawal limit. No interest is given upon the deposited money; Minimum Tk.1000/= balance must always maintain all the time;

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Mudaraba Savings (SB) Account: This deposit is primarily for small-scale savers. Hence, there is a restriction on withdrawals in a month. Heavy withdrawals are permitted only against prior notice. Some Important Points are as follows Minimum opening deposit of Tk.5000/= is required; Minimum Tk. 1000/= balance must always maintain all the time; Withdrawal amount should not be more than 1/4th of the total balance at a time and limit twice in a month. If withdrawal amount exceed 1/4th of the total balance at a time no interest is given upon the deposited money for that month. Mudaraba Short Term Deposit (MSTD) Account: Normally various big companies, organizations, Government Departments keep money in MSTD account. Frequent withdrawal is discouraged and requires prior notice. The deposit should be kept for at least seven days to get interest. The interest offered for MSTD is less than that of savings deposit. Interest is calculated based on daily minimum product and paid two times in a year. Interest rate is 4.50%.

Account Opening procedure: The account should be properly introduced by Any one of the following: An existing Current Account holder of the Bank. Officials of the Bank not below the rank of an Assistant officer. A respectable person of the locality well known to the Manager/SubManager of the Branch concerned. Receiving filled up application in banks prescribed form mentioning what type of account is desired to be opened The form is filled up by the applicant himself / herself Two copies of passport size photographs from individual are taken, in case of firms photographs of all partners are taken Applicants must submit required documents Application must sign specimen signature sheet and give mandate Introducers signature and accounts number verified by legal officer Authorized Officer accepts the application Minimum balance is deposited only cash is accepted Account is opened and a Cheque book and pay-in-slip book is given

Step 1

Step 2

Step 3

Step 4 Step 5 Step 6

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Documents required for opening account Individual / Joint Account: 1. Introduction of the account. 2. Two photographs of the signatories duly attested by the introducer. 3. Identity (copy of passport). 4. Joint Declaration Form (For joint a/c only). 5. Employees Certificate (in case of service holder). Partnership account: 1. Introduction of the account. 2. Two photographs of the signatories duly attested by the introducer. 3. Partnership letter duly signed by all partners (Sign should be similar as stated in Partnership Deed). 4. Partnership Deed duly certified by Notary public. 5. Registration (If any). 6. Updated Trade license. Proprietorship account:

1. Introduction of the account.

2. 3. 4. 5. 6. 7. Two photographs of the signatories duly attested by the introducer. Valid copy of Trade License. Rubber stamp. TIN number certificate. Identity (Copy of passport). Permission letter from DC/ Magistrate (in case of newspaper)

Limited company: 1. 2. 3. 4. Introduction of the account. Two photographs of the signatories duly attested by the Introducer. Valid copy of Trade License. Board resolution of opening A/C duly certified by the Chairman/Managing Director. 5. Certificate of Incorporation. 6. Certificate of Commencement (In case of Public limited company). 7. Certified (joint stock) true copy of the Memorandum and Article of Association of the Company duly attested by Chairman or Managing Director. 8. List of directors along with designation & specimen signature. 9. Latest certified copy of Form xii (to be certified by register of joint stock companies) (In case of Directorship change). 10. Rubber Stamp (Seal with designation of each person) 11. Certificate of registration (In case of Insurance Company Obtained from department of Insurance from the Peoples Republic of BD).

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Club / societies account: 1. 2. 3. 4. Introduction of the account. Two photographs of the Signatories duly attested by the introducer. Board Resolution for Opening A/C duly certified by President/ Secretary. List of Existing Managing Committee. 5. Registration (if any). 6. Rubber Stamp. 7. Permission letter from Bureau of N.G.O.(In case of N.G.O. A/C).

Product Information of EXIM Bank:

Education Scheme

Savings

Multiplus Savings

Smart Saver

Super Savings Scheme

Monthly Scheme

Savings

Monthly Income Scheme

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Savings Scheme:

Education Savings Scheme Multiplus Savings Smart saver Super Saving Scheme Monthly Savings Scheme (Money Grower) Monthly Income Scheme

Foreign Exchange:

Import Export Foreign Remittance

Finance/Loans:

Corporate Finance Industrial Finance Lease Finance Hire Purchase Finance Commercial Loans Project Finance Syndicate Loans Retail Loans Mortgage Loans Loan against Share and Securities

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Briefly Discussion about the products of Exim Bank:

Education Savings Scheme EXIM Bank offers Education Savings Scheme to support customer in financial planning well ahead in time for customer childrens higher education. Terms and conditions of the scheme 1. Deposit of Tk. 25,000. 2. The instrument shall be issued for 7 years, 10years, 15 years or 20 years term. 3. The deposit is payable at maturity with benefit either in lump sum or on monthly basis as education allowance for 6 (six) years starting after the completion of respective term. (See example table). 4. Normally, no withdrawal will be allowed before maturity. But, if any depositor intends to withdraw his deposit before maturity, the following rules will be applicable:
o

If withdrawal is made before seven years, interest will be calculated and paid as per prevailing savings rate.

If withdrawal is made at any time after seven years, the total amount payable at maturity of the immediate preceding term will be paid along with interest for the fraction period at prevailing saving rate.

5. The depositor can avail loan up to 80 % under this scheme.

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6.
o

In case of death of the depositor the proceeds will be paid to the nominee of the depositor or in absence of nomination to the legal successor/s of the depositor on production of Succession Certificate.

If, after death of depositor the nominee intends to continue the deposit to get monthly educational allowance for years as admissible under the rules of the scheme.

7. In case of issuing a duplicate deposit receipt the rules of issuing duplicate receipt of Term Deposit will be applicable. Example Table 1 Terms Initial Deposit (Tk.) Amount Payable at maturity Education allowance (Tk.) 7 yrs 10 yrs. 15 yrs. 1,00,000/1,00,000/1,00,000/2,20,000/3,08,000/5,44,000/per month (Tk.) 4,000/6,000/10,000/-

Example Table 2 Terms Initial Deposit (Tk.) Amount Payable at Education allowance per month (Tk.) 1,000/1,500/2,500/4,500/-

maturity (Tk.) 7 yrs. 10 yrs. 15 yrs. 20 yrs. 25,000/25,000/25,000/25,000/55,000/77,000/1,36,000/2,40,000/-

* For Islamic Banking, payable amounts shall be treated as estimated and at the year-end may be more or less.

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Multiplus Savings Savings helps to build up capital and capital is the prime source of business investment in a country. Investment takes the country towards industrialization, which eventually creates wealth. That is why savings is treated as the very foundation of development. To create more awareness and motivate people to save, Exim Bank offers MULTIPLUS SAVINGS Scheme. Terms and conditions of the scheme 1. Any individual, company, educational institution, government organization, NGO, trust, society etc may invest their savings under this scheme. 2. The deposit can be made in multiples of Tk. 10,000.00

3. The period of deposit is 10 years. But the deposit can be withdrawn at any
year with interest. As an example, if deposit is withdrawn after completion of 1 year but before 2 years then deposit with interest will be paid for 1 year only. The same rule will apply for other years. If deposit is withdrawn before 1st year then no interest will be paid. 4. Any customer can open more than one account in a branch in his name or in joint names. A deposit receipt will be issued at the time of opening the account. 5. The depositor can avail loan upto 80% of the deposit under this scheme. 6. In case of issuing duplicate receipt the rules of issuing a duplicate receipt of Term Deposit will be applicable.

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7. In case of death of depositor before the term, the deposit (with interest at savings rate) will be given to the nominee. In the absence of nominee, the heirs/ successors will be paid on production of succession certificate. The nominee may, at his option continue the scheme for the full term. Some examples are given in the table below. Any amount can be deposited in multiples of Tk. 10,000

Amount Year 1 2 3 4 5 6 7 8 9 10

10,000

20,000

50,000

1,00,000

Year wise payable to customers 10,910 12,012 13,346 14,952 16,714 18,765 21,499 25,116 28,270 31,872 21,820 24,024 26,693 29,904 33,429 37,530 42,998 50,231 56,540 63,744 54,550 60,061 66,732 74,761 83,572 93,824 107,496 125,578 141,351 159,361 109,100 120,122 133,463 149,522 167,144 187,649 214,992 251,156 282,702 318,721

For Islamic Banking, payable amounts shall be treated as estimated and at the year-end may be more or less.

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Smart Saver What is Smart Saver? Smart Saver is a high return investment plan, which helps a customer build up sizeable amount in a period of 5 years. This scheme offers a customer to buy Smart Saver Term Deposit 5 times the invested amount. Smart Saver is a 5-year term deposit scheme. Terms and conditions 1. One unit of Smart Saver Term Deposit is Tk. 25,000. 2. During the tenure of the loan the Term Deposit will be kept in the Bank as security. 3. The customer will have to open an account and monthly installment of loan will be debited from the account commencing from 30 days after opening loan account. 4. Within the 1st year if the customer fails to repay 3 consecutive installments then only the principal amount of Smart Saver Term Deposit will be encashed and the loan will be liquidated inclusive of accrued interest and balance paid to the customer. After completion of 1 year, Savings rate will be added to the principal amount of Smart Saver Term Deposit. In both cases closing charge will be Tk. 500. 5. For missed installments on due date customer will be charged Tk. 25 per unit per month.

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6. In the event of death of the customer, the bank shall be entitled to encash the Term Deposit and adjust the dues first before any refund is made to the nominees/ successors. The bank reserves the right to amend the rules and rates as and when deemed necessary. Calculation of the scheme is given below:

Unit Smart Saver Term Deposit Down payment (20%)

1 Unit 25,000

2 Unit 50,000

10 Unit 2,50,000

50 Unit 12,50,000

100 Unit 25,00,000

200 Unit 50,00,000

300 Unit 75,00,000

400 Unit 1,00,00,000

5,000

10,000

50,000

2,50,000

5,00,000

10,00,000

15,00,000

20,00,000

Bank loan 20,000 (80%) Monthly installment Customer is (after years) 5 45,00 490

40,00 0 980 90,000

2,00,000 4,900 4,50,000

10,00,000 24,500 22,50,000

20,00,000 49,000 45,00,000

40,00,000 98,000 90,00,000

60,00,000 1,47,000 1,35,00,000

80,00,000 1,96,000 1,80,00,000

paid 0

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Super Savings Scheme Savings helps to build up capital and capital is the prime source of business investment in a country. Investment takes the country towards industrialization, which eventually creates wealth. That is why savings is treated as the very foundation of development. To create more awareness and motivate people to save, Exim Bank offers SUPER SAVINGS Scheme. Terms and conditions of the scheme 1. Any individual, company, educational institution, government organization, NGO, trust, society etc may invest their savings under this scheme. 2. The deposit can be made in multiples of Tk 10,000. 3. The period of deposit is for six years. 4. Any customer can open more than one account in a branch in his name or in joint names. 5. If the deposit is withdrawn before six years term, then savings interest rate +1% will be applied before payment is made. 6. A depositor can avail loan up to 80% of the deposited amount under this scheme. 7. In case of death of the depositor, before the term, the deposit (with interest5 at savings rate +1%) will be given to the nominee. In case of issuing a duplicate deposit receipt the rules of issuing duplicate receipt of Term Deposit will be applicable.

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MONEYGROWER

Savings period and monthly installment rate The savings period is for 5, 8, 10 or 12 years. Monthly installment rate is Tk. 500/-, 1,000/-, 2,000/- or 5,000/Monthly installment deposit

The savings amount is to be deposited within the 10th of every month. In case of holidays the deposit amount is to be made on the following day.

The deposits may also be made in advance. The depositor can have a separate account in the bank from which a standing instruction can be given to transfer the monthly deposit in the schemes account.

In case the depositor fails to make the monthly installment in time, then 5% on overdue installment amount will be charged. The charge will be added with the following month(s) installment and the lowest charge will be Tk. 10/-

Withdrawal

Generally, withdrawal is not advised before a 5-year term, but if it is withdrawn before the above term, then interest will be paid at savings rate. However, no interest will be paid if the deposit is withdrawn within 1 year of opening the account.

In case the depositor wishes to withdraw between the 5, 8, 10 or 12-year period then full interest will be paid for a completed term and savings rate will applicable for the fractional period.

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Loan Advantage After three years of savings in this scheme the depositor (if an adult) is eligible for a loan up to 80% of his deposited amount. In that case, interest rates on the loan will be applicable as per prevailing rate at that time. Reasons for disqualification from this scheme

If the depositor fails to pay 3 installments in a row, then he will be disqualified from this scheme and interest will be applicable as mentioned in withdrawal clause.

If a depositor fails to pay 5 installments in a row after completion of 5-year term, then the Bank reserves the right to close the account and interest will be paid as, mentioned in withdrawal clause.

In case of death of the depositor the scheme will cease to function. The amount will be handed over to the nominee of the deceased depositor. In case of absence of the nominee the bank will handover the accumulated amount to the successor of the deceased. Monthly Installment 500/5 Years 8 Years 41,400/81,400/1,000/82,800/1,63,600/ 10 Years 1,18,450/2,36,400/ 12 Years 1,65,993/ Rules
o

2,000/1,65,000/3,27,200/ 4,72,800/ 6,63,973/ -

5,000/4,14,000/8,18,000/-

11,84,500/-

3,31,986/ -

16,59,932/-

A form has to be filled at the time of opening the account. No introduction is needed but attested photographs are advised.

The depositor can select any of the installment amounts, which cannot be subsequently changed.

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In case of minors the guardians may open and supervise the account in his favor.

A single person can open more than one account for saving under several installment rates.

The accumulated deposit with interest will be returned within one month of completion of a term.

The depositor should notify the bank immediately on any change of address.

The government tax will be deducted from the interest accumulated in this scheme.

If necessary, at the request of the depositor, the scheme can be transferred to a different branch of the same Bank.

The Bank reserves the right to change the rules and regulations of the scheme as and when deemed necessary.

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Monthly Income Scheme Highlights of the Scheme 1. Minimum deposit Tk. 25,000/2. Higher monthly income for higher deposit. 3. The scheme is for a 5-year period. Monthly income will be credited to the depositors account on the 5th of each month.

Deposit Amount Tk. 25,000/Tk. 50,000/Tk. 1,00,000/Tk. 2,00,000/Tk. 5,00,000/Tk. 10,00,000/-

Income Tk. 250 Tk. 500 Tk. 1000 Tk. 2000 Tk. 5000 Tk. 10,000

Objectives of the Scheme

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An account is to be opened by filling up a form. The Bank will provide to the customer a deposit receipt after opening the account. This receipt is non-transferable.

If the deposit is withdrawn before a 5-year term, then saving interest rate will be applicable and paid to the depositor. However, no interest will be paid if the deposit is withdrawn within 1 year of opening the account and Monthly Income paid to the customer will be adjusted from the principal amount.

A depositor can avail loan upto 80% of the deposit amount under this scheme. In this case, interest will be charged against the loan as per Banks prevailing rate.

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DEPOSIT SECTION: Deposit is the lifeblood of a bank. From the history and origin of the banking system We know that deposit collection is the main function of a bank. Accepting deposits: The deposits that are accepted by EXIM Bank like other banks may be classified in to, a) Demand Deposits b) Time Deposits Demand deposits: These deposits are withdraw able without notice, e.g. current deposits. EXIM Bank accepts demand deposits through the opening of,a) current account b) Savings account c) Call deposits from the fellow bankers Time deposits: A deposit which is payable at a fixed date or after a period of notice is a time deposit. EXIM Bank accepts time deposits through Fixed Deposit Receipt (FDR), Short Term Deposit (STD) and Bearer Certificate Deposit (BCD) etc. While accepting these deposits, a contract is done between the bank and the customer. When the banker opens an account in the name of a customer, there arises a contract between the two. This contract will be valid one only when both the parties are competent to enter into contracts. As account opening initiates the fundamental relationship & since the banker has to deal with different kinds of persons with different legal status, EXIM Bank officials remain very much careful about the competency of the customers.

CASH SECTION: Banks, as a financial institution, accept surplus money from the people as deposit and give them opportunity to withdraw the same by cheque, etc. But among the banking activities, cash department play an important role. It does the main function of a commercial bank i.e. receiving the deposit and paying the cash on demand. As this department deals directly with the customers, the reputation of the bank depends much on it. The functions of a cash department are described bellow:

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Functions of Cash Department:

1. Cash payment is made only against cheque Cash Payment 2. This is the unique function of the banking system which is known as payment on demand 3. It makes payment only against its printed valid Cheque 1. It receives deposits from the depositors in form of cash Cash Receipt 2. So it is the mobilization unit of the banking system 3. It collects money only its receipts forms

Cash packing: After the banking hour cash is packed according to the denomination. Notes are counted and packed in bundles and stamped with initial.

Allocation of currency: Before starting the banking hour all tellers give requisition of money through Teller cash proof sheet. The head teller writes the number of the packet denomination wise in Reserve sheet at the end of the day, all the notes remained are recorded in the sheet.

LOCAL REMITTANCE: Carrying cash money is troublesome and risky. Thats why money can be transferred from one place to another through banking channel. This is called remittance. Remittances of funds are one of the most important aspects of the Commercial Banks in rendering services to its customers. Types of remittance: Between banks and non banks customer Between banks in the same country Between banks in the different centers. Between banks and central bank in the same country Between central bank of different customers.

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The main instruments used by the EXIM Bank of remittance of funds are Payment order ( PO) Demand Draft ( DD) Telegraphic Transfer (TT) So the basic three types of local remittances are discussed below

Points

Pay Order Pay Order gives the payee the right to claim payment from the issuing bank Payment issuing only

Demand Draft Demand Draft is an order of issuing bank on another branch of the same bank to pay specified sum of money to payee on demand. from

TT Issuing branch requests another branch to pay specified money to the specific payee on demand by Telegraph /Telephone

Explanatio n

Payment from

from Payment branch branch

ordered Payment from ordered branch in the

Within the Generally clearinghouse used to area of issuing Remit fund branch.

Outside the clearinghouse Anywhere area of issuing branch. country Payee can also be the purchaser.

Payment Process of the paying bank

Payment is made 1.Confirm that the DD is 1.Confirm through clearing not forged one. branch 2.Confirm advice with

issuing

sent 2.Confirm Payee A/C 3.Confirm amount 4.Make payment 5.Receive advice telex Commission telephone +

3.Check the Test Code 4.Make payment

Charge

Only commission

Commission charge

Test key Arrangement: Test key arrangement is a secret code maintained by the banks for the authentication for their telex messages. It is a systematic procedure by which a test number is and the person to whom this number is given can easily authenticate the same test number by maintaining that same procedure. EXIM Bank has test key arrangement with so many banks for the authentication of LC message and for making payment.

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Commission for PO: EXIM Bank charges different amount of commission on the basis of Payment order amount. The bank charges for pay order are given in the following chart:

Total amount of PO Up to TK. 10,000.00 TK. 10,001.00 - TK .1,00,000.00 TK. 1,00,001.00 - TK. 5,00,000.00 TK. 5,00,001.00 and above

Commission TK. 15.00 TK. 25.00 TK. 50.00 TK. 100.00

VAT Tk.3 Tk 4 Tk 8 Tk 15

FIXED DEPOSIT: The Local Remittance section of EXIM Bank Motijheel Branch also issues FDR. They are also known as time deposit or time liabilities. These are deposits, which are made with the bank for a fixed period, specified in advance. The bank need not maintain cash reserves against these deposits and therefore, the bank offers higher of interest on such deposits.

Opening of fixed Deposit Account: The depositor has to fill an account form where in the mentions the amount of deposit, the period for which deposit is to be made and name/names is which the fixed deposit receipt is to be issued. In case of a Joint name EXIM Bank also takes the instructions regarding payment of money on maturity of the deposit. The banker also takes specimen signatures of the depositors. A fixed deposit account is then issued to the depositor acknowledging receipt of the sum of money mentioned there. It also contains the rate of interest and the date on which the deposit will fall due for payment. Term Deposits: These rates are not negotiable. In this table we can find out the percentage that is given by the bank for specific period of time to the customer.

Fixed deposit 3 (three) month SL no. 01 Range of amount TK 10000.00-Above Rate of Interest 8.00%

Fixed deposit: 6 (six) month SL no. 01 Range of amount TK 10000.00-Above Rate of Interest 8.25%

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Fixed deposit: 12 (twelve) month SL no. 01 Range of amount TK 10000.00-Above Rate of Interest 8.50%

Payment of interest: It is usually paid on maturity of the fixed deposit. EXIM Bank calculates interest at each maturity date and provision is made on that miscellaneous creditor expenditure payable accounts is debited for the accrued interest.

Encashment of FDR: In case of premature FDR< EXIM Bank is not bound to accept surrender of the deposit before its maturity date. In order to deter such a tendency the interest on such a fixed deposit is made cut a certain percentage less the agreed rate. Normally savings bank deposit is allowed.

Loss of FDR: In case of lost of FDR the customer is asked to record a GD (general diary) in the nearest police station. After that the customer has to furnish an Indemnity Bond to EXIM Bank a duplicate FDR is then issued to the customer by the bank.

Renewal of FDR: In EXIM Bank, the instrument is automatically renewed within seven days after the date of its maturity if the customer does not come to encash the FDR. The period for renewal is determined as the previous one.

CLEARING SECTION:

Cheques, Pay Order (P.O), Demand Draft (D.D.) Collection of amount of other banks on behalf of its customer are a basic function of a Clearing Department.
Clearing: Clearing is a system by which a bank can collect customers fund from one bank to another through clearing house. Clearing House:

Clearing House is a place where the representatives of different banks get together to receive and deliver cheque with another banks. Normally, Bangladesh Bank performs the Clearing House in Dhaka, Chittagong, Rajshahi, and Khulna & Bogra. Where there is no branch of Bangladesh Bank, Sonali bank arrange this function. Member Of Clearing House:

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EXIM Bank LTD. is a scheduled Bank. According to the Article 37(2) of Bangladesh Bank Order, 1972, the banks, which are the member of the clearinghouse, are called as Scheduled Banks. The scheduled banks clear the cheque drawn upon one another through the clearinghouse. Types of Clearing:

A) Outward Clearing: When the Branches of a Bank receive cheque from its
customers drawn on the other Banks within the local clearing zone for collection through Clearing House, it is Outward Clearing. B) Inward Clearing: When the Banks receive cheque drawn on them from other Banks in the Clearing House, it is Inward Clearing.

Types of clearing house: There are two type of clearing house: Those are

1) Normal clearing house 2) Same day clearing house Normal clearing house:

1) 1st house: 1st house normally stands at 10 a.m. to 11a.m 2) 2nd house: 2nd house normally stands after 3 p.m. and it is known as return
house. Same day clearing house:

1) 1st house: 1st house normally stands at 11 a.m. to 12 p.m

2) 2nd house: 2nd house normally stands after 2 p.m. and it is known as return house.

Who will deposit cheque for Clearing: Only the regular customers i.e. who have Savings, Current, STD & Loan Account in the bank can deposit cheque for collection of fund through clearing house. Precaution at the time of cheque receiving for Clearing, Collection of LBC, OBC & Transfer:

1) Name of the account holder same in the cheque & deposit slip. 2) Amount in The cheque & deposit slip must be same in words & in figure 3) Date in the cheque may be on or before (but not more than six months back) clearing house date. 4) Bank & Branch name of the cheque, its number & date in the Deposit slip. 5) Cheque must be signed. 6) Signature for confirmation of date, amount in words / in figure Cutting & Mutilation of cheque. 7) Cheque should be crossed (not for bearer cheque). 8) Account number in the deposit slip must be clear. 9) Depositors signature in the deposit slip.

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Return house: Return House means 2nd house where the representatives of the Bank meet after 3 p.m. to receive and deliver dishonored cheque, which placed in the 1st Clearing House. Cheque may be dishonored for any one of the following reasons: 1) 2) 3) 4) 5) 6) 7) 8) Insufficient fund. Amount in figure and word differs. Cheque out of date/ post- dated. Payment stopped by the drawer. .Payees endorsement irregular / illegible / required. Drawers signature differ / required. Crossed cheque to be presented through a bank. Other specific reasons not mentioned above.

The dishonor cheque entry in the Return Register & the party is informed about it. Partys signature required in the return register to deliver the dishonor cheque. After duration, the return cheque is sent to the partys mailing address with Return Memo. If the cheque is dishonored due to insufficiency of funds than EXIM Bank charges. 25/=as penalty.

Responsibility of the concerned officer for the Clearing Cheque: 1) 2) 3) 4) 5) Crossing of the cheque. (Computer) posting of the cheque. Clearing seal & proper endorsement of the cheque. Separation of cheque from deposit slip. Sorting of cheque 1st bank wise and then on branch wise. 6) Computer print 1st branch wise & then bank wise. 7) Preparation of 1st Clearing House computer validation sheet. 8) Examine computer validation sheet with the deposit slip to justify the computer posting 9) Copy of computer posting in the floppy disk. Bills Collection: In modern banking the mechanism has become complex as far as smooth transaction and safety is concerned. Customer does pay and receive bill from their counterpart as a result of transaction. Commercial banks duty is to collect bills on behalf of their customer. Types of Bills for Collection

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i. ii.

Outward Bills for Collection (OBC). Inward Bills for Collection (IBC).

What is OBC? OBC means Outward Bills for Collection .OBC exists with different branches of different banks outside the local clearing house . Normally two types of OBC : 1) OBC with different branches of other banks 2) OBC with different branches of the same bank Procedure of OBC: 1) Entry in the OBC register. 2) Put OBC number in the cheque. 3) Crossing seal on the left corner of the cheque & payees account will be credited on realization seal on the back of the cheque with signature of the concerned officer. 4) Despatch the OBC cheque with forwarding. 5) Reserve the photocopy of the cheque, carbon copy of the forwarding and deposit slip of the cheque in the OBC file. Commission for collection: Up to 1 lac ---------------------------------------------- 0.15% Above 1 lac---------------------------------------------- 0.10% Above 5lac ---------------------------------------------- 0.05% Inward bills for collection (IBC) When the banks collect bills as an agent of the collecting branch, the system is known as IBC. In this case the bank will work as an agent of the collection bank. The branch receives a forwarding letter and the bill. Procedure of IBC: 1. IBC against OBC: To receive the OBC cheque first we have to give entry in the IBC Register .The IBC number should put on the forwarding of the OBC with date. 2. Deposit of OBC amount: OBC cheque amount is put into the sundry depositsundry Creditors account, prepare debit & credit voucher of it. If the OBC cheque is honored, send credit advice (IBCA) with signature & advice number of the concern branch for the OBC amount.

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3. If the OBC cheque is dishonored, the concerned branch is informed about it. 4. Again place in the clearing house or send the OBC cheque with Return Memo to the issuing branch according to their information.

ACCOUNTS SECTION: Accounts Department is called as the nerve Centre of the bank. In banking business, transactions are done every day and these transactions are to be recorded properly and systematically as the banks deal with the depositors money. . Improper recording of transactions will lead to the mismatch in the debit side and in the credit side. To avoid these mishaps, the bank provides a separate department; whose function is to check the mistakes in passing vouchers or wrong entries or fraud or forgery. This department is called as Accounts Department. If any discrepancy arises regarding any transaction this department report to the concerned department. Besides these, the branch has to prepare some internal statements as well as some statutory statements, which are to be submitted to the Central Bank and the Head Office. This department prepares all these statements. Workings of this department: o o o o o o o o Recording the transactions in the cashbook. Recording the transactions in general and subsidiary ledger. Preparing the daily position of the branch comprising of deposit and cash. Preparing the daily Statement of Affairs showing all the assets and liability of the branch as per General Ledger and Subsidiary Ledger separately. Making payment of all the expenses of the branch. Recording inters branch fund transfer and providing accounting treatment in this regard. Preparing the monthly salary statements for the employees. Preparing the weekly position for the branch which is sent to the Head Office to maintain Cash Reserve Requirement (C.R.R) Preparing the monthly position for the branch which is sent to the Head Office to maintain Statutory Liquidity Requirement (S.L.R) Make charges for different types of duties Preparing the budget for the branch by fixing the target regarding profit and deposit so as to take necessary steps to generate and mobilize deposit. Checking of Transaction List Recording of the vouchers in the Voucher Register.

o o o o

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Packing of the correct vouchers according to the debit voucher and the credit voucher

Chapter 5

Problems of Exim Bank:

General Banking department In general banking department they follow the traditional banking system. The entire general banking procedure is not fully computerized. They are not using Data Base Networking in Information Technology (IT) Department. So they have to transfer data from branch to branch and branch to head office by using floppy disk and sure it is not a good system. According to some clients opinion introducer is one of the problems to open an account. If a person who is new of the city wants to open account, it is a problem for him/her to arrange an introducer of SB or CD accounts holder.

Loans and Advances Department: Political influence is one of the major problems in Bangladesh. Due to political intervention the bank becomes obliged to provide loans in most of the cases, which are rarely recovered. Bank has to face this in convenience situation almost every year. Sometimes the employee to unlawfully help the client deliberately overvalues the securities taken against the loan. As a result if the client fails to repay the loan the bank authority cannot collect even the principal money invested by the selling those assets. It is also a very important factor that leads to loan default. CIB report is not readily available from Bangladesh Bank.

Foreign Exchange Department: In foreign exchange department it is required to communicate with foreign banks and International Division of Exim Bank frequently and quickly. To make the process easily modern communication media for example e-mil, Fax, Internet etc. Should be used. But the bank has not so much practice of using these media. Modern technical equipment such as computer is not sufficient in foreign exchange department. As a result the exchange process makes delay and it is also complicated.

Other Problem: 61

Exim Bank doesnt give their attention on advertisement. As a competition market it is too much important for any organization to increasing their advertisements procedure.

Recommendation:
General Banking Department: If the enter general Banking system is fully computerized then they satisfy the customer by provide fast service. If they establish networking system with their branches then it can easily transfer data within short time. If they cancel the introducer system then they can collect more deposit through new account and it also satisfied the customer.

Loan and Advance Department: Try to avoid giving loan the political person who had bad reputation of loan repaying. Evaluate the securities value properly to avoid the risk of loan recovery. The punishment system should be established to discourage the unlawful activities of employee. Bangladesh Bank should more active to provide CIB report.

Foreign Exchange Department: In Foreign Exchange Department it is require communicating with foreign bank frequently and quickly. To make the process easy and quick the whole system should be computerized and modern communication media for example e-mail, fax, Internet should be used.

Other Problem: Exim Bank should give more attention to advertisement to create more attraction among their customer, which is collect, more deposit and increase investment scope.

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Conclusion:
As an internee of Exim Bank Ltd. I have truly enjoying my internship from the learning and experience viewpoint. I am confident that this three months internship program at Exim Bank will definitely help me to realize my further carrier in the job market. EXIM bank has converted all of their system and policy of traditional banking to Islami Banking. I think which a very practical and bold decision is. As there are lots of local and foreign banks in Bangladesh the Exim Bank Ltd. is promising commercial Bank among them. In this competitive market Exim Bank has to compete not only the others commercial banks but also with the public Bank. Exim Bank Ltd. is more capable of contributing towards economic development as compared with other bank. Exim Bank Ltd. invested more funds in export and import business. It is obvious that the right thinking of this bank including establishing a successful network over the country and increasing resources will be able to play a considerable role in the portfolio of development. Success in the banking business largely depends on effective lending. Less the amount of loan losses, the more the income will be from Credit operations the more will be the profit of the EXIM Bank Limited and here lies the success of Credit Financing. During the course of my practical orientation I have tried to learn the practical banking activities to realize it with my theoretical knowledge, which I have greathearted and going to acquire from various courses of my BBA program.

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BIBLIOGRAPHY

1. Annual Report of EXIM Bank Limited (2002, 2003, 2004, 2005 & 2006). 2. Several Booklets from EXIM Bank. 3. Several Newsletters from EXIM Bank. 4. EXIM Bank Web site. 5. Credit Operational Manual of EXIM Bank Limited. 6. Prospectus of Exim Bank Ltd. 7. Several Report in Exim Bank Library.

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ACRONYMS
A/C AD B/L BB BOE CCI & E CFR CIB CIF DD DP Note EPB EXP FC FDD FOB HS Code IBC IBCA IBDA IMP IRC L/C LCAF OBC PO PSI SWIFT TC TIN TR TT STD Account Authorized Dealer Bill of Lading Bangladesh Bank Bill Of Exchange Chief Controller of Import & Export Cost & Freight Credit Information Bureau Cost Insurance & Freight Demand Draft Demand Promissory Note Export Promotion Bureau Export Form Foreign Currency Foreign Demand Draft Free On Board Harmonized system of coding Inward Bills for Collection Inter Branch Credit Advice Inter Branch Debit Advice Import Form Import Registration Certificate Letter of Credit Letter of Credit Authorization Form Outward Bills for Collection Payment Order Pre Shipment Inspection Society for Worldwide Inter bank Financial Travelers Cheque Tax Identification Number Truck Receipt Telegraphic Transfer Short Term Deposit

FDR
CC C&F CRF ERC IBCT LIM LTR

Fixed deposit receipt

Cash Credit Clearing & Forwarding Clean Report Findings Export Registration Certificate Interbranch Credit Transaction Loan against Imported Merchandise Loan against Trust Receipt 65

PAD SOD UCPDC

Payment against Document Secured Overdraft Uniform Custom & Practice for Documentary Credit

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