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Internship Report On

Foreign Exchange Mechanism: a comprehensive study of Prime Bank Ltd (considering Jubilee Road Branch, Chittagong as standard)
Course Code : BAN-400 Course Title : Internship & Viva

Submitted to Mr. Mohammad Imtiaz Ferdous Assistant Professor Department of Business Administration Shahjalal University of Science & Technology Sylhet Submitted by Md. Mahfuzul Hoque Talukder Registration No: 2001731040 4th Year 2nd Semester Session: 2001-02 Department of Business Administration Shahjalal University of Science & Technology Sylhet Date of Submission November 6, 2007

Shahjalal University of Science & Technology Sylhet

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November 06, 2007

L tte o C r a e r f e tific te

I am very pleased to declare that Md. Md. Mahfuzul Hoque Talukder, Registration No 2001731040, 4th year 2nd semester, Department of Business Administration, Shahjalal University of Science and Technology, Sylhet-3114, has been given with the topic Foreign Exchange Mechanism: a comprehensive study of Prime Bank Ltd (considering Jubilee Road Branch, Chittagong as standard) for researching and writing an internship report on the subject. He has reviewed all the relevant literature and has been surveyed practically in Prime Bank Ltd for three months to collect both of primary and secondary data. I have supervised him throughout the preparation of the internship paper. I also certify that the internship paper is an original one and has not been submitted elsewhere previously for publication in any form. He is wished all the best in his effort.

(Mr. Mohammad Imtiaz Ferdous) Assistant Professor & Internship Supervisor Department of Business Administration, Shahjalal University of Science and Technology, Sylhet-3114.

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November 06, 2007 To The Chairman Internship Committee 4th year, 2nd year examination2005 Department of Business Administration Shahjalal University of Science and Technology Sylhet- 3114 Through: Mr. Mohammad Imtiaz Ferdous, Assistant Professor& Supervisor. Subject: Submission of Internship Report Dear Sir, It gives me enormous pleasure in presenting here with the internship report on Foreign Exchange Mechanism: a comprehensive study of Prime Bank Ltd. (considering Jubilee Road branch, Chittagong as standard), which was assigned to me as partial fulfillment of the BBA graduation requirement. The internship program gave the opportunity to have an insight on the Banking sector of Bangladesh through Prime Bank Ltd. An attempt has been made in this report to get an insight of Foreign Exchange Mechanism of Prime Bank Ltd. I have tried heart and soul to make the report effective, attractive, and useful. The internship program was very much valuable to me as it helped me to gain experience from the practical field. I am grateful to you for providing me this opportunity of gaining such practical experiences and to know how theoretical knowledge is applied in the real world. If you need any assistance for further interpretation, please call me up.

Sincerely Yours,

(Md. Mahfuzul Hoque Talukder) Reg No: 2001731040 4th Year 2nd Semester Department of Business Administration Shahjalal University of Science and Technology, Sylhet-3114.

A k o le g mn c nw de e t
It gives me immense pleasure to thank a large number of individuals for their cordial cooperation and encouragement who have contributed directly or indirectly in preparing this report. Firstly, I express my gratefulness to Almighty Allah who has enabled me to pursue my study. I am deeply grateful to Mr. Dr. Md. Nazrul Islam, Head, Department of Business Administration of Shahjalal University of Science and Technolgoy, Sylhet-3114. I convey my gratitude to my honorable Supervisor Mr. Md. Imtiaz Ferdous, Assistant Professor, Department of Business Administration, Shahjalal University of Science and Technology, Sylhet-3114 for his guidance and co-operation, which helps me immensely to prepare this report. I would like to express my gratitude to Mr. Md. Anwarul Islam, Vice President and Head of Branch, Prime Bank Ltd, Jubilee Road Branch, Chittagong for giving me the opportunity to perform my internship with great care and lastly certifying the internship program that I have completed. Special thanks to Mr. Mohammed Zakaria, AVP and Head of Operation, Mr. Ruhul Quisth, FAVP, Mr. ATM Ahsan, SEO, Mr. Kazi Amm Mamtazul Islam, EO, Mr. Kazi Foorkan Uddin, PO, Mr. Md. Safayet Ullahand, SO, Mr. Md. Salauddin, SO, Marhuma Akter, SO, Mr. Md. Shahryar Alam, SO, and Mr. Md. Mahbubul Alam, JO of Prime Bank Ltd, Jubilee Road Branch, Chittagong. It is them who made it easy for me to understand and encouraged me a lot during my internship program. And I would like to thank all other wonderful personnel working in Prime Bank Ltd, Jubilee Road Branch, Chittagong. And last but not the least; I would like to thank all the honorable teachers of Business Administration Department because I think it is the out come and integration of their teachings which has enabled me to prepare this report and also thanks to all my classmates for their intensive support and co-operation.

E e u eS m a x c tiv u m ry
It is a matter of immense pleasure that during internship period, as part of the BBA program, the opportunity of spending a period of three months with a reputable

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organization where the real life job environment, management and administration of organization observed, learned and practiced. It was needed to have an overall appreciation of corporate management but for lack of proper practice of management, which is not possible to achieve only customary education. Here is the necessity of completing internship program. To perform internship program banking sector is place where one will able to learn the art and mastery of attracting, managing and retaining customers, marketing banking products, financing firms and organizations and managing foreign exchange activities. It is not possible to learn all these activities altogether in any other service or product oriented organization. Therefore, Prime Bank Ltd has been chosen because it is a new generation private commercial bank and the leader in this sector. It is also matter of great satisfaction; the bank gave the opportunity to work at the three department of Prime Bank Ltd. as an intern. This gave the opportunity to get a synopsis of banking actions. The report prepared on the topic "Foreign Exchange Mechanism: a comprehensive study of Prime Bank Ltd. (considering Jubilee Road branch, Chittagong as standard) ". It was undertaken to highlight the following objectives-

To gain an insight of foreign exchange mechanism. To analyze the export and Import procedure maintained by Prime Bank Ltd. To Know about Remittance Funds. To identify the problems in export and import operation of Prime Bank Ltd. And finally to recommend suggestions for the successful export and import operation of Prime Bank Ltd.

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This research revealed the following significant aspects of Foreign Exchange Mechanism of Prime Bank Ltd, Jubilee Road Branch, Chittagong.

The Bank should be come under complete computerization as soon as possible. Foreign Exchange Division of Prime Bank Ltd. using lots of register to record foreign exchange transaction and this procedure is time consuming and there is every possibility of making some mistakes which may create confusion among the clients.

The laws and customs related to the foreign exchange are changing very rapidly. So, Prime Bank Ltd. should take proper initiative to acknowledge its official about newer trend, laws and customs in practice.

The scenario of International Business is quite dynamic. Newer trends are taking place time to time. This may create a tension between exportersimporters and the bankers. To reduce confusion and making long term profitable customer relationship the Bank should arrange seminars, workshops, discussion etc. this will help the Bank to run in safe mode.

The bank should establish booth in the Chittagong Port (One Bank Ltd. has two booth in the Chittagong Port) to capture more foreign exchange business and to provide more quick service to the clients.

Cn n o te ts
Letter of Certificate Certificate of completion of Internship Program Letter of Transmittal ii iii iv

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Acknowledgement Executive Summary

Chapter-1: Introduction 1.1 1.2 1.3 1.4 Introduction Objectives of the study Methodology Limitation of the study

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2 4 5 6

Chapter-2: Profile of the Prime bank Ltd. 2.1 2.2 2.3 2.4 2.5 2.6 2.7 The Bank Incorporation Goals and Objectives of Prime Bank Ltd. Capital Structure Operation Performance of Prime Bank Ltd at a glance Trends in Financial Health: Prime Bank Ltd 8 9 9 10 10 15 17

Chapter-3: Operational Procedure of the Foreign Exchange Division . 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 3.10 3.11 Foreign Exchange Necessity of Foreign Exchange Activities of Foreign Exchange Division Regulation of Foreign Exchange Division Parties involved in Documentary Credit Letter of Credit Type of L\C Letter of Credit settlement Modes of investment in used in Foreign Exchange Operational Mechanism of L\C Back to Back L\C 20 20 21 21 22 23 24 25 26 27 31

Chapter-4: Import Operation 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 4.10 Import Division Import Policy Main features of Import policy Import procedure Import mechanism L\C opening Step involved in lodgment Retirement of Shipping Documents Import performance of Prime Bank Ltd. Import performance of Jubilee Road Branch. 33 33 34 35 35 37 45 47 49 50

Chapter-5: Export Operation 5.1 5.2 5.3 5.4 Export Regulatory Organs for export Required information Understanding 52 52 53 53

ix 5.5 5.6 5.7 5.8 5.9 5.10 5.11 5.12 5.13 Back to Back L\C Export L/C Foreign Documentary Bills for Payment Foreign Documentary Bills for Collection Export bill scrutiny sheet Modes of Payment of Export Bills Inland Letter of Credit-ILC Export performance of Prime Bank Ltd. Export performance of Jubilee Road Branch 58 61 64 64 65 66 68 68 69

Chapter-6: Remittance Department 6.1 6.2 6.3 6.4 Remittance Department Inward Remittance Inward Remittance flow of Jubilee Road Branch Outward Remittance 71 71 73 73

Chapter-7: Findings, Analysis, and Recommendation 7.1 7.2 7.3 Findings and Analysis Recommendation Conclusion 76 80 82

References Bibliography Glossary

84 85 86