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Internship Report - Janata Bank Limited PDF
Internship Report - Janata Bank Limited PDF
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F O R E I G N E X C H A N GE M A N A GE M E N T
OF JANATA BANK LIMITED
ii
iii
EXECUTIVE SUMMARY
Janata Bank Ltd is a govt owned bank with numerous branches spreading all
over Bangladesh. It collects remittances from NRB from different countries and
transfers the currency in BDT to the destined location. Here I have tried to
describe the remittance processing structure of JBL. Along with, I have
included the changes made by globally accepted protocol UCP-600 and wired
transfer service SWIFT.
In this report I have tried to show the contribution of JBL’s remittance earning
on national remittance earning. JBL’s performance is not dissatisfactory but the
remittance earning is not increasing as the rising national remittance
curve.After analyzing the data of JBL’s remittance earnings processthis report
have suggested that JBL lacks in foreign currency collection structure. Its
remittance earning is increasing but the increase is far below the national
remittance increase. JBL should take up to the mark structural change in
service to cope with the national trend and help Bangladesh earn more
remittance.
In addition, with this intern reporthave been included the regression analysis
of import-export volume with regard of exchange rate.
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CONTENTS
1. Introduction .............................................................................................................................................................. 1
2. Origin of the Report ............................................................................................................................................... 1
3. Objectives of the report ........................................................................................................................................ 1
3.1. Broad objective .............................................................................................................................................. 1
3.2. Specific Objectives ........................................................................................................................................ 2
4. Scope of the report ................................................................................................................................................. 2
5. importance of the report ..................................................................................................................................... 2
6. Limitations ................................................................................................................................................................. 3
7. Analysis techniques ............................................................................................................................................... 3
8. Required data ........................................................................................................................................................... 3
9. Sources of Data ........................................................................................................................................................ 4
9.1. Sample Information...................................................................................................................................... 4
9.2. Primary Source of Data ............................................................................................................................... 4
9.3. Secondary Sources of Data ........................................................................................................................ 4
10. Organizational Profile ...................................................................................................................................... 4
10.1. Historical Background of the organization .................................................................................... 4
11. organization mission and vision .................................................................................................................. 5
11.1. Mission:......................................................................................................................................................... 5
11.2. Vision:............................................................................................................................................................ 5
12. offered Services by the organization ......................................................................................................... 5
12.1. Bills Collection: .......................................................................................................................................... 6
12.2. Payments made on behalf of Govt. .................................................................................................... 6
12.3. Services Areas ............................................................................................................................................ 7
13. Organizational structure ................................................................................................................................. 8
13.1. Management Aspect ................................................................................................................................ 8
14. Future plans of the organization ...............................................................................................................10
15. Introduction .......................................................................................................................................................11
16. Swift .......................................................................................................................................................................12
The structure of SWIFT ......................................................................................................................................13
16.1. Cash Reporting: Supporting customer’s need for account information ..........................13
16.2. The Functions of SWIFt ........................................................................................................................14
Solutions for ............................................................................................................................................................14
17. changes made in UCP-600 ............................................................................................................................15
18. Opening Letter of Credit (L/C) ...................................................................................................................17
18.1. Procedure of opening the Letter of Credit (L/C) .......................................................................17
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18.2. L/C Application Form (L/CAF) .........................................................................................................18
18.3. L/C Authorization Form (L/CAF) ....................................................................................................19
19. Securities of L/C ...............................................................................................................................................21
20. Export ...................................................................................................................................................................21
20.1. Formalities of Export Procedure......................................................................................................22
20.2. Disposal of Export procedure............................................................................................................23
20.3. Import ..............................................................................................................................................................25
20.4. Import procedure ...................................................................................................................................25
20.5. Payment Modes .......................................................................................................................................26
21. Export Finance ..................................................................................................................................................28
21.1. Details Commodity Wise Export ......................................................................................................29
Details Export of Janata Bank Limited of 2006 to 2009 .................................................................................29
21.2. Export Target & World Economic Crisis .......................................................................................33
21.3. National and Janata Bank Limited's Export Performance .....................................................34
21.4. Comparison of Export of 2009 with Public Banks ....................................................................35
22. Import Finance ..................................................................................................................................................36
22.1. Commodity wise Import of Janata Bank Limited ......................................................................36
22.2. Import target and achieve in last 3 years .....................................................................................38
22.3. Contribution of Janata Bank in National Import........................................................................38
22.4. Income from Import ..............................................................................................................................39
22.5. Contribution to National Import of JB in last decade ..............................................................39
23. Foreign Remittance .........................................................................................................................................41
23.1. Country wise remittance of Janata Bank Limited .....................................................................41
23.2. Wage Earners' Remittances of Nation ...........................................................................................44
23.3. Foreign Exchange and Foreign Trade of JBL ...............................................................................45
23.4. analysis: effect of exchange rate change on import and export volume of bangladesh
46
Data input.................................................................................................................................................................47
Regression analysis of import volume vs exchange rate ......................................................................49
Regression analysis of export volume vs exchange rate ......................................................................50
23.5. Problem of Foreign Exchange in Bangladesh .............................................................................51
conclusion ..........................................................................................................................................................................52
Reference ...........................................................................................................................................................................54
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1. INTRODUCTION
This report has a certain purpose to focus on the operations of “Foreign Exchange”
of Janata Bank Limited. Without any doubt Foreign exchange catches the flash as it
has great importance in the balance of trade in economy. Banks plays a vital role in
this discipline.
Introduction 1
3.2. SPECIFIC OBJECTIVES
• To analyze the real Foreign Exchange performance of Bangladesh.
This report is a total effort to reflect a clear idea about the strategies, activities, and
performance of Bangladesh regarding Foreign Exchange Business.
• Time limitation It was one of the main constraints that affected covering all
aspects of the study.
• Lack of Secondary Information: The import export data of Bangladesh is not much
available over the net.Secondary source of information was not sufficient for the
completion of the report.
7. ANALYSIS TECHNIQUES
Both qualitative and quantitative methods were applied for preparing this report.
The data were analyzed and presented by Microsoft excel and shows percentage,
graphical presentation and different types of charts. Best effort was given to analyze
the numerical findings.
8. REQUIRED DATA
I have mainly focused on numerical data in preparing the report. Also I have used
theoretical portion as the demand of the report. Analyzing foreign exchange
management of a bank, both theoretical and technical knowledge are necessary for
execution. Then everything with accuracy, I have analyzed and made conclusion.
Limitations 3
9. SOURCES OF DATA
Sources of Data 4
incorporated as a public Limited Company on 21, May 07 vide certificate of
incorporation No-C66933(4425)07 in the early era of privatization. The Bank has
taken over the business of Janata Bank at a purchase consideration of Tk. 2593.90
million as a going concern through a vendor agreement signed between the Ministry
of Finance of the Peoples’ Republic of Bangladesh and the Board of Directors on
behalf of Janata Bank Limited on 15th November 2007. The operation of Janata Bank
Limited works through 851 branches and including 4 overseas branches at United
Arab Emirates and a subsidiary company named Janata Exchange Company Srl in
Italy. It is linked 1202 foreign correspondents all over the world.
11.1. MISSION:
As it is recognized as the leading commercial bank in the aspect of Bangladesh
market and it is providing retail and corporate banking services, it is trusted and
respected as a partner in the social and economic development program in our
country and among our nation.
11.2. VISION:
Becoming effective largest commercial bank in the perspective of Bangladesh to
support socio-economic development of the country and assists go ahead for
becoming leading bank in South-Asia.
As per decision of the govt. 46 (Forty Six) branches of JBL(40 branches in Dhaka city,
1(one) branch in Narayangonj city and 5(five) branches in Chittagong city) are
involved to receive all utility bills in a same station from January'04.
Branches
There are 851 branches of Janata
Bank Limited in home and abroad.
Among them 443 branches are
situated in urban areas including
four foreign branches and 408
branches are in rural areas. And all
foreign branches are situated in
United Arab Emirates.
The management consists of one chairman, eleven directors, one CEO & MD and one company
secretary..
Mid and lower level employees get the direction and instruction from the Board of
Directors about the tasks they have to meet. The chief executive provides the
guideline to the managers and employees, but bears the responsibility for
determining how tasks and goals are to be attained.
Organizational structure 8
Chairman
Managing
Director
General Manager
Deputy General
Organization Monogram
Manager
Assitant General
Manager
Senior Principal
Officer
Principal officer
Senior Officer
Officer
Sub Accountant
Senior Clark
Organizational structure 9
14. FUTURE PLANS OF THE
ORGANIZATION
1. Involvement in export activitylargely by maintaining good communication
with diverse parties.
2. To collect new members in FY2010 to launch export related new business.
3. At least 2 new AD branch will open in FY2010.
4. More facilities will be provided to the exporters on the basis of export priority
and facilitate them on the basis of performance.
5. Sufficient workforce has involved increasing export and import business,
providing special services and initiated different training program of officers
has been started.
6. Very dynamic new dimensional Credit Product willbe started in a large scale
by name of BMRE Loan for export project to import machinery, expand
factory, purchase transport among exiting parties.
7. To take the competitive position charge, decrease commission and other
facilities will continue to complete the journey.
15. INTRODUCTION
One of the most important businesses carried out by the commercial bank is foreign
trading. General focusing states that, the trade among various countries falls for
close link between the parties dealing in trade. The situation calls for expertise in the
field of foreign operations. The bank, is referred to as rending international banking
operation which provides such services. Transactions with overseas countries in
respect of export, import and foreign remittance dealings are under the preview of
foreign exchange department. International trade demands a flow of goods from
seller to buyer and of payment from buyer to seller. In this case the bank forms
bridge between the buyer and seller.
Among all departments Foreign exchange department of Janata Bank Limited is one
of the most important. This department handles various types of activities. Among
these main three are as follows:
a) Export
b) Import and
c) Foreign remittance
Additionally I have included the global trends of money transfer method like SWIFT
and recent changes in the global protocol of exchange like UCP-600.
Introduction 11
16. SWIFT
SWIFT means High-value payment market infrastructures focus primarily on security
and resilience to support time-critical payments, efficiency to have the right trade-off
between risks and cost. Liquidity cost reduction by early finality, easy collateral
coverage and better liquidity management through real-time interactive services
Balancing cost, efficiency and risk are your key requirements, and SWIFT meets them
with a reliable, secure and reusable messaging infrastructure, supporting
international and proprietary standards.
More than 62 high-value payments clearing and settlement systems covering more
than 90 countries and carrying more than 240 million payments a year, rely on SWIFT
for secure messaging services and common message standards essential to their
smooth operation.
Because customers are multilateral, customers need a trusted third party like SWIFT
to provide secure, reliable and proven messaging solutions. SWIFT’s offering is more
compelling in terms of cost and risk than alternatives, thanks to reusability of
participants’ existing SWIFT infrastructures, value-added services such as FIN Copy,
and standard support services. SWIFT solutions for high-value payment clearing
systems support the messaging layer for payment transaction processing, cash
management, business administration functions, reporting and generic
communication.
Swift 12
THE STRUCTURE OF SWIFT
Swift 13
16.2. THE FUNCTIONS OF SWIFT
SOLUTIONS FOR
• For payments
• Cash Reporting
• Supporting your real-time account information needs
• Payments and cash management
Economic changes in the payments landscape have forced the banking community to
find new ways to reduce their operational costs, mitigate their liquidity risk and
increase the revenue and efficiency of their core payment products. Under the
pressure of regulators, the cash management service offering becomes more
transparent to meet new customer expectations. While conforming to regulation is a
must, service quality becomes a key differentiator.
SWIFT has developed offerings in payments and cash management to help the
banking community meet these urgent challenges:
• Increase operational efficiency and save costs: SWIFT’s single window allows
you to rationalize your connectivity channels with:
Swift 14
2. High value payments clearing and/or settlement systems operating on a real-
time gross settlement basis using SWIFT’s secure and reliable FIN domestic
services for high value payment market infrastructures
3. Retail payments clearing systems using SWIFT’s cost efficient services for retail
payments market infrastructures: the services help to clear “batches” of
payments prior to settlement at discrete intervals, with or without netting.
- A leaner set of rules with 39 articles rather than 49 articles of UCP 500.
- Five article from UCP 500 were not included in UCP 600
• Article 5 Instruction to issue/amend credits
• Article 6 Revocable credit
• Article 8 Revocation
• Article 12 In complete and unclear instructions
• Article 38 Other documents
• Following articles have been changed and appear in new form either as
combination, adoptions or rewarding based on position papers issued by
Banking Commission. 2, 6, 9, 10, 20, 21, 22, 30, 31, 33, 35, 36, 46 & 47.
- Main focus has been to make the language more simple and clear. The
responsibilities of the parties to documentary credit transaction have
been more transparent. Article covering advising of L/C and
amendments has clear responsibility of the bank.
Exporter will submit those documents in accordance with the terms and conditions
as mentioned in L/C. Generally the documents observed by the foreign exchange
department are:
• Bill of exchange
• Commercial invoice
• Bill of lading / Air way bill / Truck receipt
• Certificate of origin
• Packing list
• Clean Report of Finding (CRF)
• Insurance cover note
• Pre-shipment certificate
• The Documents Sent To The Issuing Bank Through The Negotiating Bank:
The negotiating bank carefully checks the documents provided by the exporter
against the credit, and if the documents meet all the requirement of the credit, the
bank will pay, accept, or negotiate in accordance with the terms and conditions of
the credit. Then the bank sends the documents to the L/C opening bank.
a) The terms and conditions of the L/C must be complied with UCPDC 500
g) Certificate declaring that the item is operation not more than 5 years in case of
car.
20. EXPORT
Janata Bank Limited exports a large quantity of goods and services to many
countries. Readymade textile garments (both knitted and woven), Jute, Jute-made
products, frozen shrimps, tea, hide and skin, vegetables are the main goods that
Bangladeshi exporters exports to foreign countries. Garments sector is the largest
sector that exports the lion share of the country's export. Bangladesh exports most
of its readymade garments products to U.S.A and European Community (EC)
countries. Bangladesh exports about 40% of its readymade garments products to
U.S.A. Most of the exporters who export through Janata Bank Limited foreign
Securities of L/C 21
exchange Branch are readymade garment exporters. They open export L/Cs here to
export their goods, which they open against the import L/Cs opened by their foreign
importers
Export 22
• Endorsement on EXP:Before the exporter with the customs or postal
authorities lodges the export forms, they should get all the copies endorsed
by Janata Bank Limited. Before shipment, exporter submits EXP. form with
commercial invoice. Then Janata Bank’s respective officers check it properly, if
satisfied, certified the EXP. Without EXP exporter cannot make shipment. The
customer must declare all export goods on the EXP issued by the authorized
dealers
Triplicate:On realization of export proceeds the same bank to the same authority
reports Triplicate.
Export 23
• Quality Control Certificate
• G.S.P. certificate
• Photo
• Examination of Document:Banks deal with documents only, not with
commodity. As the negotiating bank is giving the value before repatriation of
the export proceeds it is advisable to scrutinize and examine each and
every document with great care whether any discrepancy(s) is observed
in the documents. The bankers are to ascertain that the documents are strictly
as per the terms of L/C Before negotiation of the export bill. Bank officers
assigned for examining the export documents may use a checklist for their
convenience.
• Negotiation of export documents:Negotiation stands for payment of value to
the exporter against the documents stipulated in the L\C. If documents are in
order, Janata Bank Limited purchases (negotiates) the same on the basis of
banker- customer relationship. This is known as Foreign Documentary Bill
Purchase (FDBP).If the bank is not satisfied with the documents submitted to
Janata Bank Limited and gives the exporter reasonable time to remove the
discrepancies or sends the documents to L/C opening bank for collection. This
is known as Foreign Documentary Bill for Collection (FDBC).
• The customer submits the L/C to Janata Bank Limited along with the
documents to negotiate
• Janata Bank Limited officials scrutinize the documents to ensure the
conformity with the terms and conditions.
• The documents are then forwarded to the L/C opening bank.
• The L/C issuing banks gives the acceptance and forwards an acceptance letter.
• Payment is given to the customer on either by collection basis or by
purchasing the document.
Export 24
20.3. IMPORT
Import means purchase of goods or services from abroad. Normally consumers, firms
and Government organizations import foreign goods or services to meet their various
necessities. Main import items are food item, edible oil, fertilizer, petroleum,
machineries, chemicals, raw materials of industry, cement clinkers etc. So, in brief,
we can say that import is the flow of goods and services purchased by local agent
staying in the country from foreign agent staying abroad.
i) At first, the importer must obtain Import Registration Certificate (IRC) from
the CCI&E submitting the following papers:
• Trade fair.
• Chamber of Commerce.
Import 25
• Foreign Missions in Bangladesh.
• Journals etc.
iii) When the importer accepts the Proforma Invoice, he/she makes a purchase
contract with the exporter detailing the terms and conditions of the import.
iv) After making the purchase contract, importer settles the means of payment
with the seller. An import procedure differs with different means of payment.
The possible means are Cash in Advance, Open Account, Collection Method
and Documentary Letter of Credit. In most cases, the Documentary Letter of
Credit in our country makes import payment. Purchase Contract contains
which payment procedure has to be applied.
Import 26
beneficiary, upon submission of some stipulated documents and fulfilling the
terms and conditions mentioned in the letter of credit.
Import 27
21. EXPORT FINANCE
Export through Janata Bank Ltd. for the year 2008 and 2009 is Tk.85418.00 million
and Tk. 87500.00 million respectively. In spite of Global Financial Crisis the growth
chart in export through Janata Bank Ltd. remains upwards due to our timely steps
regarding credit facilities and services packages. We have already re-fixed our
schedule of exchange at a reduced rate the loan pricing is more competitive. With
the credit lines our experts have introduce the following new products:
• Cash Credit: Working capital facility to dyeing unit and packaging unit.
• Mid term Loan: For procurement of machinery, space parts, boiler, generator,
vehicles etc. to export oriented industrial unit.
• Packing Credit: Working capital facility to pay wages salary utility bills etc.
• LTR, FC: Short term credit for procurement of capital machinery from abroad.
• Term Loan: For (Export oriented) Ship Building.
• Export Project BMRE: Loan for factory building construction. Expansion,
development and Maintenance, construction of factory godown, purchase of
machineries from local and foreign markets, covered van, generator and
establish ETP.
Export Finance 28
21.1. DETAILS COMMODITY WISE EXPORT
Here given details commodity wise export figures of Janata Bank Limited from 2006
to 2009. It has shown here commodity wise and monthly wise export figures in
details.
Export Finance 29
Grand Total 7185.55
January 8.18 35.74 0.56 39.81 323.65 65.04 11.36 80.13
February 1.55 57.35 0.83 52.56 332.52 45.16 11.34 90.25
March 4.88 90.44 0.47 74.6 348.78 53.54 10.22 99.13
April 4.76 74.57 0.46 89.53 278.37 66.17 10.4 157.21
May 3.66 48.59 0.3 69.31 284.77 44.88 13.17 200.85
June 7.27 55.09 0 65.47 384.56 102.27 15.62 152.75
July 9.73 45.29 0.34 58.16 376.99 111.91 18.97 127.65
2008
In 2006 total export of Janata Bank was Tk. 7089.66 crore. Ready Made Garments
was Tk. 3549.82 crore and it was the highest position. Hide & skin and frozen fish
took the second and third position consequently. It is also clearly observed that in
the month of August and September export amount was highest through the year.
In 2007 total export of janata bank was tk. 7185.55 crore. Readymade garments was
tk. 3540.93 crore and it was the highest position. Hide & skin and frozen fish took the
second and third position consequently. First half of the year 2007 export amount
Export Finance 30
was comparatively better position
position than the second half of the year. It is also clearly
observed that total export amount of 2007 is little bit higher than 2006.
In 2008 total export of janata bank was tk. 8541.76 crore. Ready made garments was
tk. 4189.92 crore and it was the highest
highest position. Hide & skin tk. 837.53 crore and
frozen fish tk. 822.23 crore took the second and third position consequently.
Throughout the whole year 2008 export amount was comparatively better than the
last two years. It is also mention
me here that total export
port amount was significantly
higher than 20060and 2007.
In FY 2009 target export was Tk. 66480.00 million, but earned Tk. 88653.10 million
against the target amount. This was 133% higher than the target. It may mentioned
here that up to October 2009 earned
earned was Tk. 7231.80 million, that means target of
export had attained before two months end of the year.
In spite of world economic crisis and political instability in the country Janata Bank
Limited has kept its upward export trend up to last year. Because Its expertise and
experienced management team offered different promotional offer and financially
Export Finance 31
assisted to the exporters to boost up the export trend. They main offered and
assisted-
Export Finance 32
21.2. EXPORT TARGET & WORLD
WORL D ECONOMIC CRISIS
From 2006 to 2009 export of Janata Bank is in increasing pattern. Even during world
economic crisis period Janata Bank’s management shows their best performance.
That is why export position remains in upward condition.
In spite world economic crisis export growth has increased 4%. Which is highest
hig
among four government owned banks.
100000
80000
60000
40000
20000
0
2007 2008 2009
Target Achievement
Export Finance 33
21.3. NATIONAL AND JANATA BANK LIMITED'S EXPORT
PERFORMANCE
Contribution to National Export of Janata Bank Limited (mil $)
For global economic recession and political instability inside the country contribution
to national export of Janata Bank limited was lowest in the fiscal year 2007-2008
among last six fiscal years. And in fiscal year 2008-2009 it turned up warding.
Because to increase export business providing the exporter more foreign currency, to
strengthen their production capacity, to facilitate the in every maximum scope, the
bank has took four incentives. These have been proved to be fruitful adding Tk.2.00cr
(approx.) more to the bank’s annual income through only export business.
Export Finance 34
21.4. COMPARISON OF EXPORT OF 2009 WITH PUBLIC
BANKS
88653.1
64243.3
44606.8
7458.1
Total export Janata Bank Limited in 2009 was Tk.88653.1 million. Sonali Bank’s
export was Tk.64243.3 million. Agrani Bank’s and Rupali Bank’s export was
Tk.44606.8 million and Tk.7458.1 million respectively. From above table and graph
we can say that Janata Bank Limited is the top position among four government
owned banks with a large difference. Its nearest competitor is Sonali Bank Limited.
Li
Export Finance 35
22. IMPORT FINANCE
Traditionally Janata Bank Ltd. is pioneer in handling major portion of country’s
import business. The total volume of import as on 30-11-2009 is 107168 million.
Major import items are industrial raw materials, chemicals, capital machineries,
scraped vessels and petroleum etc.
Through quite a good number of Authorized Dealer Branches and 1198 nos. foreign
correspondents worldwideJanata Bank Limited has been extending full range import
and relevant finance facilities. Setting Industrial vision to facilitate optimally, bank's
involvement has been showing sharp rising trend.
Import Finance 36
Import Trend of JB from 2006 to 2009
2000 48005
2001 54666
2002 58889
2003 60477
2004 74920
2005 72912
2006 128809
2007 84065
2008 129413
2009 118525
From 2000 to 2006 import of Janata Bank Limited is gradually increasing. But in 2007
the country was under caretaker government. Export, import, foreign remittance,
Import Finance 37
employment in abroad etc. were moving forward in slow rate. For this reason import
in 2007 sharply down compare with 2006. Again in 2008 import of Janata Bank
Limited reached higher than 2007. And in 2009 import is dropped little bit.
Percentage of
Year Target Achieved
Achieved
2007 8000 840.54 105%
Import of
National Import
Year Growth Janata Bank Growth
Tk.(crore)
Tk.(crore)
2006 111307 0 12880.9 0
Import Finance 38
22.4. INCOME FROM IMPORT
Particulars 2007 2008
Import Finance 39
JBL's contribution from 1995 to 2007
12000
10000
8000
Tk. in crore
6000
4000
2000
0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
- - - - - - - - - - - - -
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
JBL Tk. (Cr) 4010 3799 3732 4647 4754 5233 5345 6117 6953 8398 9230 1075 9466
Increase of import indicates the country is less wealthy and decrease of import
indicates that the country has sufficient resources and is able to fulfill its local
demand. So as a publicly owned bank Janata bank Limited is less service providing
attitude to the importers. It provides little facilities to its importers. As a result
import contribution percentage to national is decreasing gradually from fiscal year
1995-1996
1996 to fiscal year 2007-2008.
2007
Import Finance 40
23. FOREIGN REMITTANCE
Inward foreign remittance through Janata Bank Ltd. up to November 2009 is Tk.
51508.55 million. Foreign remittance from NBRs reached record high of Tk. 45924
million in 2008 against Tk.36788 million in 2007 and continue to play an important
supporting role in strengthening the economy of the county Janata Bank ltd. by
reducing lead-time, has ensured quick delivery of foreign remittance, an NBR branch
has been opened to serve exclusively Non-resident Bangladeshis through Speedy
Money Remittance System with instant to the beneficiaries. Anybody willing to
remit foreign currency from any corner of the world can use wide network of the
bank. The remittance reaches to the beneficiary within 3 days without charging any
commission. Our worldwide network includes 4 branches in UAE, 2 exchange houses
in Italy and correspondent relationship with all the major Banks and all important
trade centers of the world.
Recently Janata Bank Ltd. has launched its Speedy Foreign Remittance Payment
System which enables beneficiaries to receive their money within shortest possible
time. The beneficiary also gets information of remittance through automated SMS.
It’s a secured, easy, cost effective and speedy way of remittance for the remitter.
Janata bank Ltd. has signed an agreement with Western Union Network to facilitate
wide range of remittance of the globe. Both the organizations make it possible to
receive the money from about 300,000 locations of 200 countries instantly with
prevailing mutual mechanism and workforce. The achievement of Janata Bank Ltd. in
attracting foreign remittance as compared to country’s performance is given bellow:
Foreign Remittance 41
Table: Country wise Foreign Remittance of JBL from 2004 to 2006
country 2004 2005 2006 2007 2008 2009
JanataEchange Co., Italy 1182.5 2077.1 3102.1 3513 2289.8 1446.8
Janata Bank, UAE Branches 5196 5638 5666.7 9188.3 12548.8 16207.7
Other Exchange Co. 2143.5 2279.5 2901.7 4714 6878.2 8738.1
Kuwait 3468.6 4089.3 5652.6 7615.9 7780.1 6764.3
Saudi Arabia 4057.9 3762.7 3598.3 3025.2 4536 7718.2
Oman 1129.8 1095.6 1106.2 1171 1341.6 1038.7
Bahrain 785.2 817.4 853.2 834.5 916.7 716.1
Greece 0 0 537.9 697.9 591.5 524.5
UK 0 0 0 0 2213.3 6174.9
Qatar 196.1 190.8 149.2 173.6 200.6 118.9
United States 26.9 29.2 132.8 153.6 222.3 285.7
Malaysia 1139.3 623.9 264.2 208.7 113.2 23.9
Singapore 0.2 0.4 5.3 0.7 20.2 98.1
Korea 0 23.2 2.5 0 0 0
Canada 166.7 0 6.6 7.2 0 0
Australia 14.4 0 0 0 0 0
Other sources (SWIFT/Telex) 4556.4 5945.7 5288 5484.4 6272.1 6334.2
Grand Total 24063.5 26572.8 29267.3 36788 45924.4 56190.1
60000
50000
40000
30000
20000
10000
0
Grand Total
Foreign Remittance 42
Inward remittance from Bangladeshi nationals working abroad continued to play an
important role in strengthening the current account. Receipts on this sector
increased gradually in every year from 2006 to 2009. The underlying reason was that
Bangladesh Bank has simplified the approval policy of drawing arrangements
between foreign exchange houses and domestic bank. Janata Bank’s management
has taken this opportunity.
For quick payment of TTs issued by 4(Four) UAE branches of Janata Bank Limited (
Abu Dhabi, Al-Ain, Dubai &Sharjah branch) Foreign Exchange Corporate Branch,
Dhaka( FECB, Dhaka), Laldighi East Corporate Branch, Chittagong(LDE, Ctg), Foreign
Exchange Corporate Branch, Sylhet( FECB, Sylhet), Khulna Corporate Branch, Khulna,
Barisal Corporate Branch, Barisal &Rajshahi Corporate Branch, Rajshahi are
nominated. To facilities to its remitters Janata bank Limited has started-
2. LDE, Ctg will cover whole Chittagong Division, except branches under greater
Comilla and Noakhali Area.
7. Comilla Corp. will cover all branches under greater Comilla district.
8. Noakhali Corp. will cover all branches under greater Noakhali district.
Commission for issuance of Taka Drafts from our UAE branches has been reduced
and refixed from AED 10.00 to AED 4.00 and commission for issuance of TTs drawn
on Bangladesh and payable at any bank branches are re-fixed at AED 12.00 from AED
30.00.
Foreign Remittance 43
23.2. WAGE EARNERS' REMITTANCES
REMITT ANCES OF NATION
Inward remittances from Bangladeshi nationals working abroad continued to play an
important role in strengthening the current account of Bangladesh
Bangladesh Bank. Receipts on
this sector increased by 22.4 percent to USD 9689.3 million in FY 09 from USD 7914.8
million in FY 08. The underlying reason was that Bangladesh Bank has simplified the
approval policy of drawing arrangements between foreign exchange
exchange houses and
domestic banks. As a result 40 banks have been allowed for establishing 820 drawing
arrangements with 208 exchange houses all over the world for collecting
remittances. Due to these measures, remittances have recorded a substantial
increase by 22.4 percent to USD 9689.3 million during the year 2009. Remittances as
percentage of GDP increased by 089 percentage points to 10.84 in FY 09 from 9.95 in
FY 2008. The shares of major source countries in the remittance receipts of FY 2008
and FY 2009 are given bellow.
Foreign Remittance 44
Wage earners'
remittances 2009 Wage earners' remittances
Country Percentage 2009
Kingdom of 29.50% Other
countries Kingdom of
Saudiarabia Saudiarabia
18%
UAE 18.10% 30%
UK 8.20%
USA
Kuwait 10.00% 16%
USA 16.30%
UAE
Other countries 17.90% UK 18%
8%
Total 100.00%
Kuwait
10%
This is the whole scenery of inward foreign remittance of 2008 and 2009 of
Bangladesh. In the sector of foreign remittance earning 2008 Kingdom of Saudiarabia
in highest position that is 29.40%, USA second position-
position 17.50% and United Arab
Emirates is third position 14.30%. And in 2009 Kingdom of Saudiarabia again top
position, in second position United Arab Emirates and in third position USA. Their
inward remittances are 29.50%, 18.10% and 16.30% respectively.
Foreign
ign Exchange and Foreign Trade of JB Trade of JB 2008
Foreign Remittance 45
Foreign Exchange and Foreign Trade of JBL
2006 - 2008
140000
120000
100000
80000
60000
40000
20000
0
Import Export Remittance
Export and foreign remittance are in good position. They are in increasing trend from
2006 to 2009. And due to global economic crisis and for various trade barriers and
quotas import does not grow much higher compare with export and foreign
remittance. In 2007 export and import are comparatively low with other years due
du to
political instability inside the country. But inward remittance is continuously upward
trend up to 2009.
The
he objective is to measure the relationship
relationship of exchange rate with import-export
import
volume. That’s why exchange rate was taken as independent variable and export-
export
import volume is taken as dependent variable.
Foreign Remittance 46
DATA INPUT
Foreign Remittance 47
import trend (in mil USD)
1800000
1600000
1400000
1200000
1000000
800000
600000
400000
200000
0
import
export
Foreign Remittance 48
REGRESSION ANALYSIS OF IMPORT VOLUME VS EXCHANGE RATE
Running the analysis with the data using spss the report that generated:
b
Variables Entered/Removed
Variables
Model Variables Entered Removed Method
a
1 exchange rate . Enter
Model Summary
b
ANOVA
Total 1.271E12 38
a
Coefficients
Standardized
Unstandardized Coefficients Coefficients
Foreign Remittance 49
a
Coefficients
Standardized
Unstandardized Coefficients Coefficients
From the model summary table, we can say that R square is only .059. it means the
changes in exchange rate can only explain 5.9% of the change in import volume. It
also means that there are other important factors are there to influence the import
volume rate.Its also true that Bangladesh is using controlled floating exchange rate
with USD. The dispersion is not much significant for short time but with long time it
has some effects.
Model Summary
b
ANOVA
Total 2.152E12 38
Foreign Remittance 50
b
ANOVA
Total 2.152E12 38
a
Coefficients
Standardized
Unstandardized Coefficients Coefficients
The R square value is .074, which means the changes of exchange rate can influence
only 7.4% of the variation of import volume.
1. Global economic crisis which decreases the consumptions of goods and also
the exports.
2. Withdrawal of restriction on China for RMG export to Europe and USA in
2009.
3. Export volume has dropped due to lack of global demand.
Foreign Remittance 51
4. Lack of diversification, especially for export sector.
5. Very high dependency on Textile and RMG Sectors to export.
6. In case of import prices of commodities and raw materials in international
market.
8 . Low level of project Finance in 2007, 2008 & 2009 due to the
national political instability.
It is clear that the Janata Bank Limited Foreign Exchange department has ensured
both quality and services which helps to improve the overall status of the Bank. For
this reason Janata bank Limited has able to achieve second position in country and
top position among public banks in export sector in 2009. However the branch may
have scope to improve in a few areas. Such as-
01. Insufficient number of exporter and importer is not enough to achieve the goal
who operate through this bank. So JBL should offer more facilities to attract their
clients.
02.. It is a crying needto provide more quality services to their clients in order to
compete in the market.
CONCLUSION
Nearly edge is seen while inspecting the Foreign Exchange Department of Janata
Bank Ltd.’s success. That means, this bank successfully finished last year with an
appreciable performance .JBL attained first place in the last year among the
government banks forit’s flawless completion of blending of solid quality and sincere
service.
For a greater achievement and attain more priority among the customers and clients
JBL can walk through the way under some precision direction:
conclusion 52
o Banking sector moves toward a very newer and wider type of voyage that results
in ending up with some critical marketing overkill. Now a dayspeople are looking
for a further opportunity to have some scheme in the same bank from where
they have collected the remittance.
o Total revival of investment of commodity in commercial sector requires a very
rapid and complete action to provide a more accurate and fast recycling of
invest/
o Less interesting export facilities should be proven improved.
o Finding out the newer destination of our export goods and ending up with being
adjusted with the newer sector’s customs.
o With successful promotional programs JBL can attract more people from this
particular walk of life.
o The overall matter of foreign remittance should be driven under a complete
computerized system having a main server country wide to keep up a congenial
environment.
conclusion 53
REFERENCE
1. JANATA BANK LTD WEBSITE
2. JANATA BANK ANNUAL REPORTS
3. EXPORT PROMOTION BUREAU
4. TRADEMAP.ORG FOR IMPORT EXPORT DATA
5. EXCHANGERATE.COM
a. (http://www.exchangerate.com/past_rates.html?letter=B
&continent=&cid=239-
USD¤cy=20&last30=&date_from=09-30-
2007&date_to=01-04-2011&action=Generate+Chart)
6. SWIFT.com
Reference 54