INTRODUCTION

CHAPTER 1

1|Page
1.1 Introduction

The necessity of foreign Exchange activities cannot be ignored in any ways because of its
dependency in the banking sector. It can be considered as the backbone of any bank as it shows
the ways to do all the banking tasks and it is actually the starting point of all the banking
operations. It provides the opportunity to its clients to deposit money and at the same time
attractive services are ensured as per the customer needs, wants and close accounts, mail
transfer, demand draft, receive Cheque for clearing etc. It also offers the customers to deposit
money for FDR (Fixed Deposit Receipts) with attractive interest rate at maturity.

So, all the operations are started from the Foreign Exchange activities and all of these are based
on the monetary transition. As a result, recording of all monetary transaction has become
compulsory in the modern business sector. Not only recording, but also it includes the process
of communicating, summarizing and explaining the economic events of a bank within a specific
period of time. . I strongly believe that any business graduate thought to have the basic
understanding about Foreign Exchange operations as it can show the ways to enter in the new
business of its strong relation with all of the financial activities. In all of my internship report I
have tried of my best to provide almost all of the basic idea of Foreign Exchange operation and
basic accounting procures that’s practiced in all of the branches of UBL. I have also concerned
about the performance evaluation from different perspective.

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 bachelor’s degree, to launch a career with some
practical experience. Against this backdrop, I have completed my three months internship in
the Uttara Bank Limited, Pallabi Branch, Dhaka which has helped me a lot to understand the
real life situation of banking business.

2|Page
1.2 Origin of the study

Bachelor of Business Administration (BBA) Course requires a three month attachment with an
organization followed by a report assigned by the faculty supervisor. I took the opportunity to do my
internship in Uttara Bank Limited, Pallabi Branch, Mirpur, Dhaka. The organization attachment started
on 16/10/2016 and finished on 15/01/2017. Actually this is a feedback which department accepts from
the students who join in the organization after the completion of theoretical part of the BBA program
Mr. Masnoon Salehin, Lecturer, School of Business Studies, South East University, asked me to prepare a
report on "Foreign Exchange Operations of Uttara Bank Limited" as part of the fulfillment of internship
requirement.

I have tried my best to use this opportunity to enrich my knowledge on banking system. After observing
thoroughly, I have prepared this report on the basis of my findings and observation relating to the topic.

1.3 Objective of the study

1.3.1 Broad Objective:

The primary purpose of this study is to evaluate the “"Foreign Exchange Operation of Uttara bank.

1.3.2 Specific Objective: To achieve the above broad objective, my specific objectives are-

 To oversee the nature and relationship among different components of Foreign Exchange
transaction Operation regarding the business of commercial Banks.
 To acquire practical experience about work environment, to know relation among staff,
discipline and behavior of an organization that will help me to buildup future working life.
 To reveal the nature of foreign exchange transactions & Operation.
 To know the export and import procedure of Uttara Bank limited.
 To know the remittance procedure of Uttara Bank limited.

3|Page
1.4 Scope of the Study

This study focuses on the Foreign Exchange Operation of Uttara Bank Ltd. This report has the crisp
details of the procedure of the Foreign Exchange Operation. Along with that, a relevant stream of
discussion has been made on the theory and policy issues relating to Foreign Exchange Operation. I had
a great opportunity to have an in depth knowledge of all the banking activities practiced by the Uttara
Bank Limited.

1.5 Methodology of the study

1.5.1 Data Collection Methods

 Studying and analyzing the annual reports of Uttara bank.

 Collection of data and information from the concern Division of the bank on a regular basis.
 Consulting with the employees to get information about the Bank’s present practices.

1.5.2 Sources of Data

All the necessary information to prepare the report is collected from both primary and secondary source
of data.

Primary sources:

 Discussion with officials.

 Observation of daily activities regarding training.

Secondary sources:

 Annual reports of Uttara Bank Limited.

 Internet and official website of Uttara Bank Limited.
 Various study reports.

1.6 Limitations of the study

In preparing the Report, I have experienced some acute problems that have, to some extent,
affected the presentation of the report. The acute problems were –

4|Page
a) Lack of Information or Data:

Adequate and in-depth well-organized literature was not available because a few researchers
endeavored to work on such project in the past. Though the officials tried to assist, sometimes their
working pressure couldn’t give me proper assistance what I needed. There is some information which
needed special permission from top level, is not always achievable.

 b) Time Constraint:

It is something like impossible to cover the entire Foreign Exchange banking and phenomena exploiting
a three months time period while an employee or an officer is awarded with one or two year
probationary period to do his or her particular job.

 c) Comparison Status:

I have had no opportunity to compare the Foreign Exchange banking system of the Uttara Bank Ltd. with
that of other contemporary and common size banks. It was mainly because of the shortage of time and
Internship nature.

5|Page
Company Profile

CHAPTER 2

6|Page
2.1 History of Uttara Bank

Uttara Bank Limited celebrated 50th anniversary of its Banking Service in 2015. This well
established and ancient bank has a rich history. With the initiation of some renown bengali
businessmen it was established to facilitate the disadvantaged people of the then East Pakistan
and started its banking operation officially on 28th January of 1965 in name of “Eastern Banking
Corporation” with four branches which soon reached 60 just before the independence. During
Non-cooperation movement in 1971, this bank performed the treasury function of East Bengal.

 After independence, Eastern Banking Corporation was nationalized and renamed as “Uttara
Bank” and resumed its banking operation from 26th March 1972. Embarking on a progressive
journey, Uttara Bank continued to grow and expand in the successive years. It took the name
“Uttara Bank Ltd.” after privatization from June,1983 and became one of the largest privet sector
bank of Bangladesh. In the later years, Uttara Bank became the trend setter in the banking
industry, acquiring lion's share in inward foreign remittances and a major market share in loans
to large, medium and small industries, traders and farmers. Based on the bank’s consistent strong
financial performance and its expanding presence, Uttara Bank Ltd. is currently ranked as the
most trusted bank in Bangladesh.

 At present the bank has 228 branches and all are under online network. In addition, its effective
and diversified approach to seize the market opportunities is going on as continuous process to
accommodate new customers by developing and expanding rural, SME financing and offshore
banking facilities. Besides these traditional delivery points, the bank is also very active in the
alternative delivery area. It currently has the facilities of SMS Banking, Internet Banking and a
large number of ATMs of its own with ATM sharing arrangement with other partner banks.

The Bank is proud of its management team headed by Managing Director, Mr. Mohammed
Rabiul Hossain and it encourages all employees to devote a measure of their time and talent to
support distressed community by participating in CSR programs. Its main objective is to render
service to the people whether rich or poor and to contribute to the development of the nation.

7|Page
2.2 Mission of Uttara Bank

 To provide high quality financial service.

 To provide excellent quality customer service.
 To maintain corporate and business ethics.
 To become a trusted repository of customers money and their financial advisor .
 Continuously improving productivity and profitability, and thereby enhancing shareholder value.

2.3 Vision of Uttara Bank

 To be leading commercial bank in the country & contribute maximum to the welfare for the
people of the country.
 Prime objective to deliver a quality that demonstrates a true reflection of our vision.
 Excellence in Banking.

2.4 Goal of Uttara Bank

Short Term Goal: Increase financial services day by day. Earn satisfactory profit by giving services to
the customer.

Long Term Goal: Maximize the wealth of shareholders and want to be a leading bank in the banking
sector of Bangladesh.

2.5 objectives of Uttara bank

 Building a strong customer focus and relationship based on integrity, superior service.
 To create an honest, open and enabling environment.
 To finance the international trade both in import and export.
 To strive for profit and sound growth.

2.6 Strength of Uttara Bank

 Clients
 Working forces (manpower)
 Familiar and friendly working environment

8|Page
  Excellent team work
 Financial and administrative discipline
 Strong risk management
 Commitment to the stakeholders
 Strong guidance of Board of Directors and its Committee
 Attractive leadership

Financial health and strength

Despite the recent crisis in the Bangladeshi banking sector, Uttara Bank is maintaining a decent financial
health. Bonik Barta, a financial daily newspaper has declared this bank as one of the strongest banks of
Bangladesh based on seven indices.

2.7 UTTARA BANK LIMITED AT A GLANCE

 Uttara Bank Limited is one of the largest private Banks in Bangladesh.

 The Bank operates through 228 fully On-line branches ensuring best possible and fastest
services to its valued clients.
 The Bank has more than 600 foreign correspondents at worldwide.
 Total number of employee is 3,746 at present.
 The Board of Directors consists of 14 members.
 The Bank is headed by the Managing Director who is the Chief Executive Officer.
 The Head Office is located at Bank’s own 18-storied building at Motijheel, the
commercial center of the capital, Dhaka.

Uttara Bank Limited Networks

 Corporate Offices ( Corporate Branch & Local Office )  2
 Regional Office 12
 Worldwide Affiliates 600
 Total Branches ( Including Corporate Branch & Local Office ) 228
 Authorized Dealer Branches 39
 Treasury & Dealing Room 1
 Training Institute 1
 Man Power 3746

9|Page
Different Wings
Name of the Division
Human Resources Division
Central Accounts Division
Credit Division
Information & Communication Technology
(lCT) Division
Internal Control & Compliance Division
Banking Control & Common Services
Division
Board & Share Division
International Division
Treasury Division
Establishment Division
Corporate Banking Division
Affiliated Departments
Personnel Department
Disciplinary Department
Test Key Department
Research & Planning Department
Risk Management Department
Accounts Department
Reconciliation Department
Approval Department
Administration & Monitoring Department
Lease Finance Department
Recovery Department
MIS Department
Development & Support Department 
Card Department
Audit & Inspection Department
Monitoring Department
Compliance Department
Anti-Money Laundering Department
Branches Operation Department
Business Promotion Department
Green Banking Department
Board Department
Share Department
Correspondence Banking Department
Remittance Department
Trade Services Department
Front Office (Dealing Room)
Back Office
Asset & Liability Management Department
General Services Department
Transport Department
Stationery & Records Department
Engineering Department
Credit Marketing Department
Credit Business Development Department
10 | P a g e
2.8Board Of Directors

SL Name
01 Azharul Islam Chairman
02 Iftekharul Islam Vice- Chairman
03 Syed A.N.M Wahed Director
04 Engineer Tofazzal Hossain Director
05 Asif Rahman Director
06 Faruque Alamgir Director
07 Arif Rahman Director
08 Dr. Md. Rezaul Karim Mazumder Independent Director
09 M. Tajul Islam Director
10 Prof. Dr. Abu Hossain Siddique Independent Director
11 Col. Engineer M.S. Kamal (Retd.) Director
12 Dr. Md. Nazmul Karim Chowdhury Independent Director
13 Abul Barq Alvi Director
14  Shaikh Abdul Aziz Managing Director & CEO

2.9 Five Years at a Glance of UBL Export, Import and Foreign

Remittance:
(Amount in million)

Year Export Import Foreign Remittance

2015 12224.4 38738 53315.8
2014 13447.3 45870.9 52030.2
2013 14306 40336.8 44301.3
2012 14192.9 35418.6 43585.6
2011 15588.5 33037.6 37848.7

2.10 Product and services of Uttara bank

UBL has different kind of Product and services. The products are –

 Personal Loan
 Any purpose Loan

11 | P a g e
  Small Business Loan
 Different deposit Scheme
 Monthly Saving Scheme
 Monthly Benefit Scheme
 Money Gram
 LC

UBL Services are-

 Corporate Banking
 Personal Banking
 SME Banking
 Capital Market Services
 Telephone And Internet Banking Services

2.11 Corporate Social Responsibility

Uttara Bank Limited manages its business in a responsible way and contributes to the society and
environment in which it operates. Corporate Social Responsibility (CSR) is the continuing commitment
by business to behave ethically and contribute to economic development. It also improves the quality of
life of the workforce and their families as well as of the local community and society at large. Uttara
Bank Limited considers socially responsible activities as an important part of its culture, identity and
business. Uttara Bank Ltd. conforms to all of the stringent regulations issued by the Government and the
Bangladesh Bank. As part of our corporate social responsibility, Bank contributes greatly to the
nourishment of the country’s all calamities, arts, culture and sports. During the year 2015 Bank donated
33.7 million in different CSR activities.

12 | P a g e
Theoretical Aspect

CHAPTER 3

13 | P a g e
3.1 Foreign Exchange
Foreign exchange is the exchange of one currency for another or the conversion of one currency
into another currency.

3.2 Import
An import is a good or service brought into one country from another. Imported goods or services
introduce domestic consumers to newer things by foreign producer.

3.3 Export
A good or service that is produced in one country and then sold to and consumed in another
country.

3.4 Remittance
Remittance is Transfer of funds, usually from a buyer to a distant seller, instrument of transfer
(such as a check or draft) or funds so transferred.

3.5 Letter of credit

A letter of credit is a bank guarantee that a buyer's payment to a seller will be received on time
and for the correct amount. In the event that the buyer is unable to make payment on the
purchase, the bank will be required to cover the full or remaining amount of the purchase.

3.6 Classification of letter of credit

 Revocable LC
 Irrevocable LC
 Cash LC
 Sight LC
 Deferred LC
 Back to Back LC

14 | P a g e
1. Revocable LC: This LC type can be cancelled or modified by the Bank (issuer) at the customer’s
instructions without prior agreement of the beneficiary (Seller). The Bank will not have any liabilities to
the beneficiary after revocation of the LC.

2. Irrevocable LC: This LC cannot be cancelled or modified without consent of the beneficiary (Seller).
This LC reflects absolute liability of the Bank (issuer) to the other party.

3. Cash LC: Cash L/C denotes that, the payment is paid in cash. In other words, after shipment, the
applicant makes payment to the beneficiary through L/C.

4. Sight LC: According to this LC, payment is made to the seller immediately (maximum within 7 days)
after the required documents have been submitted.

5. Deferred LC: According to this LC the payment to the seller is not made when the documents are
submitted, but instead at a later period defined in the letter of credit. In most cases the payment in
favor of Seller under this LC is made upon receipt of goods by the Buyer.

6. Back to Back LC: This LC type considers issuing the Second LC on the basis of the first LC. LC is opened
in favor of intermediary as per the Buyer’s instructions and on the basis of this LC and instructions of the
intermediary a new LC is opened in favor Seller of the goods.

3.7 Documents required under L/C Operation

1. Draft:
A bill of exchange is a binding agreement by one party to pay a fixed amount of cash to another party as
of a predetermined date or on demand.

2. Proforma invoice:
An abridged or estimated invoice sent by a seller to a buyer in advance of a shipment or delivery of
goods. It notes the kind and quantity of goods, their value, and other important information such as
weight and transportation charges.

3. Commercial Invoice:
The invoice is the bill for the goods from the seller to the buyer. It can be used to determine the true
value of goods when assessing the amount of customs duty.

4. Bill of Lading:
A document issued by a carrier, or its agent, to the shipper as a contract of carriage of goods. It is also a
receipt for cargo accepted for transportation, and must be presented for taking delivery at the
destination.

15 | P a g e
5. Air waybill:
An air way bill is a receipt issued by an air carrier indicating receipt of goods to be transported by air and
showing goods consigned to a named party.

6. Packing list:
A packing list is usually requested by the buyer to assist in identifying the content do each package or
container.

7. Bill of Entry:
Bill of entry is a custom clearance copy. Custom authority certificates that imported goods are legal or
illegal. Bill of entry must deposit into importers bank by the importer because central bank examines the
parties bill of entry.

3.8 Application for issuing LC

 Full name and address of the supplier, manufacturer or beneficiary

 Opener’s name and address
 The total amount of credit asked for
 Specific credit or a revolving letter of credit and amount of the currency in which the documents
are to be drawn.
 The terms of sale, i.e. whether the contract is on CIF, CNF, FOB basis.
 The risks to be covered under the policy and the amount of insurance.
 Brief description of goods including quantity, quality and unit price.

3.9 Parties of documentary letter of credit

1. Issuing Bank
Issuing Bank is the bank that issues a letter of credit at the request of an applicant or its own behalf.
Issuing bank undertakes to honor a complying presentation of the beneficiary without recourse.

2. Advising Bank
Advising bank is the bank that advises the credit at the request of the issuing bank

3. Confirming Bank
Confirming bank is the bank that adds its confirmation to a credit upon the issuing bank's authorization
or request.

4. Nominated Bank
Nominated bank is the bank with which the credit is available or any bank in the case of a credit
available with any bank.

16 | P a g e
5. Negotiating Bank
The bank, which makes payment to the exporter after inquiry, the document submitted by the exporter
with the original letter of credit then it is called negotiating bank.

6. Reimbursing Bank
Reimbursing Bank shall mean the bank instructed and/or authorized to provide reimbursement
pursuant to a reimbursement authorization issued by the issuing bank.

3.10Different account in L/C operation:

1. Nostro Account:
It means “our account with you”. A Nostro account is a foreign currency account of a bank maintained
by its foreign correspondents abroad.

2. Vostro Account:
Vostro account means “your account with us”. The account maintained with foreign correspondent in a
bank of a particular country is known as vostro account.

3. Loro Account:
Loro account means “their account with you”. Account maintained by third party is known as Loro
account.

3.11 SWIFT

Founded in Brussels in 1973, the Society for the Worldwide Interbank Financial Telecommunication
(SWIFT) is a co-operative organization dedicated to the promotion and development of standardized
global interactivity for financial transactions. SWIFT's original mandate was to establish a global
communications link for data processing and a common language for international financial
transactions. The Society operates a messaging service for financial messages, such as letters of credit,
payments, and securities transactions, between member banks worldwide.

17 | P a g e
Foreign Exchange Operation

CHAPTER 4

18 | P a g e
4.1 Foreign Exchange Department

One of the largest businesses carried out by the commercial bank is foreign trading. 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, which provides such operation, is referred to as rending
international banking operation. Mainly transactions with overseas countries are respects of import;
export and foreign remittance come under the preview of foreign exchange transactions. International
trade demands a flow of goods from seller to buyer and of payment from buyer to seller. In this case the
bank plays a vital role to bridge between the buyer and seller.

The Importer The Bank The Exporter

(Buyer of Goods) (Third Party) (Seller of Goods)

Fig: Foreign Exchange Department.

Some national and international laws regulate functions of this department. Among these, Foreign
Exchange Act, 1947 is for dealing in foreign exchange business, and Import and Export Control Act, 1950
is for Documentary Credits. Governments’ Import &Export policy is another important factor for import
and export operation of banks.

4.2 Definition of Foreign Exchange

Foreign exchange means exchange foreign currency between two countries. If we consider foreign
exchange as a subject, then it means all kind of transactions related to foreign currency. In other words,
foreign exchange deals with foreign financial transaction.

On the other hand, we can say that, Foreign exchange is a process or system of conversion of one
national currency into another and of transferring money from one country to another.

Among all departments, foreign exchange department is one of the most important departments for
Uttara Bank Limited. This department handles various types of activities. Among these the main three
are as follows:

19 | P a g e
 Chart - Foreign Exchange operations

These three parts are most essential part of foreign exchange operations of Uttara Bank Limited. Not
only Uttara Bank but also all banks of Bangladesh have to play these roles in foreign exchange
operations.

4.3The most commonly used documents in of foreign Exchange:

 Documentary letter of credit

 Bill of Exchange
 Bill of lading
 Commercial invoice
 Certificate of origin of goods
 Inspection certificate
 Packing list
 Insurance policy
 Performa invoice/indent

Documentary Credit:

In simple term, a documentary credit is a conditional Bank undertaking of payment.  Expressed more
fully, it is a written undertaking by a Bank (issuing Bank) given to seller (beneficiary) at the request, and
in accordance with the instructions, of the buyer (applicant) to effect payment (that is, by making a
payment, or accepting or negotiating bill of exchange) up to a stated sum of money, with in a prescribe
time limit and against stipulated documents.

The customary clauses contain in a L/C are the followings:

 A clause authorizing the beneficiary to draw bills of exchange up to certain on the opener.
 List of shipping documents, which are to accompany the bills
 Description of the goods to be shipped
 An undertaking by the opening Bank that bills drawn in accordance with the conditions will be
dully honored.

20 | P a g e
Bill of Exchange:

An unconditional order issued by a person or business which directs the recipient to pay a fixed sum of
money to a third party at a future date. The future date may be either fixed or negotiable. A bill of
exchange must be in writing and signed and dated.

Bill Of Lading:

A bill of lading is a document that is usually stipulated in a credit when the goods are dispatched by sea.
It is a evidence of contract of carriage, is a receipt for the goods, and is a document of title to the goods.
It also constituted a document that is, or may be, needed to support an insurance claim.

The details on the bill of lading should include-

 A description of the goods in general terms not inconsistent with in the credit
 Identify marks and numbers, if any
 The name of the carrying vessel
 Evidence that the goods have been loaded on board
 The ports of shipment and discharge
 The names of shipper, consignee and address of the notifying party
 Whether freight has been paid or is payable at destination
 The number of original bills of lading issued
 The date of issuance

Commercial Invoice:

A commercial invoice is the accounting document by which the seller charges the goods to the
buyer. A commercial invoice normally includes the following information:

 Date
 Name and address of the buyer and seller
 Order of contract number, quantity and description of the goods, unit price and the total price
 Weight of the goods, number of the package, shipping marks and numbers.
 Terms of delivery and payment
 Shipment details

21 | P a g e
Certificate of Origin:
A certificate of origin is a signed statement providing evidence of the origin of the goods.

Inspection Certificate:
This is usually issued by an independent inspection company located in the exporting country certifying
or describing the quality, specification or other aspects of the goods, as called for the contract and the
L/C. The inspection company is usually nominated by the buyer who also indicates the types of
inspection he wishes the company to undertake.

Pro-forma Invoice:
It is seller’s questions or agreement between seller and buyer. In this the seller declare the rate,
quantity, quality, manufacturing and other information about goods and that accepted by buyer.

Packing List:
Here the detail descriptions of goods packed in cages are written. Such as total quantity in lot, per
packet, total weight of shipment, per packet etc are written.

4.4 Import

Import is foreign goods and services purchased by consumers, firms & Governments in Bangladesh. An
importer must have import registration certificate (IRC) given by chief controller of import and exports
(CCI & E) to import anything from other country.

Classification of Importers-
Personal Importer: They need no registration from CCI&E for import up to a certain amount as
per IPO in force.

Commercial Importer: Those who import the goods to sell-out the same to the market directly
without any other processing is called commercial importer.

Industrial Consumer: Those who Import the goods for Industrial Consumption are called
Industrial Importer.

Import Procedure of Uttara Bank Limited:

22 | P a g e
 Buyer and Seller
Buyer's application Issuing letter of Advising letter of
conduct a sell
for issuing L/C credit credit
contract

Presentation of Send the

Shipments of Bank check the
document by the documents to the
goods by the seller document against
seller issuing bank
the credit

Figure: Import financing procedure

Payment Procedure of the Import Documents:

This is the most sensitive task of the Import Department. The officials have to be very much careful
while making payment. This tasks constitutes the following –

 Date of payment: Usually payment is made within 7 days after the documents have been
received.
 Preparing sale memo: A sale memo is made at BC rate to the customer. As the T.T & OD rate
is paid to the ID, the difference between these two rates is trading. Finally, an Inter Branch
Exchange Trading Credit Advice is sent to ID.
 Requisition of the foreign currency: For arranging necessary fund for payment, a requisition
is sent to the International Department.
 Transmission of telex: A telex is transmitted to the correspondent Bank ensuring that
payment is being made.

23 | P a g e
4.5 Export

By export we generally mean selling of visible and invisible goods and services outside the country
against letter of credit, firm contract or Advance payment. Besides, local supplies against Letter of Credit
/contract through banking channel are also deemed as export. However the local export does not need
to be reported to Bangladesh Bank in the schedules.

Types of Export:
Export must be executed under the following payment/settlement system-

 Export against L/C or firm Contract

 Export against Advance Payment
 Export under consignment basis

Export section of Uttara Bank Limited:

By the term Export, we mean that selling of anything from home country to abroad. On the other hand
Banker’s define export as sending of visible things outside the country for deal. Export Trade plays a vital
role in the development process of an economy. With the export earning, we meet our Import Bills. The
export trade of the country is regulated by the Import and Export (Control) Act, 1950.There are some
formalities, which an exporter has to fulfill before and after shipment of goods. The export section of
Uttara Bank Limited deals-

 Export
 Local Purchase

24 | P a g e
Export procedure of Uttara Bank Limited:

Registration of Export Securing the Order Signing the Contract

Procuring the Submission of the

Receiving Letter of Credit Materials and Documents to the
Shipment of Goods bank for Negotiation

Figure: Export financing procedure

Mode of Payment of Export Bill Under LC:

The most common methods of payment under a L/C are as follows:

Sight payment credit: In a sight payment credit, the Bank pays the stipulated sum immediately
against the exporter’s presentation of the documents.

Deferred payment credit: In deferred payment, the Bank agrees to pay on a specified future
date or event, after presentation of the export documents. No bill of exchange is involved. In
Uttara Bank Ltd. (UBL), payment is given to the party at the date of D.A 60-90-120-180 as the
case may be. But the Head Office is paid at T.T clean rate. The difference between the two rates
is the exchange trading for the branch.

Advising L/C: When exporter transmits L/C to the Bank for advising than Bank sends an
advising letter to the beneficiary depicting that L/C has been issued.

Test Key Arrangement: Test Key Arrangement is a secret code maintained by the Banks for the
authentication for their massage. It is a systematic procedure by which a test number is given can
easily authenticate the same test number by maintaining that same procedure. RBL has test key
arrangements with so many Banks for the authentication of L/C messages and for making
payment.

25 | P a g e
4.6 Remittance

This bank is authorized dealer to deal in foreign exchange business. As an authorized dealer, a bank
must provide some services to the clients regarding foreign exchange and this department provides
these services.

The basic function of this department are outward and inward remittance of foreign exchange from one
country to another country. In this process of providing this remittance service, it sells and buys foreign
currency. The conversion of one currency into another takes place an agreed rate of exchange, which
the banker quotes, one for buying and another for selling. In such transactions the foreign currencies are
like, other commodities offered for sales and purchase, the cost (convention value) being paid by the
buyer in home currency, the legal tender. Remittance procedures of foreign currency.

Types of Foreign Remittance:

1. Inward Foreign Remittance
Remittance comes from foreign countries to our country is called inward remittance.To the
bankers or ADs inward remittance means purchase of foreign currency by authorized dealers.
Generally, inward remittances are received by draft, mail transfer,TT,purchase of foreign bills &
travellers Cheque, export bills.Basically, these are the formal channels of receiving inward
remittance.

 Pay Order (PO)

 Demand Draft(DD)
 Telegraphic Transfer (T.T)
 Mail Transfer

2. Outward Foreign Remittance:

Remittance from our country to foreign countries is called outward foreign remittance. On the other
word, sales of foreign currency by the authorized dealer or formal channels may be addressed as
outward remittance. The authorized dealers must utmost caution to ensure that foreign currencies
remitted or released by them are used only for the purposes for which they are released. Out ward
remittance may be made by appropriate method to the country to which remittance is authorized. Most
outward remittance is approved by the authorized dealer on behalf of Bangladesh Bank.

Foreign Remittance Process:

26 | P a g e
Fund transfer form one country to another country goes through a process which is known as
remitting process:

Check the document from the clients Fill up the Remitter from by the client

After confirmation, give money to theclient Insert the 10 digit code in the software

Figure: Remittance process

C

27 | P a g e
Findings, Recommendations and
Conclusions

CHAPTER 5

5.1Findings:
After doing internship in this bank and collectio0n data also information I found:

28 | P a g e
  Superior Quality: This branch provides its customers excellent and consistent
quality in every service. It is of priority that customers are totally satisfied.
 Efficient management: All the levels of the management of this bank are solely
directed to maintain a culture for the betterment of the quality of the service and
development of a corporate brand image in the market through organization wide
team approach and open communication system.
 Experts: The key contributing factor behind the success of this bank is, it provides
their employees training both in house and outside job.
 Poor condition of Export Business: According to annual report 2015 to 2011 year of
UBL, then we see, UBL Foreign Remittance Business and Import Business is
very well, though import business was decreased in 2015. But UBL export
Business is very poor than import and Foreign remittance business. UBL export
business is decreasing in 2013 to 2015 and also in 2011 to 2012. Though in 2012
to 2013 Export Business increased but it is not well.
 Lack of modern technology & facilities: Small amount of ATM booth and very few
online services.
 Revenue: Though the import and export business increased year by year, but the
bank’s income growth rate very much fluctuated during the last few year.

5.2 Recommendations

In accordance with my practical experience & knowledge gained from working in Foreign
Exchange Operations of UBL, I would like to recommend the followings:

 To attract more clients Uttara Bank Ltd. Should take new marketing strategy, which will
increase the total export and import business.
 Attractive incentive package for the exporter will help to increase the export.
 Effective training is very much essential for the foreign exchange officials.
 Computerized Banking system and latest communication devices are the most important
elements for the coming year. So for a sound and stable foreign exchange operation,
Uttara Bank Ltd. has no alternative but to modernize.
 Foreign exchange operation of other Bank is more dynamic and less time consuming.
Uttara Bank Ltd. should be armed with modern facility to face the challenge.
 In our country, financial problem is a great constraint to foreign trade and UBL is very
mush conservative to post shipment finance. If the Bank took a bit liberal position the
exporter could easily come out from financial constraint.
 Bank can provide foreign market reports, which will enable the exporter to evaluate the
demand for their product in foreign countries.

29 | P a g e
5.3 Conclusions

Bangladesh, a growing third world country having wide scope of foreign trade, turns its positive
growth in recent years though the world economy is not boost up so much. This is because our
economy plays a vital role in international trade. Export, import and foreign remittance are the
three main wings of international trade.

Foreign Exchange business is an important part for commercial banks and so commercial banks
treats this section carefully. Uttara Bank Ltd- has some facilities and can provide Foreign
Exchange services efficiently and quickly. No country is sufficient enough to meet its need and
to Import and Export foreign exchange/remittance is very important. Delay in opening LC
suffers a country’s consumers most. And Inward Foreign Remittance has great contribution in
our economy and in people’s livelihood. UBL plays a vital role in all this three sectors. As a
Commercial Bank, UBL meeting the present day International business need of the customers in
a competitive environment has been and is still a challenge for Uttara Bank Ltd. From the very
inception in the early eighties, UBL bank has covered good grounds. And, foreign exchange
business has now become one of the most important portfolio of the bank in respect of volume of
fund deployed, generation of return for the bank as well as maintaining the high image of the
bank at home and abroad. UBL is going to increases foreign relationship through correspondence
banking day by day. It should introduce new import, export finance especially for new investors.
It should introduce new marketing strategy to hold the strong position in home and abroad.In
future days UBL will be the leader among the commercial banks through leadership, service and
future planning.

Bibliography:

30 | P a g e
  Reza, M.S (2012). “Pragmatic approach to foreign exchange”, 1st Edition, Bata Publications.
 Kotheri, C. R. (2003-04). “Research Methodology” Second Edition, Wishwa Prakashan,
Calcutta, India.
 Uttara Bank history. Retrieved December 9, 2016 from http://www.uttarabank-
bd.com/index.php/home/history
 Financial health and Strength. Retrieved December 9, 2016 from
https://en.wikipedia.org/wiki/Uttara_Bank
 Uttara Bank at a glance. Retrieved December 10, 2016 from http://www.uttarabank-
bd.com/index.php/home/atglance
 Foreign Exchange Aspect. Retrieved December 12,2016 from
http://www.investopedia.com/terms/f/foreign-exchange.asp
 Export Aspect. Retrieved December 12,2016 from
http://www.investopedia.com/terms/e/export.asp
 Import Aspect. Retrieved December 12, 2016 from
http://www.investopedia.com/terms/i/import.asp
 Remittance Definition. Retrieved December13, 2016 from
http://www.businessdictionary.com/definition/remittance.html
 Letter of Credit Aspect. Retrieved December 14, 2016 from
http://www.investopedia.com/terms/l/letterofcredit.asp
 What is Bill Of exchange? Retrieved December 15, 2016 from
http://www.accountingtools.com/questions-and-answers/what-is-a-bill-of-exchange.html
 Proforma invoice Definition. Retrieved December 16,2016
http://www.businessdictionary.com/definition/pro-forma-invoice.html
 Parties to letter of credits. Retrieved December 16, 2016 from
http://www.letterofcredit.biz/Parties_to_Letters_of_Credit.html
 SWIFT Definition. Retrieved December 17, 2016 from
http://searchcio.techtarget.com/definition/SWIFT
 What is bill of exchange? Retrieved December 18, 2016 from
http://www.investorwords.com/477/bill_of_exchange.html#ixzz4TqPZQp8o
 Annual Report 2011-2015 of Uttara bank Limited.

31 | P a g e