Internship Report

On
Foreign Exchange Activities of
National Bank Limited

Bangladesh University of Business and Technology (BUBT)

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 “Foreign Exchange Activities of
National Bank Limited”
SUBMITTED TO:

Faruk Sarker
Lecturer
Department of Accounting
Bangladesh University of Business and Technology (BUBT)

SUBMITTED BY:

Abid Mostofa
ID: 16172101128
BBA Program
Department of Accounting
Intake: 42th, Section: 11 (B)
Bangladesh University of Business and Technology (BUBT)

Date of Submission: 20th March, 2021

Bangladesh University of Business and Technology (BUBT)

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 Letter of Transmittal

Date: 20-03-2021
To
Faruk Sarker
Lecturer
Bangladesh University of Business and Technology (BUBT)
Plot # 77-78, Road # 9, Rupnagar R/A,
Mirpur-2 Dhaka, 1216.

Subject: Submission of the Internship Report.

Dear Sir,
It is my pleasure to present this Report on Foreign Exchange Activities of National Bank Limited
as a requirement for completing my Bachelor of Business Administration. I enjoyed preparing
the report though it was challenging to finish within the given time. In preparing this report, I
have tried my level best to include all the relevant information related to foreign exchange
activities of National Bank Limited. I have a strong belief that the report will fulfill your
expectation and I have tried to give my best effort so that I can prepare a solid report as per
instruction. I would be very grateful if you accept my report.

Your kind consideration and cooperation will be highly appreciated. All of my efforts will be
successful if the report can serve its purpose.
Sincerely yours,

……………….
Abid Mostofa
ID: 16172101128
Department of Accounting
BBA Program
Batch: BBA 42nd (Section- 11)
BUBT

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 Bangladesh University of Business and Technology (BUBT)

To Whom It May Concern

This is to certify that the internee report on “Foreign Exchange Performance of National Bank
Limited” For the degree Bachelor of Business Administration (BBA) major in Accounting from
Bangladesh University of Business and Technology (BUBT) carried out by Abid Mostofa
Student ID# 16172101128 under my supervision. No part of the internship report has been
submitted for any degree diploma, title, or recognition before.

………………..
Faruk Sarker
Lecturer
Department of Accounting
Bangladesh University of Business and Technology (BUBT)

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 Student’s Declaration

Internship Report

I here announce that the extensive study entitled “Foreign Exchange Activities of National Bank
Limited”
(Conducted on behalf of National Bank Limited)

Prepared in partial accomplishment of the Requirement for the award of degree

Bachelor of Business Administration (BBA)

From
Bangladesh University of Business and Technology (BUBT)

..……………...
Abid Mostofa
ID: 16172101128
Department of Accounting
BBA Program Batch: 42nd (Sec: 11) BUBT

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 ACKNOWLEDGEMENT

At first, all praises belongs to the mighty God, the most clement, most generous and bounteous
to all living creatures and their actions. In preparing this report of National Bank Limited, I have
received commendable support from all the employees of National Bank Limited, Uttara Branch.

I am very much grateful to my organizational supervisor Kazi Enamul Huq (Senior Principal
Officer) National Bank Limited to give the opportunity to work on the Uttara branch. He has
given me all kind official support to complete the report perfectly. I like to thank,

1. Md. Meshkat-Ul-Anwer Khan (Executive Vice President & Manager)

2. Muhammad Asif Iqbal (Vice President & BAMLCO)
3. Md. Rezaul Islam (Senior Principle Officer)
4. Mohammad Arafat Rahman CDCS, CERM (Foreign Exchange In-Charge & SEO)
5. Kaberi Islam (Senior Executive Officer)
6. Pervin Akhter (Senior Executive Officer)
7. Umea Hany Mansura (First Executive Officer)
8. Jannatul Ferdaus (First Executive Officer)
9. Rehana Yasmin (First Executive Officer)
10. Md. Mahbubul Haque (Junior officer)
11. Mehrun Ahmed Roshne (Junior Officer)
12. Md. Emdadul Haque (Junior officer)

I am very much indebted to my supervisor Faruk Sarker (Lecturer) Bangladesh University of

Business and Technology (BUBT) for giving me direction at different times to prepare this
report. It is his guided supervision that resulted in successful completion and timely submission
of the report.

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 Executive Summary

An internship program is very important and essential for acquiring experience through learning
and spreading the scope of knowledge. I have done my internship program in National Bank
Limited: Foreign Exchange Department and General Banking Department, Uttara Branch.

This internship report is aimed at providing a comprehensive picture to the areas of Foreign
Exchange performance of National Bank Limited. The report has been divided into eleven parts.
These are: Introduction, Corporate review of National Bank Limited (NBL), Foreign Exchange,
and Documents Used in Foreign Exchange Business, Letter of Credit (L/C), Import, Export,
Foreign Remittance, Findings and Analysis, References.

National Bank Limited is one of the largest commercial Bank of Bangladesh. The main objective
of the Bank is to provide all of banking services at the doorsteps of the people. The Bank also
participates in various social and development programs and takes part in implementation of
various policies and promises made by the Government. National Bank Limited plays a
pioneering role in handling foreign trade and foreign exchange transactions. With wide network
of branches at home and a large number of correspondent banks worldwide, it is handling the
largest volume of export-import business including homebound remittances. For this reason,
Foreign Exchange of the Bank is very much essential. But, now a day’s banking sector of
Bangladesh is suffering the disease of default culture which is the consequence or result of bad
performance of most banks.

There are three types of modes of foreign exchange market, which are: Export Financing, Import
Financing and Foreign Remittance. Foreign Exchange Branch does these foreign exchange
activities vastly. In this report, I mention the overall operating procedure of foreign exchange
transaction of National Bank Limited (NBL). I also mention the findings of my report and
describe the recommendation to overcome the limitation.

I have taken all the reasonable care to ensure the accuracy and quality to make the report
standard. And I believe that it has included all the necessary information to be relevant.

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 Table of Content
PAGE
CONTENTS NUMBER
Letter of Transmittal 03
Acknowledgment 06
Executive summary 07
Chapter 1 Introduction & Background of the study 10-14
1.1 Introduction 10
1.2 Background of the study & Rationale 10
1.3 Objectives of the Study 11
1.4 Scope of the report 12
1.5 Methodology 12-13
1.6 Limitations of the study 13-14
Chapter 2 Company Profile 15-31
2.1 History and heritage 15-17
2.2 Mission 18
2.3 Vision & Commitments 19
2.4 Strategic priority 20
2.5 Core values 20
2.6 Organizational strategy 20
2.7 Functions of National Bank Ltd 21
2.8 National Bank foundation 21
2.9 Capital Structure 22
2.10 Organizational structure department 22
2.11 Organizational Structure of NBL 23
2.12 Risk Management 24
2.13 Management Structure 24-26
2.14 HRD (Human Resources Department) 26
2.15 District Wise Branch Distribution 27
2.16 Financial Statement 28-
2.16.1. Balance Sheet 28-29
2.16.2. Profit and Loss Statement (Income Statement) 30
2.16.3. Cash Flow Statement 31
Chapter 3 Foreign Exchange 32-37
3.1 Foreign Exchange 32
3.2 Foreign Exchange Market and Bangladesh 32-34
3.3 Foreign Exchange rate in Bangladesh 34
3.4 Foreign Exchange History in Bangladesh 35
3.5 Interbank transaction in foreign exchange 35-36
3.6 Foreign exchange reserve in Bangladesh 36
3.7 Category Wise Position of Interbank FX transaction 36-37

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Chapter 4 Foreign Exchange Department 38
4.1 Foreign Exchange Department 38
4.2 Flow chart of Foreign Exchange Department
38
Operation
Chapter 5 Export 39-43
5.1 Export 39
5.2 Export Transaction Procedures of NBL 39-40
5.3 Documentary Credit/Letter of Credit (L/C) 40
5.4 Steps in letter of credit opening 40-41
5.5 How to Letter of Credit work 42
5.6 Performance evaluation of National Bank Limited
42
(NBL), Uttara Branch:
5.7 Name of Some Exported Items 43
Chapter 6 Import 44-46
6.1 Meaning of Import 44
6.2 Who is Importer 44
6.3 Types of Import 44
6.4 Name of Some Importers 45
6.5 Name of Some Imported Items 45
6.6 Goods Are not Importable 46
Chapter 7 Foreign Remittance of NBL 47-52
7.1 Meaning of Remittance 47
7.2 Types of A/C for Foreign Remittance 47-48
7.3 Process of Foreign Remittance 48
7.4 Bank with NOSTRO Account 48-49
7.5 Types Of Foreign Remittance 49
7.6 Inward Foreign Remittance 49-51
7.7 Outward Foreign Remittance 51
7.8 Western Union Money Transfer Section 51-52
Chapter 8 Analysis 53-68
8.1 SWOT Analysis of the organization: 53-55
8.2 PEST Analysis 56-57
8.3 Ratio Analysis 57-68
Chapter 9 Findings 69-73
9.1 Major Findings 69
9.2 Policy Implications 70
9.3 Conclusion 71
9.4 Reference 72
9.5 Abbreviation 73

Chapter-1

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 Introduction & Background of the study
1.1. Introduction:

The nature of this report is descriptive. So instead of doing any survey, observation method is
used to complete this qualitative research. I have tried to collect all such information that will
reflect the actual situation of the bank for any report. I have collected various types of primary
and secondary data while I was performing my intern. I have collected various data from various
sources by face to face interview with the employees working in different departments of
National Bank Limited, Uttara branch, personal investigation bankers of different branches of
NBL, circulars sent by Head office and maintaining daily diary which contains all the activities
that has been observed in the bank.

1.2. Background of the study & Rationale:

After completing my BBA from Bangladesh University of Business and Technology (BUBT), I
wanted to do Internship in a reputed Bank which would be helpful for my future professional
career. I got the opportunity to perform my internship in the National Bank Ltd. I was sent to
Uttara Branch. It was a three months long practical orientation program. This report is originated
as the requirement of National Bank Ltd.

Internship program offers an opportunity to know the environment of a particular organization.

By doing this program, I have developed and refined my theoretical knowledge gained in the
classroom. This program provides exciting experience of planning, culture, behavior of
employee and management style of that organization, which helps me to fill the gap between
theoretical and real practical world.

Theoretical knowledge does not make a person perfect. To implement the academic knowledge,
practical knowledge related to it, is important. A perfect consideration between theory and
practice is important in the context of modern business world. In order to resolve the dichotomy
between theory and practice, the Uttara National Bank Limited internship program as a partial
completion of BBA program. This program is necessary for every student to complete his or her

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academic degree. Internship program brings students closer to the business theory and practical
and thereby help them to substantiate their knowledge so that they can prepare themselves to
start a successful career.

Under the internship program, every student is assigned to an organization with a view to acquire
practical knowledge. After taking practical knowledge, each Student is required to prepare a
report on the selected organization under the guideline of his/ her assigned teacher.

As a participant in this program, I was place at National Bank Limited, Uttara branch, for a
period of three months. As per the instruction of internship supervisor, I was devoted to learn the
banking operation of NBL. During the tenure of my internship program, I worked in three
sections of banking. However, I have worked more vigorously in Foreign Exchange Department
in particular. Based on the learning and practical experience, I have prepared this report. It is also
mandatory to submit a report to the bank.

1.3. Objectives of the Study:

The main objective of the study is to analyze the foreign exchange business of National Bank
Limited. There are some specific objectives on the way of achieving the main objective. These
are as following;

The objectives of the study are mentioned below:

 To know the foreign exchange polices of the National Bank Limited
 To know the earnings from foreign exchange operations of the Bank.
 To know the foreign remittance activities of NBL.

1.4. Scope of the report:

This report has been prepared through extensive discussion with bank employees, clients and
officers and on the information gathered from the annual report and prospectus of National Bank
Limited. I have got the great opportunity to have an in-depth knowledge of the General Banking
of NBL.

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1.5. Methodology:

To make the report more meaningful and presentable, two sources of data and information have
been used widely.
Sources of Data: Sources of data collection is divided into two ways. One of them is Primary
and another is secondary.

Primary sources: The “primary sources” are as follows:

 Face-to-face conversation with the respective officers and staffs of the Banks.
 Informal conversation with the bankers.
 Practical work exposure from the different desks six departments of the branch.
 Study of the relevant files as instructed by the officers concerned.
 Personal diary (that contains every day experience in bank while undergoing practical
orientation).

Secondary sources: The “Secondary sources” of data and information are:

 Annual Reports of National Bank Ltd.
 Annual Report of other banks.
 Periodicals published by Bangladesh Bank.
 Various books, articles, compilations etc. Regarding general banking functions, foreign
exchange operations and credit policies.
 Personal diary maintained while undergoing the practical orientation.

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Data Analysis:
 SWOT analysis
 Ratio analysis

1.6. Limitations of the Study:

Although I have got the full co-operation from employees, clients officers of NBL and they also
gave me much time to prepare this report properly in the way of my study, I have faced some
difficulties, which made my conduction of the program little hazardous.
Some of these are mentioned below:
1. It should be certainly mentioned that the time three months is very short to get the total
view of the banking functions.
2. The officers were quite busy with their regular activities. For this reasons it was also a
little problem to collect detail information from them.
3. In some cases, they could not be able to supply me any information for the reason that
they have no printed documents.
4. Office secrecy was one of the most important problems. Disclosing of some information
was restricted.
5. In case of secondary data collection, there was very little secondary information. There
were few support books, reports, journals, etc. moreover, the branch office had very little
of this information. That’s why bulk of it had to be collected from the head office.
6. As the officers were very busy with their day-to-day work, they could provide very little
time.

Chapter-2

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 Company Profile
2.1. History and Heritage:

National Bank Limited has its prosperous past, glorious present, prospective future and under
processing projects and activities. Established as the first private sector bank fully owned by
Bangladeshi entrepreneurs, NBL has been flourishing as the largest private sector Bank with the
passage of time after facing many stress and strain. The members of the board of directors are
creative businessmen and leading industrialists of the country. To keep pace with time and in
harmony with national and international economic activities and for rendering all modern
services, NBL, as a financial institution, automated all its branches with computer networks in
accordance with the competitive commercial demand of time. Moreover, considering its fourth-
coming future, the infrastructure of the Bank has been rearranging. The expectation of all class
businessmen, entrepreneurs and general public is much more to NBL. At present we have 225
branches under our branch network. In addition, our 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.

The emergence of National Bank Limited in the private sector was an important event in the
Banking arena of Bangladesh. When the nation was in the grip of severe recession, the
government took the farsighted decision to allow the private sector to revive the economy of the
country. Several dynamic entrepreneurs came forward for establishing a bank with a motto to
revitalize the economy of the country.

National Bank Limited was born as the first hundred percent Bangladeshi owned Bank in the
private sector. From the very inception, it was the firm determination of National Bank Limited
to play a vital role in the national economy. We are determined to bring back the long forgotten
taste of banking services and flavors. We want to serve each one promptly and with a sense of
dedication and dignity.

The then President of the People's Republic of Bangladesh Justice Ahsanuddin Chowdhury

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inaugurated the bank formally on March 28, 1983 but the first branch at 48, Dilkusha
Commercial Area, Dhaka started commercial operation on March 23, 1983. The 2nd Branch was
opened on 11th May 1983 at Khatungonj, Chittagong.

At present, NBL has been carrying on business through its 225 branches & Branches spread all
over the country. Since the very beginning, the bank has exerted much emphasis on overseas
operations and handled a sizable quantum of home bound foreign remittance. It has drawing
arrangements with 415 correspondents in 75 countries of the world, as well as with 37 overseas
Exchange Companies located in 13 countries. NBL was the first domestic bank to establish
agency arrangements with the world famous Western Union in order to facilitate quick and safe
remittance of the valuable foreign exchanges earned by the expatriate Bangladeshi nationals.
This has meant that the expatriates can remit their hard-earned money to the country with much
ease, confidence, safety and speed.

NBL was also the first among domestic banks to introduce international Master Card in
Bangladesh. In the meantime, NBL has also introduced the Visa Card and Power Card. The Bank
has in its use the latest information technology services of SWIFT and REUTERS. NBL has
been continuing its small credit program for disbursement of collateral free agricultural loans
among the poor farmers of Barindra area in Rajshahi district for improving their livelihood.

NBL focused on all key areas covering capital adequacy, maintaining good asset quality, sound
management, satisfactory earning and liquidity. As a consequence, it was possible to a record
growth of 175.51 percent with Tk. 8,809.40 million pretax profit in the year under review over
the preceding year. The net profit after tax and provision stood at Tk. 6,860.34 million which
was Tk. 2,070.47 million in the previous year registering a 231.34 percent rise. The total deposits
increased to Tk. 102,471.83 million being 33.37 percent increase over the preceding year. Loans
and advances stood at Tk.92,003.56 million in the year under report which was Tk. 65,129.289
million representing 41.26 percent rise over the preceding year. Foreign trade stood at Tk.
144,255.00 million in 2010 compared to Tk. 115,939.00 million, increased by 24.42 percent
compared to that of the previous year. During 2010, the bank handled inward remittance of Tk.
49,145.30 million, 10.73 percent higher than that of the previous year. Return on Equity (ROE)

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registered a 77.84 percent rise over the preceding year.

Since its inception, the bank was aware of complying with Corporate Social Responsibility. In
this direction, we have remained associated with the development of education, healthcare and
have sponsored sporting and cultural activities. During times of natural disasters like floods,
cyclones, landslides, we have extended our hand to mitigate the sufferings of victims. It
established the National Bank Foundation in 1989 to remain involved with social welfare
activities. The foundation runs the NBL Public School & College at Moghbazar where present
enrolment is 1140. Besides Awarding scholarship to the meritorious children of the employees,
the bank has also extended financial support for their education. It also provided financial
assistance to the Asiatic Society of Bangladesh at the time of their publication of Banglapedia
and observance of 400 years of Dhaka City.
The Transparency and accountability of a financial institution are reflected in its Annual Report
containing its Balance Sheet and Profit & Loss Account. In recognition of this, NBL was
awarded Crest in 1999 and 2000, and Certificate of Appreciation in 2001 by the Institute of
Chartered Accountants of Bangladesh.
The bank has a strong team of highly qualified and experienced professionals, together with an
efficient Board of Directors who play a vital role in formulating and implementing policies.

Bank Name: National Bank Limited. Address: Dhaka Branch Location

48, Dilkusha Commercial Area, Dhaka – 1000. Phone: +880-2-956-3081 / +880-2-956-3081
Fax: +880-2-956-3953, 966-9404
Email: ho@nblbd.com
Website: http://www.nblbd.com/
Year of incorporation: March 28, 1983

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 2.2 VISION

Ensuring highest standard of clientele services through best application of latest information
technology, making due contribution to the national economy and establishing ourselves firmly
at home and abroad as a front ranking bank of the country are our cherished vision.

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 2.3 MISSION

Efforts for expansion of our activities at home and abroad by

adding new dimensions to our banking services are being
continued unabated. Alongside, we are also putting highest
priority in ensuring transparency, account ability, improved
clientele service as well as to our commitment to serve the
society through which we want to get closer and closer to
the people of all strata. Winning an everlasting seat in the
hearts of the people, as a caring companion in uplifting the
national economic standard through continuous up gradation
and diversification of our clientele services in line with
national and international requirements is the desired goal
we want to reach.

COMMITMENTS

Carrying Ourselves In Serving Customer

at Work: In Serving the Bank:  Customer First
 Discipline  Loyalty  Quality Focus
 Integrity  Total Commitment  Credibility &
 Sincerity & Dedication Secrecy
 Caring  Excellence through
 Creativity teamwork

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2. 4. Strategic Priority:
To have sustained growth, broaden and improve range of products and services in all areas of
banking activities with the aim to add increased value to shareholders‟ investment and
offer highest possible benefits to our customers.

2.5. Core Values:

The banking system of NBL has different core values on different stakeholders including for the
customers, employees, shareholders and communities. Customers desire a most caring bank
which will provide them the most courteous and efficient service in every area of their business.
The employees always want a Bank that will promote wellbeing in every aspect of their lives.
The main goal of the shareholders is to yield fair return on their investment through generating
stable profit. The general view of our communities is that they show the propensity to assume the
role of banking system to be social responsible and close adherence to national policies.

2.6. Organizational Strategy:

As the financial services industry is a very competitive industry, the main strategy of NBL is the
organic growth – to build branches and strengthen their distribution network. They will continue
to invest and expand in Bangladesh as fast as local regulations allow.
The principle strategies are –
People - Attract, retain and reward top performers.
Profitable Growth - Growing sales and increase the revenues.
Execution - Performing with skill and speed.
Credit Quality - Maintaining credit quality and understand the role in managing losses.
Customer Centered - Always providing exceptional customer service.
Ownership – The performance and results should be owned.
Efficiency - Lowering the costs and wise use of resources.

2.7. Functions of National bank Ltd:

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Some general function of National Bank are given below-
1. To maintain all types of deposit Accounts.
2. To make investment.
3. To conduct of reign exchange business.
4. To conduct other Banking services.
5. To conduct social welfare activities.
6. To work for continues business innovation and improvements.
7. To bui1d up strong-based capita1ization of the country.
8. To ensure the best uses of its creativity, well disciplined, well manages and perfect
growth.

2.8. National Bank Foundation:

Keeping the view the great objective of contributing to expansion of education and welfare of the
society, the National Bank Foundation was set up in 1989. With financial assistance of the
Foundation, The National Bank Public School and College has been established in Moghbazar
Dhaka. There are a total of 820 students studying in the school section from class 1st to 10th,
while there are 120 students at the college section. In 2006, a total of 70 students appeared at the
SSC Examination, of which 87% came out successful. In the college section, a total of 90
students appeared at the HSC Examination, of which 81% came out successful.

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2.9. Capital Structure: (Taka in million)
Particulars Year-2019 Year-2018 Growth
Core Capital:
Paid up capital 29,203.99 26,549.08 10.00%
Statutory reserve 15,835.71 14,380.83 10.12%
Other Reserve 965.98 902.12 7.08%
Retained Earnings 3,031.89 2,977.32 1.83%
Total 49,037.57 44,809.35 9.44%

Table-2.1: The Capital Structure of NBL

*Source: NBL Annual Report 2019

2.10. Organizational Structure and Department:

Organizational setup of the National bank Limited is consisting of three organizational domains.
Firstly the central top management, which contains Board of Directors, Managing Director,
Additional Managing Director and Deputy Managing director. The major responsibilities of this
group are to take central decision and transmit it to the second step. Secondly the executive level
management, which contains Executive Vice Presidents, Senior Vice Presidents, Vice Presidents
and Assistant Vice Presidents. The major responsibilities of this part are to supervise and control
division/ department. Thirdly, the branch operation management, which contains branch
manager and other mid/ lower level management. The major responsibilities of this part are to
the 100 branches of this bank and report to the Head Office from time to time.

2.11. Organizational Structure of NBL:

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 Chairperson (Owner)
↓
Board of Directors (Owners)
↓
Managing Director and CEO
↓
Deputy Managing Director (DMD)
↓
Senior Executive Vice President (SEVP)
↓
Executive Vice President (EVP)
↓
Senior Vice President (SVP)
↓
Vice President (VP)
↓
Senior Assistant Vice President (SAVP)
↓
Assistant Vice President (AVP)
↓
Senior Principal Officer (SPO)
↓
Principal Officer (PO)
↓
Senior Executive Officer (SEO)
↓
Executive Officer (EO)
↓
First Executive Officer (FEO)
↓
Junior Officer
↓
Trainee Assistant Officer (TAO)

*Source: Source of NBL.

* Flowchart-2.1: Organizational Structure of NBL

2.12 Risk Management:

Risk Management encompasses all the activities that affect its risk domain. Risks are generally

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defined by the adverse impact on profitability of several distinct sources of uncertainty. National
Bank attaches highest priority to establish, maintain and upgrade risk management infrastructure,
systems and procedures. Adequate resources are allocated in this regard to improve skills and
expertise of relevant employees to enhance their risk management capacity. The risk
management guideline and other policies and procedural guidelines are approved by the Board of
Directors of NBL and it is regularly reviewed to bring these up to the finest satisfaction level.
The degree and types of risk that a bank faces depend upon a number of factors such as its size,
complexity of business activities, volume technology operations etc. Risks are normally
classified within following 3 categories:

*Flowchart-2.3: Classify of Risk Management.

Every single risk may contribute to direct and/or indirect damage to the bank, and business with
financial implications that may be an issue in the short, medium and long term.

2.13 Management Structure:

In 2001 National Bank Limited made commendable progress in all business, like deposit, credit,
fund management, investment, foreign remittance, credit card & foreign exchange related
business. Bank has expended business activities as holding previously & parallel by
diversification its investment to a new product. As a major financier remarkable portion of total
exports of the country. The total assets of the bank were Tk38400.37 million as on 31st
December 2005, which is higher than previous year. This is the sign of good management. The
management processes are as follows:
2.13.1. Planning:
The strategic planning approach in NBL is top-down. Top management formulates strategy at the

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corporate level, and then it is transmitted through the division to the individual objectives. Board
of directors or Executive committee usually takes the decision. In this Process lower level
manager are detached in making process, even brainstorming of lower level manager is absent in
decision-making and planning process.

2.13.2. Organizing:
Organizing of the National Bank Limited is based on Departmentalization. The organization is
divided into twelve departments headed by Executive vice President or Senior Vice President. In
the National Bank Limited the whole operation is centralized and authority is delegated by
written guidelines. These guidelines are:
 Operational manual approved by Head Office, where each aspect or banking
operation is elaborately defined.
 Advance manual including advances limit for different management level.
 Bad and doubtful recovery manual.
 Code of conduct.
 Foreign banking guidelines.
 Central bank directives.
Different management position holders in departments and branches practice their authorized
power in different cases with administrative loophole.

2.13.3. Staffing:
Entry-level recruitment process of the National Bank Limited is conducted in three ways. One
way is recruitment of probationary officer. Each probationary officer has one-year probation
period. After completion of probation period the officer joins as officer grade III (b). The career
path of probationary officer is headed toward different management positions. Second way of
recruitment is to recruit non-probationary officer who joins as an assistant officer. The career
path of an assistant officer is lengthier than probationary officer. The third way of recruitment
is recruitment of staff and sub-staff such as typist, messenger, driver, guard, attendant, cleaner
and other lower level positions. Promotion policy of NBL is basically based on seniority basis.
Sometimes, employees are promoted to the higher position for their outstanding perfoffi1ance.
However, it is found that the average length of a position held by an employee is around five

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years.

2.13.4. Controlling:
The bank has strict control over its all-organizational activities. The Bangladesh Bank directives
indicate some control measures. Audits and inspection are conducted by different parties to
check whether the bank implement these control system properly or not. The central bank
conducts credit inspection by a team. The National Bank Limited has audit and inspection
department to take controlling measures in internal operations. Audit and inspection team send to
the branches now and then and is responsible for preparing report that will be submitted to the
chief Administration to take necessary actions.

2.14. HRD (Human Resources Department)

The Human Resource Manager currently heads this department. The major functions of this
department are strategic planning and policy formulation for Compensation, Recruitment,
Promotion, Training and developments, Personnel Services and Security. The HR department is
very much concerned with the discipline that is set up by the NBL group. NBL group has got
strict rules and regulations for each and every aspect of banking, even for non-banking purposes.
The Dress Code. All these major personnel functions are integrated in the best possible way at
NBL, which results in its higher productivity. The Human resource officer monitors the
employee staffing and administration activities. The Training officer supervises Training,
development & rotation activities.

2.15. District Wise Branch Distribution:

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National Bank Limited has total 225 branches all over the country. There are 44 Authorized
Dealer Branch.

District Number of Branch

Dhaka 103
Chittagoang 34
Rajshahi 27
Khulna 28
Shariatpur 14
Sylhet 19

*Table-2.2: Branches of NBL

2.16. Financial Statement

2.16.1. Balance Sheet:

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27 @BUBT
2.16.2. Profit and Loss Statement (Income Statement):

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2.16.3. Cash Flow Statement:

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 Chapter-3

Foreign Exchange

3.1. Foreign Exchange:

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Foreign exchange is the exchange of one currency for another or the conversion of one currency
into another currency. Foreign exchange is the conversion of one country's currency into that of
another. In a free economy, a country's currency is valued according to factors of supply and
demand. In other words, a currency's value can be pegged to another country's currency, such as
the U.S. dollar, or even to a basket of currencies. A country's currency value also may be fixed
by the country's government. However, most countries float their currencies freely against those
of other countries, which keep them in constant fluctuation.
Foreign exchange also refers to the global market where currencies are traded virtually around
the clock. The largest trading centers are London, New York, Singapore and Tokyo. The term
foreign exchange is usually abbreviated as "forex" and occasionally as "FX."

3.2. Foreign Exchange Market and Bangladesh

Foreign Exchange Market allows currencies to be exchanged to facilitate international trade and
financial transactions. Evolution of the market in Bangladesh is closely linked with the exchange
rate regime of the country. It had virtually no foreign exchange market up to 1993. Bangladesh
bank, as agent of the government, was the sole purveyor of foreign currency among users. It tried
to equilibrate the demand for and supply of foreign exchange at an officially determined
exchange rate, which, however, ceased to exist with introduction of current account
convertibility. Immediately after liberation, the Bangladesh currency taka was pegged with
pound sterling but was brought at par with the Indian rupee. Within a short time, the value of
taka experienced a rapid decline against foreign currencies and in May 1975, it was substantially
devalued. In 1976, Bangladesh adopted a regime of managed float, which continued up to
August 1979, when a currency-weighted basket method of exchange rate was introduced. The
exchange rate management policy was again replaced in 1983 by the trade-weighted basket
method and US the dollar was chosen as intervention currency. By this time a secondary
exchange market (SEM) was allowed to grow parallel to the official exchange rate. This gave
rise to a curb market.
At present, the system of exchange rate management in Bangladesh is to monitor the movement
of the exchange rate of taka against a basket of currencies through a mechanism of real effective
exchange rate (RFER) intended to be kept close to the equilibrium rate. The players in the
foreign exchange market of Bangladesh are the Bangladesh Bank, authorized dealers, and

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customers. The Bangladesh Bank is empowered by the Foreign Exchange Regulation Act of
1947 to regulate the foreign exchange regime. It, however, does not operate directly and instead,
regularly watches activities in the market and intervenes, if necessary, through commercial
banks. From time to time it issues guidelines for market participants in the light of the
country’s monetary policy stance, foreign exchange reserve position, balance of payments, and
overall macro-economic situation. Guidelines are issued through a regularly updated Exchange
Control Manual published by the Bangladesh Bank. The authorized dealers are the only resident
entities in the foreign exchange market to transact and hold foreign exchange both at home and
abroad. Bangladesh Bank issues licenses of authorized dealership in foreign currencies only to
scheduled banks.

The amount of foreign exchange holdings by the authorized dealers are subject to open position
limits prescribed by Bangladesh Bank, which itself purchases and sells dollars from and to the
dealers on spot basis. The size of each such transaction with Bangladesh Bank is required to be
in multiples of $10,000, subject to a minimum of$50,000.
The foreign exchange market of the country is confined to the city of Dhaka. The 32 scheduled
banks operating as authorized dealers in the inter-bank foreign exchange market are not
permitted to run a position beyond certain limits. In the event of speculation on an appreciation
of the value, an authorized dealer may buy more foreign currencies than it needs, but at the end
of the day it must maintain its limit by selling excess currencies either in the inter-bank market or
to customers.
The average monthly transactions of the inter-bank market accounted for $23.46 million in 1991-
92 and crossed the $1 billion mark in 1998-99. The average monthly turnover for the six months
between July and December 2000 was $1.5 billion.
The phenomenal growth of inter-bank transactions was due mainly to relaxation of exchange
control regulations and expansion of the activities of the Bangladesh Foreign Exchange Dealers
Association (BAFEDA) formed on 12 August 1993.
The-interbank foreign exchange market of Bangladesh is still at its rudimentary stage. The
market is an oligopolistic one and is dominated by a few relatively large banks, which have
remained only as dealers instead of developing themselves into buyers or sellers. The most
widely used practice is spot transaction; this covers 95% of the total transactions. Only forward

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transactions offer protection against foreign exchange risks. Deals in foreign exchange market
are usually confirmed over telephone, followed by a written advice. Confirmed deals may be
cancelled on payment of necessary costs.
3.3. Foreign Exchange rate in Bangladesh
3.3.1. Inter-bank exchange rates as on 1st December, 2020:
Currency Buy Sell
USD 83.95 84.95
EUR 100.38 103.45
GBP 112.20 115.54
JPY 0.79 0.82
CHF 92.02 96.89
SGD 62.36 66.08

Table-3.1: Inter-bank exchange rates as on 1st December, 2020:

*Source: National Bank Limited

3.3.2. Exchange Rate (Taka per US$):

*Table-3.2: Bangladesh Exchange Rate against USD as on October,

2020 (Taka per US$)
*Source: Bangladesh Bank

3.4. Foreign Exchange History in Bangladesh

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Up to 1990, multiple exchange rates were allowed under different names of export benefit
schemes such as, Export Bonus Scheme, XPL, XPB, EFAS, IECS, and Home Remittances
Scheme. This led to a wide divergence between the official rate and the SEM rate. The situation
also gradually gave rise to a number of conflicting regulations, poor risk management, and
various types of implicit or explicit government guarantees to the users of foreign exchange. This
resulted in a number of macro-economic imbalances prompting the government to adjust the
official rate in phases and to liquidate its difference with the rate at SEM. The two rates were
finally unified in January 1992. The first step towards currency convertibility was taken on 17
July 1993 and this marked the beginning of a relatively open foreign exchange
market in the country. Until then the Bangladesh Bank used to declare mid-rate along with the
buying and selling rates for dollar applicable to authorized dealers. Initially the spread was BDT
0.10, which was gradually widened to BDT 0.30.

At present, the system of exchange rate management in Bangladesh is to monitor the movement
of the exchange rate of taka against a basket of currencies through a mechanism of real effective
exchange rate (RFER) intended to be kept close to the equilibrium rate. The players in the
foreign exchange market of Bangladesh are the Bangladesh Bank, authorized dealers, and
customers. The Bangladesh Bank is empowered by the Foreign Exchange Regulation Act of
1947 to regulate the foreign exchange regime. It, however, does not operate directly and instead,
regularly watches activities in the market and intervenes, if necessary, through commercial
banks. From time to time it issues guidelines for market participants in the light of the
country’s monetary policy stance, foreign exchange reserve position, balance of payments, and
overall macro-economic situation. Guidelines are issued through a regularly updated Exchange
Control Manual published by the Bangladesh Bank.

3.5. Interbank transaction in foreign exchange

The interbank market is the top-level foreign exchange market where banks exchange different
currencies. The banks can either deal with one another directly, or through electronic brokering
platforms. The Electronic Brokering Services (EBS) and Reuters Dealing 3000 Matching are the
two competitors in the electronic brokering platform business and together connect over 1000
banks. The currencies of most developed countries have floating exchange rates. These

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currencies do not have fixed values but, rather, values that fluctuate relative to other currencies.
The interbank market is an important segment of the foreign exchange market. It is a wholesale
market through which most currency transactions are channeled. It is mainly used for trading
among bankers. The three main constituents of the interbank market are:
 The Spot market
 The Forward market
 SWIFT
The interbank market is unregulated and decentralized. There is no specific location or exchange
where these currency transactions take place. However, foreign currency options are regulated in
the United States and trade on the Philadelphia Stock Exchange. Further, in the U.S., the Federal
Reserve Bank publishes closing spot prices on a daily basis.

3.6. Foreign exchange reserve in Bangladesh

Foreign Exchange Reserves also known as Official Reserves and International Reserves are the
foreign assets held or controlled by the central banks. The reserves themselves can either be gold
or a specific currency like the dollar or the euro. They can also be special drawing rights and
marketable securities denominated in foreign currencies like treasury bills, government bonds,
corporate bonds and equities and foreign currency loans. The reserves are generally used to
finance the balance of payments imbalances or to control exchange rates.

3.7. Category Wise Position of Interbank FX transaction.

The foreign exchange market is the mechanism by which participants: transfer purchasing power
between countries; obtain or provide credit for international trade transactions, and minimize
exposure to the risks of exchange rate changes. US dollar involved in 87% of all transactions.
London is the largest FX market. Only 11% of daily spot transactions involve non- financial
customers. 66% of all foreign exchange transactions involve cross-border counterparties. Largest
of all financial markets with average daily turnover of over $2 trillion.

One way to deal with the foreign exchange risk is to engage in a forward transaction. In this
transaction, money does not actually change hands until some agreed upon future date. A buyer
and seller agree on an exchange rate for any date in the future, and the transaction occurs on that

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date, regardless of what the market rates are then. The duration of the trade can be one day, a few
days, months or years. Usually the date is decided by both parties. Then the forward contract is
negotiated and agreed upon by both parties.

Chapter 4

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 Foreign Exchange Department

4.1. Foreign Exchange Department

Foreign Exchange Department is the international department of a bank. It deals globally. It
facilities international trade through the various modes of services it possess. If the branch is an
authorized dealer in foreign exchange market, it can remit foreign exchange from home country
to foreign countries. The department mainly deals with foreign currencies. Hence it is called
foreign exchange department. The department brides with the Export, Import and Foreign
Remittance.

4.2. Flow chart of Foreign Exchange Department Operation

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 Chapter-5
Export

5.1. Export
An export is a function of international trade whereby goods produced in one country are
shipped to another country for future sale or trade. The sale of such goods adds to the producing
nation's gross output. If used for trade, exports are exchanged for other products or services in
other countries.

5.2. Export Transaction Procedures of NBL

Export L/C operation is just reverse of the import L/C operation. For exporting goods by the
local exporter, bank may act as advising banks and collecting bank (negotiation bank) for the
exporter. NBL also has the capacity to support the exporters in Bangladesh. There are basically 2
types of L/C‟s - Local L/C and Foreign L/C, which for the commercial banks to deal with. NBL
also deals with these 2 kinds of L/C‟s.

5.2.1. Registration for the Exporter to Export in Abroad

In the export policy of Bangladesh any one cannot export goods in abroad. To export goods an
exporter needs a valid Export Registration Certificate from the Chief Controller of Import and
Export (CCI&E). Exporters find an Export Registration Certificate (ERC) number which is
incorporate on Export form and papers connected for obtaining Export Registration Certificate.
A Bangladeshi exporter has to apply to the controller or joint controller or Deputy Controller or
Assistant Controller of Import and Export to get an ERC. The ERC have to renew every year.
An exporter can do this registration from Dhaka, Chittagong, Sylhet, Comilla, Barisal, Borga,
Rangpur, Dinajpur and from Mymensingh. The following documents are required for ERC-

1. National ID card
2. Memorandum and Article of Association
3. Certificate of Incorporation in case of limited company.
4. Trade license.
5. Bank statement.
6. Assets Certificate.

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 7. Income Tax certificate
8. TIN certificate
9. BIN certificate
10. Membership of chamber of Commerce.

5.3. Documentary Credit/Letter of Credit (L/C):

Letter of Credit is an undertaking by a banker of the importer to the exporter, to the effect that
the amount of the L/C will be duly paid. The banker on behalf of the importer issues the L/C in
favor of the exporter (beneficiary) and forwards the same to the exporter to the effect that the bill
drawn by him shall be duly accepted and paid. It creates confidence in the mind of the exporter
so far as payment of the bill is concerned. It is also facilitate the exporter to get the benefit of
discounting the bill before the date If maturity. Now in every bank L/C is transferred and verified
through SWIFT which is the genuineness of verification.
*Figure-4: Functions usually done by Foreign Exchange department of NBL

*Flowchart-5.1: The process of Letter of Credit (L/C).

5.4 STEPS IN LETTER OF CREDIT OPENING

On receiving the document or papers from the importer the letter of credit opening bank is to
perform the following function in connection with opening the letter of credit:

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 I. To scrutinize the document thoroughly and to consult with import policy, Bangladesh
Bank and International Division‟s circular.
II. To prepare and “offering sheet”. This offering sheet is nothing but a prescribed office
note on which the branch manager will sanction the margin to be obtained from the
importer.
III. Commission of letter of credit to be calculated as 50% of the total amount equivalent to
Bangladesh currency.
IV. P&T charges to be realize for taka 100 (fixed charge) if the letter of credit dispatched
through Airmail. If it is a cable or telex letter of credit the P&T charges to be realized at
actual.
V. Foreign correspondents adjusting charges (FCC) to be realized TK.1500 (fixed amount).
VI. To make entry in “letter of credit opening register”.
VII. To dispatch the letter of credit as follows:
 First and second copy – Advising Bank, which in turn forward the original copy of the
exporter.
 Third copy – Reimbursing Bank.
 Fourth & Fifth copy – Importer.
 Sixth copy – C.C.I. & E.
 Seventh to Ninth copy – Letter of credit opening bank’s copy.

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5.5. HOW TO LETTER OF CREDIT WORK

5.6. Performance evaluation of National Bank Limited (NBL), Uttara Branch:

Exporter name
Prome Agro Foods Ltd.
Seam Agro Foods Ltd.
My Food Ltd.
Shell Home Tex (RMG)
NS Plastic

*Table-5.1: Performance evaluation of NBL.

*Source: NBL Uttara Branch

5.6.1. Analysis and results:

In 2019 the growth in L/C of Uttara branch was higher than November, 2018. So from the
diagram I can say the performance of Uttara branch (NBL) in 2019 was excellent.

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5.7. Name of some exported items: (Based on above Exporters)

Commodity
Chanachur, Dry Chili, Dry Bay Leaf, Biriyani Masala, Fish Curry Powder,
Mustard Oil, Special Toast, Mango Pickle, Dry cake etc.
As Above
As Above
Dress Making Materials: Button, Chain.

*Table-5.2: Some Exported items by NBL.

*Source: NBL Uttara Branch

Chapter-6

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 Import

6.1. MEANING OF IMPORT

A good or service brought into one country from another country in a fair and acceptable
fashion, typically for use in trade. Imported Goods or services introduce domestic consumers to
newer thinks by foreign producers.
Companies usually import goods and services to supply to the domestic market at a cheaper price
and provide goods that are superior compared to goods manufactured in the domestic market.

6.2. WHO IS AN IMPORTER?

The person who deals in import business obtaining import Registration Certificate (IRC) in terms
of importers, exporters and indenters (Registration) order – 1981 from the CCI&E submitting the
following papers is treated as importer.
1. National ID card
2. Memorandum and Article of Association
3. Certificate of Incorporation in case of limited company.
4. Trade license.
5. Bank statement.
6. Assets Certificate.
7. Income Tax certificate
8. TIN certificate
9. BIN certificate
10. Membership of chamber of Commerce.

6.3. TYPES OF IMPORT

There are two types of import-
 Commercial Import.
 Industrial Import.
Commercial Import: Importer does commercial import only for trading purpose. These products
are finished goods. Such as; rice, wheat, soybean oil etc.
Industrial Import: Importer does industrial import for industrial use only. These products are raw

43 @BUBT
materials and capital machinery. Such as; raw cotton, crude oil etc.

6.4. Name of some importers

Importers
Prome Agro Foods Ltd.
Seam Agro Foods Ltd.
BLUEBELL International
Hafsa seeds Company
National Health Care

*Table-6.1: Some Importers of NBL.

*Source: NBL Uttara Branch.

6.5. Name of some imported items (Based on above importers)

Items
Suger, Wheat.
As above
Stone
All kinds of Seeds
Insulin, Syringe.

*Table-6.2: Some Imported items.

*Source: NBL Uttara Branch.

6.6. Goods are not importable

The following types of goods are not importable-

 Books, Newspaper, periodicals, documents and other papers, posters photographs, films,
gramophone records, audio and video cassette tapes etc. containing matters likely to

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 outrange the religious feeling and beliefs of any class of the citizen of Bangladesh.
 Unless otherwise specified in this order, old, second-hand and recondition goods, factory
reject add goods of job-lot or stock-lot of secondary or substandard quality.
 Maps, chart and geographical globes which indicate the territory of Bangladesh but do
not do so in accordance with the maps published by the department of survey,
Government of the people’s republic of Bangladesh.
 Horror comics, obscene and subversive literature including such pamphlets, posters,
newspaper, periodicals, photographs, films, gramophone records audio and video cassette
tapes etc.
 Reconditioned office equipment, photocopier, type writer machine, telex, phone,
computer and fax.
 Unless or otherwise specified in this order, all kinds of waste.
 Goods hearing words or inscriptions of a religious connotation the use or disposal of
which may injure the religious feeling and beliefs of any class of the citizen of
Bangladesh.
 Goods bearing any obscene picture, writing inscription or visible representation.

Chapter-7
Foreign Remittance of NBL

7.1. Meaning of foreign Remittance:

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The word “Remittance” originates from the word “remit” which means to transmit fund. In
banking terminology, the word remittance means “transfer of fund one place to another”. When
money transferred from one country to another is called “Foreign Remittance”. That means
foreign remittance is the transfer of foreign currency from one country to another country.

7.2. Types of Account for Foreign Remittance:

 NOSTRO A/C
When a Bank maintains a Foreign Currency account with a foreign Bank abroad the account is
called NOSTRO account. NOSTRO account means “our Account with you”.
Example:
If National Bank Limited maintains a US Dollar account with American Express Bank, New
York, then it is a NOSTRO account of NBL.

 VOSTRO A/C
When foreign bank maintains a convertible taka account with a Bangladeshi bank or with its
branch in Bangladesh, the taka account is called VOSTRO account. VOSTRO account means
“your account with us”.
Example:
If American Express Bank and New York maintains taka account with the help of NBL then that
taka account is a VOSTRO account for NBL.
What is the Nostro account for a bank in a particular country is a Vostro account for the bank
abroad maintaining the account thus the account of NBL with Standard Charted Bank, New
York, regarded as its Nostro account held with Standard Charted Bank, New York. While
Standard Charted Bank, New York, regards it as its Vostro account held for NBL.

 LORO A/C
When two Banks maintain two NOSTRO accounts with a same foreign Bank in abroad, then one
Bank‟s NOSTRO account is Loro account for another Bank. Loro account means “their account
with you”. Account maintained by third party is known as Loro account.
Example:
NBL & Agrani Bank both maintains a NOSTRO account No 1 & 2 respectively with American

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Express Bank New York. Then NOSTRO account 1 & 2 are LORO account for each other.

7.3. Process of Foreign Remittance:

Fund transfer from one country to another country goes through a process which is known as
remitting process. National Bank Limited has 175 domestic branches. The bank has “Nostro
Account” with a foreign bank Standard Charted Bank, New York. Bangladeshi expatriates are
sending foreign remittances to their local beneficiary, through that account.
 Now, the Bangladeshi expatriates will contact with Standard Charted Bank to remit fund
to Bangladesh.
 Then Standard Charted Bank will credit the “NOSTRO A/C” of NBL and send the
message through SWIFT.
 Next the local bank’s Head Office international division will receive telex message and
the TFMD will record the advice and generate the advice letter to the respective branch
of the bank.
 The branch will first decode the test, verify signature and check the account number and
name of the beneficiary.
 After full satisfaction, the branch transfers the amount to the account of the beneficiary
and intimates the beneficiary accordingly. But sometimes the complexity arises, if the
foreign Bank has no “NOSTRO A/C” in which country where the expatriates want to
remit fund. Then the Foreign Bank has to take help of a third bank who has “NOSTRO
A/C” with intended Bank.
7.4. Banks with NOSTRO Account:
In order to meet the customer needs for International Trade, the Bank has developed a wide
network with more than 580 Banks all over the world. Some Banks with NOSTRO A/C are:

 Standard Chartered Bank, New York, USA.

 Mashreq Bank PSC, New York, USA.
 ICICI Bank Limited, Hongkong.
 Commerz Bank, AG
 Habib Bank, AG Zurich.
 Korea Exchange Bank Limited.

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  Sonali Bank UK(USD).
 UBAF, Singapur.

7.5. Types of Foreign Remittance:

 Foreign remittance is two types:
 Inward Foreign Remittance.
 Outward Foreign Remittance.

*Flowchart-7.1: Types of Foreign Remittance.

7.6. Inward Foreign Remittance:

Inward Foreign Remittance means Remittance received from foreign countries from abroad. To
the bankers or ADs inward remittance means purchase of foreign currency by authorized dealers.
In other words remittance coming into our country from other countries by the remitter by way
of permissible banking channel is called „Inward Foreign Remittance‟ i.e. beneficiaries point
of view it is inward foreign remittance. On the other hand remitter‟s point of view it is called
outward Foreign Remittance.

Ways of Inward Foreign Remittance:

 Spot Cash.
 FTT

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  FDD
 TC

Spot cash:
 Only from Foreign Exchange House Spot Cash can be send to Bank.
 No need to have account receiver.
 Photocopy of NID or student ID and PIN code are must for receiving money.
 Service charge is gained by Bank.

FTT:
 From Bank remitter can send fund to beneficiary.
 Here account is must for beneficiary. Because fund is credited to beneficiary‟s account.
Then beneficiary can withdraw money as his/her necessity.
 Here the Foreign Bank credit the NOSTRO account of NBL.
 In case of outward remittance it is vice versa.

FDD:
 It is instrument.
 Here instrument is given to the concern Bank from which it is taken.
 Here purpose may be many such as, payment to anybody, for Business issue, may be
travelling etc.
 It is collection basis that means Banks normally takes 3 to 4 days for payment.
 After giving payment NOSTRO account is debited.
 In case of NBL there must have two officers signature in this instrument.
 In case of outward remittance it is vice versa.

TC:
 It is an instrument.
 Here the format of intermediary Bank is used.

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  Normally American Express Travelers Cheque or Standard chartered TC is used.
 That means here standard format is used.
 It is on cash basis. That means after taking the TC the fund is readily available.
 In case of outward remittance it is vice versa.

7.7. Outward 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 remitter has to deposit money along with the application
contains name and address of the payee name of the currency etc. All outward remittances must
cover the transactions approved by the Bangladesh Bank. 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. Outward remittance may be made by appropriate method
to the country to which remittance is authorized.
Purposes of Outward Remittance:
1. Travel
2. Medical treatment
3. Educational purpose.
4. Attending seminar etc.
Ways of outward Foreign Remittance:
 FDD
 FTT
 TC

7.8. Western Union Money Transfer Section:

Has the most modern technology for remitting money within quiets possible time from any part
of the world through their more than 170000 representatives in 190 countries and regions has
established a unique money transfer system with western union of. Through an online computer
system units can be instantly of the world. 56.17 million dollar was remitted to this bank through
this organization during the year 2003.NBL brought a substantial amount of foreign exchanges in

50 @BUBT
to the country through the western union in 2003, which is 44% higher than that of 2002 The
western union is a globally reputed name in money transfer services and data exchange forever
150 years. Western union has continued its tradition of possessing the latest technology and
handling wide scale remittances.
Payment of remittance by expatriate Bangladeshis through the western union are being made at
121 branches of NBL. These branches are connected with the on-
line computer system of the western union. The special feature of services is as follows:
Fast: Remits money in minutes
Safe: World-class security system
Easy: Over 2, 00,000 agents locations across 200 Countries and territories worldwide
Reliable: Trusted by millions for over 150 years.

Chapter-8
Analysis
8.1. SWOT Analysis Of the organization:

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Every organization has some strength that helps it to survive, some weakness that push it
backward, some opportunities that helps it to compete and also some threats that keeps it aware.
NBL also has some SWOTs. These are mentioned below.

*Flowchart-8.1: SWOT Analysis.

8.1.1. Strengths of the organization:

NBL is a very competitive organization. It is operated by a very efficient management group.
There is a good employee-employer relationship in its head office and also its all branches. It has
a healthy dislike of is competitors. NBL has sponsored to the top programs, seminars, writing
competition and gained valuable coverage. In Bangladesh, it has 225 branches to provide
services to the people. All these branches are located in such a place in where customers feel
comfortable and safe to make their transaction. There are 4740 staffs who work for NBL either
in back office or in front office. It has a better financial position than others in the banking
business. It is strong at research and development, as is evidenced by its evolving and innovative
product & service range. NBL has more social awareness than other banks in Bangladesh right

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now.

8.1.2. Weakness of the organization:

The organization does not have a diversified range of products & services. Still the bank is not
fully computerized. Manual registers are used in some cases. However, the income of the
business is still heavily dependent upon its share on the retail market. It caters less the corporate
market than the SCB. This may leave it vulnerable if for any reason its market share erodes. The
retail sector is very price sensitive. But it pays very less interest than other banks. So, if they
found higher interest rate offering by other private banks of Bangladesh then they will lose
customers. It has less promotion campaign than the other bank, because they believe brand value
is the top promoting entity for the company.

8.1.3 Opportunities of the organization:

NBL has a goodwill that it provides different banking services to the people with a minimum
cost and cut a very little charge on its transactions. Although it already has 225 branches to
provide services to its customers, it also has the opportunity to build up more branches to make
more convenient for the customers. The banking business of NBL and its other social activities
have increased day by day. Sophisticate customer service scheme of the NBL more preferable to
customers than other banks. Products & services development offers NBL many opportunities.
There is the opportunity to develop products and services such as insurance business & huge
investment in capital market etc.
Such high value items will tend to have associated with them, high profits. There are also global
marketing events that can be utilized to support the brand such as the sports & other cultural
activities.

8.1.4. Threats of the organization:

NBL is exposed to the international nature of trade. It has to deals in different currencies and so
costs and margins are not stable over long periods of time. Such an exposure could mean that
NBL may be doing banking business at a loss. The new technology emerges to protecting the
currency value & use options for better credit rate earnings. The market for banking sector is

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very competitive. The model developed by NBL to be world’s local bank is now commonly used
and to an extent is no longer a basis for sustainable competitive advantage. Competitors are
developing alternative brands to take away the market share of NBL. The roles and regulation of
the government and conventional laws of Bangladesh are also act as threats for the growth of
banking business development in Bangladesh.
As discussed above in weaknesses, the retail banking sector is becoming price competitive. This
ultimately means that retail consumers are transacting in bank around for a better deal. So if
NBL charges a comparative high price for a bank account service, or loan rate service, then the
customers could go to the other bank to compare fees & charges for the exactly the same
services, and will take decision the cheaper of the two.
Such customer’s price sensitivity is a potential external threat to NBL.

 Converting Threats into Opportunities

NBL has to expose its international nature of trade more efficiently. It has to recover costs and
maintains margins over long periods of time. The new technology has to use to protecting the
currency value & use options for better
Credit rate earnings. NBL has to come to with other sort of criterion that’s why the competitor
have to fight very long to copy that exposure. NBL has to give a better deal in the banking fees
& charges for the customers for the retail banking sector.

 Converting Weakness into Strength:

NBL has to focus equally to both ranges of customers either retail or corporate. It has to build
up a proper strategy that’s why the corporate customers can be interested to open more of
corporate account in NBL. NBL also has to give higher interest rate for various products &
services to gain more market share in banking business. They have to advertise their brand name
more. They can sponsor their name for various social activities, which will bring up NBL value
more to the local customers. They can also make social awareness to the local customers.

8.2. PEST Analysis:

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We know that a scan of the external macro-environment in which the firm operates can be
expressed in terms of the following factors:

1. Political.
2. Economic.
3. Social.
4. Technological.

*Figure-8.2: PEST Analysis.

NBL considers the PEST analysis very important to understand better the local environment
before beginning the marketing process. NBL‟s environmental analysis is a continuous process.

8.2.1 Political Factors

The political arena has a huge influence upon the regulation of NBL‟s businesses. We can
consider the following aspects
1. The political environment is not stable, so as the banking sector. Though the business
activity is wholly regulated by Bangladesh Bank, in a country like Bangladesh, NBL‟s
banking activity is depending on the political culture of Bangladesh.
2. Government policy influence laws that regulate NBL’s business.
3. The government’s position on marketing ethics, culture & religion is totally based on
custom & culture of Bangladesh. So, NBL is following that custom.

8.2.2. Economic Factors

NBL considers the state of a trading economy in the short and long-terms. The interest rates for
various accounts are quite attractive. The bank also invested a huge portion of money to the T-
bill market. The level of inflation also affects the business values in Bangladesh. Though as
being a fore bank it can adjust that inflation very easily.

8.2.3. Socio cultural Factors:

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NBL considers the social and cultural factors considerably. Like-
1. It thinks about the principle religion of the country and gives its employees the best
possible benefit for that. Two bonuses in a year are based on two Eid festivals.
2. The attitudes towards other products and services of other competitive banks are marked
specifically. They try to update their system & procedure in a standard manner.
3. Our mother tongue is Bengali. I saw the top level managers are converse with one
another in Bengali.
4. NBL knows that, the people of Bangladesh are very emotional in nature. So, it tries to
adopt that emotion in their business for better understanding the local customer.

8.2.4. Technological Factors

Technology is vital for competitive advantage, and is a major driver of globalization. NBL
allows a better technology for its products and services to be made more cheaply and to a better
standard of quality to the customer. These technologies offer consumers and businesses more
innovative products and services such as ATM machine. NBL offers its customers to a new way
to communicate with consumers e.g. Customer Relationship Management (CRM) etc.

8.3. Ratio Analysis:

A tool used by individuals to conduct a quantitative analysis of information in a company's
financial statements. Ratios are calculated from current year numbers and are then compared to
previous years, other companies, the industry, or even the economy to judge the performance of
the company. Ratio analysis is predominately used by proponents of fundamental
analysis.

Ratio analysis is a study of the relationships between financial variables. It is very important in
fundamental analysis which investigates the financial health of any financial institution. This

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ratio analysis gives frank financial information in this current business world. By giving a glance
anyone will be able to know what the position that institution is now. Therefore managers,
shareholders, creditors etc. all take interest in ratio analysis. For example using liquidity ratios
managers can use the information if the institution's liquidity is struggling and they may have to
take out short term finance. For this reason to evaluate the performance of NBL the ratio analysis
has been selected. Here in this report contains the most common ratios and analysis to evaluate
the performance of NBL over the year 2015 and 2019.
To do an analysis, the following ratios and values have been calculated:
8.3.1. Current Ratio:
This ratio is calculated by dividing the total current assets of an institution by its total current
liabilities. It shows how any institution like NBL meets its current liabilities through its current
assets.
Year 2015 2016 2017 2018 2019
Current
Ratio: 0.71 1.03 0.85 1.22 1.03
(CA/CL)

*Table-8.1: 5 years Current Ratio of NBL.

Current Ratio: (CA/CL)

1.4

1.2

0.8

0.6

0.4

0.2

0
2015 2016 2017 2018 2019

*Graph-8.1: Current Ratio.

In 2019 company’s current ratio was 1.03 times higher than current liabilities. Current ratio has
increased than last year as current asset increase also current liabilities increase in a higher
proportion which is good for the bank. As we know higher the current ratio is better for the

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institution because this higher ratio helps to prevent getting default.

8.3.2. Return on asset (ROA):

ROA is a profitability ratio which shows how profitable a bank is related to its total assets. ROA
gives an idea that how efficient the management of a bank is to generate profits using its assets.
Return On Asset (ROA) = Net income / 2015 2016 2017 2018 2019
1.43% 1.90% 1.43% 1.08% 0.96%
Average Total
Asset

*Table-8.2: 5 years Return on asset (ROA) of NBL.

Return On Asset (ROA)

2.00%
1.80%
1.60%
1.40%
1.20%
1.00%
0.80%
0.60%
0.40%
0.20%
0.00%
2015 2016 2017 2018 2019

Year

*Graph-8.2: 5years Return on Asset (ROA) of NBL.

ROA is the most used profitability ratio. As NBL was a part of banking industry and its most of
the assets come from the debt which was the reasons for its low net profit as well as poor ROA.
As a result the NBL had low ROA in the year of 2019 which were 0.00996. In the year 2019 the
net profit of the bank had decreased.

8.3.3. Return on equity (ROE):

Return on equity measures a bank’s profitability which calculates how much net profit that bank
may generates with the money that shareholders have invested as equity.

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 Return On Equity % 2015 2016 2017 2018 2019
=Net Income/Equity 12.74% 15.96% 12.27% 9.63% 8.87%

*Table-8.3: 5 years Return on equity (ROE) of NBL.

Return On Equity %
2019

2018

2017

2016

2015

0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00% 16.00% 18.00%

Return On Equity %
*Graph-8.3: 5 years Return on Equity (ROE) of NBL.

ROE is very popular ratio toward the shareholders of any bank. After doing the analysis from
NBL‟s financial statements its shows those in years 2019 ROA percentage is lower than 2015.
The lower the percentage is not good for the bank as well as for shareholders.

8.3.4 Interest Income:

Net interest income is the difference between the revenue that is generated from a bank's assets
and the expenses associated with paying out its liabilities. A typical bank's assets consist of all
forms of personal and commercial loans, mortgages and securities. The liabilities are the
customer deposits. The excess revenue that is generated from the interest earned on assets over
the interest paid out on deposits is the net interest income

Interest Income 2015 2016 2017 2018 2019

(Tk in Millions) 19,504.69 18,947.93 22,546.17 27,911.30 34,730.59

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 *Graph-8.4: 5years Interest Income of NBL.

Interest Income
40,000.00

35,000.00

30,000.00

25,000.00

20,000.00

15,000.00

10,000.00

5,000.00

0.00
2015 2016 2017 2018 2019

*Graph-8.4: 5years Interest Income of NBL.

8.3.5 Number of Employees:

Number Of 2015 2016 2017 2018 2019

Employees

4266 4617 4602 4657 4740

*Table8.5: Number of Employees of NBL.

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 Number Of Employees
4800

4700

4600

4500

4400

4300

4200

4100

4000
2015 2016 2017 2018 2019

*Graph-8.5: Number of Employees of NBL.

In NBL number of employees is increase day by day. In 2015 there was employees 4,266 and in
2019 it was increase to 4,740. It is good for a country about employment.

8.3.6. Capital Adequacy Ratio:

Also known as capital-to-risk weighted assets ratio (CRAR), it is used to protect depositors and
promote the stability and efficiency of financial systems around the world. Two types of capital
are measured: tier one capital, which can absorb losses without a bank being required to cease
trading, and tier two capital, which can absorb losses in the event of a winding-up and so
provides a lesser degree of protection to depositors.
Total Capital 2015 2016 2017 2018 2019
Adequacy Ratio
12.05% 13.19% 13.79% 14.04% 13.38%

*Table-8.6: 5 years Capital Adequacy Ratio of NBL.

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 Total Capital Adequacy Ratio
2019

2018

2017

2016

2015

11.00% 11.50% 12.00% 12.50% 13.00% 13.50% 14.00% 14.50%

*Graph-8.6: 5 years Capital Adequacy of NBL.

8.3.7. Capital:
The bank's capital management framework ensures that the bank and its subsidiaries are
capitalized conformity with the risk profile, regulatory requirements, and economic capital
standards approved by the Board of Directors of the bank.
Maintenance of adequate capital base in line with Basel Ill is bank's main focus. Capital
management of NBL usually refers to implementing measures aimed at maintaining adequate
capital, assessing internal capital adequacy of the bank and calculating its Capital to Risk
Weighted Assets ratio.
As part of the internal capital adequacy assessment process (ICAAP) of NBL, management
identifies the risks that the bank is exposed to, and determines the means by which they will be
mitigated. Capital is used to cover some of these risks, and the reminder of these risks is
mitigated by means of collateral or other credit enhancements. Contingency planning additional
reserves and valuation allowances, and other mechanisms. NBL always maintains a prudent
balance between Tier- and Tier-2 capital to support the projected business and regulatory
requirement Total capital as on December 31, 2019 was Tk.30,000.00 million and Capital to
Risk Weighted Assets Ratio (CRAR) was 12.50% in solo basis and 10.00% in consolidated
basis. Availability of sufficient capital enhanced the Bank's single borrower's exposure limit up
to a desired level to meet the corporate customers demand The capital management approach

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clearly calculates and estimates existing and forecasted capital for business continuity
minimizing risks and maximizing earnings in progressive manner.
Capital (taka
2015 2016 2017 2018 2019
in millions)
Authorized
17,500.00 30,000.00 30,000.00 30,000.00 30,000.00
Capital
Paid-up
17,177.20 19,753.78 23,704.53 26,549.08 29,203.99
Capital
Reserve
Fund & 16,380.76 16,449.09 16,666.29 18,260.27 19,833.57
Surplus

*Table8.7: Capital Management.

Capital
35,000.00

30,000.00

25,000.00

20,000.00

15,000.00

10,000.00

5,000.00

0.00
2015 2016 2017 2018 2019

Authorized Capital Paid-up Capital Reserve Fund & Surplus

*Graph-8.7: Last 5 years Capital Management of NBL.

8.3.8. Share of NBL:

The Authorized Capital of the Bank stood at BDT 30,000.00 million while the paid-up capital is
BDT 29,203.99 million as of December 31, 2019. NBL’s shares are being maintained with
Central Depository System since 2004. A total number of 2917.18 million shares have been
recorded with the CDS (Central Depository System) while 32.19 million shares remained in
script till 31.12.2019. The Board of Directors of the Bank considered to increase the authorized
capital of the Bank for future business enhancement. The proposal of the Board for increasing

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the capital to Tk. 5,000 crore. The net asset value (NAV) per share was Tk. 16.79 in 2019 which
was Tk. 16.88 in 2018. The earnings per share (EPS) reached to Tk. 1.43 in 2019 which was
Tk.1.40 in 2018. Though capital market showed ups and downs, NBL shares are still admired by
the investors due to the inner financial strength of the Bank.

Year 2015 2016 2017 2018 2019

EPS 1.95 2.35 1.77 1.40 1.43
*Table8.8: Earning per share.

Earnings Per Share

2.5

1.5

0.5

0
2015 2016 2017 2018 2019

Earnings Per Share

*Graph-8.8: Earnings per share (EPS).

8.3.9. Profit of NBL:

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 PROFIT Trend
(Taka in 2015 2016 2017 2018 2019
Millions)
Profit
before Tax 8260.14 10753.13 10265.87 9219.18 8784.40
&
Provision

Profit After Tax & 3854.03 5567.87 4696.01 4100.31 4164.35

Provision

*Table-8.9: 5 years Profit Trend of NBL.

Profit Trend
12000

10000

8000
Range

6000

4000

2000

0
2015 2016 2017 2018 2019

Year

Profit before Tax Profit After Tax

*Graph-8.9: 5 years Profit Trend of NBL.

8.3.10. LAST 5 YEARS IMPORT BUSINESS OF NBL:

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 Year 2015 2016 2017 2018 2019
Amount 85,598.27 69,582.90 88,477.30 90,579.63 99,501.40

*Table-8.10: Last 5 Years Import Business of Nbl. (Tk in Millions)

IMPORT

2019

2018

2017

2016

2015

0.00 20,000.00 40,000.00 60,000.00 80,000.00 100,000.00 120,000.00

*Graph-8.10: 5 YEARS IMPORT BUSINESS OF NBL. (*Source: NBL Annual Report.)

Analysis: Import trade finance of NBL has been increased to TK. 99,501.40 million in the year
2019 compared to TK. 90,579.63 million in the year 2018. The increase in TK. is by 01.098%.
The main commodities were scrap vessels, rice, wheat, edible oil, capital machinery, petroleum
products, Fabrics and other consumer items.

8.3.11. LAST 5 YEARS EXPORT BUSINESS OF NBL:

Year 2015 2016 2017 2018 2019
Amount 67,888.84 50,167.64 42,877.60 50,282.23 54,544.76

*Table-8.11: LAST 5 YEARS EXPORT BUSINESS OF NBL. (Tk in Millions)

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 EXPORT

2019

2018

2017

2016

2015

0.00 10,000.00 20,000.00 30,000.00 40,000.00 50,000.00 60,000.00 70,000.00 80,000.00

*Graph-8.11: 5 YEARS EXPORT BUSINESS OF NBL.

Source: NBL Annual Report.

Analysis: Export trade finance of NBL has been increased to TK. 54,544.76 million in the year
2019 compared to TK. 50,282.23 million in the year 2018. The increase in TK. is by 1.084%.
The main commodities were tea, fish, jute, jute products, Fabrics and other consumer items.

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 Chapter-9

Findings

9.1. Major Findings:

The L/C Processing in NBL is satisfactory but has some problems. There have also some
problems in other sectors. The presentation of data can be summarized as of the following
findings:
 Internet Banking has been introduced. But most of the time the server is unavailable.
 Profit rate is low. So to somebody it is unattractive.
 In case of import and export financing it takes long time to sanction the fund.
 NBL banks have their own websites which acts as an information center and promotional
tool for the banks.
 NBL has own banking software.
 Lack of available information on banking product.
 Customers are often unaware about banking services.
 Lack of Manpower in foreign exchange department.
 NBL Uttara Branch has SWIFT facilities. Very few bank in our country offer this. By
using this modem technology Uttara Branch, provide faster service.
 The monitoring system of the foreign exchange department of NBL is excellent. The
chain of command is strictly maintained here. The executives now and then visit the
department, which keeps all the officers alert about their duty.
 Government rules and regulation often make problem for import and export market in
Bangladesh.
 The Foreign Exchange Department is very much Strong. Clauses they use in dealing with
the foreign Bank in term of L/C opening and amendment of L/C are very much eligible to
the foreign Bank. It is giving a competitive advantage to the NBL. For this, businessmen
like to deal their business with the NBL.

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9.2. Policy Implications:
The following steps may be taken for the betterment of the company:

 Branch should intensify its quality of client service. Customer services must be made
dynamic and prompt.
 Bank employ and train up more employees in foreign exchange department.
 Put more emphasis on Export business, the depository service and create more depository
services.
 Technological Skills should be developed. NBL should establish its own networking
system between its branches so that they can exchange their information faster and
efficiently.
 National Bank Ltd. should train up their officers of all branches about all sort of
information regarding SWIFT and its services.
 National Bank Ltd. should always monitor the performance of its competition in the field
of Foreign Trade and General banking Service.
 NBL should locate their branches in the important places of the rural area so that most
people will know about the Foreign Remittance Service of NBL.
 Government should remove barriers on foreign exchange businesses.
 The Bank should create such situation so that people put confidence on private bank for
huge money transaction.
 NBL should sponsor seminar and symposium for the purpose increase awareness about
the services of NBL.
 NBL should conduct strong Marketing Innovation activities to increase business in &
outside Bangladesh.
 NBL should invest its fund in the profitable sector that will produce more profit for the
owner of the account so that people will attract for NBL.
 Encourage and facilitate Imports of Industrial goods.

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9.3. Conclusion:

Though Bangladesh is a small country in nature but its import and export activities in the world
is considerable. Every year Bangladesh exports a large volume of jute, tea, woven Garments,
Knitwear, Frozen fish, Leather etc. and import raw materials for readymade garments, manure,
accessories and different apparels.

In Bangladesh many banks are providing foreign exchange services in terms of letter of credit
and foreign remittance and among them National Bank is one of the successful bank. Even in last
year 2019 the whole world sank in the global commercial recession but the foreign exchange
activities of NBL was quite steady through the year.

In 2019 National Bank limited forwarded total number of 44,889 LCs (Import+ Export)
amounting to US$ 1836.12 Million in trade with a growth of over the previous year. The main
commodities were scrap vessels, rice, wheat petroleum products etc.

Besides the above activities NBL is showing its interest in foreign operation. NBL has own
exchange house in Oman, Singapore, Malaysia, Myanmar and arrangement with different world
leading exchange houses. Through which the foreign exchange operation and transfer of
remittance have becomes ease. In the last four month the total inflow of foreign remittance is
US$ 37,953.98 million which shows an envious performance of National Bank among its
competitors.

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9.4. Reference:

 Annual Report 2015 to 2019, National Bank Ltd. Company Report. Available from:
Annual Report.
 Auditors' report and consolidated financial statements of National Bank Limited for the
year ended December 31, 2019 by Rahman Mostafa Alam & Co.Chartered
Accountants.
 INCOTERMS 2020 presentation_ K M LUTFOR RAHMAN

9.4.1. Websites:
 www.bangladesh-bank.org
 www.foreignexchange.com
 www.nblbd.com
 http://www. nblbd.com/branch.php
 https://www.investopedia.com/
 https://www.slideshare.net/
 https://www.nblbd.com/assests/financial/NBL_Financial_Statement_3rd_Quarter_30_Se
p_2020.pdf

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9.5. Abbreviation:

ABBREVIATION ELABORATION

NBL National Bank Limited

Branch Code 068 (Uttara Branch)
FE Foreign Exchange
CCI & E Chief Controller of Import &Export
IRC Import Registration Certificate
UCPDC Uniform Customs & Practices for Documentary Credit
LCAF Letter Of Credit Authorization Letter
ERC Export Registration Certificate
A/C Account
TFMD Treasury & Fund Management Department
L/C Letter Of Credit
SWIFT Society For Worldwide Inter Bank Financial Telecommunication
TIN Tax Identification Number
FTT Foreign Telegraphic Transfer
FDD Foreign Demand Draft
TC Travelers Cheque
CSR Corporate Social Responsibility
NID National Identification Number
ID Identification Number
ATM Automated Teller Machine
PIN Personal Identification Number
SMS Short Message Service
I-BANKING Internet Banking

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