CHAPTER ONE

INTRODUCTION

1
1.1 Introduction
By doing internship in Premier Bank I got some experience about the foreign trade.
International trade is the system by which countries exchange goods and services.
Countries trade with each other to obtain things that are better quality, less expensive or
simply different from what is produced at home.

To buy foreign goods or services, or to invest in other countries, companies and

individuals may need to first buy the currency of the country with which they are doing
business. Generally, exporters prefer to be paid in their country’s currency or in U.S.
dollars, which are accepted all to the world. Sometime it is paid by EURO and ACU
dollars. ACU dollars country are related to India, Iran, Nepal, Pakistan, Sri Lanka, Bhutan
and Myanmar will be reported to BB at ACU Dollar.

The procedures used to exchange currency in international trade are called foreign
exchange system, banks plays vital roles in this procedures world widely. The
Bangladeshi banks provide foreign exchange services under, Foreign Exchange Act, 1947
is for dealing in foreign exchange business, and Import and Export Control Act, and 1950
is for Documentary Credits. Premier Bank has also become a member of SWIFT (Society
For Worldwide Inter Bank Financial Telecommunication) in 2001, which provides a fast,
secured & accurate communication network for financial transactions such as letter of
credit, fund transfer etc. As an authorized dealer under regulations of BB, Premier Bank
Baridhara Branch provides the followings three type services under their foreign
exchange department.

1.2 Origin of the Study

For any business school student only curriculum activity is not enough for handling the
real business situation, therefore it is an opportunity for the students to know about the
field of business through the internship program. As internship program is a perfect blend
of the theoretical and practical knowledge. This report is originated to fulfill the
requirement of the assigned project internship report on “Foreign Exchange Analysis of
Premier Bank Ltd. In this regard an organization attachment at Baridhara Branch of
Premier Bank has been given to me a period of three months commencing from July

2
09.07.2015 to 10.09.2015. During this period I learned how the host organization works
with the help of the internal supervisor.

The internal supervisor assigned me one of the projects and shuffled me around to
educate me about the operation of a bank.

1.3 Objectives of the Study

Main Objectives of the study are as follows:
 To know about the Foreign Exchange Analysis of Premier Bank.
 To study Foreign Exchange Trend of Premier Bank
 To assess the impact of interest and commission come from foreign trade.
 To suggest some policy to overcome the problems of issues foreign trade.

1.4 Scope of the Study

Premier Bank Limited is one of the new generation banks in Bangladesh. The scope of
the study is limited to the Baridhara Branch only. The report covers the organizational
structure; background, functions and the performance of the bank have mainly worked in
the foreign exchange so my report covers all the activities of foreign exchange
department in the Baridhara branch. While preparing this report I haven’t any limitations
the employees of foreign exchange department has helped me a lot and I have use both
primary and secondary data which was available to me.

1.5 Methodology of the study

To furnish the report I have collard date from two nurses such as :

Primary Sources of Data:

Primarily the data is collected for the research by
 Interviewing the manager, executive, officer of the Premier Bank

Secondary Sources of Data:

Secondary data is collected through the following sources-
 Various files and documents of Foreign Exchange Department of Premier Bank
Ltd

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  Newspaper articles.
 Annual reports of the Bank
 Articles related to Foreign Exchange Mechanism in different journals and
magazines
 Different website & Premier Bank’s website

1.6 Limitation of the Study

Three months is not enough to know about commercial banking operation through I have
been received maximum assistance from the every individual of the Premier Bank
Baridhara branch Definitely, I could not produce an outstanding report for the time
limitations. Due to the time limit, the scope and dimension of the study has been
curtailed.
The Term paper is likely to have following limitations:
 Since the ideal size of data could not be taken, suggested operating process may
not be useful without appropriate modifications.
 Due to shortage of time, the accuracy of information may not have been
completely perfect.
 The Operating Process is a theoretical suggestion. Only a practical application of
this may justify its effectiveness that could not be done due to time limitation.
 Lack of comprehension of the respondents was the major problem that created
many confusions regarding verification of conceptual question.
 Confidentiality of data was another important barrier that was faced during the
conduct of this study. Every organization has their own secrecy that is not
revealed to others. While collecting data on Premier Bank , personnel did not
disclose enough information for the sake of confidentiality of the organization.
 Rush hours and business was another reason that acts as an obstacle while
gathering data.
 Observing and analyzing the broad performances of a Bank and one of its
Branches, moreover when it is a AD branch, are not an easy job by this short
duration of time (only three months).

However, omitting this, the report will help us understand the Foreign Exchange
departments of the bank
4
 CHAPTER TWO
PROFILE OF
PREMIER BANK LIMITED

5
2.1 History of the Premier Bank Limited
The journey of The Premier Bank Limited began with a clear vision „Service First‟ back
in 1999. A visionary entrepreneur and well-known industrialist Dr. H. B. M. Iqbal along
with thirteen successful and renowned business personalities laid the foundation of the
Bank to be the best amongst the top financial institutions. Taking together with the
nation,The Premier bank Limited has passed 13 years of its voyage of corporate
excellence and is flying fast to rise and prosper. With a long history of glory and success,
The Premier Bank Limited has rooted deep into a sound capital base and spread
everywhere to a larger network of Branches, ATMs and SME channels. Since inception
in 1999, they have crossed any significant milestones that stand testimony to our
Innovation and Excellence in creating a new paradigm in banking industry. Our wings of
operations have widened up to SME potentials, agricultural prospects and Retail business
opportunities.The Premier Bank has cut through the barriers of borders to go global as
wide as possible. To widen global services for wage earners remittances, it has
established fully owned subsidiary companies in several countries around the globe. Real
Time Centralized Online banking equipped with state-of-the art technology is the part of
our service. The Bank runs both conventional and Islamic Banking operation with
comprehensive range of products to meet up the variant needs of customers from different
strata. Technology based Plastic products and services such as debit card and credit card
have already occupied a position in the core business operation of the Bank. All the
Branches are resourced with cutting-age facilities controlled by highly efficient chain of
staff to provide personalized services to the customers. The Bank through its subsidiary
also provides brokerage services and margin loan facilities in the capital market. As a
capable absorbent of financial shocks, a much talked matter-of-the-day, they have made
our foundation strong with a capital Adequacy at 10.55%, nationwide network of 64 no.
of branchesand with the loyalty and trust of 1,69,010 no. of customers at the end of 2011.
Strong capital baseand well-managed balance sheet give us confidence to face challenges
and seize growth opportunities in the years ahead. From the very beginning, the Bank set
forth a dream to create a financial institution that would stand out in the crowd and meet
the demand of 21st century. After 12 successful years of operation, the Bank is justified
in its vision and mission and well-set to step into its another promising year of progress.
With an ongoing focus on effecting our strategies and priorities, controlling risks and
expenses and growing our business platforms – with our strong foundation and the finest

6
team of people working together, they will make the best of today for the benefit of all
our stakeholders.

2.2 Profile of the PBL:

Name of the organization : The Premier Bank limited.
History : 1999,issued market share & named
The Premier Bank Ltd.
Year of estrablished : 1999, named Eastern Bank Corporation.
Nature of Organization : Private commercial bank.
Product : Bank service.
Shareholder : Main shareholders include leading
Industrialists and business magnets of the
country. The Board of Directors consists
of 13Limited members. Most of the
directors are owner of large business groups.
Total Number of employess : 2,850.
Customers : Business enterprise & individuals.
Head office : The Premier Bank Limited,
Iqbal Center,Kemal Ataturk Avenue,
Banani, Dhaka, Bangladesh

2.3 Vision,Mission,Value,Goals & Objectives.

Vision
The Bank has clear vision towards its ultimate destiny - to be the best amongst the top
financial institutions

Missions
To be the most caring and customer friendly provider of financial services,
creating opportunities for more people in more places.
To ensure stability and sound growth whilst enhancing the value of shareholders
investments.
To aggressively adopt technology at all levels of operations to improve efficiency
and reduce cost per transaction.

7
 To ensure a high level of transparency and ethical standards in all business
transacted by the Bank.
To provide congenial atmosphere which will attract competent work force that
will be proud and eager to work for the Bank.
To be socially responsible and strive to uplift the quality of life by making
effective contribution to national development.

Values :
Service first- For them „Service first‟ is not just an abstraction; they mean it, it holds
a prime and central focus in our operation. They believe, discharge of quick
andquality service is the hallmark for banking standard.
Easier banking- They have made day-to-day banking easier-than-ever through state-
of-the-art facilities. They tend to create a congenial atmosphere for our customers to
feel free and go away with banking. They divide our clients as individuals to impart
the best attention.
Better relationship- As they form bondage with their valued clients, so theydevelop
itinto a sustainable end. A good understanding with them, while carrying out business
transactions, helps them perceive their goals and thus, enable them to respond pro-
actively to their financial needs.
Assured confidentiality- Since we deal in business in the form of financial loss or
gain, our solemn promise remains intact with the interest of our clients so much so
that all banking transactions are done in a confidential & professional manner.
Good corporate governance- The dynamic Board of Directors of the premier Bank
Limited hails from different disciplines of business and industry at home and abroad.
They are well respected in the society for their contribution. The bank is equipped
with a highly competent Management Team who has long experience in domestic and
international Banking. The Bank upholds and strictly abides by good corporate
governance practices and is subject to the regulatory supervision of Bangladesh Bank.
Corporate citizenship- We are a compliant Bank and we pay due taxes. We are eager
to inspire eco-friendly investment. We are an abiding citizen in terms of all laws,
rules, norms, sentiments and values of the land

8
Goals and objectives
To build up strong pillar of capital.
To promote trade, commerce and industry.
To discover strategies for achieving systematic growth.
To improve and broaden the range of product and services.
To develop human potentialities by increasing employment opportunities.
To enhance asset of shareholders.
To offer standard financial services to the people.
To create congenial atmosphere so that the client becomes interested to deal with
the premier bank limited.
To keep business morality.
To develop well fare oriented banking service.
To offer highest possible benefit to customers.
As to its position among its counterparts is held high to let the viewers cast their
very first look at it.
To carry on the business of discounting and dealing in exchange of specie and
securities and all kinds of mercantile banking.
To carry on business as financiers, promoters, capitalists, financial and monitory
agents, concessionaires and brokers.
To establish and open offices and branches to carry on all or any of the business
abroad and within the country provided prior permission is obtained from
Bangladesh bank.

9
2.4 Management Stricture
Management Structure of PBL :
The bank has in its management a combination of highly skilled and eminent bankers of
the country of varied experience and expertiseDr. H. B. M. Iqbal was the foundation
Chairman of the Board of Director of PBL. He was the first governor of Bangladesh
BankDr. H. B. M. Iqbal is the Present Chairman of PBL. Present M.D. is MR. K. A. M
Majedur Rahman. Board of director of the bank is given below…
Dr.H.B.M.Iqbal,
Chairman

Mr. MoinIqbal
(Vice-chairman)

Mr. B.H Haroon Mr. Abdus Salam MsNawrinIqbal(Direc

(Director) Murshedy (Director) tor)

Mr. Shafiqur Rahman Mrs. Shaila Shelly Khan Mr. Yeh Cheng
(Director) (Director) Min(Director)

Mr. Mohammad Imran Shah Md. Mrs. Faiza Rahman

Iqbal (Director) NayanHaroon Rahman (Director)
(Director)

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2.4.2 Management Hierarchy of Any Bank:

CHAIRMAN

MANAGING DIRECTOR AND CEO

ADDITIONAL MANAGING DIRECTOR

DEPUTY MANAGING DIRECTOR

SENIOR EXECUTIVE VICE PRESIDENT

EXECUTIVE VICE PRESIDENT

FIRST VICE PRESIDENT
SENIOR VICE PRESIDENT
ASSISTANT VICE PRESIDENT
VICE PRESIDENT
PRINCIPAL OFFICER

SENIOR EXECUTIVE OFFICER

EXECUTIVE OFFICER

OFFICER ASSISTANT OFFICER

2.5 Capital
The authorized capital of the Bank is Tk 2,000 million and Paid up Capital of is Tk
681.45 million as on 31 December 2005. The Bank is processing to issue share to public
within this year to raise capital of the Bank by about 50% from the present level. Capital
Adequacy Ratio was 9.02% on risk weighted assets as on 31 December 2005 which is
above the stipulated requirement for all Banks in Bangladesh.

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Capital structure :

Capital Structure of PBL

Owned Capital Borrowed

Capital

Paid-up Reserve Deposit Call money From

capital  Statutory central
reserve. bank
 General
reserve.
 Retained
earning.

 Owned Capital:
 Paid-up Capital:
Paid-up capital of a commercial bank is the long term funds contribution to bank
primarily by its owners, subsequently contributed by PBLagainst their share of the
bank. It is the bank’s last line of defense against failure.
 Reserves :
Reserves are created out of the profit every year. Every commercial bank is under
compulsion, required to set a part of its profit as reserve known as statutory reserve.
Banks also create reserve for bad and doubtful debts etc. these reserves provide protection

12
to depositors in getting refund of certain portion of their deposits when bank faces the
danger of liquidation.
 Retained earning :
Undistributed portion of profit, which may also be employed as fund.
 Borrowed Capital:
 Deposit : It is the main source of banks fund. It is the life blood of a bank that
enables the bank to lend or interest with a view to earn profit. It helps maintain
liquidity of a commercial bank.
 Call money:
A bank can borrower from other banks in order to meet its liquidity short fall for a
short period of time, as the same is refundable at call.
 Borrowing from centeral bank : Central bank is the lender of the last resort so
the banking system. A bank can approach central bank for temporary assistance,
but a bank cannot seek assistance on a continual basis.

2.6 Key performance indicator

During the year, we expanded our business and undertook a significant trade finance
business and commercial lending operations. This strategy has resulted in an operating
profit of Tk. 196.24 million in 2002 compared to Tk. 124.14 million in the previous year.
Propelled by strong growth in both loans and deposits, the Bank’s operating income
increased substantially in 2002. Our net interest income for 2002 was Tk. 129.75 million
as compared to Tk. 107.89 million for 2001. Net income in 2002 was Tk. 132.37 million,
compared to Tk. 112.20 million in 2001. Return on assets and return on equity were
4.87% and 67.44% respectively. Earnings per share were Tk. 28.30, compared to Tk.
26.09 in 2001. Total assets at the end of 2002 were Tk. 6,036.92 million, an increase of
Tk. 2,587.98 million or 75.03% for the year. Key factors contributing to this significant
improvement were strong revenue growth, net interest income and continued
improvement in operating efficiency.

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2.8 Profit & Loss Account
For the year ended 31st December, 2005
2013 2012 2011
Taka Taka Taka
Interest Income 2,160,523,124 1,615,063,257 852,706,461
(1,558,092,496 (1,135,229,107
Interest paid on Deposits & Borrowings (643,887,283)
) )
Net Interest Income 602,430,628 479,834,150 208,819,178
Income from investments 137,410,073 138,135,977 89,543,758
Commission, Exchange & Brokerage 429,850,232 414,552,949 248,271,743
Other Operating Income 136,074,299 227,700,163 61,236,575
Total Operating Income 1,305,765,232 1,260,223,239 607,871,254
Salaries and Allowances 207,819,135 149,175,987 100,415,845

Rent, Taxes, Insurance, Lighting etc. 59,713,606 58,005,463 38,406,179

Legal Expenses 1,093,281 934,637 436,406

Postage, Telegram, Telephone, Stamps etc 20,907,174 18,417,634 10,245,844
Audit Fees 865,000 110,000 75,000

Printing, Stationery, Advertisement, etc 32,892,816 28,199,956 14,350,431

Chief Executive's Remuneration 6,956,000 4,103,400 2,520,000

Directors' Fees 1,195,000 1,249,500 1,525,000
Repairs, maintenance and depreciation 29,296,148 26,338,882 16,623,260
Other Expenditure 45,998,351 42,750,885 22,547,032
Total Operating Expenses 406,736,511 329,286,344 207,144,997
Profit before Provision 899,028,721 930,936,895 400,726,257
Provision against loans and advances 385,205,000 75,040,000
Specific Provision -- -- --
Total Provision 385,205,000 75,040,000 10,097,690
Total Profit before Income Tax 513,823,721 855,896,895 390,628,567
Provision for Income Tax 332,892,485 385,352,222 177,475,419
Net Profit after Tax for the year 180,931,236 470,544,673 213,153,148
Appropriations 181,006,678 619,186,539
Statutory Reserve @ 20% on Profit before tax 102,764,744 171,179,379 78,125,714
Retained earning for the year - 41,388,719 -
Retained earning brought forward - - -
Cash Dividend for the year - (205,401,314) (12,210,000)
Issue of Bonus Share at Premium - (148,639,032) 32,847,120
Transafer to Dividend equalisation reserve - (93,891,372) -
Retained earnings 78,241,934 75,442 148,641,866
Earning Per Share ( EPS) 32.45 84.40 67.02
These financial statements should be read in conjunction with the annexed notes

14
BALANCE SHEET
Particulars 2013 Taka 2012 Taka 2011 Taka

PROPERTY & ASSETS

Cash in Hand (including Foreign Currency) 209,262,679 187,739,664 120,489,194
Balance with Bangladesh Bank & Sonali Bank 1,158,903,319 303,899,492 433,659,461
(including Foreign Currency)
Balance with other Banks & Fin. Institution 266,967,554 60,107,686 96,427,288
Money at Call & Short Notice 400,000,000 540,000,000 770,000,000
Investment at cost 2,242,778,300 2,752,616,400 1,342,817,900
Loans & Advances 18,032,502,768 15,383,926,662
Loans, cash credit and overdraft 16,850,564,408 14,242,463,511 7,023,734,590
Bills discounted and purchased 1,181,938,360 1,141,463,151 1,071,830,851
Land, Building, Furniture and Fixtures etc. 165,475,331 149,569,777 107,898,470
Other Assets 291,951,460 107,987,268 129,437,701
Non-banking Assets - - -
TOTAL ASSETS 22,767,841,411 20,090,781,753 11,096,295,455

LIABILITIES & CAPITAL

Borrowing:other Banks, Fin. Inst.and Agents 36,446,622 38,100,000 -
Deposits & Other accounts: 20,290,466,907 18,005,196,392
Current and other Accounts 5,182,612,768 4,034,211,740 2,631,100,595
Savings Deposits 1259,499,369 1,320,059,895 1,098,808,684
Fixed Deposits 13,544,526,408 12,356,377,366 6,067,143,838
Bills Payable 303,828,362 294,47,391 232,375,759
Other Liabilities 1,307,395,533 899,482,954 378,319,746
Total Liabilities 21,634,309,082 18,932,779,346 10,408,837,721
Paid-up-Capital 557,549,712 557,549,712 408,910,680
Statutory Reserve 403,849,311 301,084,567 129,905,188
Other Reserve 93,891,372 93,891,372 148,641,866
Proposed Cash Dividend - 205,401,314
Retained Earnings 78,241,934 75,442 -
Total Shareholders' Equity 1,133,532,329 1,158,002,407 687,457,734
TOTAL LIABILITIES AND CAPITAL 22,767,841,411 20,090,781,753 11,096,295,455
st
Balance Sheet at 31 December, 2005

15
Monthly Performance at a glance
Particulars Jun 13 Jul 13 Aug 13 Sep 13 Oct 13 Nov 13

Total Assets 25062.50 25087.40 25472.50 25668.60 26474.20 --

Total Deposits 22069.10 21784.30 22737.80 20766.80 23769.20 21784.30

Loan and Advances 19319.70 19065.70 19117.00 18249.10 19553.30 20467.70

Operating Profit 427.10 499.70 576.10 641.00 700.60 754.00

Return on Equity 53.68% 53.85% 54.31% 47.35% 48.43% --

Total employee 641 639 640 650 649 650

Performance at a glance
Particulars 2009 2010 2011 2012 2013

Authorised Capital 1000.00 1000.00 1000.00 2000.00 2000.00

Paid-up Capital 222.00 239.76 408.91 557.55 681.45

Reserve Fund 25.30 98.24 130.00 301.08 403.85

Deposits 2206.39 5373.75 10030.52 18005.20 20290.47

Advances 2057.96 4280.73 8095.57 15383.93 18032.50

Investments 270.13 680.09 1330.20 2750.00 2242.78

Foreign Trade Business 6158.43 11782.80 20934.30 33937.38 33571.00

Foreign Remittance 57.51 54.80 364.50 1408.00 1427.40

Income 415.41 576.78 1251.76 2395.45 2863.86

Expenditure 291.27 380.54 851.03 1464.52 1964.83

Operating Profit 124.14 196.24 400.73 930.93 899.03

Fixed Assets 47.59 73.29 107.90 149.57 165.48

Total Assets 3448.94 6036.92 11096.30 20100.25 22767.84

Book Value per share (Taka) 121.68 140.97 168.12 207.69 203.31

Earning per share 26.09 28.30 67.02 84.40 32.45

Dividend 13.50% 13.70% 36.35% 36.84%

16
Loan as % of total Deposits 93.27% 79.66% 80.71% 85.44% 88.87%

Non-Performing Loan as 0.64% 1.16% 0.36% 0.43% 3.86%

percentage of total Loan

Capital Adequacy Ratio 12.47% 9.27% 11.76% 10.69% 9.02%

Number of Branches 7 12 17 21 21

No of Foreign Correspondents 131 156 238 297 297

Number of Employees 164 281 435 554 605

Bank started operation on 26-10-1999

2.9 Product and Services offered by The PBL

Deposit Related Products:
Deposit is often called the lifeblood of commercial banks. As blood is essential and vital
for life is deposit for commercial banks. No commercial bank can be thought of without
deposit. In fact modern commercial banking starts with deposits from the public followed
by lending or financial trade, commerce and industry. The most of the deposit of a bank
come from the various type of bank account that is provided by a bank. Those bank
accounts are described below:

Types of bank account

1. Savings Account
The Premier Bank Ltd. have added a special feature to their Savings Deposit Accounts.
They pay interest (6.5% p.a.) on daily balances on Savings Accounts. Most of the Banks
in Bangladesh pay interest on monthly minimum balance. So, if we are maintaining say
Tk. 10.00 Lac in our Savings Account with our present Banker for 29 days and our
deposit balance drops below Tk. 1000 even for a single day, we are not getting any
interest on that amount. There are also several restrictions on withdrawal from the
Account to qualify for interest.
In Premier Bank, however, we will get interest on any amount that we keep in the
account. There is no restriction for withdrawal from the account and they are paying
interest @ 6.5 % p.a. on daily balance. They hope that we will take full advantage of this
offer and place our deposits with their Bank to earn more.

17
2. Current Account
The current account is probably the most useful bank account. This is a non-interest
bearing deposit account.
5. Short Term Deposit (STD) Account
The Premier Bank Ltd. pay interest @7.00% p.a. for minimum 1 Crore and @6.00% p.a
for bellow 1 Crore on the daily closing balance of Short Term Deposit (STD) Account.
Interest is payable on daily closing balance. Any individuals and corporate bodies can
open STD account.
6. Fixed Deposit
The Premier Bank Ltd. offers very competitive rate of interest on Fixed Deposit (FDR).
Indicative rate for one-year deposits at present is 12.75% p.a. The customer could also
deposit for 1/2/3/6/12/24/36 months term –
The choice depend on the customer
Term Interest Taka 10 Crore & above Taka. 40 Crore &
Interest (%) above Interest (%)
1 month 9.50 9.50 9.50
3 month 11.75 11.75 12.00
6 month 12.00 12.00 12.25
1 year & Above 12.25 12.50 12.50

7. Double Benefit Scheme :

Under this scheme, any deposit becomes almost double after only 6 years!
The accepts deposits in multiple of Tk.10,000.00. Specially designed instrument shall be
issued for the deposit under the scheme in the same manner as issued in case of FDR. The
instrument is not transferable and renewable. In case of premature encashment after 3
months, benefits may be allowed on the deposit amount at ruling savings rate.Loan
facility may be allowed up to 80% of deposit against lien/pledge on such instrument at
bank's prescribed rates and rules. Here the DBS rate is 12.54%..
Term Initial Deposit Payable at Maturity

6 year Tk.1,00,000/- Tk200000/-

6 year Tk 200000/- 400000/-
Deposit Amount: Minimum Tk. 1,00,000/- or its multiple(s).
8. Monthly Income Scheme

18
Customer’s saving is precious. The Premier Bank Ltd. helps their customer’s investment
to generate a regular monthly income for their wish through this scheme. The account
holder shall get benefit of Tk. 1000.00 every month against deposit of Tk. 1,00,000.00 for
5 years and Tk. 980.00 every month for 3 years
term Initial deposite Monthly benefits
3 years 100000 980
5 years 1000000 1000
3 years 50000 450
5years 115000 500
Deposit of Tk. 50,000 ( Minimum) or its multiple is acceptable.
10. Monthly Savings Scheme
A regular savings pay off when the customer really needs it. Save small amount in the
customer account each month and let customer savings grow with time through this
Monthly Savings Scheme.
Term Monthly deposite On Maturity
3-year 500 21600
3-year 1000 43200
5-year 500 41000
5-year 1000 8200

19
 CHAPTER THREE
FOREIGN EXCHANGE ANALYSIS
OF PREMIER BANK

20
3.1 Foreign Exchange
The exchange of one currency for another or the conversion of one currency into another
currency. Foreign exchange also refers to the global market where currencies are traded
virtually around-the-clock. The term foreign exchange is usually abbreviated as "forex"
and occasionally as "FX."
Foreign exchange transactions encompass everything from the conversion of currencies
by a traveler at an airport kiosk to billion-dollar payments made by corporate giants and
governments for goods and services purchased overseas. Increasing globalization has led
to a massive increase in the number of foreign exchange transactions in recent decades.
The global foreign exchange market is by far the largest financial market, with average
daily volumes in the trillions of dollars.

3.2 Business
1. An organization or enterprising entity engaged in commercial, industrial or
professional activities. A business can be a for-profit entity, such as a publicly-traded
corporation, or a non-profit organization engaged in business activities, such as an
agricultural cooperative.
2. Any commercial, industrial or professional activity undertaken by an individual or a
group.
3. A reference to a specific area or type of economic activity.
i. Businesses include everything from a small owner-operated company such as a
family restaurant, to a multinational conglomerate such as General Electric.
ii. To "do business" with another company, a business must engage in some kind of
transaction or exchange of value with that company.
iii. In this sense, the word "business" can be used to refer to a specific industry or
activity, such as the "real estate business" or the "advertising business".

3.3 Foreign Exchange for Business

If your business trades internationally then the Telegraph Business Foreign Exchange
service provided by Moneycorp can help you protect yourself and make the most of
market movements. With over 30 years experience in the foreign exchange market
Moneycorp provides a service unrivalled by bank and brokers.

21
Our aim is to build an ongoing, mutually beneficial relationship with your organisation,
so we will always do our best to keep you and your clients happy. If your clients are
businesses that trade internationally, you can refer them to Moneycorp and earn an
additional revenue stream for your business.

3.4 Foreign Exchange Market

The market in which participants are able to buy, sell, exchange and speculate on
currencies. Foreign exchange markets are made up of banks, commercial companies,
central banks, investment management firms, hedge funds, and retail forex brokers and
investors. The forex market is considered to be the largest financial market in the world.

Because the currency markets are large and liquid, they are believed to be the most
efficient financial markets. It is important to realize that the foreign exchange market is
not a single exchange, but is constructed of a global network of computers that connects
participants from all parts of the world.

3.5 Export
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. Exports are one of the oldest forms of economic transfer, and occur on a large
scale between nations that have fewer restrictions on trade, such as tariffs or subsidies.

Most of the largest companies operating in advanced economies will derive a substantial
portion of their annual revenues from exports to other countries. The ability to export
goods helps an economy to grow by selling more overall goods and services. One of the
Crore functions of diplomacy and foreign policy within governments is to foster
economic trade in ways that benefit both parties involved.

22
3.6 Import
A good or service brought into one country from another. Along with exports, imports
form the backbone of international trade. The higher the value of imports entering a
country, compared to the value of exports, the more negative that country's balance of
trade becomes.

The word "import" is derived from the word "port," since goods are often shipped via
boat to foreign countries. Countries are most likely to import goods that domestic
industries cannot produce as efficiently or cheaply, but may also import raw materials or
commodities that are not available within its borders. For example, many countries have
to import oil because they either cannot produce it domestically or cannot produce
enough of it to meet demand.

3.7 Remittance
The process of sending money to remove an obligation. This is most often done through
an electronic network, wire transfer or mail. The term also refers to the amount of money
being sent to remove the obligation.

When a person sends a check to the government to pay for a tax bill, the check is
remittance to remove the tax obligation. If you were to send money to a friend in Europe
through a wire-transfer service, the sum of the payment is the remittance.

3.8 Foreign currency (FC) account

It is an account in foreign currency that can be opened in any of authorized dealer
branches. Bangladesh nationals residing abroad, foreign nationals residing abroad or in
Bangladesh and also foreign firms registered abroad and operating in Bangladesh or
abroad may open and maintain this account. This account may also be opened in the
names of resident Bangladesh nationals working with the foreign/ international
organizations, operating in Bangladesh provided their salary be paid in the foreign
currency. This bank offered a number of foreign currency accounts such as RFCD and
NFCD. Other account includes Convertible taka Account, which is an account in taka,
and the account holder has the option to convert taka into foreign currency and vice versa.

23
3.9 Corporate Account
The Premier Bank Ltd. is also paying interest @ 6.5% p.a. on daily balance for Corporate
customers. It is a savings account that operates like a virtual current account. There are no
restrictions on withdrawal. Now we can have all the features of current account with the
interest of savings account.

3.10 Foreign Exchange Division

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 Bank
The Importer The Exporter
(Buyer of Goods) (Third
Party) (Seller of Goods)

In the Premier Bank Baridhara Branch there are eight peoples are working continuously
with great effort and teamwork there are quite efficient skill and talented the above jobs
are performed in this department. The Bangladesh Bank and the respected VP of this
section control them. There are more than 70 clients and 25 countries they are dealing
with. They believe in teamwork and extreme hard work.

Foreign Exchange Departmentis an international department of the bank. It deals with

globally and facilitates international trade through its various modes of services. It
bridges between importers and exporters. Bangladesh Bank issues license to scheduled
banks to deal with foreign exchange. These banks are known as Authorized Dealers. If
the branch is authorized dealer in foreign exchange market, it can remit foreign
exchange from local country to foreign country. This department mainly deals with
foreign currency. This is why this department is called foreign exchange department.

24
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.

Foreign trade financing is an integral part of banking business. Documentary Credit

(also called letters of credit or “L/Cs”) is the key player in the foreign exchange
business. According to foreign exchange regulation Act, 1947, as adapted in
Bangladesh, "Foreign exchange means foreign currency and includes all deposits, credit
and balances payable in foreign currency as well as all foreign currency instruments,
such as Drafts, Travelers cheques, Bills of Exchange and promissory notes payable in
any foreign country.

Export L/C:
There are a number of formalities, which an exporter has to fulfill before and after
shipment of goods. These formalities or procedures are enumerated as follows, -

Obtaining Export Registration Certificate (ERC)

No exporter is allowed to export any commodity permissible for export from Bangladesh
unless he is registered with Chief Controller of Imports and Exports (CCI & E) and holds
valid Export Registration Certificate (ERC). After applying to the CCI&E in the
prescribed from along with the necessary papers, concerned offices of the Chief
Controller of Imports and Exports issues ERC. Once registered, exporters are to make
renewal of ERC every year.

Securing the order:

After getting ERC, the exporter may proceed to secure the export order. He can do this by
contracting the buyers directly through correspondence.

25
Obtaining EXP:
After having the registration, the exporter applies to Premier Bank with the trade license,
ERC and the Certificate from the concerned Government Organization gets EXP. If the
bank is satisfied, an EXP is issued to the exporter.

Signing of the contract:

After communicating with buyer the exporter has to get contracted for exporting
exportable items from Bangladesh detailing commodity, quantity, price, shipment,
insurance and mark, inspection, arbitration etc.

Receiving the Letter of Credit:

After getting contract for sale, exporter should ask the buyer for Letter of Credit
clearly stating terms and conditions of export and payment.

After receiving L/C, the following points are to be looked for:

a. The terms of the L/C are in conformity with those of the contract.
b. The L/C is an irrevocable one, preferably confirmed by the advising bank.
c. The L/C allows sufficient time for shipment and a reasonable time for
registration.
d. If the exporter wants the L/C to be transferable, divisible and advisable, he
should ensure those stipulations are specially mentioned in the L/C.

3.11 Procuring the materials

After making the deal and on having the L/C opened in his favor, the next step for the
exporter is to set about the task of procuring or manufacturing the contracted
merchandise.

Endorsement on EXP:
Before the exporters with the customs/postal authorities lodge the export forms, they
should get all the copies endorsed by Premier Bank . Before shipment, exporter submits
exp. form with commercial invoice. Then Premier Bank officer checks it properly, if
satisfied, certifies the exp. without it, exporter he cannot make shipment. The customer
must declare all exports goods on the EXP issued by the authorized dealers

26
Disposal of Export Forms:
 Original: customs authority reports first copy of EXP to Bangladesh Bank
after shipment of the goods.
 Duplicate: Negotiating bank reports the Duplicate to Bangladesh Bank in or
after negotiation date but not later than 14 days from the date of shipment.
 Triplicate: on realization of export proceeds the same bank to the same
authority reports Triplicate.
 Quadruplicate: Finally, the negotiating bank as their office copy retains
Quadruplicate Shipment of goods Exporter makes shipment according to the
terms and condition of L/C.

Presentation of export documents for negotiation:

After shipment, exporter submits the following documents to Premier Bank for
negotiation.
a. Bill of Exchange or Draft;
b. Bill of Lading
c. Invoice
d. Insurance Policy/Certificate
e. Certificate of origin
f. Inspection Certificate
g. Consular Invoice
h. Packing List
i. Quality Control Certificate
j. G.S.P. certificate
k. Photo – Sanitary Certificate.

Examination of Document
Banks deal with documents only, not with commodity. As the negotiating bank is giving
the value before repatriation of the export proceeds it is advisable to scrutinize and
examine each and every document with great care whether any discrepancy(s) is observed
in the documents. The bankers are to ascertain that the documents are strictly as per the
terms of L/C Before negotiation of the export bill. Bank officers assigned for examining
the export documents may use a checklist for their convenience.

27
Negotiation of export documents
Negotiation stands for payment of value to the exporter against the documents stipulated
in the L\C. If documents are in order, Premier Bank purchases (negotiates) the same on
the basis of banker- customer relationship. This is known as Foreign Documentary Bill
Purchase (FDBP).

If the bank is not satisfied with the documents submitted to Premier Bank gives the
exporter reasonable time to remove the discrepancies or sends the documents to L/C
opening bank for collection. This is known as Foreign Documentary Bill for Collection
(FDBC)
A. Procedure for FDBP
1. After purchasing the documents, Premier Bank gives the following entries, -
FDBP A/C ----------------------------------------------------------Dr.
(At Doc. rate)
Postage A/C--------------------------------------------------------Cr.
Handling charge A/C--------------------------------------------Cr.
Negotiation A/C--------------------------------------------------Cr.
Source Tax A/C---------------------------------------------------Cr.
Customer A/C ---------------------------------------------------Cr.
(Before realization of proceeds)
2. Subsequently, Bank will send the documents to the L/C opening Bank for payment
with a forwarding letter detailing the enclosures. Upon realization of proceeds the
Negotiating Bank would pass the following vouchers:
Premier Bank General A/C----------------------------------------------Dr.
(At T.T Doc. rate)
FDBP A/C----------------------------------------------------------Cr.
Income A/C (Profit on exchange gain)---------------------Cr

28
 3.12 Profitability of the foreign exchange department
Import, Export, Remittance for the last four years
Fig in Crore taka
No of
TARGET TARGET LC/
ITEMS 2010 2011 2012 2013 GROWTH Export
2013 ACHIVED
Doc.
Opened
IMPORT 20.69 65.55 168.71 238.78 235 41.53% 101.61% 759
EXPORT 26.11 61.61 132.05 190.16 200 44.01% 95.08% 1757
REMITTANCE 0.22 4.06 11.15 18.24 30 63.59% 60.80%

250

200

150 IMPORT
EXPORT
100 REMITTANCE

50

0
2010Y 2011Y 2012Y 2013Y

Figure: Export, Import, Remittance in 2010, 2011, 2012, 2013

Up to 2010, 2011, 2012 & 2013 total Export, Import & Remittance of Premier Bank of
Baridhara Branch is shown the pie chart.
Target & achieved of Import, Export, Remittance in 2013
Fig in Crore

Target Achieved
Particular Target 2013 Achieved In 2013
(%)

Import 235 238.78 101.61%

Export 200 190.16 95.08%

29
 Remittance 30 18.24 60.80%

300

250
235 238.78
200 200 190.16
150 Import
Export
100
Remittance
50
30 101.61%
18.24
0 95.08%
Target 2013 Achieved In 2013 Target Achieved 60.80%
(%)
Figure: Achieved & Target in 2013

Up to December 2013 total Export, Import & Remittance of Premier Bank of Baridhara
Branch is shown the pie chart.

FDBP, FDBC, LDBC for the year 2013

PARTICULARS EXPORT VALUE (USD) EXPORT VALUE (TAKA)
FDBP 8,791,242.93 596,321,396.79
FDBC 1,595,619.08 107,638,236.91
LDBC 9,506,388.92 647,997,132.99
LDBP 7,824,093.41 547,686,539.00
TOTAL 27,717,344.34 1,899,643,305.69

30
 Figure: FDBP, FDBC, LDBC in 2013

FDBP, FDBC, LDBC for the year 2013 of Premier Bank of Baridhara Branch is shown
the pie chart.

Total Import for the year 2013

PARTICULARS IMPORT VALUE (USD) IMPORT VALUE (TAKA)
CASH 15,598,060.20 1084273768.86
DEFFERD 3,575,433.79 249037877.19
OTHERS 10,077,660.89 706416503.06
BTB LOCAL 3,696,784.39 257250185.65
FOREIGN 637,797.91 48858927.36
EPZ 427,720.88 29736022.34
EDF 286,486.71 19911551.87
TOTAL 34,299,944.77 2,395,484,836.33

Figure: Import in 2013

31
 Growth of Import for the last four years
Figure in Crore

PARTICULARS 2010 2011 2012 2013

IMPORT 20.69 65.55 168.71 238.78

IMPORT
300
250 238.78
200
168.71
150 IMPORT
100
50 65.55
20.69
0
2010 2011 2012 2013

Figure: Growth of Import

Growth of Import for the last four years 2010-2013 of Baridhara Branch is shown the pie
chart.

Growth of Export for the last four years Figure in Crore

PARTICULARS 2010 2011 2012 2013
EXPORT 26.11 61.61 132.05 190.16

200 EXPORT 190.16

150
132.05
100 EXPORT

61.61
50
26.11
0
2010 2011 2012 2013

Figure: Growth of Export

Growth of Export for the last four years Figure in Crore up to 2010-2013 of Baridhara
Branch is shown the pie chart.

32
CHAPTER FOUR
MY DUTIES

33
4.1 Documentary Credit/Letter of Credit (L/Cs)
Documentary Credit is an assurance of payment by the bank. It is an arrangement under
which the bank at the request of the buyer or on its own undertakes to make payment to
the seller provided specified documents are submitted.

Documentary Credit is an arrangement whereby a bank (issuing bank) acting at the

request and on the instruction of a customer (the applicant) or on its own behalf
undertakes to make payment to or to the order of a third party (the beneficiary) or to
accept and pay bills of exchange (draft) drawn by the beneficiary, or authorize another
bank to negotiate against stipulated documents provided the terms and conditions to the
credit are complied. Thus, Documentary Credits are akin to bank guarantees. In popular
language, they are known as Letters of Credit (L/Cs). Bank guarantees are, however,
issued to cover situation of non-performance whereas Documentary Credits are issued on
behalf of the buyer to cover situation of performance, i.e., the issuing bank agrees to
make payment to the beneficiary once he surrenders the requisite complying documents.
However, the term Documentary Credit has of late been extended to cover the situation of
non-performance too. Documentary Credits have gained wider acceptance in international
trade for they try to safeguard the interest of both the buyer and the seller by reducing
their risks. Thus, Documentary Credit offers a unique and universally used method of
achieving a commercially acceptable arrangement by providing for payment to be made
against complying documents that represent the goods and making possible the transfer of
those goods.

34
Sales Contract

The Buyer The Seller

Reimbursing Agreement

The Buyer The Issuing Bank

Documentary Credit Agreement

The Issuing
The Beneficiary
Bank

Fig.: Triangular contractual agreement under the Documentary Credit System

3.2 Proposal for opening of L/C

In case of an L/C of a small amount only the prescribed application form, i.e., the LCA
Form is enough to open an L/C. But when the L/C amount is reasonably high, then the
importer needs to submit an application to the Foreign Exchange Department of
Baridhara Branch for getting a limit of the L/C amount. The salient features of the
application are –
 Full particulars of the bank account
 Nature of business
 Required amount of limit
 Payment terms and conditions
 Goods to be imported
 Offered security
 Repayment schedul

4.3 The L/C application form

L/C Application Form is a sort of an agreement between customer and bank on the basis
of which letter of credit is opened. Baridhara Branch provides a printed form for opening
of L/C to the importer. A special adhesive stamp of value Tk.150 is affixed on the form in
accordance with Stamp Act in force. While opening, the stamp is cancelled. Usually the

35
importer expresses his decision to open the L/C quoting the amount of margin in
percentage. Usually the importer gives the following information –
 Full name and address of the importer
 Full name and address of the beneficiary
 Draft amount
 Availability of the credit by sight payment/acceptance/negotiation/deferred payment
 Time bar within which the documents should be presented
 Sales type (CIF/FOB/C&F)
 Brief specification of commodities, price, quantity, indents no. etc.
 Country of origin
 Bangladesh Bank registration no.
 Import License/LCAF no.
 IRC no.
 Account no.
 Documents no.
 Insurance Cover Note/Policy no., date, amount
 Name and address of Insurance Company
 Whether the partial shipment is allowed or not
 Whether the transshipment is allowed or not
 Last date of shipment
 Last date of negotiation
 Other terms and conditions (if any)
 Whether the confirmation of the credit is requested by the beneficiary or not.
 The L/C application must be completed/filled in properly and signed by the authorized
person of the importer before it is submitted to the issuing bank.

The L/C application needs to be submitted along with the following documents –
(1) Proforma Invoice stating description of the goods including quantity, unit price
etc.
(2) The Insurance Cover Note, issuing company and the insurance numb

36
3.4 The letter of credit authorization form (LCAF)
The Letter of Credit Authorization Form (LCAF) is the form prescribed for the
authorization of opening letter of credit/payment against import and used in lieu of import
license. The authorized dealers are empowered to issue LCA Forms to the importers as
per basis of licensing of the Import Policy Order in force to allow import into Bangladesh.
If foreign exchange is intended to be bought from the Bangladesh Bank against an LCAF,
it has to be registered with Bangladesh Bank’s Registration Unit located in the concerned
area office of the CCI&E. The LCA Forms available with authorized dealers are issued in
set of five (05) copies each. First Copy is exchange control copy, which is used for
opening of LC and effecting remittance. Second Copy is the custom purpose copy, which
is used for clearance of imported goods from custom authority. Triplicate and
Quadruplicate Copy of LCAF are to be sent to concerned area of CCI&E office by
authorized dealer/Registration Unit of Bangladesh Bank. Quintuplicate Copy is kept as
office copy by authorized dealer/Registration Unit. The Letter of Credit Authorization
Form (LCAF) contains the followings –
 Name and address of the importer
 IRC no. and year of renewal
 Amount of L/C applied for (both in figure and in word)
 Description of item(s) to be imported
 ITC Number/HS Code No.
 Signature of the importer with seal

4.5 Back- to-back L/C

In case of a “Back-to-Back” letter of credit, a new L/C (an import L/C) is opened on the
basis of an original L/C (an export L/C). Under the “Back-to-Back” concept, the seller as
the beneficiary of the first L/C offers it as a ‘security’ to the Advising Bank for the
issuance of the second L/C. In case of a back-to-back L/C, no cash security (no margin) is
taken by the bank; bank liens the first L/C. In case of a back-to-back L/C, the drawn bill
is usage/time bill.
In Baridhara Branch papers/documents required for opening of back-to-back L/C are as
follows –
 Master L/C

37
  Valid Import Registration Certificate (IRC) and Export Registration Certificate
(ERC)
 L/C Application and LCAF duly filled in and signed
 Performa Invoice or Indent
 Insurance Cover Note with money receipt

In addition to the above documents, the following papers/documents are also required to
export oriented garment industries while requesting for opening of back-to-back letter of
credit –
 Textile Permission
 Valid Bonded Warehouse License
 Quota Allocation Letter issued by the Export Promotion Bureau (EPB) in favor of
the applicant for quota items

A checklist to open back-to-back L/C is as follows –

 Applicant is registered with CCI&E and has bonded warehouse license
 The master L/C has adequate validity period and has no defective clause
 L/C value shall not exceed the admissible percentage of net FOB value of relative
Master L/C
 Usage Period will be up to 180 days.

Obtain all required papers

Check the credit limit

Prepare offering sheet if regular credit line is not available

Mark lien on the Master L/C

Issue the L/C

Fig: Flow Chart for issuing back-to-back L/C

38
4.6 Payment for back-to-back L/C
In case of back-to-back L/C for 30-60-90-120-180-360 days of maturity period, deferred
payment is made. Payment is given after realizing export proceeds from the L/C Issuing
Bank. For Garments Sector, the duration can be maximum 180 days. For importing
machinery, without permission from Bangladesh Bank, Baridhara Branch can authorize
for 360 days. In such cases, the VP of the branch used to exercise his discretionary power.

4.7 Reporting to Bangladesh Bank

At the end of every month, the reporting to Bangladesh Bank regarding the following
information is mandatory –
 Filling of E-2/P-2 Schedule of S-1 category that covers the entire month’s
amount of import, category of goods, currency, county etc.
 Filling of E-3/P-3 Schedule of for all charges, commission with T/M Form.
 Disposal of IMP Form that includes: (a) original IMP is forwarded to
Bangladesh Bank with invoice and indent, (b) duplicate IMP is kept with the
branch along with the Bill of Entry/Certified Invoice, (c) triplicate IMP is kept
with the branch for office record, (d) quadruplicate is kept for submission to
Bangladesh Bank in case of imports where documents are retired.

39
 CHAPTER FIVE

SWOT ANALYSIS

40
5.1 SWOT Analysis:
The Premier Bank Ltd. is one of the dynamic banks in Bangladesh. Within a short period
of time, the bank has achieved an emerging success and this bank has lot of potentiality to
become a leading bank in the banking sector. For me it is very difficult to explain bank’s
solidity as I am doing my internship for only three months. But From my practical
observation, I have tried to define The Premier Bank ltd by analyzing a SWOT Analysis.

Strength:
 It has well reputation in the market
 Not engaged in unfair business practice.
 Concentrated market.
 Officers are highly educated.
 Executives are highly qualified and experienced.
 Bank has many attractive deposit schemes.
 Efficient management practices in the Bank.
 Well diversified Credit Portfolio.
 Deposit mix is very sound.

Weakness:
 High Cost Deposit is more than low cost deposit.
 Short time experiences of the Bank.
 Officer has limited experience and not enough trained.
 Long-term credit is not sufficient.
 Small market shares in Banking-business.

Opportunities:
 Can increase the credit scheme.
 Can increase the advertising of the Bank.
 Private Banks becomes more reliable to local public.
 Govt. has banned some ‘Jatiya Sanchaya patra’.

41
Threat:
 There are many competitors in the market.
 Competitors have more deposit.
 Govt. imposes tax and VAT on profile.
 Govt. pressures to reduce interest rate.

42
 CHAPTER SIX
FINDINGS, RECOMMENDATIONS
AND CONCLUSION

43
6.1 Final Findings
During my internship period in the Premier Bank, I have worked in Baridhara Branch for
three months. During this period I have found that:
 All the employees of this department are skilled, active, self-motivated and
absolutely friendly to the clients.
 There is no foreign exchange manual in Premier Bank .
 Marketing for foreign exchange business demands special importance and
extensive research as the product is different but there is a lacking of this in the
bank.
 A notable number of L/C’s were opened to import goods from the neighboring
country India through different land ports.
 Most of the importers of the branch are enjoying limit facility from the bank.
 Some of the importers are doing their import business mire than one bank.
 In some cases, storage or warehouse capacity of the customer not being checked or
considered prior to open imports L/C.
 Different marketing and research cell is not available for import section.
 In some cases PSI order not been followed properly.
 Lack of promotional initiatives to expand the foreign exchange business specially
the import L/C service.
 For opening the L/C they are very much liberal to their clients.
 All the employees of foreign exchange department are not satisfied with the salary
given to them.
 Premier Bank cannot attract most of the foreign organizations and MNCs working
in our country. Generally they take the services from other foreign banks.
 The number of employees of the department is not sufficient.
 They always emphasize on customer satisfaction.
 The employees are not satisfied with the logistic support provided by the bank.
 They believe in complete team work.
 The bank is fully online system.
 The branch follows all govt. rules and regulations.

44
6.2 Recommendations
I had the practical exposure in Premier Bank Ltd. for just three months, with my little
experience in the bank in comparison with vast and complex banking system; it is not so
easy to recommend some suggestion to enhance the performance level of the
organization. I had observed some shortcomings regarding operational and other aspects
of their banking. On the basis of my observation I would like to present the following
recommendations.
 L/C should be established against the request of the applicant who has favorable
previous records of accomplishment.
 L/C margin may be increased i.e. opener’s equity to be increased.
 A copy of original L/C may be dispatched to nominate (as per L/C terms) land ports
prior to shipment of goods against the concern L/C.
 A copy of NOC or something like this to release import items from the land ports to
be directly dispatched to concern custom authority with concern L/C and subsequent
amendments (if any).
 Bank should take initiative for the enlistment of C & F agent.
 Stipulation of more than one land port in the L/C should be avoided.
 Instructions of PSI Act 1999 to be followed meticulously.
 Quality performance of import L/C opening should be considered along with
estimating the annual volume of the same major revenue earning commodities.
 The bank can diversify its import portfolio by increasing customers to reduce
dependency from some customers.
 Letter of credit opening procedure and margin requirement may be relaxed for
prime customers, otherwise new and competitive banks will take the clients away by
giving special facilities.
 New customers should be given some advantage to open L/C. If they are treated
well, they may gradually become prime customer for Premier Bank .
 They should setup a strong and effective foreign exchange manual.
 Against mother L/C they should not provide cent percent margin. They should
follow the Bangladesh Bank’s rules and regulations.

45
  In foreign exchange department it is required to communicate with foreign banks
frequently and quickly. To make the process easily modern communication media
for example e-mail, Internet fax should be used.
 Different marketing and research cell should be established to improve the import
services of the bank.
 They always try to keep the motivated skilled employee in the organization.
 Modern technical equipment such as computer is not sufficient in foreign exchange
department. This causes delay in the foreign exchange process and it also makes the
process complicated. Therefore the Foreign Exchange department should be
computerized so that the exchange process would be convenient for both the banker
and the client.
 Data base networking is one of the most recent technologies to transfer from branch
to branch or from branch to head office and vide versa. So they must use this
technology in Foreign Exchange Department.

6.3 Conclusion
From the beginning of greater change in the world economic structure, banking activities
has becoming an important thing. Now a day the idea of banking is also developed and a
huge number of private commercial banks are just on waiting for business. So it is a
matter of think that how to establish an idea with different techniques, In Bangladesh,
Commercial banks are playing vital role in the development of our economy and financial
system. Premier Bank Limited has a strong position in the today’s competitive market.
The Premier Bank, Baridhara Branch, Dhaka also contributing a better proportion of
profit in Premier Bank’s total earning. Total analysis of the bank has the greater
opportunity to do better in the future. Day by day Premier Bank’s area of service i s
increased all over the country through setting up new branches at new places. The
reliability of the customer on Premier Bank‘s increasing day by day for its better services.
But they may introduce online and ATM services with more facilities comparing with
other commercial bank to improve their services and to make efficient and easy customer
services. They also may follow the given recommendations in order to improve day by
day. Premier Bank Limited may contribute a vital role in the socio-economic prospective
and in the development of our economy.

46
 References

Book References:
 Hua, Guangying, (2009), “Internet Banking and Commerce”, Journal of internet
banking, vol. 14, no.1.
 Mermod, Asli Yuksel, (2011), “Internet Banking and Commerce”, Journal of
internet banking, vol. 16, no.1.
 Wang, Chun and Wang, Zheng, (2006), “The Impact of Internet on Service
Quality in the Banking Sector”.
 K, Pandachi, B, Seetanah and A, Appadu, (2007), “A Study on the USE of
Internet Banking Among SMEs in Mauritius”.
 Hernández-Ortega, Blanca, (2007), “Internet Banking and Commerce”, Journal of
internet banking, vol. 12, no.3.

Web Side:
 http://www.premierbankbd.com
 http://www.arraydev.com/commerce/jibc/2007-12/blanca_final.pdf
 http://www.arraydev.com/commerce/jibc/2009-04/online%20banking_ghua.pdf
 http://www.arraydev.com/commerce/jibc/2010-08/1104-Publ_pdfversion.pdf.
 http://epubl.ltu.se/1653-0187/2006/07/ltu-pb-ex-0607-se.pdf

Annual Report:
 Annual Report of Premier Bank Ltd.-2011.
 Annual Report of Premier Bank Ltd.-2012.
 Annual Report of Premier Bank Ltd.-2013.
 Premier Bank Procedure Mannual- General Banking
 A training program book by BIBM

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