EXECUTIVE SUMMARY
Foreign exchange earnings of Bangladesh are
not sufficient due to limited export earnings, while the import spending is
huge which makes the balance of trade position in a chronic deficit situation
of our country. Here foreign inward remittance by our migrant workers is very
important and significant for our country.
Migrant worker’s remittance have long
been seen as relatively less volatile source of foreign exchange earnings while
the earnings from export and other sources such as Foreign Direct Investments
and other sort of foreign private investments fluctuates widely depending on
the exchange rate variation, presence of investment enabling environment, and
the overall economic and political stability. Bangladesh is a major
worker-exporting country, which has renewed its interest in migrant worker’s
remittance, mostly triggered by the continuous deficits in her balance of trade
and balance of payment. So, foreign inward remittances contribute to the
economy of Bangladesh
with strong positive impact on growth, employment, and balance of
payments.
Demand for migrant worker’s
remittance has now increased tremendously in developing countries including Bangladesh
since the world remittances of total USD397 billion in 2008, USD305 billion
went to developing countries and some 190 million people are migrants which
is 3.0% of world population. Besides
migrant worker’s remittance are substantially helping the macroeconomic
development process in the home country.
Bangladesh is earning yearly foreign
remittance of almost USD10 billion from its manpower export. Though 62.66
millions of Bangladeshi nationals have gone abroad for work from the year 1976
to 2008, there is no institutional financing to promote them. As a result they
are to depend on own source, relatives and individual loan with high interest
rate. Sometimes they are to sell their land even residence. To help this group
of people, Pubali Bank Limited, the
first Bangalee owned private commercial bank, emerged in the year 1959, has
introduced a new product namely “Non
Resident Credit Scheme (NRCS)”, a collateral-free loan. Besides the bank is
taking various steps to get foreign remittance through legal (banking) channel
which is helping the wage earners to get rid of illegal activities like money
laundering as well as increasing bank’s foreign remittance and profit.
CHAPTER
1
1.1
INTRODUCTION
Bangladesh is a developing country
with a population of more than 15 cores. Among them some cores are unemployed
and the government cannot create employment within the country for this huge
unemployed population. As such millions of unemployed young people are going
aboard for work. In the last year 2008, this number was 8, 75,055. But since
most of them are poor and there is no institutional financial support for them,
they are to depend on personal loan with high interest @ 25% to 30% monthly
basis. Otherwise they are to sell their land even residence to arrange money to
bear the expenses which is increasing the number of landless poor people that is
increasing by 3.7 percent per annum (BBS, 2004). To save this group of people
from loosing of land and to provide financial support, Pubali Bank Ltd.
introduced “Non Resident Credit Scheme (NRCS)”, a
collateral-free credit, in February, 2008. This report focuses the NRCS importance and flow of migrant
worker’s remittance in Pubali Bank Ltd. An effort has also been made to focus
how this product and flow can be increased and made more effective.
1.2
RATIONALE OF THE STUDY
Bangladesh
has earned USD 9,689.26 million in the fiscal year 2008-2009 from wage earners
that has helped to reach our foreign currency reserve over USD7,470.90 million
as at the end of June, 2009. And their remittance is going to be the main
source of foreign currency earning superceding Readymade Garments (RMG) which
is still leading foreign exchange earnings.
Introduction
of Pubali Bank’s “Non Resident Credit
Scheme (NRCS)” to help these Sonar Manush is expected to be
popular specially in the nonresident dominating areas that will help them from loosing of land and to provide financial support
. Through this product, the borrowers will be benefited by getting loans with
ease and low interest rate and without collateral security. The bank may also
make profit and increase their inward foreign remittance. Besides the bank is
making arrangement with different agencies of different countries specially
with that of our wage earners dominated countries which is helping to increase
foreign remittance inflow of the bank. This report will focus on the NRCS and
foreign remittance of the bank.
1.3
OBJECTIVES OT THE STUDY
1. To be familiarize
with the product prospect “Non Resident
Credit Scheme (NRCS)”.
2. To know the
disbursement of this credit of the bank.
3. To know the bank’s
set up of inward foreign remittance.
1.4
METHODOLOGY
This
research is basically descriptive in nature. Related available information have
been collected for thorough analysis from secondary sources like Pubali Bank’s
annual reports, websites, circulars, manuals, Foreign Exchange Remittance Cell,
Bangladesh Bank’s
website, RAMMRU, Ministry of Labour & Employment, Bureau of Statistics and different publications & compilations.
The research has done on the basis of
secondary data.
Collected
data have been furnished in Microsoft Excel and then analyzed for growth,
trend, and relevant graphs by using Ms- Excel software.
Finally,
Interpretation of results and recommendation and conclusion have been done.
1.5
SCOPE AND LIMITATIONS
1.5.1
Scope
Millions
of workers of our country are going abroad for work without institutional
financial support. Here introduction of Pubali Bank’s “Non
Resident Credit Scheme (NRCS)” to help these workers is expected to be
popular that will help them from loosing of land and
to provide financial support . Through this product, the borrowers will
be benefited by getting loans with ease and low interest rate and without
collateral. The bank may also make profit and increase their inward foreign
remittance. Besides the bank is making arrangement with different agencies of
different countries specially with that of our wage earners dominated countries
which is helping foreign remittance inflow of the bank. So there is huge scope
to study on the topic.
1.5.2 Limitations
Data used
in study have been collected from secondary source. Since bank always wants to
maintain business secrets, it was tough to obtain available data. Besides since
the product has been introduced recently, credit disbursement is negligible and
the bank has no suitable database for the product and foreign remittance. Time
and resource are other constraints for which extensive study can not be carried
out. Despite having all these limitations, I have tried my best to make a clear
view of the facts with the available information.
CHAPTER 2
LITERATURE
REVIEW
Foreign remittance is going to be the
main source of foreign exchange of Bangladesh. In fact it has already
superceded RMG sector, the main source of foreign exchange that earns almost
75% of foreign exchange, if cost of
import of RMG raw materials and other related cost are deducted. But unfortunately there is no institutional
financial support for these wage earners. Recently Pubali Bank Ltd. has
introduced NRCS for these workers. So far I know no study on the product and foreign
remittance of the bank has been made yet. Since I am in the bank since the year
2000 and now serving as Branch Manager at Komorgonj branch, Nawabgonj, Dhaka, a non resident dominated area, I have ample scope
to make a study on this area of the bank.
I have
gone through Pubali Bank’s annual reports of different years of the bank’s
financial position. Bank’s circulars and manuals have been reviewed to know the
product feature of Non Resident Credit Scheme. Besides database of Foreign
Exchange Remittance Cell of the bank has been used to know yearly remittance inflow
and its pattern of the bank. For loan disbursement information, I have
consulted with bank’s Credit Division. Besides
Bangladesh Bank’s
website and publication have been viewed for foreign remittance inflow,
different banks’ position relating to foreign remittance etc. Moreover RAMMRU
publications, website of Ministry of Labour & Employment, Statistical
Pocket Book of Bureau of Statistics, newspapers and different publications & compilations have been
reviewed.
CHAPTER 3
CONCEPTUAL
ANALYSIS AND COMPANY INFORMATION
3.1 DIFFERENT TERMS AND CONCEPTUAL
FRAMEWORK:
3.1.1 TERMS
NRCS (Non Resident Credit Scheme): A
collateral-free loan product offered by the Pubali Bank Limited for the
Bangladeshi nationals who are going to foreign countries for work.
Non Resident: Bangladeshi
nationals who are residing in foreign countries as workers.
Foreign Remittance: In brief sending and receiving small amounts of money from one country
to another. Foreign remittance refers to the transfer of fund from one country
to another either through official channels i.e. banking channel, different
exchange houses or through informal channels.
Agent:
Exchange house in foreign countries who have agreement with Pubali Bank Ltd. to
remit money to the bank on their (bank’s) behalf.
: It is the process of selling
domestic-made goods or services in another country. Export is the main source
of our foreign inward remittance.
RCES OF FOREIGN INWARD REMITTANCE:
Major sources of foreign inward
remittances are as follows:
Migrant Workers’ Inward Remittance
Export Proceeds
Foreign loans, aids, grants, foreign
investments etc.
Channels Of Migrant
Workers Foreign Inward Remittance:
Channels used for sending foreign
inward remittance are:
1. Formal Channel:
Banks
Approved Exchange House
2. Informal Channel:
Hundi
Hawla
Friends/Relatives
3.1.4 MAJOR COUNTRIES OF EMPLOYMENT
OF OUR MIGRANT WORKERS
Most of our migrant workers are going
to the Middle East countries and Malaysia. In
the year 2008, Bangladesh
sent 8,75,055 workers in different countries. But this year it is decreasing. Up
to August 2009, Bangladesh
sent 3,27,359 workers comparing to 6,18,080 workers up to August 2008.
Employer country of our workers | No. of workers sent in 08 | No. of workers sent Up to Aug. 09 |
UAE | 4,19,356 | 1,72,917 |
K.S.A. | 1,32,124 | 10,777 |
Malaysia | 1,31,762 | 12,213 |
Oman | 52,896 | 31,437 |
Training Bureau: The Daily Prothom Alo, September 7, 2009.
Different Years
the country’s principal assets. In these days when unemployment problem is
acute in our country, workers’ migration is playing a vital role in our
economy.
- Firstly,
it reduces unemployment;
- Secondly,
migration results in remittance flow to the country, which serve as an
important but less expensive source of much needed foreign currency.
abroad for work from the year 1976 to 2008. A comparative position of number of
workers left for abroad in different years is presented in the next Table.
Year | Number of workers left for abroad |
2000 | 2.13 |
2001 | 1.85 |
2002 | 2.41 |
2003 | 2.73 |
2004 | 2.52 |
2005 | 2.86 |
2006 | 2.63 |
2007 | 8.32 |
2008 | 8.75 |
2009* | 4.90 |
our workers has been made in foreign countries. But it is decreasing in this
year for different reasons like world recession, bad image of our workers in
abroad, weak diplomatic communications by our foreign embassies, lack of exploration
of new markets etc.
per year from the remittance of migrant
workers. It is a good news for our country that the volume of migrant workers’
remittance has been showing a tremendous growth over last few years. It has now
been a very significant source of foreign currency for our country which is
helping our country in maintaining a healthy foreign exchange reserve,
financing the import payments, removing the dearth of foreign currency,
increasing national income and many more. The volume and growth of migrant
workers’ foreign remittance is presented in the following table:
Year | % change over the previous year | |
1993-94 | 43.55 | — |
1994-95 | 48.14 | 10.54% |
1995-96 | 49.70 | 3.24% |
1996-97 | 63.00 | 26.76% |
1997-98 | 69.35 | 10.08% |
1998-99 | 81.98 | 18.21% |
1999-00 | 98.07 | 19.63% |
2000-01 | 101.70 | 3.70% |
2001-02 | 143.77 | 41.37% |
2002-03 | 177.29 | 23.32% |
2003-04 | 198.70 | 12.08% |
2004-05 | 236.47 | 19.01% |
2005-06 | 322.75 | 36.49% |
2006-07 | 412.99 | 27.96% |
200708 | 538.20 | 30.31% |
2008-09 | 658.86 | 22.42% |
Workers. (Source: Economic Trends, July-
2009, BB)
Inward Remittance of Migrant Workers over years
the comparative position of migrant worker’s remittance over the years, which
represent the steady growth in remittance that has actually resolved our
foreign exchange constraints, helped to increase the supply of savings.
increased substantially in volume to recent years. This rise in inward
remittances is the outcome of Bangladesh Bank, commercial banks as well as
Bangladesh Government’s initiatives to facilitate remittance service both at
home and source countries. These are:
- Expanding
access, bringing the services closer to their work places in host
countries and closer to the recipients in rural Bangladesh;
- Lowering
cost of the remittance services;
- Ensuring
competitive exchange rate and providing convenient saving and investment
options both in foreign and domestic currencies;
- Providing
information about the remittance services and the savings and investment
options with sufficient details to enable migrant workers to choose the
best suited, least cost options.
- Pre-departure
briefing
- Offering
reduced interest rate on loan to the remitters and their families for
sending foreign remittance to different banks. For example, NCC Bank Ltd. offers reduced
interest rate if foreign remittance is sent through the bank.
significant for our country. It may be summerized, in brief, as follows:
healthy foreign exchange reserve;
Balance of Payments;
and political life;
investment;
money exchanges;
financial markets;
productions;
flow of funds;
BANK LIMITED
Banking scenario of the then East Pakistan as
Eastern Mercantile Bank Limited at the initiative of some Bangalee
entrepreneurs in the year 1959 under Bank Companies Act 1913 . After
independence of Bangladesh
in 1972 this Bank was nationalised as per policy of the Government and renamed
as Pubali Bank. Subsequently due to changed circumstances this Bank was
denationalised in the year 1983 as a private bank and renamed as Pubali Bank
Limited. The Government of the People’s Republic of Bangladesh handed over all assets
and liabilities of the then Pubali Bank to the Pubali Bank Limited. Since then
Pubali Bank Limited has been rendering all sorts of Commercial Banking services
as the largest private commercial bank through its branch network all over the
country. Online banking and Islamic banking are in progress in the bank. It
TK. 5,000 (Five thousand) million only and paid up capital of TK. 2,940
(Two thousand nine hundred forty) million only. Reverse Fund & Other
Reserve is 4,606.42 million as on 31, December, 2008.
General Managers and 2 Deputy General Manages in its Head Office. It has also
17 Regional Offices to monitor the branches. It is now operating its activities
all over the countries with 371 branch network which will be 386 by the year
2009 with the existing manpower of 5,321.
comprising of 13 members headed by Chairman. Management team is comprised of 1
Deputy Managing Director, 25 General Managers, 64 Deputy General Managers and
131 Assistant General Managers headed by Managing Director & Chief
Executive Officer.
of Pubali Bank Ltd. for the year ended 31 December 2008
Pubali Bank Limited | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance Sheet as at 31 December, 2008 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Particulars | 2008 | 2007 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Taka | Taka | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cash | 7,842,374,422 | 6,843,519,863 | Cash in Hand (including foreign currency) | 2,029,132,949 | 2,087,901,273 | 5,813,241,473 | 4,755,618,590 | Balance with Other Banks & Financial Institutions: | 2,000,450,636 | 1,101,569,774 | In Bangladesh | 1,833,882,772 | 779,517,461 | Outside Bangladesh | 166,567,864 | 322,052,313 | Money at call and short notice | 1,099,886,667 | 20,000,000 | Investments: | 8,375,594,255 | 5,556,578,405 | Government | 7,805,362,751 | 5,426,589,401 | Others | 570,231,504 | 129,989,004 | Loans and Advances: | 61,788,152,585 | 50,549,167,102 | Loans, cash credits, Overdrafts etc. | 61,289,826,056 | 50,086,557,423 | Bills Purchased and Discounted | 498,326,529 | 462,609,679 | Fixed Assets including premises, furniture & fixtures: | 1,383,362,664 | 1,367,228,968 | Other Assets | 7,394,501,326 | 6,122,225,922 | Non-Banking Assets | 375,246 | 375,246 | Total Assets | 89,884,697,801 | 71,560,665,280 | Liabilities and Capital: | Liabilities: | Borrowing from other banks, financial institutions and agents | 393,065,945 | 1,187,764,568 | Deposits and Other Accounts: | 73,016,508,560 | 57,996,817,802 | Current and Contingency Accounts | 11,575,101,378 | 10,619,221,463 | Bills Payable | 1,948,443,847 | 1,909,137,199 | Savings bank deposits | 26,030,281,124 | 24,291,225,666 | Term deposits | 30,889,775,302 | 18,956,529,157 | Other deposits | 2,572,906,909 | 2,220,704,317 | Other liabilities | 8,928,304,917 | 6,443,993,397 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Liabilities: | 82,337,879,422 | 65,628,575,767 | Capital/ Shareholders’ Equity | Paid-up Capital | 2,940,000,000 | 2,100,000,000 | Statutory Reserve | 2,418,827,866 | 1,790,655,415 | Retained surplus (general reserve) | 893,129,032 | 5,752,014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Proposed issue of bonus share | – | 840,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other reserves | 1,294,861,481 | 1,195,682,084 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| – | – | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total shareholders’ equity | 7,546,818,379 | 5,932,089,513 | 89,884,697,801
| 71,560,665,280 | Off Balance Sheet Items: | Contingent liabilities | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Acceptance for endorsements | Letters of guarantee | 2,763,709,791 | 3,421,579,950 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Irrevocable letters of credit | 12,616,319,942 | 11,408,136,788 | Bills for Collection | 605,147,834 | 266,327,336 | Other contingent liabilities | 1,871,501,084 | 757,169,296 | Total contingent liabilities | 17,856,678,651 | 15,853,213,370 | 31 December 2008
3.2.2.3 Key Financials
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
- Savings
Bank account - Current
account - Short
Term Deposit account - Pubali
Sanchay Prokolpo (Monthly deposit scheme) - Cash
Credit account - Over
Draft account - Term
Loan - Car
Loan - Doctors
Loan - Apartment
Loan - Consumer
Loan for Household Durables - Non
Resident Credit Scheme - Bank
Guarantee - Letter
of Credit (LC) - Bill
purchase/Discount - Export
Credit (Pre Shipment & Post Shipment) - Remittance
(Inward, Outward) - Collection,
Purchase and Sale
of Foreign Currency and Travelers Cheques. - Maintenance
of Student education file. - Guarantees
in Foreign Currency. - Foreign
Currency accounts. - NFCD
(Non-Resident Foreign Currency Deposit) A/C. - RFCD
(Resident Foreign Currency Deposit) A/C - Forward
Contracts - Correspondent
Banking Relations. - Taka
Drawing Arrangement - Dealing
Room - S.W.I.F.T.
(Society for Worldwide Interbank Financial
Telecommunication) - Safe
Deposit (Locker Service) - ATM
Service - Online
banking
- Savings
CHAPTER
4
NON
RESIDENT CREDIT SCHEME AND FOREIGN REMITTANCE OF PUBALI BANK LTD.
4.1.1 Product Feature
Pubali
Bank Ltd. started NRCS from March 01, 2008 for
Bangladeshi citizens who have work-permit of foreign countries and visa. The
features of the product are:
1. | Product | Non |
2. | Credit | TK |
3. | Period | 24 |
4. | Eligibility | Bangladeshi |
5. | Educational | Minimum |
6. | Collateral | No |
7. | Documents | a) |
8. | Rate | 13% |
9. | Security | a) b) c) d) e) |
10. | Grace | 2 |
11. | Mode | To |
4.1.2 Loan Procedure
Branch
will receive application from the borrower and particulars of guarantors on the
bank’s prescribed form. Upon verification of Appointment letter, Work-permit,
Passport, Visa, Release letter from the Ministry of Labour and Employment of
Bangladesh and all other documents supplied by the borrower, branch will send
the loan proposal to the Human Resources Division, Head Office through their
respective Regional Office. Upon sanction of loan by the Human Resources Division, branch will
disburse the loan to the borrower having 23 undated cheques, tri-party
agreement, life policy, FDR etc, if any.
4.1.3 Legal Procedure
Bank
can initiate legal action to recover loan if the borrower fails to repay 3
consecutive installments.
4.1.4 Loan Disbursement Under NRCS
The
bank has already disbursed TK1.10 core through its 24 branches 64
beneficiaries. Recovery rate is 100% and present outstanding is TK 0.6268 core
against its outstanding advances of TK6,178 crores
So
it is clear that the product has almost
no impact on the bank.
4.1.5 Reasons of Poor Performance
of NRCS
Since
opportunity of service in the foreign countries is generating a huge employment
for our country and this sector is going to be the main source of our foreign
exchange earnings, government and banks need special attention to the non
resident workers. Though Pubal Bank Ltd. has introduced NRCS, it has some
drawbacks. These are:
1.Criteria
of getting loan is rigid and in some cases irrational. Such as educational qualification
to be minimum SSC. But in fact most of them who are going abroad for work are
not SSC. Passed. Moreover it is not necessary for such unskilled workers.
2.
Bank makes finance after getting visa of the proposed borrower. But in reality
specially in case of middle east counties where most of our workers are going,
visa is delivered after getting full payment by the manpower agencies.
3.
Bank asks for appointment letter and work permit of foreign countries. But in
most cases these are not given to the workers specially in case of middle east
countries and Malaysia.
Rather work permit (Akama) is given after reaching in the country.
4.
Bank ask for personal guarantee from 2 acceptable relatives of the borrower.
But relatives of poor borrower may not be acceptable to the bank.
5.
Bank processes the loan application after getting all the documents. But when a
worker gets these documents, he/she has not enough time left to avail this
loan.
6.
If the borrower fails to go abroad within 15 days from the date of disbursement
of the loan, he/she has to repay the full loan amount and bank can initiate
legal action which worsen the borrower’s condition who lost their amount to the
tout agents.
7.
Maximum credit amount of TK2,50,000 is not sufficient specially for KSA. and
European countries and other developed countries.
8.
Bank officials are not interested to disburse this loan.
For
these problems the product is not working well which is reflected in its
negligible disbursement of TK1.10 million only in more than 1 year time against
its disbursement outstanding of TK61,784 million as on 31 December, 2008. And NRCS has almost
no impact in foreign remittance of the bank. Though the bank’s inward foreign
remittance is increasing day by day, it is for arrangement of new agencies in
different countries, specially for Western Union Money transfer, and prompt and
dedicated remittance service of the bank. In recognition of this service, Mr.
Abu Fuad, officer, of the bank’s
Komorgonj branch, Nawabgonj, Dhaka has been awarded “Sonar Manush Seba Padak, 2008” by RAMMRU (Refugee and Migratory
Movement Research Unit), a research project of Dhaka University.
4.2 Foreign Remittance of Pubali
Bank Ltd.
4.2.1 Agencies and Network
Pubali
Bank Ltd. is playing a vital role in receiving foreign remittance by banking
channel. Bangladesh is now earning almost USD 10 billion from wage earners that
has helped to reach our foreign currency reserve over USD08 billion. Though
Readymade Garments (RMG) is still leading our exports, if cost of import of raw
materials for RMG and others is deducted, foreign remittance of these wage
earners will lead our foreign exchange earnings.
Pubali
Bank Ltd. is playing a vital role in receiving foreign remittance by banking
channel. The bank is using its wide network to receive foreign remittance.
Agent network is different countries are:
Country | Agents |
United Arab Emirates | 1. Wall 2. Habib 3. Al-Ahalia 4. Lari 5. National 6. Al 7. Al 8. Emirates 9. UAE 10. Al-Ansari 11. Reda Al-Ansari Exchange UST. 12. Federal 13. Al-Falah |
Kuwait | 14. Al-Mulla 15. Oman 16. City 17. Bahrain 18. Al-Muzaini 19. Security 20. UAE 21. Dollarco |
Qatar | 22. Al 23. Oman 24. National 25. Eastern 26. Habib-Qatar 27. Trust |
KSA | 28. Al 29. Bank 30. Al-Amudi |
Oman | 31. Hamdan 32. Musandam 33. Oman 34. Modern 35. Laxmidas 36. Mustafa 37. Oman 38. Purusshuttam |
Bahrain | 39. Bahrain-India 40. Zenj 41. Nunu |
USA. | 42. Wall |
UK. | 43. Bangladesh |
Italy | 44. Dhaka |
Singapore | 45. Balaka |
All Over the World | 46. Western Union Money Transfer |
Besides
the bank is receiving foreign remittance from all over the world by SWIFT.
4.2.2 Foreign Remittance of Pubali
Bank Ltd.
Pubali
Bank Ltd. is one of the leading banks in receiving foreign remittance. The bank
received almost TK 2800 crores per year from migrant foreign remittance.
Pubali
Bank foreign remittance receipt from migrant workers in different years:
Year | TK in crore |
2006 | 2110 |
2007 | 2406 |
2008 | 2800 |
August | 2115 |
Pubali
Bank Ltd. is now one of the 5 leading banks in Bangladesh in receiving migrant
workers foreign remittance. The other banks are Sonali Bank Ltd., Agrani Bank
Ltd., Janata Bank Ltd. and Islami Bank Bangladesh Ltd.
Pubali
Bank Ltd. is releasing payment of
remittance to the beneficiaries within 48 to 72 hours. At present most of the
remittance of middle east countries are made through TT. that are centrally
processed by the bank’s Foreign Exchange Remittance Cell at its Head Office.
Besides fastest payment is done by Western
Union Money Transfer that has been introduced in the bank in the year 2009.
CHAPTER 5
CONCLUSION
AND RECOMMENDATIONS
5.1Recommendation
The
report is completely done on foreign remittance with special emphasis on Non
Resident Credit Scheme of Pubali Bank Ltd.
Though NRCS is an excellent product,
it is not working well. For proper functioning of the product and increasing
inward foreign remittance of the bank, the following recommendations may be
considered by the bank management:
1. To relax the bindings of
educational qualification. Rather bank may provide additional amount for the
borrowers who have technical/vocational education.
2. Bank may provide loan to the
workers by arranging proper technical training for them through a reputed
agency that will ensure their attractive income which will increase the bank’s
inward remittance as well as remittance of the country.
3. Loan limit may be increased up to
4,00,000 at least.
4. Interest rate may be reduced to
10%.
5. Insurance of the credit may be
introduced by the bank’s cost that may reduce the bank’s credit risk as well as
save the borrowers in case of unwillful default.
6. Bank officials may be motivated to
disburse this loan that will generate income, increase foreign remittance and
after all help this poor workers from burden of high interest rate and being
ousted from their residence land.
Besides bank may initiate the
following steps to increase foreign remittance:
7. To make agreement with more
agencies specially in the new markets where the bank has no agent. These
countries may be Iraq,
Libia, Sudan, South Africa, Mali, Malaysia, East Europe, Latin America etc.
8. Proper marketing of the product
and foreign remittance channel may be done.
9. Special exchange rate of remitting
foreign currency by the wage earners may be allowed which is in most cases less
than that of new generation banks that may increase the bank’s remittance
inflow.
10. Incentive may be allowed to the
agencies for achieving target of remitting foreign currency to the bank.
5.2 Conclusion
Finally, we can conclude by stating
that foreign inward remittance is indispensable and very important for the
development of our economy. Because it helps in increasing national income,
reducing unemployment, developing and maintaining a healthy foreign exchange
reserve, facilitates investment, finance import payments and important projects
of the country and many more. So we should take all sort of initiatives, so far
possible for us, to augment the flow of foreign inward remittance. The
government of the country will have to play proactive role in this regard. The
embassies of our country working in different parts of the world must also play
their role effectively to explore markets for our workers as well as solving
various problems of the people of our country working over there.
The Government as well as different
regulatory bodies like Bangladesh bank and other banks will have to provide
maximum effort so that the possible foreign inward remittances get into the
country through proper channels. They should also offer different loan and
other products for helping these migrant workers. A system should also be
developed for proper management of the foreign inward remittances that we are
earning with our all efforts.
Appendices
1. Kothari C. R., Research Methodology, Methods and
Techniques, New Age International Publishers, New Delhi
2.Annual Report, Pubali Bank Limited, 2007,2008.
3. Economic Trends, Bangladesh Bank, July-2009.
4. Annual Report, Bangladesh Bank, 2007-2008
5. Bangladesh
Statistical Pocket Book
6. RAMMRU publications
7. The daily Prothom Alo, September 07, 2009