Export Import Bank of Bangladesh Ltd
Executive Summary
Commercial banks are one of the key contributors in the economy of developing countries. They act as financial intermediaries by performing the function of mobilizing the funds from one party and lending the same to another while making a reasonable amount of profit after meeting the cost of fund. People and the government itself are very much dependent on the services provided by the 55 banks in the financial market. Banking system of Bangladesh has gone through three phases of development. They are nationalization, privatization and lastly reform the financial sector. Export Import of Bangladesh Limited has started its journey as a private commercial bank on August 3, 1999.
The whole working process of Principal Branch, EXIM BANK Ltd is divided into 3 sections. They are 1) General Banking, 2) Credit and 3) Foreign Exchange. To know how well a bank is performing actually, a case study on Nawabpur Branch of EXIM BANK Ltd. is being taken. This report has been presented based on observation from each section, which is consisted of various departments. Foremost, I have tried to make acquainted with the bank and branch in this report. The banking practice of conventional banking and Islamic banking is highly different from the concept.
The Islamic concept thinks, interest is harmful for the economy and banking should be done on the Shariah basis. From the very beginning of this bank it was not operated under this concept of Islamic Shariah system, which was converted into Islamic banking later. The Islamic banking collects deposit from different viewpoint, so the whole banking practice with the clients differ highly from conventional banking. The Islamic bank gives the depositors the amount of profit they earn from their operation, not the interest. So the credit contracts are ultimately differ from the conventional banking. The Islamic banking used the credit in different name that is “investment”. Here the bank goes with the client a type of business relationship where the bank made arrangement to conduct business for the client, the bank is the owner of the money and property where the client just provide the labor and share the profit with the bank.
General banking is the starting point of all the banking operations. This department provides day to day services the customers. It opens new accounts, remit funds, issue bank drafts and pay orders etc. provide customer through quick and sincere service is the goal of the general banking department.
Foreign Exchange department plays significant roles through providing different services for the customers. Letter of Credit is the key part of foreign exchange business. With the globalization of economies, international trade has become quite competitive. Timely payment for exports and quicker delivery of goods is, therefore, a pre-requisite for successful international trade operations. To ensure this purpose EXIM Bank Limited transmits L/C through SWIFT (Society for Worldwide Inter bank Financial Telecommunication) to the advising bank.
EXIM Bank Ltd is providing different sorts L/C services like L/C opening, lodgment, BLC (Bill under letter of credit), back to back L/C etc. Foreign Exchange department also provide foreign remittance lie traveler’s cheque, foreign demand draft, endorsement of US $ in passport etc.
This repot in its beginning introduced the EXIM Bank Ltd. which shows its historical background, the mission, values, performance and the other aspect like the capital constituents of the bank. Next the report shows highlights on the overall banking activities. These are general banking, foreign exchange and investment. From the investment and general banking we got to understand the Islamic banking concepts and the way the Islam thinks the interest and what a bank should be.
Different products/ services offered by EXIM Bank are shown in brief. Also different types of loans and advances are discussed in brief.
Performance of the Nawabpur Branch of EXIM Bank is shown, with SWOT analysis showing its strengths, weakness, opportunity and threats. Also different problems areas of EXIM Bank are discussed at the end.
Chapter1
Introduction
1.1)Background of the report
This report is prepared for fulfilling a partial requirement of both the BBA and the Internship Programs. The EXIM Bank Limited is the host organization for the 3-months Internship Program, which began on February10, 2010 and ended on May09, 2010. To prepare the report as an apprentice I have taken necessary assistance from EXIM Bank Limited during my internship Nazneen Fatema Madam is the internship Adviser who authorized the topic of this report. And I am working most of my internship period with the foreign exchange division and investment division.
1.2) Objective of the report
The objectives of this report are to find out the followings:
1. To find out the functions of International Operational Associates Bank of the world with EXIM Bank of Bangladesh Ltd.
2. To evaluate the role of Export and Import Department to facilitate the international trade.
3. To find out the operational procedures of L/C in international trade.
4. To find out different types of Export-import procedures of EXIM Bank of Bangladesh limited.
1.3) Significant of the study
Importance of the topic to choose:
The world is now become globalize so we have to sustain in the competitive world. We must take the competitive advantage. We should more involvement in international economy. It is important to me because I feel very much interest about international business. I think we are in the same world so all of us should enjoy each and every resource in the world. And it has another importance to me that is implementation my educational knowledge and theoretical knowledge to the practical. Find out the advantage, disadvantage and diplomacy we should compliance in international trade.
Importance to the study:
The important of my study to the employees is great deal because an employee should have knowledge about the international trade why international trade is important not only that how international trade work trade balance. Crystal clear knowledge about the importance of international trade motivates the employees to work in foreign exchange division in bank.
Importance to the employers:
The importance of employees implies the importance of employers. Because if the employees can be more sincere in their duties the company will able to attract more clients into their bank and ultimately the profit the bank will increase significantly.
Management practitioners:
The management will also be benefited from my study because it will also helps the management to understand their weakness and strength dealings in international trade in import financing and export financing. They will find out the new area of investing in international trade. They will obviously find our new strategies to smooth the foreign exchange and ultimately fulfill their social and economical objectives and goals of the organizations.
Stoke holders and society at large:
It is found when at the project in the EXIM Bank the people are involved in international trade but do not know some trams and conditions and paper to be ready for imports and export the merchandise. So, will also have importance to the stack holder to know the rule and regulation they must need to obey the rules and regulations of the Trade and commerce Ministry of Bangladesh.
To smooth the progress of international is now become more important duty in the age of globalization. So, international trade is become more important than before. One country cannot be efficient of producing each and every goods as well as every country have not al kind of natural resources that the country needs. Facilitating the international trade the banks play an important role. The proper financing in international trade can play an important rule to regulate on to the exported and imported products.
1.4) Methodology
Source of information
The data are collected from two sources:
Primary Source:
· Personal experience gained by observing the different tasks of bank.
· Personal investigation with bankers
Secondary Source:
· “PROSPECTUS” published by EXIM Bank 2006.
· Publications of News paper
· Publications
· Internet
· Annual Report
1.5) Budgeted for the Study
Financial Budget for conducting my Study for the project:
The Sources of money conducting for my study:
The EXIM Bank does not provide any financial motivation to the internship students but they provide quality work place for the students.
So I had to spend everything from my guardian money for conducting my studies during my internship period.
1.6) Limitation of the study
The study has a numbers of boundaries, describe followings:
The first limitation of this study is the time constrain, the duration for the time was very small.
Experiences gathered from one branch of the Bank so it’s difficult to find out every transaction of a Bank.
Another draw back of the study is confidentiality to disclose their data, information because the market is more competitive.
The officers of a Bank are too much busy to provide information and interviews to my project.
Chapter2
Orientation of EXIM Bank LTD
2.1) Introduction
Early banking system served mainly as depositors for funds, while the more modern system has considered the supplying or credits their main purpose. A Bank not only accepts money or deposits, but it also lends money and creates its own people. Sawyers states, We can define a bank as an institution whose debts (bank deposits) are widely accepted in settlement of other peoples debts to each other Banks are financial institutions or financial intermediary that collect fund from people as deposit and lend this fund as loans and advances to the borrowers in different sectors of the economy against interest for a certain period. Banks play a very important role in both national and international trade. Banks provide some other non-traditional services like-factoring, issuing bank guarantees etc. Moreover, Bank is financing to the international trade because on country can survive without international trade. The financings are very much supportive to the global economy.
In Bangladesh, there are Government Banks, Private Banks and Foreign Banks. The EXIM Bank of Bangladesh Limited is one of the leading private sector commercial bank in Bangladesh.
Name of the Organization & locations
Export Import Bank of Bangladesh Limited
Head Office Corporate Branch:
“Symphony”, Plot # SE (F)-9, Road # 142
Gulshan Avenue, Gulshan Dhaka – 1212,
Bangladesh.
Tel : 956104, Fax: 880-2-9556988
E-mail : eximho@bdonline.com
Website : www.eximbankbd.com
SWIFT : EXBKBDDH
Branch Office where I am deployed for my Project:
Nawabpur Branch
198/1 Nawabpur Road,
Dhaka-1100, Bangladesh.
2.2) Management Philosophy, Mission, Vision, Goal of the Company
The Vision is….
· To be the finest bank in the banking arena of Bangladesh under the Shariah guidelines.
And the Missions of EXIM Bank Limited are stated in the following bullets:
· To maintain Corporate and business ethics.
· To become a trusted repository of customers’ money and Financial advisor.
· To make our stock superior and rewarding to the customers and Share holders.
· To display team spirit and professionalism.
· To have a Sound Capital Base.
· To provide high quality financial services in export and Import trade.
· To provide excellent quality Customer service.
2.3) Leadership pattern of the organization:
Leadership: Leadership is the process of influencing and supporting others to work enthusiastically toward achieving objectives. It is the critical factor that helps an individual or a group identifies its goals and them motivate and assist in achieving the stated goals. Leadership is the important part of the management.
There are three types of leadership
- Autocratic leadership
- Consultative leadership and
- Participative leadership
The EXIM Bank believes in participative leadership. The Bank always gets suggestion from the officers and management.
2.4) Historical Background of the Organization
EXIM Bank Limited was established in 1999 under the leadership of Late Mr. Shahjahan Kabir, founder chairman who had a long dream of floating a commercial bank which would contribute to the socio-economic development of our country. He had a long experience as a good banker.
A group of highly qualified and successful entrepreneurs joined their hands with the founder chairman to materialize his dream. In deed, all of them proved themselves in their respective business as most successful start with their endeavor, intelligence, hard working and talent entrepreneurship. Among them, Mr. Nazrul Islam Mazumder became the honorable chairman after the demise of the honorable founder chairman.
This bank starts functioning from 3rd August, 1999 with Mr. Alamgir Kabir, FCA as the advisor and Mr. Mohammad Lakiotullah as the Managing Director. Both of them have long experience in the financial sector of our country.
By their pragmatic decision and management directives in the operational activities, this bank has earned a secured and distinctive position in the banking industry in terms of performance, growth, and excellent management. The authorized capital and paid up capital of the bank are Tk. 1000.00 million and Tk. 313.87 million respectively.
The bank has migrated all of its conventional banking operation into Shariah based Islamic banking since July 2004.
2.5) Name and the Characteristics of the Founders
The following are top management and the founder and sponsor director of the company
- Late Shahjahan Kabir
- Md. Nazrul Islam Mazumder
- Alamgir Kabir, FCA (Founder Chairman & Former Advisor)
- Mohammed Lakiotullah (Chairman & Managing Director)
2.6) Structure of the Organization
Organ gram of EXIM bank
Figure: Organ gram of EXIM Bank Limited
2.7) Corporate Culture of EXIM Bank Bangladesh Ltd.
This bank is one of the most disciplined Banks with a distinctive corporate culture. Here we believe in shared meaning, shared understanding and shared sense making. Our people can see and understand events, activities, objects and situation in a distinctive way. They mould their manners and etiquette, character individually to suit the purpose of the Bank and the needs of the customers who are of paramount importance to us. The people in the Bank see themselves as a tight knit team/family that believes in working together for growth. The corporate culture we belong has not been imposed; it has rather been achieved through our Corporate conduct.
2.8) Organizational Culture of EXIM Bank Bangladesh Ltd.
Organizational culture means the common perception held by the organization’s members; a system of shared meaning that distinguishes from one organization to other organizations. This bank is one of the most disciplined Banks with a distinctive prorate culture. Here we believe in shared meaning, shared understanding and shared sense making. Our people can see and understand events, activities, objects and situation in a distinctive way. Hey mould their manners and etiquette, character individually to suite purpose of the Bank and the needs of the customers who are of remount importance to us. The people in the Bank see themselves as a; ht knit team/family that believes in working together for growth. The prorate culture we belong has not been imposed; it has rather been levied through our corporate conduct.
2.9) Quality of Work-life (QWL)
The EXIM Bank of Bangladesh Ltd has a great working condition, working environment. The organization has well decorated branches Office. The office has world class facilities. The branches are well equipped. And the organization’s works are divided into different segments. So officers are well knowledge about their jobs. So Officers never feel confuse about their works. And they can work more sincerely and with great responsible way. The strategy provides more effective and efficiency for the organization.
· Project Finance
· Syndicate Loans
· Retail Loans
· Mortgage Loans
· Loan against Share and Securities
Foreign Exchange:
· Non Resident Foreign Currency Deposit Account (NFCD)
· Foreign Currency Deposit Account
2.10) Achievements of EXIM Bank
In order to ensure delivery of smooth and most reliable remittance services to NRBs living and working in UK, Export Import Bank of Bangladesh Limited (Exim Bank) has started operation of its wholly owned subsidiary “EXIM Exchange Company (UK) Ltd”. on 30th June 2009 in London, United Kingdom, one of the oldest destinations for the expatriate Bangladeshis. It is the first exchange house owned by a Bangladeshi private bank.
Bangladesh Bank Governor Dr. Atiur Rahman inaugurated the exchange house as the Chief Guest, while H.E. Dr. M. Sayeedur Rahman Khan, Honorable High Commissioner, Government of the People’s Republic of Bangladesh, was present in the program as special guest. Chairman of EXIM Bank and Director of EXIM Exchange Company (UK) Ltd. Mr. Md Nazrul Islam Mazumder presided over the program.
Deputy High Commissioner Mr. Allamah Siddique, Director of EXIM Bank Mr. Muhammed Nurul Fazal Bulbul, Mrs Nasrin Islam, Mr. Abdullah-Al-Zahir Swapan, Mr. Md. Shahidullah, Managing Director of EXIM Bank Mr. Kazi Masihur Rahman and local elites were also present in the opening ceremony.
With the opening of EXIM Exchange the Bangladeshi expatriates will now be able to send remittances to their family members back home within shortest possible time through online transfer to all the branches of EXIM Bank. EXIM Exchange Company (UK) Ltd is located at the Universal House of Wentworth Street London which is a very convenient location for the Bangladeshi community and business houses. Unlike any other exchange company operating in UK, as EXIM Exchange is completely owned and supervised by EXIM Bank under the approval of Bangladesh Bank and UK regulators, it is expected to be the most reliable and trusted Exchange House for the NRBs.
2.11) Implementation of the world renowned Core Banking Software (TEMENOS T24):
In order to provide IT enabled products and services to our valued customers, bank has implemented a world renowned shariah based centralized core banking software named TEMENOS T24. This software is capable enough to provide all sorts of electronic banking services to the valued customers through various electronic delivery channels.
2.11) VISA ISLAMIC CARD
By the grace of Almighty Allah, Exim Bank Ltd has started commercial operation of fully Shariah based VISA Islamic Card (Local, International & Dual Currency) under the principle of Bai-Murabaha. This is the first Islamic electronic product for any Islamic bank in Bangladesh.
The Salient Features of the card are-
· First Shariah Based Islamic Card by any Islami Bank in Bangladesh.
· Lowest Profit Rate in the Card Market
· Simple Profit Rate
· No Hidden Charge
· Dual Currency Facility in One Card
· Free Supplementary Card
· 24 Hours Customer Service
2.12) Growth of Bank
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Chapter3
Activities of EXIM Bank
3.1) The Activities of EXIM Bank are divided into the following Departments:
3.3.1) General Banking department
- Accepting different types of Deposits
- Account Opening
- Cheque Book issue
- Transfer of an Account
- Closing of Account
3.3.2) Remittance department:
- Issuing and Payment of Demand Draft
- All related Correspondence with other Branches and Banks
- Compliance of Audit and Inspection
- Balance of local Demand Pay Order and
- Maintenance of record and proof sheet.
- Payment of incoming TT
- Issuing Encashment of pay Order and
- Maintenance of record and proof Sheet.
- Issuance local Drafts
- Issuing Outgoing TT, Issuance of ICA, IBCA and IBDA
3.3.3) Clearing Department:
Clearing House Operation:
The followings are the main functions performed by the department:
- Pass outward instruments to the Clearing-House.
- Pass inward instruments to the respective departments.
- Return issue to the clearing-house incase of any dishonor.
- Prepare IBCA and IBDA for the respective branch and OH.
3.3.4) Advance or loan department:
The advanced depart perform one of the most important task for it generate the income for the company. So the company must sell its product very carefully, so that it can provide more income and the Bankers get to be more about bad loss of the loans and advances. So the organization has lending authority.
They evaluate and assessment credit risk of loan. They approve loan and advance under dual signs one must be by the lending authority
3.3.5) Foreign Exchange Department
They have done the transactions with the foreign affairs. They proposal to buy currency for them to Head Office. They open L/C. They do lodgment and other foreign dealing.
3.2) Export and Import Trade Handling and Financing
As a commercial bank, we do all traditional Banking including the wide range of saving and credit scheme products, retail banking and ancillary services with the support of modern technology and professional Excellency. But our main focus on export and import trade handling and the development of entrepreneurship and patronization of private sectors.
3.3) Motivational Factors:
3.3.1) Financial Incentives
1. Bonus (each 10 corer profits)
2. Annual Performance based incentives
3. Employee super compensation fund
3.3.2) Non-Financial motivational factors
1. Festival Gift to the Employees
2) Call together Ceremony
3) Annual Picnic
4) Merit based Scholarships
Chapter4
Investment & Foreign Exchange Business
4) Investment parts
4.1.) Product and Services:
Product and Services:
Super Saving Hajj Deposit Multiplus Savings
Scheme
Monthly Saving Monthly Income
Scheme Scheme
4.2) Investment and Finance:
- Corporate Finance
- Industrial Finance
- Project Finance
- Syndicate Investment
- Mode of Investment
- Murabaha
- Bai Muazzal
- Izara Bil Baia
- Wazirat Bil Wakala
- Quard
- Local Documentary Bill Purchased
- Foreign Documentary Bill Purchased
4.3) Deposit:
Al-Wadia Current Deposit
- One Month
- Three Months
- Six Months
- Twelve Months
- Twenty Four Months
- Thirty Six Months
Foreign Currency Deposit
Mudaraba Savings Scheme
- Monthly Savings Scheme (Money Grower)
- Monthly Income Scheme (Steady Money)
- More than Double the deposit in 6 years (Super Savings)
- More than triple the Deposit in 10 years (Multiplus Savings)
- Mudaraba Hajj Deposit
We emphasize on non-fund business and fee based income. Bid bond/ Bid security can be issued at customer’s request.
Our Bank is posed to extend L/C facilities to its importers / exporters through establishment of correspondent relations and Nostro Accounts with leading banks all over the world.
Moreover, Consumers can deposit their Telephone bill of Grameen Phone in all the branches except Motijheel and the consumers of Palli Biddut somity of Gazipur can deposit their electricity bill to Gazipur branch.
MUDARABA SUPER SAVINGS SCHEME
Objectives of the Scheme:
Savings help to build up capital and capital is the principal source of business investment in a country. That is why savings is treated as the very foundation of development. To create more awareness and motivate people to save, EXIM Bank offers super savings scheme.
Terms and Conditions of the Scheme:
· Any individual, company, educational institution, government organization, NGO, trust, society etc. may invest their savings under this scheme.
· The deposit can be made in multiples of Tk. 5,000.00.
· Any customer can open more than one account in a branch in his/her name or in joint names. A Deposit Receipt will be issued at the time of opening the account.
· The Deposit will approximately be double in 6 (six) years.
Highlights of the Scheme:
· Some examples are given in the table below. Any amount can be deposited in multiples of Tk. 5,000.00.
| Deposit | Payable (approximately) at maturity |
| 5,000.00 | 10,002.00 |
| 10,000.00 | 20,004.00 |
| 20,000.00 | 40,008.00 |
| 50,000.00 | 1,00,020.00 |
| 1,00,000.00 | 2,00,040.00 |
| 2,00,000.00 | 4,00,081.00 |
| 5,00,000.00 | 10,00,203.00 |
· Savings will be treated as projected and it will be adjusted after the declaration of profit at the end of the year. The weight age of deposit will be 1.17.
· Not less than 65% of investment income shall be distributed among the Mudaraba Deposit holders as per weight age of deposit.
Premature encashment of the scheme:
· In case of premature encashment before 1 year no profit shall be paid.
· In case of premature encashment after 1 year but before 3 years profit shall be paid at Savings Rate plus 0.75%.
· In case of premature encashment after 3 years but before maturity profit shall be paid at Savings Rate plus 1.00%.
In case of any unexpected situation:
· In case of death of depositor before the term, the amount will be given to the nominee according to the rules of premature encashment. In the absence of nominee, the heirs/ successors will be paid as per succession certificate.
· In case of issuing duplicate receipt the rules of issuing a duplicate receipt of Term Deposit will be applicable.
· The nominee may, at his option continue the scheme for the full term.
Quard facility under the scheme:
A depositor can avail quard up to 90% of the deposit under this scheme.
Additional terms and conditions:
Bank reserves the right to change the weight age of deposit & percentage of distribution of Investment Income.
At the time of payment, Income Tax shall be deducted upon profit
MUDARABA MONTHLY SAVINGS SCHEME (MONEY GROWER)
Objective of the scheme:
A monthly savings scheme secures your future with ease. A small savings of today will provide you comfort tomorrow.
Savings Period and Monthly Installment Rate:
The savings period is for 5, 8, 10 or 12 years.
Monthly installment is Tk. 500/-, 1000/-, 2000/- or 5000/-.
Not less than 65% of investment income shall be distributed among the Murabaha Depositors as per weight age. The deposit will bear weight age 1.16, 1.17, 1.18, 1.19 respectively.
Bank reserves the right to change the weight age of deposit & percentage of distribution of Investment Income.
Monthly Installment Deposit:
· The savings amount is to be deposited within the 10th of every month. In case of holidays the deposit amount is to be made on the following day.
· The deposits may also be made in advance.
· The depositor can have a separate account in the bank from which a standing instruction can be given to transfer the monthly deposit to the scheme account.
· If the depositor fails to make the monthly installment in time, then 5% on overdue installment amount will be charged. The charged amount to be added with the following month(s) installment and the lowest charge will be Taka Ten.
Withdrawal:
· Generally, withdrawal is not advised before a 5 (five)-year term, but if it is withdrawn before the above term, profit will be paid at savings rate. However, no profit will be paid if the deposit is withdrawn within 1 (one) year of opening the account.
· In case the depositor wishes to withdraw between the 5, 8, 10 or 12 years period then full profit will be paid for a completed term and savings rate will be applicable for the fractional period.
Quard Advantage:
After 3 (three) years of savings in this scheme the depositor (if adult) is eligible for a quard up to 90% of his/her deposited amount. In that case, profit rates on the quard will be applicable as per prevailing rate at that time.
Reasons for disqualification from this scheme:
· If the depositor fails to pay 3 (three) installments in a row, then he/she will be disqualified from this scheme and profit will be applicable as mentioned in withdrawal clause.
· If a depositor fails to pay 5 (five) installments in a row after completion of any one of these terms, then the Bank reserves the right to close the account and profit will be paid as mentioned in withdrawal clause.
· In case of death of the depositor the scheme will cease to function. The amount will be handed over to the nominee of the deceased depositor. In case of absence of the nominee, the bank wills handover the accumulated amount to the successor of the deceased.
Achievement from the scheme:
The accumulated amount may be more or less of following table:
| Term | Monthly Installment | |||
| 500/- | 1,000/- | 2,000/- | 5,000/- | |
| 5 yrs. | 39,041/- | 78,082/- | 1,56,164/- | 3,90,411/- |
| 8 yrs. | 74,202/- | 1,48,404/- | 2,96,809/- | 7,42,024/- |
| 10 yrs. | 1,05,095/- | 2,10,190/- | 4,20,380/- | 10,50,952/- |
| 12 yrs. | 1,44,461/- | 2,88,923/- | 5,77,847/- | 14,44,618/- |
Rules:
· A form has to be filled at the time of opening the account. Attested photographs are advised.
· The depositor can select any of the installment amounts which cannot be subsequently changed.
· In case of minors, the guardians may open and supervise the account in his favor.
· A single person can open more than one account for saving under several installment amounts.
· The accumulated deposit with profit will be returned within one month of completion of a term.
· The depositor should notify the bank immediately on any change of address.
· The government tax will be deducted from the profit accumulated in this scheme.
· If necessary, at the request of the depositor, the scheme can be transferred to another branch.
· The Bank reserves the right to change the rules and regulations of the scheme as and when deemed necessary.
· Income Tax on profit paid shall be deducted at the time of payment.
MUDARABA MONTHLY INCOME SCHEME (STEADY MONEY)
Objectives of the scheme:
· A monthly scheme that really makes good sense. A sure investment for a steady return. Actually, steady money makes your money work for you.
· Proper utilization of savings from stipend, wage earning, retirement benefit and so on.
· Higher monthly income for higher deposit.
Formalities of opening an account:
· An account is to be opened by filling up a form.
· The Bank will provide the customer a deposit receipt after opening the account. This receipt is non-transferable.
Highlights of the scheme:
· Minimum deposit Tk. 1, 00,000/-.
· The scheme is for a 3 (three)-year period.
| Deposit Amount | Income (Tk.) |
| 1,00,000/- | 1,000/- |
· The income is estimated which may be more or less at the year end and accordingly the same shall be adjusted. The deposit will bear 1.15 weight ages.
· Not less than 65% of Investment Income shall be distributed among the Mudaraba Deposit holders as per weight age.
· Bank reserves the right to change the weight age of deposit & percentage of distribution of Investment Income.
Quard facility:
A depositor can enjoy investment facility (excluding Quard) up to 80% of the deposited amount under these scheme complying investment norms of the bank. In this case, profit, will be charged against the investment facility as per Bank’s norms. During the tenure of the investment, the Monthly Income will be credited to the investment account until liquidation of the invested amount inclusive of profit.
Disbursement of monthly income:
Monthly income will be credited after one month i.e., on the due date of the next month to the depositor’s account.
Premature encashment of the account:
If the deposit is withdrawn before a 3 (three)-year term, then saving rate plus 0.75% of profit will be applicable and paid to the depositor. However, no profit will be paid if the deposit is withdrawn within 1 (one) year of opening the account and monthly income paid to the customer will be adjusted from the principal amount.
Additional terms and conditions:
· Applicant must open/have an Al-wadia CD or Mudaraba SB A/C with the branch in which monthly income will be credited automatically.
· The government taxes will be paid to the debit of monthly income.
MUDARABA MULTIPLUS SAVINGS SCHEME
Objective of the scheme:
To gather public’s idle money in exchange of high return within the shortest possible time.
Terms and Conditions of the Scheme:
· Any individual, company, educational institution, government organization, NGO, trust, society etc. may invest their savings under this scheme.
· The deposit can be made in multiples of Tk. 5,000.00.
· Any customer can open more than one account in a branch in his/her name or in joint names. A Deposit Receipt will be issued at the time of opening the account.
· The period of deposit is 10 (ten) years.
Highlights of the Scheme:
· Some examples are given in the table below. Any amount can be deposited in multiples of Tk. 5,000.00.
| Deposited Amount | Amount payable approximately after maturity |
| 5,000.00 | 15,879.00 |
| 10,000.00 | 31,758.00 |
| 50,000.00 | 1,58,793.00 |
| 1,00,000.00 | 3,17,587.00 |
· Payable amount will depend on projection and will be adjusted after the declaration of profit at the end of the year. The weight age of deposit will be 1.17.
· Not less than 65% of investment income shall be distributed among Mudaraba Depositors as per weight age.
In case of premature encashment:
· In case of premature encashment before 1 year no profit shall be paid.
· In case of premature encashment after 1 year but before 3 years profit shall be paid at Savings Rate plus 0.75%.
· In case of premature encashment after 3 years but before 5 years profit shall be paid at Savings Rate plus 1.00%.
· In case of premature encashment after 5 years but before 8 years profit shall be paid at Savings Rate plus 1.50%.
· In case of premature encashment after 8 years but before maturity profit shall be paid at Savings Rate plus 2.00%.
In case of unexpected situation:
· In case of death of depositor before the term, the deposit amount will be given to the nominee according to the rules of premature encashment. In the absence of nominee, the heirs/ successors will be paid on production of succession certificate.
· In case of issuing duplicate receipt the rules of issuing a duplicate receipt of Term Deposit will be applicable.
· The nominee may, at his option continue the scheme for the full term.
Quard facility against the scheme:
· The depositor can enjoy loan up to 80% of the deposit under this scheme.
Additional Terms and Conditions:
· Bank reserves the right to change the weight age of deposit & the portion of distribution of Investment Income.
· At the time of payment of deposit Income Tax on profit shall be deducted.
4.3) The functions of Export Import Bank of Bangladesh Limited are followings:
- To maintain deposits
- To make investment
- To conduct foreign exchange business
- To extend other banking services
- To conduct welfare activities
4.4) Foreign Exchange Division of EXIM Bank Ltd:
As I have passed most of my time in the foreign exchange division, I (we) need to have clear concept about the letter of credit in a bank. That’s why I gave a brief description about LC:
The clause of the credit authorizing the negotiating bank to provide pre-shipment advance to the beneficiary is printed/ typed in red, the credit is called “Red Clause Letter of Credit.” Under the said clause, the opening bank is liable for the pr-shipment advances made by the negotiated bank, in case the beneficiary fails to repay or deliver the documents for negotiation.
PARTIES OF A LETTER OF CREDIT
Within a L/C, there are several parties and every party has different liabilities and rights. The names of the parties are given below;
- Importer or Buyer
The party who request or give order the bank to open L/C is called Importer or Buyer. This party also called L/C opener or Applicant.
- Opening or Issuing Bank
The bank who open or issue L/C in favor of the Importer is called L/C opening or issuing bank. The L/C opening bank is also entitled Importer or Buyer bank.
- Exporter or Seller or Beneficiary
The L/C is opened in favor of that party is called Exporter or Seller or Beneficiary.
4. Advising or Notifying Bank
Advising or Notifying Bank is the bank by whom L/C is advertised to the exporter. This bank is generally situated in exporter’s country.
5. Confirming Bank
The bank which adds confirmation of its own to the L/C is called Confirming Bank. It has been done on the request of L/C Issuing Bank. The Advertising Bank himself becomes Confirming bank or any other Bank.
6. Negotiating Bank
The bank that negotiates and pay bill to the beneficiary is called Negotiating Bank. The Advertising Bank and the Negotiating Bank will be same or not.
7. Paying or Reimbursing Bank
According to the condition of L/C, the L/C is prepared on the bank is called Paying or Reimbursing Bank. This bank becomes Issuing bank or not.
CONTENTS OF LETTER OF CREDIT
In the L/C, the following terms are included
- The name and full address of L/C applicant.
- The signature of person permitted by L/C applicant firm.
- The name and full address of Beneficiary
- The name and date of L/C
- Type of shipment with total cost
- Type of payment
- Short description of product
- The name of the issuing firm with proforma voice or indent number
- The fixed date of loading and the destination harbor.
- The expired date of L/C
- the chart of required documents
- The number of IRC and L/C
- The direction for payment of bank charges
- The name of the medium by which L/C is sent.
If additional directions are available than those must be mentioned in L/C
STEPS INVOLVED IN OPENING LETTER OF CREDIT
Opening letter of Credit means the bank issuing L/C on the request of applicant/ importer in favor of exporter/beneficiary. The bank by which L/C is opened is called L/C opening or Issuing Bank. The applicant/ Importer expresses desire by writing on own Letter Pad to the selected bank. Afterward, the following steps are seen to taken for opening L/C
A. Steps Taken by the Importer
The importers of both sectors Government and Private need to submit the following documents to the bank for opening the L/C forms;
- Letter of Credit Authorization Form Duly Filled in & Signed.
- Letter of Credit Application Form Duly Filled in & Signed.
- Indent or Proforma Invoice Issued by the Indenter or Foreign Supplier.
- Insurance Cover Note.
- Import Permit Duly Filled in & Signed
- Written Application for Opening L/C in the Letter Pad of the Firm.
- The importers of Government sector will submit attested permission copy form Administrative Ministry or Division or Authorities.
The private sector importers will submit the following documents in addition
1. The legal membership certificate from registered local business and trade society or trade or business society representing the special type of business for whole Bangladesh.
2. The certificate of payment of renew fee of import registration certificate of certain year.
3. The three declaration paper of payment of tax of previous year of importer or submission of income tax return
4. The proven paper of tax identification number (TIN) receives in the case of other objective of import except personal uses.
5. Under the principle import law of 2003-2006, the papers or necessary documents that the main controller notified by government notices or wants by direction or will want.
B. Steps Taken by L/C Opening Bank
The bank will check the following matters before opening L/C
- To check the signature with seal of L/C forms.
- To check the signature of both parties of suppliers of Proforma Invoice.
- The compares of the product & price of L/C and L/C forms that both are same.
- Whether the exchange rate mentioned accurately.
- Whether there is insurance cover note in the name of issuing bank.
- Whether there any direction to negotiating bank according to bank’s rules.
- Whether reimbursement clause is available.
- Whether the interest rate is mentioned in the case of youjence L/C.
Besides these, bank will sure about the following matters & takes necessary steps.
1. The selected bank will sure about the matters when receiving L/C, A form from all private importers.
A. The selected importer has legal import registration certificate (I. R. C)
B. The renew fee is paid accordingly of that year. And
C. the description of treasure invoice is recorded in I. R.C accordingly.
If the private sectors importers haven’t certificate of without I. R.C, the L/C, A form will not accept or debenture will not establish without the legal I.R.C.
2. In the case of import of goods in land port, the name of the festinated land port is mentioned in all debentures.
3. To import capital machinery and primary machinery for new settled industry, L/C is opened without the registered import certificate. In that case, no need to collect the IRC cancellation letter from the department of main import-export controller. In the case of free sectored industry, the formal gradation letter is not necessary to the sponsor to import capital machinery & machinery by cash foreign currency
4. to record the H.S code no:
Bank will not permit any L/C forms until record the H.S code systemically.
5. Registration of L/C, A forms:
Cash foreign currency, product pledge, donation and other cases where the registration of Bangladesh bank is necessary, in that cases the selected bank will send five copies of L/C, A form to the registration unit of Bangladesh bank. The 1st and 2nd copies of L/C,A form’s will send to the selected bank and 4th and 5th copies to the authorities of import control for auditing and record within fifteen (15) days.
6. The rules of those sectors where the L/C, A form registration is not necessary against the Government sanction: Import under loan, donation, negotiation or special commerce deedwhere the Bangladesh bank registration is not necessary, in that cases, selected bank records the above description in the importers L/C, A form. Then the importer requests the selected bank to open L/C by sending L/C, A / L/C application form with others necessary documents. Then the selected banks opens the L/C, A form and send 3rd and 4th copy of that form to the authority of import control within 15 days.
- L/C, A form in cash foreign currency: In the cases of importing in cash
foreign currency, foreign currency is purchased with the permission of Bangladesh Bank. Only these cases the declared L/C, A form in cash foreign currency will registration in the registration unit of Bangladesh Bank. The Rubber Stamp entitled “Declared in cash foreign currency” will print on the right corner on all the declared L/C, A form. The bank that opens debenture against issuing cash foreign currency, will sent 3rd and 4th copy of L/C, A form to the authorities of import control of related area within fifteen (15) days after opening the debenture.
- Sending copy of bond to import controller authority for recording: after opening a bond, related bank sends a readable copy of bond and if it is rectified then a copy of that bond to the import control authority for recording it within fifteen days.
- Sending income tax notice which is submitted by private importer: The related private importers nominated bank will keep one copy of income tax notice which is submitted by importer and send another copy to the director of NBR or national board of revenue, Shegun Bagicha, Dhaka.
10. Changing of nominated bank: the nominated bank can be changed by informing the local import export controller portfolio with giving approval of both of the registered bank.
There are many formal and informal matters involved in opening import L.C or departure or bond. In many factors the liability of bank is shown excessively in that situation the importer should not overlook his responsibility. The importer should regularly supervise that whether the bank is doing his tasks in proper way or not and it should have full skill and experience about every steps of bank. Because, importer has to bear the liability of LC.
4.5) Retirement of Documents:
After sending the contractual goods in the ship. The seller starts collecting and preparing documents which is mentioned in the bond/debenture. The exporter submits the bill of lading through collecting from shipping company and trade invoice, certificate of origin, packing list, bill of exchange, etc to the bank after preparing all of there.
Bank receives the documents from their customer and negotiates in the furtherance of the contract.
After that, negotiating bank send the shipping documents to the bond openin