Performance and Contribution of the Honking and Shanghai Banking Corporation Limited (HSBC)to Economy

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Bangladesh Overview

of the Organization :
The Hongkong and Shanghai Banking Corporation Ltd

Year of Establishment : 1996

Office   :
Anchor Tower, 1/1-B Sonargaon Road, Dhaka 1205

of the Organization :
Multinational Company

HSBC group shareholders

Loan products

of Offices :

800 +

Offers full online banking from branch to branch.

Serves individual and
corporate customers.


As one of the largest
international banks in Bangladesh, HSBC has a long-term commitment to its
customers and provides a comprehensive range of financial services: personal,
commercial and corporate banking; trade services; cash management; treasury;
consumer & business finance; and securities and custody services.

The Hongkong and
Shanghai Banking Corporation Limited offers a full range of personal banking
products and services designed to take care of its customers’ growing needs and
requirements. HSBC in Bangladesh has launched a number of loan products. Among
those – Car Loan, Home Loan, Travel Loan, Professional Loan, Lifestyle Loan,
Student Loan, Motorbike Loan, Furniture Loan, Wedding Loan, CNG Conversion
Loan, Medical Loan and Home Equity Loan are most popular. The Bank has already
launched Phone banking, a state-of-the-art automated telephone banking service
available 24 hours a day, 7 days a week, and
days a year, which allows customers to access their account from the
comfort of the office or home.

The Hongkong and Shanghai
Banking Corporation Limited offers a wide range of cash financing, working
capital, short and medium-term loans and guarantee facilities from its Head
Office and Chittagong branch. The Offshore Banking Unit (OBU) provides US
Dollar denominated working capital as well as short-term finance for capital
imports to eligible businesses. Using high-speed communication links, HSBC
connects customers to international payment systems.

As the leading provider
of trade finance and related services to importers and exporters in Asia, HSBC
in Bangladesh operates a highly automated trade-processing network and offer an
Electronic Data Interchange (EDI) capability through Hexagon. The Bank also
uses SWIFT, an efficient and secure mechanism for bank-to-bank global
communications used for all trade related activities including fund transfers
and issuance of DC’s (Documentary Credit).

HSBC provides global
trade services and cash management services to local banks. HSBC’s worldwide
network strength, with over 7900 offices in 81 countries and territories,
coupled with a world class reputation in Trade Finance (“Best Trade
Documentation Bank” – Euro money) and an unparalleled presence in Asia (“Best
Bank in Asia” — Euro money), places HSBC in an ideal position to render
unmatched correspondent banking services.

HSBC’s commanding
presence in the USA (5th largest USD clearing bank globally), UK
(largest GBP clearing bank globally), and the Euro land (largest Euro clearing
bank in the UK) both in terms of network strength and clearing ability allows
the Bank to also provide first class cash management solutions in 3 major
global currencies; the US dollar, Pound sterling and the Euro.

HSBC was the pioneer in
introducing electronic cash management solutions in Bangladesh, by introducing
its state-of-the-art proprietary software, Hexagon, back in 1997. This was
initially made available to corporate clients only but has since been expanded
to include banks and retail clients.

With Hexagon, the
Bank’s proprietary cash management system, corporate customers can access
banking services from anywhere in the world to view account balances and
statements, make transfers and international payments, and to open documentary
credits, by using only a PC, a modem and a telephone line.


The HSBC Group is committed
to Five
Core Business Principles

customer service;

Effective and
efficient operations;

Strong capital
and liquidity;

lending policy;

Strict expense

HSBC Operates According to
Certain Key Business Values:

The highest
personal standards of integrity at all levels;

Commitment to
truth and fair dealing;

management at all levels;

Openly esteemed commitment
to quality and competence;

A minimum level
of bureaucracy;

Fast decisions
and implementation;

Putting the
Group’s interests ahead of the individual’s;

The appropriate
delegation of authority with accountability;

Fair and
objective employer;

A merit approach
to recruitment/selection/promotion;

A commitment to
complying with the spirit and letter of all laws and regulations business is

The promotion of
good environmental practice and sustainable development and commitment to the
welfare and development of each local community.

HSBC’s reputation is founded
on adherence to these principles and values. All actions taken by a member of
HSBC or staff member on behalf of a Group company should conform to them.


Credit Administration department basically deals with
all the documentation, processing, administration and disbursement of the
import-export services provided to corporate clients. This department is known
to be the heart of HSBC Trade & Supply Chain that administers and manages
all the trade tools and facilities provided by HSBC Corporate Banking. Some
important aspects of this department are LC advising, documentation, OD
facilities, guarantees, etc.

Foreign Exchange Division

For-ex division of Trade & Supply Chains is solely concerned with the
management of Foreign exchange inflow and outflow. The For-ex division of Trade
& Supply Chain in relation with NSC and FCD manages the foreign currency
traffic of HSBC that originates from Corporate Banking and Trade & Supply

2.2.1 Letter
of Credit or Documentary Credit

Letter of Credit or
Documentary Credit is a conditional bank undertaking of payment provided that
all the terms and conditions of the credit are complied with. Elaborately,  it is a conditional undertaking given by
issuing bank at the request of a customer (Importer) or on its own behalf to pay
seller (Exporter) against stipulated documents provided all the terms and
conditions of the Credit is complied with.

These stipulated
documents are likely to include those required for commercial, regulatory,
insurance or transport purposes such as commercial invoice, certificate of
origin, insurance policy or certificate and a transport document of a type
appropriate to the mode(s) of transport used.

The basic of Trade
& Supply Chain operation is to have clear understanding about the trade
cycle. A typical scenario of trade cycle is presented below. At first, initial
contract and agreement occurs between buyer/importer and seller/exporter. Then
seller/exporter asks buyer/importer to open a letter of credit. Importer
approaches to a bank and the bank then issues LC and sends the information to
exporter’s bank. Exporter’s bank then advices LC to the exporter. Exporter then
dispatches the goods according to the terms and conditions to the Importer.
Then exporter presents all the documents to the bank. Exporter’s bank then
forwards the documents to the importer’s bank. Importer’s bank collects
payments from the importer and handovers the documents. Importer’s bank then
remits funds to the exporter’s bank and thus exporter receives the payments
made by the importer from the exporter’s bank. This is a generalized scenario
of trade. Collection and payment mechanism among the involved parties can vary
according to different terms and conditions.

Figure 1:
Typical Scenario of Trade Cycle

Importance of Letter of Credit

Letter of Credit or
Documentary Credit offers some benefit to both importer and exporter. The
importance of letter of credit to importer and exporter is presented below-

or Advantages of Letter of Credit to the Beneficiary/Exporter/Seller:

A letter of credit is
an instrument which facilitates trade transactions between two parties who are
not known to each other. The major advantages derived by the seller or the
beneficiary of a letter of credit are as follows:

Certainty of Payment and Avoidance of Risk. Though the exporter may be quite unfamiliar with the
importer, the letter of credit provides him an absolute assurance that the
bills of exchange drawn under the letter of credit will be honored. The risk of
dishonor of the bill is thus totally avoided because the financial standing and
reputation of the opening banker (and also of the confirming banker in case of
a confirmed letter of credit) stands as an absolute security against any such
risk. The exporter may execute the order with greater degree of assurance and

Immediate Negotiation of Bills is possible under
Letter of Credit.

drawn under the letters of credit are readily negotiated by the
advising/confirming banker or any other banker, because of the firm undertaking
given by the opening banker. The seller (or exporter) is able to realize the
amount of the bill immediately by negotiating it with any banker. In the
absence of a letter of credit, the bill may not be acceptable to a banker for
negotiation or may be negotiated on the basis of the exporter’s standing. If a
bill is sent for collection, the exporter has to wait till the amount of the
bill is actually realized from the importer.

Security against Exchange Restrictions.

Advance may be obtained.

exporter may obtain an advance from the bank on the basis of a letter of credit
for the purpose of procuring and processing or manufacturing the goods to be

Importance or Advantages of Letter of Credit to the
Opener/ Importer/ Seller:

i) The issuing banker
lends the benefit of his own credit to the importer, who is enabled to import
the good which is otherwise not possible.

ii) The letter of
credit gives an assurance to the importer that the bills of exchange drawn
under the credit will be honored only when they are strictly in accordance with
the conditions laid down in the letter of credit and the documents required
therein are duly enclosed.

2.2.3 Types of Letter of Credit

  1. Documentary
    Letter of Credit and Clean Letter of Credit:

When the banker
opening a letter of credit incorporates a clause in the letter of credit that
the documents of title to goods, such as bill of lading, insurance policy,
invoice, consular invoice, certificate of origin, etc. must be attached with
the bill of exchange drawn under the letter of credit, such letter is called a
documentary letter of credit. In fact the opening bankers undertaking to honor
or pay the bill of exchange is made conditional on the submission of such
documents by the beneficiary. The interest of the opening bank is thus
safeguarded, because it acquires the property in the goods exported, as soon as
the documents of title to goods duly endorsed in its name are handed over to

When the letter of
credit does not contain any such clause, it is called a clean letter of credit.
Documents of title in such a case are not attached with the bill of exchange,
but are sent to the consignee directly. As the opening banker does not get
possession over the documents, such letter of credit is opened in case of
parties of sound financial standing. In case of other parties, the banker may
insist on the maintenance of adequate cash margin with it or the guarantee of a
third party, or any other security.

  1. Fixed
    Credit and Revolving Credit:

The opening banker
specifies in the letter of credit the amount up to which one or more bills may
be drawn by the beneficiary within the specified period of time. The letter of
credit remains effective until the specified amount is exhausted within the
specified time. Such credit is called a fixed credit.

In case of revolving
credit, the opening banker specifies not the total amount up to which bills may
be drawn, but the total amount up to which bills drawn may remain outstanding
at a time. As soon as any of such bills is paid by the importer, the
beneficiary may draw another bill/bills under the letter of credit. Revolving
credit is thus automatic and does not need renewal within the specified period
of time.

  1. Revocable
    and Irrevocable Letters of Credit:

Letters of Credit may
be either revocable or irrevocable. All credits should, therefore, indicate
whether they are revocable or irrevocable. If no such indication is given, the
credit shall be deemed to be revocable (Article 1, Uniform Customs and

In case of revocable
letter of credit, the opening banker reserves to himself the right to cancel or
modify the credit at any moment without prior notice to the beneficiary. A
revocable credit, therefore, does not constitute a legally binding undertaking
between the banker concerned and the beneficiary. It is a mere intimation or
advice to the beneficiary to draw bills under the credit. Such credit provides
no real security to the exporter, who should accept it only from buyers of
known integrity.

2 of the Uniform Customs and Practice of Documentary Credits, however, provides
that when a revocable credit has been transmitted to and made available at a
branch or other bank, its modification or cancellation shall become effective
only upon receipt of its notice by such branch or other bank. The right of such
branch or other bank to be re-imbursed for any payment, Acceptance or
negotiation made by it prior to receipt of such notice shall not be affected.

to Article 3, irrevocable credit constitutes a definite undertaking of the issuing
bank, provided and the terms and conditions of the credit are complied with:

to pay or that payment will be made (if the credit provides for payment)
whether against a draft or not;

to accept drafts (if the Credit provides for acceptance by the issuing bank) or
to be responsible for their acceptance and payment at maturity (if the Credit
provides for acceptance of drafts drawn on the applicant for the credit or any
other drawee specified in the credit).

to purchase/negotiate without recourse to drawers and or bona fide holder,
drafts drawn by the beneficiary, at sight or at a tenor, on the applicant or
any other drawee specified in the credit or to provide for purchase/negotiation
by another bank (if the credit provides for purchase/negotiation).

a letter of credit once established and advised cannot be cancelled or amended
in any way by the issuing banker, except with the consent of the beneficiary
and any other interested party, i.e. the negotiating banker.

  1. Confirmed
    and Unconfirmed Letters of Credit:

the opening bank requests the advising bank in the exporter’s country to add
its confirmation to an irrevocable credit and the latter does so, it is called
‘irrevocable and confirmed letter of credit’. The advising banker, after he
adds his name to the undertaking, is called the ‘confirming banker’. Such
confirmation constitutes a definite undertaking on the part of the confirming
bank either-

that the provisions for the payment or acceptance will be duly fulfilled or

that in case of a credit available by negotiation of draft, the confirming will
be negotiate drafts without recourse to the drawer.

undertaking cannot be cancelled or modified without the agreement of all
concerned. A confirmed irrevocable letter of credit provides absolute security
to the beneficiary. The opener asks the issuing banker, at the request of the
beneficiary, to arrange a confirmed credit. The confirming banker takes upon
himself the liability similar to that of the opening banker.

the advising banker does not add his confirmation, the letter of credit remains
an unconfirmed one. In such a case there will be no such obligation on the
advising bank.

  1. ‘With’
    and ‘Without Recourse’ Credits:

of exchange may be drawn under the letter of credit ‘with recourse to the
drawer’ or without such recourse. In case of ‘with recourse’ bills, the banker,
as the holder of the bill, can recover the amount of the bill from its drawer,
in case the drawee of the bill fails to honor it. In order to avoid such
liability, the exporter may ask the importer to arrange credit ‘without
recourse’ to the drawer. Under this type of credit, the issuing banker will
have recourse to the drawee only and if he fails to honor the bill, the banker
can realize the amount by deposing of the goods (if it is a documentary credit
and documents have not been handed over to the importer). The liability of the
drawer of such a bill of exchange ends as soon as it is negotiated.

  1. Transferable
    and Non-Transferable Letters of Credit:

the beneficiary is authorized to draw bills of exchange under a letter of
credit. But if the beneficiary is an intermediary in the transaction and the
goods are actually to be supplied by someone else, the beneficiary may request
the opener to arrange a transferable letter of credit. Under a transferable
letter of credit the beneficiary can transfer his right to draw a bill to
somebody else. The Uniform Customs and Practice for Documentary Credits define
a transferable credit as “a credit under which the beneficiary has the right to
give instructions to the bank called upon to effect payment of acceptance or to
any bank entitled to effect negotiation to make the credit available in whole
or in part to one or more third parties (second beneficiaries).” Thus the
credit may be transferred to one or more persons. But it can be done only if
the credit is expressly designated as “transferable” by the issuing bank. The
rules regarding transferable credit are as follows (Article 46, Uniform

A transferable credit can be transferred only once.

Fraction of transferable credit can be transferred separately, provided partial
shipments are not prohibited and the aggregate of such transfers does not
exceed the amount of the credit.

The credit can be transferred only on the terms and conditions specified in the
original credit, with the exception of the amount of the credit, of any unit
price stated therein, and of period of validity or period of shipment. Any or
all of these may be reduced or curtailed.

The name of the first beneficiary can be substituted for that of the applicant
for the credit. But if the name of the applicant for the credit is specially
required by the original credit to appear in any document other than the
invoice, such requirement must be fulfilled.

The first beneficiary of a transferable credit can transfer the credit to a
second beneficiary in the same country, but if he is to be permitted to
transfer the credit to a second beneficiary in another country, this must be expressly
stated in the credit.

credit may be divisible also. The total amount may be split into more than one
part and each part may be transferred to different persons.

  1. Back to
    Back Letter of Credit:

a beneficiary receives a non-transferable letter of credit, he may request a
bank to open a new letter of credit in favor of some other person on the
security of the letter of credit issued in his favor. Such letter of credit is
called Back to Back Letter of Credit.

  1. Red
    Clause Letter of Credit:

the seller of the exporter needs credit for the purchase of raw materials,
processing them into final product, packing and dispatching them to the port
town. Such credit is called ‘packing credit’. A letter of credit which includes
a clause printed in red ink and known as “red clause” enables him to secure
such packing credit from the banker advising such credit. A Red Clause Letter
of Credit contains an authority from the issuing banker to the
advising/negotiating banker to grant advances to the beneficiary up to a
specified amount at the responsibility of the former. The advance made under
this letter of credit is for short period and is recovered from the amount,
payable by the negotiating banker to the beneficiary when the letter negotiates
the required documents under the letter of credit.

2.2.4 Parties to a Letter of Credit

A letter of credit is
a legal instrument, which binds all parties according to the terms and
conditions incorporated in the credit. There are four principal parties in a
Letter of Credit:

The Importer/Buyer/Opener

purchaser of the goods is called importer. Once the buyer and the seller have
agreed to the sales transactions, it is the buyers’ responsibility to initiate
the opening of the letter of credit.

Bank which at the request of his customer (importer) opens a Letter of Credit
is called Issuing Bank. The Issuing Bank is the buyer’s bank/opening bank of
the credit.

c) The Seller/Exporter/Beneficiary

supplier of the goods is called as seller or exporter or the beneficiary. The
seller after shipping the goods as per terms of the credit presents the
documents to the negotiating bank.

Advising Bank

is the correspondent bank of the issuing bank of the credit through which the
credit issued by the opening bank is advised at seller’s country. Advising bank
may also be a negotiating bank.

e) Negotiating

The bank who negotiates/purchases/discounts the
documents tendered by the exporter as per terms of the credit is known as
negotiating bank.

2.2.5 Import Procedures

1. Procurement of IRC from
the concerned authority.

2. Signing purchase contract
with the seller.

3. Requesting
the concerned bank (importer’s bank to open an L/C (irrevocable) on behalf of
the importer favoring the exporter/ seller/ beneficiary.

5. The advising bank advises/informs the
seller that the L/C has been issued.

6. As soon as the exporter/seller receives
the L/C and is satisfied that he can meet L/C terms and conditions, he is in a
position to make shipment of the goods.

7. After making shipment of goods in favor of
the importer the exporter/s submits the documents to the negotiating bank for

9. After
receiving the documents the L/C issuing bank also examines the document and if
found complete, then makes payment to the negotiating bank.

10. The L/C
opening bank then requests the importer to receive the document payments.

2.2.6 Opening of Import Letter of Credit

The import of goods
into Bangladesh is regulated by the Ministry of Commerce in accordance with the
imports and exports (control) Act 1950 and notifications issued there under
while Bangladesh Bank control the financial aspects such as method of payments,
rates of exchange, remittances against imports through its exchange control
department under the provisions of foreign exchange regulation Act 1947. The
Customs Authorities physically supervised the goods to ensure that the items
imported are permissible under import trade control regulations before release
of the same for consumption in the country.

Pre-Requisite for Opening a Letter of Credit

a) Must be a client/account

b)   Request letter from the
client to open L/C.

c) Original
IRC (Import Registration Certificate) duly renewed up to current date should
also be produced to the bank for verification and return.

d) Valid Membership
Certificate from a registered Chamber of Commerce and Industries/Trade
Association. .

e)   Trade License.

f) Income Tax declaration
in triplicate/TIN Certificate.

h)   Fixing up of margin of
L/C on mutual basis.

Documents Required from the Importer

CREDIT APPLICATION (supplied by the Bank -duly filled in by the importer or his
authorized Agent. This application is an agreement between the importer and the
Bank. This form is to be affixed with Tk. 150/- adhesive stamp.

(Marine/Air/Post) in favor of the bank.

e) LC
AUTHORISATION FORM In Lieu of Import License duly signed by the importer and
permission from Bangladesh Bank (may be taken by the client and/or by the Bank
on behalf of the importer).


provides tangible evidence that the goods ordered have been produced and
dispatched in accordance with the buyer’s requirement.

details need to be communicated accurately to various parties, so both
importers and exporters need to be familiar with the principal documents used.
Documentation is also used to satisfy government regulations and has become an
increasingly important factor in obtaining finance for international trade.

is normally the responsibility of the exporter to make sure that documents for
the transportation of goods are complete, accurate and properly and promptly processed.
Failure to do so may result in additional costs being incurred.

importer has the responsibility for completing accurately the necessary forms
for the goods to be licensed for import and cleared through Customs. Incorrect
documentation can cause delay in the clearance of goods at their destination.
Goods can be impounded, warehoused or left on the quayside, with the risk of
damage or loss and consequent expenses. The use of a forwarding agent can help
reduce administrative and documentation pressures on importers and exporters.

2.3.1 Financial Documents

principal financial documents used in international trade are described below-

Bill of Exchange

bill of exchange is the most important and most widely used instrument in
international trade by which sellers can obtain the payment from their buyers
for the invoiced value of goods. It provides a convenient mechanism for the
giving or receiving or receiving of a period of credit.

to bill of exchange Act, 1882, bill of exchange is defined as “An unconditional
order in addressed by one person to another, signed by the person giving it,
requiring the person to whom it is addressed to pay on demand or at fixed or
determinate future time a certain sum of money to or to the order of a specified
person, or to bearer.”

Ø  A ‘sight’ bill payable on demand, or at sight.

Ø  A ‘term’ bill or ‘usance’ bill is payable at a fixed
or determinable future time. The drawee agrees to pay on the due date by
writing an acceptance across the face of the bill.

Promissory Note

promissory note is a promise to pay issued by the buyer (the maker) in favor of
the seller (the payee or beneficiary). Although it is similar to a bill of
exchange it does not always carry the same legal rights. Promissory noted are
popular in forfeiting arrangement and with countries where there is some fiscal
reason not issuing a bill of exchange.

2.3.2 Other International Trade

Commercial Invoice

commercial invoice is a claim for payment for the goods under the terms of the
commercial contract. It is addressed to the importer by the exporter. It serves
as a checklist so that a particular consignment can be identified and is the
main evidence in any assessment for customs duty. A commercial invoice normally
includes the following information-

Ø  Date.

Ø  Invoice number.

Ø  Name and address of seller and buyer.

Ø  Order or contact number, quantity and description of
the goods, unit price and the 

total price.

Ø  Weight of the goods, number of packages, and shipping
marks and numbers.

Ø  Terms of delivery and payment.

Ø  Shipment details.

Packing List

exporter must prepare a packing list showing item by item, the contents of the
containers, or cases to enable the importer of the goods to check the shipment.
It should give description of the goods, net weight and gross weight,
measurement etc. this helps in identifying the contents of specific packages
and thus may facilitate assessment by the customs. Bank may require such list
when they have financial interest in the merchandise.

Bills of Lading

the most important commercial document in international trade, the bill of
lading (B/L) is used to control delivery of goods transported by sea. In
negotiable form, title to the goods may be transferred by endorsement of the
B/L. The details of the bill of lading should include-

Ø  A description of the goods in general terms not
inconsistent with in the credit.

Ø  Identify marks and numbers, if any.

Ø  The name of the carrying vessel.

Ø  Evidence that the goods have been loaded on board.

Ø  The ports of shipment and discharge.

Ø    Whether freight has been paid or is payable at

Ø  The number of original bills of lading issued.

Ø  The date of issuance.

Sea Waybill

Insurance Policy or Certificate

terms of a contract between the importer and the exporter should define the
responsibilities for arranging insurance cover whilst the goods are in transit
and what risks are to be covered. The insured risks will be detailed under
Institute Cargo Clauses, and those applicable to a particular transaction will
be noted on the certificate/policy.

insurance certificate document must-

Ø  Be that specified in the credit.

Ø  Cover the risks specified in the credit.

Ø  be consistent with the other documents in its
identification of the voyage and description of the goods.

Air Waybill

air waybill is a receipt for goods carried by air and is often referred to as
an ‘air consignment note’. Like the sea waybill, it is non-transferable and not
a document of title. It is usually produced as ‘house air waybill’ where cargo
consolidation is involved.

Road Consignment Note

is used for international transport by road. It is not a document of title and
is not transferable. It is more commonly known as certificate of movement by
road (CMR) or ‘truck waybill’.

Railway Consignment Note

is used for international transport by rail. It is not a document of title and
is not transferable.

Parcel Post Receipt

post office receipt for goods dispatched by mail. The receipt is evidence of
dispatch only.

Certificate of Origin

is a declaration which states the country (or countries) of origin of the goods
and is commonplace in countries wishing to identify the origin of all imported
goods (or their components) or where there are quotas or other import
restriction in force. It should be completed by the supplier and may have to be
authenticated by a chamber of commerce or other authorized body in the
exporter’s country. In some instances, the certificate must also be legalized
by the embassy or other representative of the concerned. The certificate should
include the name and address of the exporter, the manufacturer (if different),
the importer, a description of the goods and, if required, the signatures and
seals of the authorizing organization.

Certificate of Inspection

can safeguard their interests, and ensure that the goods comply with the
specifications stated in the contract of sale by arranging for the goods to be
inspected by an independent body before they are dispatched. The certificate of
inspection will give details such as weights, numbers and quality, packaging
and identifying marks, shipping details and the signatures and seals of the
inspecting organization. In some countries exporters may be required to obtain
certificate of inspection from a specific inspection agency, such as SGS, for
exports to certain countries.

Certificate of Health

and animal products may require a certificate stating that they comply with the
importing country’s health regulations. This certificate must be authorize and
signed by the health authority in the exporter’s country.


concept of ‘collection’ is a compromise between:

  1. Open Account Trading

favors the
buyer/importer that usually pays after he receives the goods, reducing the
debit balance of his account with the seller/ exporter according to arrangements
established between them. And,

  1. Payment in Advance

favors the
seller/exporter who receives payments before he ships the goods.

settlement by collection reduces

risk to both
importer and exporter

delay in receipt
of payment by exporter

using banks as intermediaries to ‘collect’ payment from the importer for goods
which the exporter has already sent.

2.4.1 Clean and Documentary Collections

is a request for payment which can be put forward in different ways – Clean
Collection or Documentary Collection:

Clean Collection: Bills of Exchange/Draft with no commercial documents attached.

The amount of the bill may be:

the cost of
goods, in which case the documents of title would have been sent direct to the

the cost of a
service, such as the use of a tugboat to bring into harbor, when no documents
are required

Documentary Collection: Bill of Exchange/Draft with Shipping Documents etc.
The attachment documents include the document(s) of the title (Bill of Lading)
which the importer needs to clear the goods.

Whichever documents the exporter presents to his bank,
he always attaches his instructions on a COLLECTION ORDER. These instructions
are passed on to the importer telling him how and when to pay.

exporter will ask the importer to settle the bill in one of two ways:

D/P: DOCUMENTS AGAINST PAYMENT: payable at sight (on demand) – the collecting bank
hands over the shipping documents only when the importer has paid the bill. The
drawee is usually expected to pay within 3 working days of presentation.

D/A: DOCUMENTS AGAINST ACCEPTANCE: D/A means that the exporter is allowing credit terms
to the importer: the period of credit is the ‘term’ of the bill, also known as
‘usance’. The importer/drawee is required to ACCEPT the bill i.e. to make a
signed promise to pay the bill at a set date in the future. When he has signed
the bill in acceptance, he can take the documents and clear his goods. The
payment date is calculated from the ‘term’ of the bill- the ‘term’ is usually a
multiple of 30 i.e. 30 days, 60 days, 90 days, 120 days etc. and starts either
from sight or from the date of shipment, whichever is stated on the bill of

2.4.2 Handling Export Collections

role of the Exporter’s bank is to follow the instructions on the method of
collecting payment from the Importer. There is no legal obligation for the bank
to check documents but it should warn its customer of defects which may cause
delay: this is, after all, part of good customer service.

Collection Order

shipping the goods, the Exporter prepares the documents and hands them to his
bank (the Remitting Bank) to be forwarded to the Collecting Bank. With the
documents he submits a COLLECTION ORDER with his instructions.

Collection Order is a form issued by the bank, to be completed by the Exporter
when he submits any trade bill –DC or Non-DC; it is designed to make it simple:

for the Exporter
to give bank his instructions clearly and completely

for bank to
transfer the instructions to bank’s covering schedule which bank send to the
collecting bank

and conditions are printed on the back of the Collection Order- by signing the
form, the Exporter agrees:

to be bounded by
the provisions of ICC 522, the Uniform Rules for Collections

that the bank is
not liable for error made by the Collecting Bank

to be subject to
bank TFGA form.

Banks Job on Receipt of Collection

are several simple tasks to be done- they may be done in a different order in
different branches:

check the
completeness of the Collection Order details

names and

shipment details


payment terms

disposal of

verify the
signature(s) on the Collection Order

confirm TFGA held

verify that all
documents listed on the Collection Order are attached

assign internal
control number (single series for all bills)

register receipt
of the bill

time stamps the
Collection Order and return the duplicate to the customer

check the
consistency of the documents

the Collection Order needs to be amended the amendments must be signed by the
customer’s authorized signatory or confirmed in writing.

Checking Documents

is no legal obligation for banks to check documents sent for collection, but
bank should warn its exporting customers of delay that might be caught by
incomplete documentation etc.

Bank Checks:

that the
documents are consistent e.g.

that invoice
amount = the draft amount

all documents
mention the same goods

that vital
documents are not missing e.g.

some countries
require certificate of origin certified by an embassy or consulate

that all
documents requiring customer’s signature are signed by an authorized signatory
of the customer.


Bill of Exchange


Bill of Lading

Insurance Policy (only required for CIF and CIP

documents presented should be examined to ensure they are consistent with each
other. All documents received by the Remitting Bank should be as stated on the
Exporter’s Collection Order and should mention the number of copies of each
document presented.

amendments to documents must be made as soon as possible to avoid any delay to
the Importer because the goods have already been shipped.

Covering Schedule

the documents are in order and instructions complete, the Remitting Bank:

  1. Choose the Collecting
    Bank (if not specified by the Exporter): a branch or correspondent bank in
    the Importer’s country (in the same city/town if possible).
  2. Prepares the Covering
    Schedule on the basis of the Collection Order together with instruction on
    how to send payment to the Remitting Bank (usually by telex unless the
    amount is small).
  3. Mails the Schedule and
    Bill by REGISTERED AIR MAIL to the Collecting Bank.
  4. Diaries a date for
    chasing the bill if payment/advice of acceptance has not been received.

Recording Collections

this stage the Remitting Bank will have to pass entries covering the
transaction regarding the remitting fund to the exporter’s bank. Thus,
exporter’s bank realizes the remitted fund by the importer’s bank. Then
recognizes the fund and records appropriately.


payment is a vital consideration in any international trade transaction. In
this chapter the payment mechanisms of HSBC Trade & Supply Chains are
discussed. Before the discussions of the payment mechanisms the risks of
international trade are briefly discussed-

2.5.1 The Risks

is important to identify the risks that faced when trading internationally and
to be aware of some of the methods available to reduce these risks. In
international trade there are generally more risks for the seller of goods than
for the buyer.

of these risks can be insured against or mitigated through the payment
mechanism. However, reducing risks may transfer both risk and cost to trading
partner, and impact upon competitiveness.

of the main risks in international trade are-

Country risk

  • Political and economic
  • Transfer risk
  • War
  • Import/export

Importer risk

  • Non-payment of
  • Delayed payment of
  • Insolvency of buyer

Industry risk

  • Demands for particular
  • Recession in
    particular industry
  • Competitive
  • Fashionable or
    seasonal goods

Foreign exchange risk

  • Fluctuating exchange
    rates affect pricing and profit.

Exporter risk

  • Problems in producing
    correct documentation.
  • Failure to supply goods
    in accordance with the sales contract.

Transportation risk

  • Risks associated with
    the mode of transport, e.g. marine risks.
  • Storage facilities in

2.5.2 Settling International Trade Debts

four main ways to settle international trade debts are:

  1. Open account
  2. Bill for collection
  3. Documentation credit
  4. Advance payment

method of payment that customer’s trading partner chooses to adopt depends on a
number of factors:

  • The level of trust
    between customer
  • The creditworthiness
    of partner
  • Customer’s respective
    bargaining power
  • Conditions imposed by
    a third party, e.g. a credit insurer
  • Import/export
    regulations (in certain countries)

A. Open Account

open account method of payment is probably the most favored, especially in
Europe and North America. It saves costs and procedural difficulties, although
the risks to the exporter are obviously the highest degree of security for an

on open account terms implies that the exporter trusts the overseas buyer’s
business integrity and ability to pay. This could be by having established a
long-term relationship with the buyer, through obtaining favorable status
reports or credit assessments on the buyer, or it may be that credit insurance
provides the confidence to trade on these terms. Alternatively, market forces
may simply dictate that open account terms are the only viable option to
conduct business.

open account trade, the goods and relevant documents are sent by the exporter
directly to the overseas buyer who will have agreed to pay the exporter upon
arrival of the documents or at the end of pre-specified certain period after
the invoice or shipment date. The exporter loses all control of the importer in
accordance with the original sales contract.

an open account arrangement is not entirely without risk to the importer. For
example, if the importer is committed to producing goods dependent upon receipt
of imported materials, or has already ‘on-sold’ the goods to a third party,
losses could occur if the goods or materials fail to arrive on time or are

B. Bills for Collection

risk ladder illustrates that the collection of commercial documents through the
banking system provides a more secure method of trading than an open account
for the exporter. For the importer this method offers a simple and lower cost
alternative to settle trade debt because under this method, for the agreement
of a period of credit between buyer and seller the buyer is allowed to take
time to re-sell the goods before having to make payment.

C. Documentary Credits

Credits (DCs) are one of the most popular methods for settling international
trade transactions because they offer security to both buyer and seller and
because they are honored through the banking system. The seller (exporter)
wants an assurance that payment will only be made after dispatch of the
specified goods. In some countries, settlement by documentary credit is
insisted upon by authorities, who may wish to control imports or the associated
outflows of foreign exchange.

documentary credit (DC) may be defined as ‘an undertaking by an issuing bank,
on behalf of an importer (the applicant, that payment will be made for goods or
services supplied by an exporter (the beneficiary), provided that the exporter
complies with all the terms and conditions established by the credit’. DCs are
usually issued in irrevocable form, which means that they constitute a definite
undertaking and cannot be revoked or amended without the agreement of all
parties to the credit.

are completely separate transactions from the underlying commercial contracts
and banks are not concerned with, or bound by, the terms of such contracts. An
important provision of UCP is that all DC terms and conditions should be
covered by the documents called for in the credit. In DC operations, banks deal
exclusively with documents and not with the goods, services or other
performances to which the documents relate.

are normally sent to the beneficiary (exporter) via an advising bank in the
beneficiary’s country. The advising bank may also be requested (by the issuing
bank) to ‘confirm’ the credit, i.e. add its own undertaking to that of the
issuing bank. In such cases, the confirming bank assumes the credit risk of the
overseas issuing bank and the political risk associated with the importing
country. On an unconfirmed credit, the advising bank does not make any
commitment to honor the DC; the exporter is relying primarily on the
undertaking of the overseas issuing bank to make payment.

importer can gain additional protection through the document definitions (e.g.
by calling for the independent inspection or quality certificates) and can
control delivery schedules and other aspects of the transaction by stipulating
specific conditions such as a latest shipment date. The importer is assured
that payment will not be made until the issuing bank has checked that the
documents presented are in full conformity with the DC terms and conditions.
However, the importer takes the risk that the goods ma be of inferior

DC terms may provide for payment immediately upon presentation of conforming
documents (sight credit) or at some future date, taking account of any extended
payment terms granted by the seller to the buyer (usance or acceptance credit).
For usance or acceptance credits, payment is made (and the importer’s account
debited) at the end of the extended term (i.e. at maturity date). However, the
shipping documents are usually released to the importer at the time they are
presented to the issuing bank, enabling the goods to be collected.

few risks arise for the exporter because the potential problem areas of the
buyer risk and country risk can be eliminated through  the addition of the ‘ confirmation’ of the
advising bank, thereby transferring the responsibility from the importer’s bank
overseas, to a more familiar bank in the country of the exporter.

using DCs, the exporter knows, usually before manufacture or shipment, the
precise terms and conditions which must be met in order to obtain payment and
when that payment will be received. The exporter should carefully check all DC
terms and conditions upon receipt. If they include unacceptable conditions or
do not reflect the underlying commercial contract, amendment of the DC should
be arranged prior to shipment. The exporter must be able to present the correct
documents and comply fully with the terms and conditions of the credit to
ensure payment. Failure to do so could result in the exporter losing the
protection of the DC 

D. Advance Payment

is no risk for the exporter when payment is received in advance of the goods
being dispatched. However, if payment is made by cheque it should be remembered
that this does not constitute payment until the cheque has been cleared through
the banking system. For cheques payable abroad this can be a considerable
period. Advance payments need not always be for the full value of the sales
contract; it is quite common for a partial advance payment to be made,
particularly for contracts involving capital goods.

method of payment is the latest secure for the importer who, in addition to
cash-flow pressure, has to face several risks-

goods may never
be shipped

goods may be
shipped late

wrong goods may
be shipped

problems with


study is an attempt to measure and analyze the trend of Trade & Supply
Chain Operations of HSBC based on historical data. This study will make
possible to forecast the future position of the undertaken variables. Trade
& Supply Chain operation is composed of export, import and remittance
related operations. So, analyzing trends of each variable before analyzing the
composite trend of Trade & Supply Chain operation might be more reasonable.

above figure shows that both export and import have an increasing trend after
the year 2006. Remittance flow has been decreased in 2007 but it had almost no
impact on the total trade operation. Because total trade operation curve shows
an increasing trend after the year 2006. Overall, the graph reveals that Trade
& Supply Chain operation of HSBC Bangladesh is increasing year by year.

Trend Analysis using Least-square Method

have also used least square method to analyze trend which will help to forecast
the future position of each variable. The basic equation is-

= a + bx,

y is dependent variable, a is constant, b is trend and x is time (Independent
Variable). In this analysis-

Y1 = Export Trend of HSBC

Y2 = Import Trend of HSBC

Y3 = Remittance Trend of HSBC

Y* = Trade Operation Trend of HSBC

us examine the analyzed trend and predict the position of each variable for the
upcoming years.

3.1.1: Export Trend of HSBC:

– 1: Export Trend of HSBC


Export Trend

= 21,615.80 + 6915.90 X

– 1 shows the export trend equation of HSBC. It indicates that during 2004 to
2008 the average export receipt by the bank was Taka 21,615.80 million. It also
indicates that during that period the export receipt was increased at a rate of
Taka 6,915.90 million per year. It is also possible to predict the future
position of export receipts by HSBC. For predicting the position of export
receipts for the year 2009 and 2010, X value will essentially be 3 and 4
respectively for the years according to the used model.







according to the trend analysis the potential export receipts of HSBC will be
Taka 42,363.50 million and Taka 49,289.40 million in the year 2009 and 2010

3.1.2: Import Trend of HSBC:

– 2: Import Trend of HSBC


Import Trend

= 26,485.40 + 7,936.90 X

– 2 shows the import trend equation of HSBC. It indicates that during 2004 to
2008 the average import payment by the bank was Taka 26,485.40 million. It also
indicates that during that period the import payment was increased at a rate of
Taka 7936.90 million per year. It is also possible to predict the future
position of import payments by HSBC. For predicting the position of import
payments for the year 2009 and 2010, X value will essentially be 3 and 4
respectively for the years according to the used model.







according to the trend analysis the potential import payments of HSBC will be
Taka 50,296.10 million and Taka 58,233.00 million in the year 2009 and 2010

3.1.3: Remittance Trend of HSBC:

Table – 3: Remittance Trend of HSBC


Remittance Trend

= 23,348.60 + 2,412.40 X

– 3 shows the remittance trend equation of HSBC. It indicates that during 2004
to 2008 the average remittance earnings by the bank was Taka 23,348.60 million.
It also indicates that during that period the remittance earnings was increased
at a rate of Taka 2,412.40 million per year. It is also possible to predict the
future position of remittance collected by HSBC. For predicting the position of
remittance for the year 2009 and 2010, X value will essentially be 3 and 4
respectively for the years according to the used model.







according to the trend analysis the potential remittance earnings of HSBC will
be Taka 30,585.80 million and Taka 32,998.20 million in the year 2009 and 2010

3.1.4: Trade Operation Trend of HSBC:

– 4: Trade Operation Trend of HSBC


Trade Operation Trend

= 71,449.80 + 17,265.20 X

– 4 shows the trade operation trend equation of HSBC which is composed of
export, import and remittance. It indicates that during 2004 to 2008 the
average amount of trade operation by the bank was Taka 71,449.80 million. It
also indicates that during that period the amount of trade operation was
increased at a rate of Taka 17,265.20 million per year. It is possible to
predict the future position of trade operation by HSBC. For predicting the
amount of trade operation for the year 2009 and 2010, t value will essentially
be 3 and 4 respectively for the years according to the used model.


Trade Operation (HSBC)





according to the trend analysis the potential trade operation of HSBC will be
Taka 1, 23,245.40 million and Taka 1,40,510.60 million in the year 2009 and
2010 respectively.

order to measure the Trade & Supply Chain’s contribution to the profitability
of HSBC bank the analysis of correlation and regression of profit on Trade
& Supply Chain operation could be appropriate. Subjectively it can understand
that Trade & Supply Chain operation contributes a lot to a bank’s
profitability. But for sure, Trade & Supply Chain operation is not the only
factor affecting profitability. Loans and advances are the other variable and
perhaps the most important variable affecting profitability. Even though, this
report is concerned with the performance analysis of Trade & Supply Chain
and specifically this part is concerned with the measurement of Trade &
Supply Chain’s contribution to profitability, we undertook Trade & Supply
Chain operation and loan and advance as the independent variable that influence
the bank’s profitability. This combined analysis could give more rational and
appropriate result for measuring Trade & Supply Chain’s contribution to

Correlation and Regression of Profit on Trade
& Supply Chain Operation and Loan and Advances:

Regression: The basic format of regression equation is Y = a +
bX. Where, Y is the dependent variable, a is constant, b indicates net
regression coefficient and X is the independent variable. In this study the
independent variable is Trade & Supply Chain operation and loan and
advances and dependent variable is profit. In the following equation variables
are termed as-

Y = Profit of HSBC

X2 = Loan and Advances of HSBC

b1, b2 = Regression coefficient


Regression Equation of Profit on Trade & Supply
Chain Operation and Loan and Advances

Regression Equation

-359.63 + 0.004 X1 + 0.065 X2

Calculated Based on collected secondary data.

regression equation is indicating that, if the amount of Trade & Supply
Chain increases by Taka 1 million, the profit of HSBC will increase by Taka
0.004 million provided that Loan and Advances (X2) remains constant.
In addition to this, if the amount of loan and advances increases by Taka 1
million, the profit of HSBC will increase by Taka 0.065 million provided that Trade
& Supply Chain Operation (X1) remains constant. So, the equation
makes it possible observe the extent of Trade & Supply Chain operation on
the bank’s profitability.



Trade Operation

& Advance



Trade Operation



& Advance




correlation matrix is showing that the correlation between profit and trade is
0.895. So, there is a presence of high degree of position relationship between
profit and Trade & Supply Chain operation. The matrix is also showing that
the correlation between profit and loan and advances is 0.96 which indicates a
very high degree of positive relationship between these two variables. In fact,
this analysis is showing that the relationship between profit and loan and
advances is higher than that of between profit and Trade & Supply Chain
operation. But still, there is significantly high degree of positive
relationship between bank’s profit and Trade & Supply Chain operation.

summary table of contains two valuable components. R indicates the coefficient
of correlation and R2 indicates the coefficient of determination.
The value of R is 0.962 which means there is a very high degree of relationship
among all the variables under the study. Moreover, as R2 is 0.926,
it means that the Trade & Supply Chain operation and loan and advances
explain 92.6% of the variation in the profitability. That is 92.6% variation of
profitability of HSBC can be explained by the variation of Trade & Supply
Chain operation and loan and advances.


a developing country, Bangladesh as well involved in international trade. From
the very early days the amount of national trade is increasing gradually in
order to satisfy inland demand of product and services as well as to satisfy a
portion of international demand. After satisfying the domestic demand
Bangladesh exports varieties of goods to the international market and in order
to satisfy the domestic demand Bangladesh imports varieties of goods and
services which are not available or adequate in the domestic market or economy.
The growth and acceleration rate of national trade of Bangladesh is depicted in
the following table-








table indicates the average growth rate of export, import and composed national
trade of Bangladesh during 2003 to 2007. The average growth rate of national
export is approximately 21.61% per annum, which indicates that each trend value
is 21.61% higher than the trend value of the previous year.

average growth rate of national import is approximately 20.31% per annum, which
indicates that each trend value is 20.31% higher than the trend value of the
previous year.

the growth rate of national trade is affected by the growth rate of export,
import. The table shows that the average growth rate of national trade is
approximately 20.85% per annum, which indicates that each trend value is 20.85%
higher than the trend value of the previous year.

the growth rate of national trade is increasing at a slight increasing rate.
Due to increase of domestic demand, economic activity, international demand for
Bangladeshi goods the amount of national trade is increasing from year to year.
It is possible to get a clearer picture of Bangladesh’s national trade from the
following graph-

Figure: National Export and Import

above graph is presenting the national trade scenario which consists the amount
of national export and import from year to year during 2003 to 2007. During
this period both national export and import got an increasing trend. Initially
in 2003 the difference between the amount of national import and national
export was small. But gradually from the year 2003 to 2007 the excess of
national import over national export rises.

Figure: National Trade

above graph is demonstrating the combined trend of national trade (export + import)
for the period of 2003 to 2007. From the graph it can generally be said that
there exist an upward tend of national trade. It concludes that, due to
increase of domestic demand, economic activity, and international demand for
Bangladeshi goods the amount of national trade is increasing from year to year.
All of above analysis tells that, in the upcoming years the amount of national
trade will increase gradually.

economic unit has contribution to the economy to some extent. HSBC is a player
in the economy and as an organization it is an economic unit as well. So,
HSBC’s different activities also have contribution to the economy to some
extent. Before stating HSBC Trade & Supply Chain’s contribution to economy
of Bangladesh let us examine the contribution of national trade to the economy
of Bangladesh.

Figure: National Trade as a Percentage
of GDP

graph is demonstrating the contribution of national trade to the economy
measured as a percentage of GDP. In the year 2003, national trade was
approximately 35% of the gross domestic product of Bangladesh. Thereafter, over
the years national trade contributed highly to the GDP of Bangladesh. By 2007
the trade was almost 50% of Bangladesh’s gross domestic product.

Figure: HSBC’s Trade Operation as a
Percentage of Total National Trade

trade & supply chain Operation has some contribution to facilitate the
national trade. Because, the updated and outstanding Trade & Supply Chain
of HSBC assists a portion of the national exporter and importer to do their
trade business smoothly. Thus, HSBC’s trade & supply chain operation has
contribution to national trade to some extent. The above graph is the
representation of HSBC Trade & Supply Chain’s contribution to the national
trade. HSBC was able to grab an increased percentage of the national trade in
2005. But the percentage declined in 2006. In 2007, the percentage remained
same as in 2006.

the measurement of national trade’s contribution to gross domestic product and
HSBC Trade & Supply Chain’s contribution to the national trade is completed
earlier, it will be easier to understand the contribution of HSBC’s trade &
supply chain to the gross domestic product of this country. A brief illustration
is given below with a simple graphical presentation-

graph is showing HSBC Trade & Supply Chain’s contribution to the GDP of
Bangladesh. As the Trade & Supply Chain of HSBC contributes to the national
trade, it also must have contribution to the GDP as well. By the year 2007,
HSBC’s trade & supply chain facilitated total trade of taka 71,509 million
which accounted almost 1.5% of GDP. This is the second highest ratio among the
presented last 5 years.

Employment Concern

the growth of HSBC and its operation in the Bangladesh economy the creation of
employment opportunity and empowering local people is an important aspect of
measuring the contribution of the concerned bank’s operation to the economy. In
Bangladesh HSBC has 8 branches in Dhaka, Chittagong and Sylhet. Among these
branches, Trade & Supply Chain Department exists only in Dhaka main office
and in Chittagong. Moreover, to facilitate the trade of EPZ customers, HSBC Trade
& Supply Chain Department operates offshore banking services. There are
also well decorated offices of HSBC in the EPZ in order to provide services to
the EPZ customers in a quick manner. Thus with the growth of Trade & Supply
Chain operation, employment opportunity is created in that specific department
as well as in the entire HSBC. Creation of employment opportunity and
empowering local people is one of the most important contributions to the
economy of Bangladesh where unemployment and inflation is a key problem.


problems specified under this study and during the organizational attachment is
pointed out below-

The position of
HSBC in import business and remittance is not as higher as some other banks.
This might be keeping HSBC away from deriving the dominant position among the
banks in Bangladesh.

Most of the
Export Turnover of HSBC comes from the EPZ area or offshore banking. The Export
turnover from the on-shore area is relatively less.

In this modern
technological era banks of this country are still relying on lots of paper
works which are possible to accomplish electronically. In Bangladesh, HSBC is
also doing lots of manual tasks in order to comply with local systems.
Specifically, Trade & Supply Chain Department of HSBC in our country is
still maintaining different forms, registers etc. in order to serve the
purposes of local corporate clients and comply with different domestic rules
and regulations.

The inefficient
employees of corporate clients cause HSBC to provide an extra effort for
different tasks, which is unusual and unexpected. For international trade,
submitting different trade documents on time and following up specific steps
are essential. In most cases, different corporate clients of HSBC trade &
Supply Chain Department do not take enough care regarding this. As a result, Trade
& Supply Chain Department’s employees often become bound to provide extra
time and energy.

Often huge amount
delivery failures are being piled up at branches due to inefficient courier
services. For this reason the foreign documents of L/C cannot be reached at
perfect place at perfect time.


to the respective problems stated above some recommendations are stated below –

HSBC should
increase their investment in Trade & Supply Chains and branches into the
major areas so that they can lead the highest position among banks in

The Export
turnover from the on-shore area should be increased through massive campaign
and other means necessary. This is necessary for HSBC in order to generate more

Since, HSBC can’t
but have to comply with local system; it should employ more personnel in order
to accomplish the paper works quickly and in efficient manner.

HSBC can arrange
some periodic training for its corporate clients where different employees of
corporate client will receive training and clear instruction regarding the
trade document formalities. It might help HSBC employees to allocate time and
energy for other works which might be advantageous for both the clients and

HSBC should
strictly monitor the courier services that are engaged in delivering mails and
documents. So the bank should assert some control on its mailing activities in
order to ensure proper delivery of mail and documents. 


The intra industry profit destroying rivalry in the
banking industry makes a bank’s operation challenging to squeeze out any
abnormal profit. In such situation, with an enormous financial strengths and
brand image, HSBC is serving the local people of Bangladesh by offering diversified
banking services. Doing outstanding performance and being the dominant among
the industry in this cut throat competitive situation depends not only on the
internal strengths but also on the external opportunities. Considering this,
efficient, timely and updated corporate strategy makes a way out for an
organization to reach the desired position. HSBC is such a multinational bank
which was able to grow its size in banking industry of Bangladesh through
consistent performance. Though HSBC has established image as one of the best
service provider for its potential customers; yet HSBC is not the market
leader. The consistent performance of the bank over the last few years is the
evidence of the strengths of the bank, efficiency of management team, and uphill
struggle of employees. Despite the existence of deficiencies in some areas, the
overall performance of HSBC was outstanding among the banking industry in
Bangladesh. The bank has to overcome the shortcomings in the near future and
offer new innovative services in order to retain its position as a leader
amongst banks year after year.



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