CHAPTER 1

INTRODUCTION TO THE INTERNSHIP REPORT

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ChapterContents

BackgroundoftheStudy
Methodology
Rationaleofthestudy
Objectiveofthereport
ReportOrganization
Scope&Limitation

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INTRODUCTION
TO THE INTERNSHIP REPORT

1.0 Background of the study

As a mandatory part the BBA Program, all the students of the faculty of Business Studies,
University of Rajshahi have to undergo a three month long internship program with an
objective of gaining practical knowledge about current business world. After this internship
program each and every students have to submit an internship report mentioning their
activities during the internship program.
Ive started my internship at the Dhaka Bank, Narayanganj Branch, Narayanganj on 1st July
2013 and at the end of the program I am submitting my internship report focusing on the
contribution of Export-Import Business and Foreign Remittance Management to the overall
performance of bank especially on profitability perspective.
Foreign operation includes all the activities like foreign remittance, Import, Export,
Investment etc. related with foreign country. It gives its customer the L/C facility in case of
Import & Export. I would like to choose the Export, Import, & Remittance management of
Dhaka Bank as the topic of my internship report.

1.1 Rationale of the study

Banks are investing in financial foreign operation mostly as export, import, exchange
dealings, remittance etc. Dhaka Bank earns great amount of profit through L/C business &
Foreign Remittance.
For the last few years this service sector experiencing a severe competition with other banks
who also offering same types of foreign operation facilities and innovative packages to
customers. This internship report intends to explore the foreign operation facilities given by
the Dhaka Bank over 5 years and how the bank addressed its risk exposure.

1.2 Objective of the Report

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(i)

Broad objectives:
The broad objective of the study is to search the different types of foreign operations
of Dhaka Bank Ltd. and the detail process of this.
Specific objectives:

(ii)

The specific objectives of the study may be described as:

To discuss the details business, the process, the process of maintaining this business by

the bank, the risks related to this business and the steps for minimizing risks.
The policies related to business and the compliance with the policies of Bangladesh

Bank.
To do some other tests like regression analysis, trend analysis etc to know the condition
of this type of business over last few years.

To identify problems of Dhaka Bank Limited.

To recommend suggestion for the development of Dhaka Bank Limited.

To explore the opportunities and competitive advantages that has been ignored by DBL.

1.3 Methodology
1.3.1 Research type:
This is basically an explanatory research because it will try going insight the problem and
trying to understand the problem more clearly.
1.3.2 Data collection method
Primary & Secondary sources of data have been used in the study.
Primary sources of data has been collected from

Official records of Dhaka Bank Limited (DBL).

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Face to face conversation with the bank officers & staffs.

Personal Interview Face-to-face conversation and in depth interview with the

respective officers of the branch.

Personal observation Observing the procedure of banking activities followed by

each department.

Daily diary

Practical work exposures from the different desks of the departments of the Branch
covered.

Informal conversation with the clients or customers.

Relevant file study as provided by the concerned officer.

Secondary sources of data has been collected from

Annual reports of Dhaka Bank Ltd.

Website of respective bank.
Different newspapers, published journals and articles.
Bangladesh bank monthly economic trends.
Bangladesh bank bulletin.

1.3.3 Calculative measurement

It consists of the following steps:

Trend analysis

Comparative analysis

1.3.4 Result presentation:

As the research proposal is not completed I can give a brief explanation of the format of the
results as they will be presented, e.g.

Line graphs

Tables

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1.3.5 Findings & Recommendation:

At last, I have included the recommendation essential for the development of foreign
exchange and foreign remittance management of DBL.
1.3.6 Conclusion
1.3.7 Appendix:

Include one (1) copy of each instrument to be used in the study.

Include tables or reference tools that would serve to enhance the knowledge of the
individuals reviewing the research.

1.4 Scope & Limitations of the Study

Scope
A comprehensive knowledge on the organization and a thorough knowledge on the
Export-Import operation and foreign remittance of the organization have come under the
scope of the report.
The report is about to Import-Export Business and foreign remittance management of the
Dhaka Bank for last 5 years and L/C operations during January 2008 to December 2012.
Limitations

The organization maintains confidentiality in providing some relevant information, so I

could not incorporate those.

Information regarding L/C is not maintained in a structured manner and they are so

though to gather.
Besides due to time limitation I cant cover credit department part properly.
The most functions of DBL are manual and lengthy though it is trying to upgrade.
The officials of the organization remain extremely busy throughout the day. So in spite of
their keen interest they did not have enough time to supervise and guide me.

1.5 Report organization

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The report is organized as follows:

The initial part of the report includes the overall organization; which describes the
history, background, operations & activities, financial conditions and the products &
services offered by the Dhaka Bank at a glance.
The later part is the main project part, which includes six chapters describing L/C
practice in Dhaka Bank, Remittance Management of Dhaka Bank, behavior analysis,
recommendations regarding L/C operation and overall profitability point of view.

CHAPTER 1 : INTRODUCTION TO THE INTERNSHIP REPORT

CHAPTER 2 : LITERATURE REVIEW
CHAPTER 3 : OVERVIEW OF THE DHAKA BANK LIMITED
CHAPTER 4 : FOREIGN EXCHANGE OPERATION OF DBL
CHAPTER 5 : L/C OPERATION: EXPORT FINANCING
CHAPTER 6

: L/C OPERATION: IMPORT FINANCING

CHAPTER 7 : FOREIGN REMITTANCE MANAGEMENT OF DBL

CHAPTER 8 : ANALYSIS
CHAPTER 9 : FINDINGS & RECOMMENDATION
CHAPTER 10

: CONCLUSION

References

CHAPTER - 2
LITERATURE REVIEW
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LITERATURE REVIEW
The History of Foreign Exchange

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The Foreign Exchange trading history was started in 1875. Prior to 1875, countries primarily
used gold and silver as a form of international payment. Payment using gold and silver were
hampered by their devaluation according to external factors such as an increase in the discovery
of new deposits, which would lead to a change in supply and demand. This factor would change
the Foreign Exchange trading history forever.
From the infantile stages of foreign exchange during the Middle Ages to WWI, the foreign
exchange markets were relatively stable and without much speculative activity. After WWI, the
foreign exchange markets became very volatile and speculative activity increased tenfold. From
1931 until 1973, the foreign exchange market went through a series of changes. These changes
greatly affected the global economies at the time and speculation in the foreign exchange
markets during these times was little, if any.
The foreign exchange market (fx or forex) as we know it today originated in 1973. However,
money has been around in one form or another since the time of Pharaohs. The Babylonians are
credited with the first use of paper bills and receipts, but Middle Eastern moneychangers were
the first currency traders who exchanged coins from one culture to another. During the middle
ages, the need for another form of currency besides coins emerged as the method of choice.
These paper bills represented transferable third-party payments of funds, making foreign
currency exchange trading much easier for merchants and traders and causing these regional
economies to flourish.
According to Julian Walmsley, author of The Foreign Exchange and Money Markets Guide,
although foreign exchange has existed since before biblical times, a formal global market for
foreign exchange did not develop until the 1800s with cable transfers taking place between
London and New York.
Historically, governments attempted to set exchange rates themselves to improve a country's
trade position. If a country set its exchange rate low relative to others, it could improve the
country's trade position by making its exports more affordable and imports from other countries
less affordable. Such policies led to trade wars as countries struggled to improve their trade
positions.

Foreign Exchange Trade in Bangladesh

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This section surveys practical contributions on various aspects of foreign exchange scenario in
Bangladesh. Several studies have attempted to analyze the behavior of foreign exchange trade in
Bangladesh.
Zahid Hussain Co-authored with Farria Naeem (2009) analyzed the foreign remittance in
Bangladesh and found that Remittances have emerged as a key driver of economic growth and
poverty reduction in Bangladesh, increasing at an average annual rate of 19 percent in the last 30
years (1979-2008). They also found that number of workers finding employment abroad every
year, oil price, exchange rate and GDP growth are the key determinants of changes in the level of
remittance inflow.
Mohammad Mafizur Rahman (2004) analyzed The Foreign Trade of Bangladesh: Its
Composition, Performance, Trend, and Policy and found that the export earnings are
continuously increasing over the years with increased import payments. Though import
payments are always higher than the export earnings in absolute terms, the percentage of
Bangladeshs export to imports is improving gradually and it is quite impressive. They also
found that the export growth rate of Bangladesh was higher than the export growth rate of the
world and the SAARC countries. The import growth rate of Bangladesh was also higher than that
of the world and the SAARC countries during the 1980s and 1990s. Bangladeshs import share
as percentage of world and SAARC countries imports has also increased over the years.
Monzur Hossain & Mansur Ahmed (October, 2009) published a working paper series named
Exchange Rate Policy under Floating Regime in Bangladesh: An Assessment and Strategic
Policy Options. They identified two issues that may justify intervention in the foreign exchange
market. One is the exchange market pressure and the other is exchange rate pass-through. They
also found a positive link between domestic credit growth (or reserve depletion) and exchange
rate market pressure is observed, indicating that any sterilized intervention would lead to
exchange rate market pressure.

CHAPTER - 3
OVERVIEW OF THE ORGANIZATION: Dhaka
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Chapter Hints.......

Chapter Contents

Chapter Hints.......

This section is designed to introduce the Dhaka Bank at a glance. All about the bank is bring here together in a summary form. History, function, management system, network of its Branch, and the services it offered includes this chapter. The prospect of Import-Export Business of total Bank is also summarized here.

Chapter Contents

Management Hierarchy
Branch network
Mission
Motto
Organization Structure
Objective of the DBL
Performance Highlights of the Company -2012
History of the Bank
Vission
Values

3.0 History and Heritage of DBL

The emergence of Dhaka Bank Limited in the private sector was an important event in the
Banking arena of Bangladesh. Dhaka Bank Limited was born as the first hundred percent
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Bangladesh owned Bank in the private sector. From the very inception it is the firm
determination of Dhaka Bank Limited to play a vital role in the national economy. It is
determined to bring back the long forgotten taste of banking services and flavors. It wants to
serve each one promptly and with a sense of dedication and dignity.
Dhaka Bank Limited is the leading private sector bank in Bangladesh offering full range of
Personal, Corporate, International Trade, Foreign Exchange, Lease Finance and Capital Market
Services. Dhaka Bank Limited is the preferred choice in banking for friendly and personalized
services, cutting edge technology, tailored solutions for business needs, global reach in trade and
commerce and high yield on investments, assuring Excellence in Banking Services.
A group of highly acclaimed businessmen of the country grouped together to responded to this
need and established Dhaka Bank Limited in the year 1995.
Dhaka Bank Limited was incorporated as a public limited company under the Companies Act.
1994. The Bank started its commercial operation on July 05, 1995 with an authorized capital of
Tk. 1,000 million and paid up capital of Tk. 100 million. The paid up capital of the Bank stood at
Tk 1,934,252,875 as on June 30, 2008. The total equity (capital and reserves) of the Bank as on
June 30, 2008 stood at Tk 3,424,609,016.
Bank efforts to provide Excellence in banking services, the Bank has launched Online Banking
service, joined a countrywide shared ATM network and has introduced a co-branded credit card.
A process is also underway to provide e-business facility to the bank's clientele through Online
and Home banking solution.
Banks are not only profit oriented commercial institution but have a public base and social
commitment. Admitting this true DBL is going on with its diversified banking activities. DBL
introduced monthly Savings Scheme, special Deposit Scheme, and Consumers Credit Scheme
and savings Insurance scheme etc. to combine the people of lower and middle income group.

3.1 Mission

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To be the premier financial institution in the country providing high quality products and services
backed by latest technology and a team of highly motivated personnel to deliver Excellence in
Banking.

3.2 Vision
Dhaka Bank draws their inspiration from the distant stars. Its team is committed to assure a
standard that makes every banking transaction a pleasurable experience. Their endeavor is to
offer you razor sharp sparkle through accuracy, reliability, timely delivery, cutting edge
technology, and tailored solution for business needs, global reach in trade and commerce and
high yield on investments.

3.3 Values

Customer Focus

Integrity

Teamwork

Respect for the Individual

Quality

Responsible Citizenship

3.4 Motto
The bank will be a confluence of the following three interests:
Of the bank

: Profit maximization

Of the customer : Maximum benefit and satisfaction.

Of the society

: Maximization of welfare

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3.5 Objectives of the DBL

The objectives of the Dhaka Bank limited are described below in the following:
1. To meet the demands of discerning customers.
2. To achieve a distinction like the luminaries in the sky.
3. Prime objective is to deliver a quality that demonstrates a true reflection of their vision
Excellence in Banking.
4. To participate in the industrial development of the country to encourage the new and
educated young entrepreneurs to undertake productive venture and demonstrate their
creativity and there by participate in the national development.
5. To develop saving attitude and making acquaintance with modern banking facilities.
6. To play a significant role in economic development of the country.
7. Ensuring highest use of the professional workforce through enhancement of their aptitude
and competence.
8. Responding to the need of the time by participating in syndicated large loan financing
with like-minded banks of the country, thereby expanding the area.
9. Brining modern banking facilities to the doorstep of general public through
diversification of banking services, thereby arousing saving propensity among the people.
10.

Foreign cordial, deep-rooted and firm banker customer relationship by dispensing

prompt and improved clientele services.

11.

Taking part in the department of national economy through productive

development of the banks resources as well as patronizing different social activities.

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12.

Connecting clients to modern banking practices by the best application of

improved information technology, so that they get encouraged to continue and feel proud
of banking with DBL.

3.6 Branches of DBL

The Bank has 75 branches, 3 SME Service Centers, 1 Business Center, 2 Offshore Banking Units
across the country and a wide network of correspondents all over the world. The Bank has plans
to open more branches in the current fiscal year to expand the network.

The Bank offers the full range of banking and investment services for personal and
corporate customers, backed by the latest technology and a team of highly
motivated officers and staff. DBL has tailored a complete solution to its export
driven customers with a countrywide network of 15 Authorized Dealer (AD)
Branches, 1 offshore banking unit and other 56 Non - AD branches.

3.7 ORGANIZATIONAL STRUCTURE OF DHAKA BANK

LIMITED

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3.8 MANAGEMENT HIERARCHY OF THE DHAKA BANK

LTD

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3.9 MANAGEMENT SYSTEM

Since its journey as Commercial Bank in 1995 Dhaka Bank Limited (DBL) has been laying great
emphasis on the use of improved Technology. It has gone to Online Operation System since
2003. And the new Banking Software FLEXCUBE was installed. As a result the Bank will able
to give the services of international standards. As per Bangladesh Banks instruction BASEL II
Implementation Team has been formed which will be responsible for proper implementation of
Basel II capital adequacy guidelines in the Bank. The guidelines have been issued by Bangladesh
Bank recently but the target date for implementation is 31st December

3.10 DIVISION OF DHAKA BANK LIMITED

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The whole operation of DBL has been divided into different divisions for the optimal
performance of the workforce. The roles of each division are well defined. The divisions have
got interrelations between them of DHAKA BANK LTD are:
Credit Division
Operation Division
Central Accounts Division
Information Technology Division
Retail Banking Division
Investment Division
Human Resources Division
Audit & Risk Management Division
Dhaka Bank Training Institute

Page 17 of 75

3.11 Performance Highlights of DBL -2012

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Performance Highlights of DBL (Source: Annual report of DBL-2012)

CHAPTER 4
FOREIGN EXCHANGE OPERATION OF

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ChapterHints.......

Chaptercontents

ChapterHints.......
ThissectionisdesignedtoshowtheforeignexchangeoperationofNBL.ThisisallabouttheForeignexchangeperformance,partiesandaccountsrelatedtotheforeignexchange,L/Coperationprocess,etc.

Chaptercontents

OperationalFlowofExport&Import
ActivitiesofForeignExchangeSection
ForeignExchangeOperationsofDBL
DifferentAccountsRelatedtoForeignExchangeTransaction
DocumentsinForeignExchangeBusiness
StepsinL/Copening

4.0 Foreign Exchange Operations of

DBL

Foreign exchange is an important department of Dhaka Bank Limited, which deals with import,
export and foreign remittances. Foreign exchange department is international department of the
bank. It deals globally and facilitates international trade through its various modes of services. It
bridges between importers and exporters. Bangladesh Bank issues license to scheduled banks to
deal with foreign exchange. These banks are known as Authorized Dealers (AD). If the branch is
AD in foreign exchange market, it can remit foreign exchange from local country to foreign
country. This department mainly deals with foreign currency. This is why this department is
called foreign exchange department.
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Some national and international laws regulate functions of this department. Among these,
Foreign Exchange Act, 1947 is for dealing with foreign exchange business, and Import and
Export Control Act, 1950 is for Documentary Credits. Governments Import and Export policy is
another important factor for import and export operation of banks.
13 branches among 75 of DBL deal with Export and Import.

Performance of Foreign Exchange (2008-2012)

Year
Export
Import
Foreign
remittance

2,008
39,038
65,737

2,009
33,305
46,160

2,010
36,924
69,606

2,011
46,247
71,377

2,012
48,928
76,648

11,834

9,786

11,097

13,201

15,840

The banks performance in this area was satisfactory. Total import, export, and remittance
business transacted were Tk. 76,648 million, Tk. 48,928 million and Tk. 15,840
million respectively during 2012. The growth rate of the import business was 7.38% and
the main items of import were industrial machineries, raw materials, commodities, and
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other consumer products. The growth rate of the export business was 5.80% and the items
of export were RMG, Shrimp, jute & jute goods leather, tobacco, ceramic tiles, tempered
quoted glass, bone crust, betel-nut etc. The growth rate of the remittance business was
20% and remittances were mainly for household uses from the NRB ( Non Resident
Bangladeshis) living and working in various parts of the world through various exchange
house and Western Union. The growth of export gave the bank an edge in managing
required foreign currency for meeting L/C commitments. The import and export business
were contributed by their corporate clients.

4.1 Regulatory Requirements of Foreign Exchange

Any import and export of our country is regulated by different local and international laws and
regulatory bodies. The core guidelines under the preview of which import and export of our
country have to be performed are:

Import Policy
Export Policy
Guidelines for foreign exchange transaction of Bangladesh Bank (Vol.1 &2).
Circular issued by Bangladesh Bank
Circular issued by NBR
Circular issued by CCI & E
UCPDC (ICC publication no.600) & ISBP, URC, URR.
Public Notice

Ministry of Commerce Circular

Other Authorization (i.e. NBC Dept)

Among the regulatory bodies, Chief Controller of Import and Export, Bangladesh Bank play
major role in monitoring and ensuring compliance of various regulations

4.2 Activities of Foreign Exchange Section

Foreign Exchange Department is divided in to three sections.

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4.3 Documents in Foreign Exchange Business

In Foreign Exchange Department different types of documents are essentially needed. So a short
description of important documents is given here.
Letter of Credit (L/C):
Letter of credit (L/C) can be defined as a Credit Contract whereby the buyers bank is
committed (on behalf of the buyer) to place an agreed amount of money at the sellers disposal
under some agreed conditions. Since the agreed conditions include, amongst other things, the
presentation of some specified documents, the letter of credit is called Documentary Letter of
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Credit. The Uniform Customs & Practices for Documentary Credit (UCPDC) published by
international Chamber of Commerce (1993) Revision; Publication No. 500 defines
Documentary Credit.
Bill of Lading:
In international trade shipping occupies an important place as a mode of transport. The document
evidencing the carriage of goods by sea is the bill of lading. A bill of lading is a document issued
by the shipping company or its agent, acknowledging the receipt of goods for carriage which are
deliverable to the consignee or his assignee in the same condition as they were received.
The Details on the bill of Leading should include:

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

Identify marks and numbers, if any.

The name of the carrying vessel.

Evidence that the goods have been loaded on board.

The ports of shipment and discharge.

The names of shipper, consignee, and name and address of notifying party.

Whether freight has been paid or is payable at destination.

The number of original bills of lading issued and the date of issuance.

Commercial Invoice:
A commercial invoice is a document containing full description of the goods shipped, its quality,
quantity, weight, unit price and total price, terms of sale, packing specifications, shipping marks,
LCAF No, LC No, exporters Registration number, B/L No, Name of the vessel etc. It is prepared
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and signed by the exporter and addressed to the importer. If shipment is made under LC, the
above descriptions must confirm to those required by the LC, Commercial invoice is normally
made out in set of five copies all of which must be signed by the exporter.
Certificate of Origin:
A Certificate of origin declares the place of actual manufacturer or growth of the goods. A
country may place restrictions on import from certain countries or preferential treatment may
accord in tariff for, imports from certain countries. For both these purposes, certificate of origin
becomes necessary. Usually such certificates are issued by the Chambers of Commerce or Trade
Associations in the exporting countries.
Inspection Certificate:
This is usually issued by an independent inspection company located in the exporting country
certifying or describing the quality, specification or other aspects of the goods, as called for in
the contract and the L/C.
Packing List:
The list would contain the details of goods contained in individual packages. This helps in
identifying the contents of specified packages and thus may facilitate assessment by the customs.
Insurance Certificate:
The insurance certificate documents must Be that specified in the credit.

Cover the risks specified in the credit.

Be consistent with the other documents in its identification of the voyage and description

of the goods.
Unless otherwise specified in the credit.
Be a document issued and / or signed by an insurance company or its agent, or by

underwriters.
Be dated on or before the date of the date of shipment as evidenced by the shipping

documents.
Be for an amount at least equal to the CIF value of the goods and in the currency of
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credit.
Import registration Certificates (IRC)
To import, a person should be competent to be an importer according to import and Export Act,
1910. Chief Controller of the Import and Export provides the registration (IRC) to importer.
Applicant has to submit IRC (Inventors Registration Certificate). It is a certificate being renewed
every year. This certificate is necessary if the contract is made between the buyers and the agents
of the sellers. IRC is of two types COM and IND. COM is given for commerce purpose and
IND is given for industrial purpose.
Bill of exchange:
It is an important instrument used primarily to finance foreign trade. It is an unconditional order
in writing signed by the person giving it requiring the receiver to pay certain sum of money to its
holders to a third person. The sum may be payable on demand or at a future time specified in the
bill. According to the section 01, Negotiable Instruments (NI) Act-1881, A bill of exchange is
an instrument in writing containing an unconditional order signed by the maker, directing a
certain person to pay [on demand or at fixed or determinable future time] a certain sum of money
only to or to the order of a certain person or to the bearer of the instrument.
Letter of Indent:
Many sellers have their agent in sellers country. If the contract of buying is made between the
buyers and the agent of the sellers then letter of indent is required.
Pro forma Invoice or Indenters Certificate:
An export invoice issued by a prospective exporter to a prospective buyer for such purposes as
obtaining import and foreign exchange licenses.
Letter of credit authorization form (LCAF)
After obtains IRC persons have to secure a Letter of Credit Authorization (LCA) form
Bangladesh Bank. And then a person become a qualified importer. He is the person who requests
or instructs the opening bank to open an L/C he is also opener or applicant of the credit.

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Forwarding
Forwarding is the letter given by the advising bank to the issuing bank. Several copies are sent to
the issuing bank. All copies including original should be kept in the bank.
Tax Identification Number or TIN
Recently, there has been made a provision to give a certificate named TIN (Tax Payers
Identification Number). Taxation department issues this certificate.

4.4 Different Accounts Related to Foreign Exchange

Transaction
There are three types of accounts Maintained by the bank for transferring funds. They areas
follow:
NOSTRO Account:
An account of the branch in a multinational bank used for transferring funds is called NOSTRO
Account.
VOSTRO Account:
VOSTRO Account is the opposite of NOSTRO Account where a multinational bank maintains
account in the local bank to meet the requirement of sending funds.
LORO Account:
Loro account means their account with you. Account maintained by third party is known as
loro account; suppose DBL is maintaining an account with HSBC Bank, New York and at the
same time Sonali Bank is also maintaining a nostro account with HSBC Bank, New York. From
the point of view of DBL Sonali Banks account maintained with HSBC New York is the loro
account.

4.5 Documentary Letter Of Credit

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It is the most important and commonly used in connection with foreign trade. Letter of Credit is
an undertaking by a banker of the importer to the exporter, to the effect that the amount of the
L/C will be duly paid. The banker on behalf of the importer issues the L/C in favor of the
exporter (beneficiary) and forwards the same to the exporter to the effect that the bill drawn by
him shall be duly accepted and paid. It creates confidence in the mind of the exporter so far as
payment of the bill is concerned. It is also facilitate the exporter to get the benefit of
discounting the bill before the date lf maturity.

4.5.1 Parties of Letter Of Credit Transaction

Issuing Bank: It is the buyer's bank. The bank that agrees to the request of the

applicant and issues its letter of credit in terms of the instructions of the applicant.
Advising Bank: It is the seller's or beneficiary's Bank. The bank usually situated in the
seller's or beneficiary's country (most of the time with which there exists
corresponding relationship with the buyer or issuing bank), request to advice the credit

to the beneficiary.
Confirming Bank: Sometimes issuing bank request advising bank or another bank to
add confirmation to the letter of credit. When that bank do this then such bank is called

confirming bank. So advising bank can be act as confirming bank.

Reimbursing Bank: This is the bank that is nominated by the issuing bank to pay (it
is also known as paying bank) or to accept drafts. It can be situated in another country.
In this connection it is to say that American Express Bank & Nat West Bank act as
reimbursing bank in case of Dhaka Bank Limited. The account, which maintains
Dhaka Bank Limited with Nat West Bank & American Express Bank, is called "Nostro
Account" and in rivers the account, which is maintained by Nat West Bank &
Issuing Bank
American Express Bank with Dhaka Bank Limited, is called "Vostro Account"
()

Advising Bank

()

Reimbursing
Bank

()
Negotiating Bank
()

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L/C Working procedure

Negotiating Bank: The bank, which makes payment to the exporter after scrutiny, the
documents submitted by the exporter with the original letter of credit then it is called

Negotiating Bank.
Nominated Bank: The bank that is nominated by the issuing bank to pay (nominated
bank is known as paying bank) or to accept drafts (nominated bank is known as
accepting bank) or to negotiate (nominated bank is known as negotiating bank).
Usually the advising bank is request & authorized to be the nominated bank unless the

credit allows negotiation by any bank

Seller: Beneficiary of the letter of credit is seller.

4.5.2 Forms of Documentary Letter of Credit

The letter of credit can be either revocable or irrevocable. It needs to be clearly indicated
whether the letter of credit Revocable or Irrevocable. When there is no indication then the
letter of credit will be deemed to be a revocable L.C. The details are as follows:
Revocable letter of credit: A revocable credit is one, which can be amended or cancelled
by the issuing bank. At any moment without "prior notice" to the beneficiary. So this is
clear that revocable credit can be revoked any time without prior notice. In case of seller
(beneficiary), revocable credit involves risk, as the credit may be amended or cancelled
while the goods are in transit and before the documents are presented, or although
presented before payments has been made. The seller would then face the problem of
obtaining payment on the other hand revocable credit gives the buyer maximum
flexibility, as it can be amended or cancelled without prior notice to the seller up to the
moment of payment buy the issuing bank at which the issuing bank has made the credit
available. In the modern banking the use of revocable credit is not widespread.

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Irrevocable letter of credit: An irrevocable credit is one, which cannot be cancelled or

amendment able any time without the consent of each party. Through this letter of credit
the issuing bank gives a definite, absolute and irrevocable undertaking to honor its
obligations, provided the beneficiary complies with all the terms & conditions of the
credit. Sometimes, Letter of Credits is marked as either with recourse to drawer or
without recourse to drawer. Dhaka Bank mostly used Irrevocable Letter of Credit

without Recourse.
Government letter of credit: That letter of credits, which are done by the Defense

Ministry and other Ministries of the government.

Master or mother letter of credit: The L.C. which come from outside the country to the
exporter from importer that is mother or master letter of credit.

Other classes of letter of credit:

Revolving letter of credit: When the L.C. is used again & again in same amount for a

specific period of time that is called revolving letter of credit.

Transferable letter of credit: Exporter can transfer his / her right of letter of credit in
full or partly to a third party. In generally, the exporter is not the supplier but act as a

middleman with in the supplier & importer.

Back-to-Back letter of credit: The letter of credit, which done by the security of mother

letter of credit.
Clean or open letter of credit: The letter of credit, which provides assurance of payment
bill of exchange without submission, of any export documents that is called clean letter of

credit.
Confirmed letter of credit: When the Irrevocable letter of credit issued by issuing bank
to the exporter as assurance of the L.C., then as per advice or documents the authorized
representative or representative bank's provide assurance or payment guarantee that is

confirmed letter of credit.

At sight letter of credit: It is a sight payment LC and the amount of LC is paid instantly
and that letter of credit which expires ninety days i.e. within this period the documents

must be sending to the negotiating bank.

Deferred payment letter of credit: That letter of credit which expires 30, 60, 90, 180
days i.e. within this period the documents must be send to the negotiating bank.

4.5.3 Steps in Letter Of Credit Opening

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The generalized process of L/C issuing in Dhaka Bank is explained below. For a business
customer approached for the first time, the process will start with opening an account with the
bank.
Step 1: Application in companys letterhead pad
First of all, the person shall have to submit an application written or printed in the
companys letterhead pad. In the application he/she will have to mention the name of the
products to be imported, margin and so on. The applicant shall have to apply for the
required forms of the bank.
Step 2: Discussion between Dhaka Bank and the party:
After receiving the application form, the Bank pays attention to the issues mentioned
below.

The products that are going to be imported are considered. Because there are
restrictions by the government on some products.

The quoted rates are specially analyzed as there also some restrictions by the
government.

Step 3: Collecting forms and depositing those with necessary documents:

In this step, the applicant collects the L/C application form, LCA Form and IMP Form
from the bank. These forms are to be filled up by the client. The forms and all other
necessary documents are then deposited at the desk of the dealing officer.
Step 4: Checking Documents:
All the documents are checked out by the dealing officer. He/she checks specially the
quoted rates, the terms and conditions of the indent or pro forma invoice and the validity
of the documents. Generally the person from whom the forms are collected is engaged in
checking out the documents.
Step 5: Putting L/C No:
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After checking the documents and L/C No. is given. Generally the officer who checks the
documents puts the L/C No.
Step 6: Preparing offering sheet:
The offering sheet is prepared by the dealing officer. Usually the officer who checks the
documents prepares the offering sheet.
Step 7: Signing offering sheet:
The offering sheet is then signed by the officer having the authority to open the L/C of
the specified amount. If it is within the maximum limit of the amount (for which the L/C
is applied) of the SAVP or branch manager, he can sign it. But if it is beyond his/her limit
proposal must be sent to the head office, either for case-to-case sanction or for credit
limit. Generally, in Dhaka Bank, SAVP or branch managers are empowered to open an
L/C without communicating with the head office, if the L/C amount is within his / her
limit.
Step 8: Typing the L/C:
After the approval of opening L/C is given, the L/C is typed in a structured format.
Step 9: Checking the L/C:
A final check is done to find out any discrepancies after the typing is completed. This is
done by the dealing officer who is generally in charge of the whole process.
Step 10: Crediting the account of the customer:
On the basis of credit arrangement with the bank of import financing, the customers
account is affected with certain credit.
Step 11: Dispatching L/C:
At the final stage, the L/C is dispatched through postage mail or telex or SWIFT or so
forth.

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Although this is the generalized process for issuing L/C, for the speed of the process sometimes
the typing and checking of documents are done before the offering sheet is signed. Then after
signing the L/C it is dispatched.
The dispatch of the L/C documents is as follows:
First & second copy - Advising Bank, which in turn forward the original copy to the

exporter.
Third copy - Reimbursing Bank.
Fourth & Fifth copyImporter
Sixth copyC.C.I. & E.
Seventh to Ninth copyLetter of credit opening bank's copy.

Flow Chart mentioning Steps in issuing an L/C in Dhaka Bank

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Application in companys letterhead

Discussionpad
between the Bank and
Collecting
the party
forms and depositing those

Preparing offering sheet

Putting L/C No.

Checking Documents

Singing offering sheet

Typing the L/C

Checking the L/C

Dispatching L/C

Crediting the account

4.5.4 Required Documents for Letter Of Credit Opening

Proposal letter (in proposal letter it must be mentioned that - price of goods, CCI & E
registration, pass book number, LCA form dully filled in signed & sealed, Import

form full set, insurance policy & addendum, P.I. number).

Application and agreement for irrevocable LC with adhesive stamp of TK.150.
Import license
HS. Code.
TIN.
VAT registration.
Indenting certificate.
Performa invoice - two copies (with in this it indicate - Performa bill no. & date, item,
particulars, quality, quantity, rate, and amount of goods, total invoice value (E &O.E.)

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LCA (Letter of Credit Authorization) form for industrial consumer - four copies.

(Within this - IRC number, total amount)

Signature of Director of the firm and manager of Dhaka Bank Limited.
IMP form - Four copies (by this the declaration of the firm's directors)
Money receipts of insurance policy.
After preparing the procedure the bank provide offer in prescribed "offering sheet".
Approval certificate of Bangladesh Bank on behalf of the importer.

4.5.5 Particulars Involved in offering sheet

Name of the party, Sanctioned limit, Facility applied for letter of credit (amount &

previous outstanding).
Forward exchange
Foreign bills purchased.
Guarantees.
Trust receipts.
Clean packing credits.
Advance against imported goods.
Goods particulars
Import license
Margin already at credit.
Margin to be obtained.
Guaranteed by.
Balance of current account.
Average Balance of bank account.
Net worth of the firm.
Customs duty.
Country of export.
Other conditions.

4.5.6 Justification for Fitness of Letter Of Credit Opening

Application from importer.

Bio-data of the applicant.
Current account opened by the applicant in the branch.
Supplier's acceptance & rate of goods.
Is it a brand item or not?
Contract on prescribed form of bank (stamp TK. 150).
Performa invoice from supplier.
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4.5.7 Method of Settlement

Based on the method of settlement the documentary letters of credit can be opened in two ways:
1. Sight letter of credit
A Sight letter of credit is a credit in which the seller obtains payment upon presentation of
documents in compliance with the terms and condition.

2. Deferred letter of credit

A Deferred letter of credit is a credit in which the seller will be paid at a fixed or determinable
future time. The buyer is obligated to pay the face amount at maturity.

4.5.8 Operation of Documentary Letter Of Credit

The following five (5) major steps are involved in the Operation of Documentary Letter of Credit

Issuing

Advising

Amendment(if necessary)

Presentation

Settlement

Issuing a Letter of Credit

Before issuing a L/C, the buyer and seller located in different countries, concludes a sales
contract providing for payment by documentary credit. As per requirement of the seller, the
buyer then instruct the bank - the issuing bank to issue a credit in favor of the seller
(beneficiary). The credit application which contains the full details of the proposed credit, also
serve as an agreement between the bank and the buyer. After being convinced about the
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necessary conditions contained in the application form and sufficient conditions to be

fulfilled by a buyer for opening a credit, the opening bank then proceeds for opening the credit to
be addressed to the beneficiary.
Advising a Letter of Credit
Advising through a bank is a proof of apparent authenticity of the credit to the seller. The process
of advising a credit consists of forwarding the original credit to the beneficiary to whom it is
addressed. Before forwarding, the advising bank has to verify the signature (s) of the officer (s)
of the opening bank and ensure that the terms and conditions of the credit are not in violation of
the existing exchange control regulations and other regulation relating to export.
Amendment of L/C
Parties involved in particularly the seller and the buyer cannot always satisfy the terms and
conditions in full as expected due to some obvious and genuine reasons. In such a situation, the
credit should be amended. Amendment of L/C may be for Time Extension:
The time duration of L/C can be extended by writing an application by the opener of L/C and
signature of the opener should be verified provided the LCA is valid or the agreement is valid up
to that period.
Change in L/C amount:
Increase of L/C amount may be done provided that the LCA covers the increase in amount. L/C
amount can be decreased provided the relevant contract or indent is amended accordingly and
with the consent of beneficiary. For increasing the amount of L/C the following accounting
procedure will be passed:
Debit: Acceptance for Constituent Liability
Credit: Constituent liability for acceptance
Presentation of Documents

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The seller being satisfied with the terms and conditions of the credit proceeds to dispatch the
required goods to the buyer and after that, has to present the documents evidencing dispatching
of goods to the negotiating bank on or before the stipulated expiry date of the credit. After
receiving all documents, the negotiating bank then checks the documents against the credit. If the
documents are found in order, the bank will pay, accept or negotiate to the issuing bank. The
issuing bank also checks the documents and if they are found as per credit requirements, either
effects payment, or reimburses in the pre-agreed manner.
Settlement
Settlement means fulfilling the commitment of issuing bank in regard to effecting payment
subject to satisfying the credit terms fully. This settlement may be done under three separate
arrangements as stipulated in the credit, these are:
Settlement by payment
Here the seller presents the document to the paying bank and the bank then scrutinizes the
documents, if satisfied the paying bank makes payment to the beneficiary and in case this bank is
other than the issuing bank, then send the documents to the issuing bank. If the issuing bank is
satisfied with the requirements, payment is obtained by the paying bank from the issuing bank.
Settlement by Acceptance
Under this arrangement, the seller submits the documents evidencing the shipment to the
accepting bank accompanied by the draft drown on the bank at the specified tenor. After being
satisfied with the documents, the bank accepts the documents and the draft and if it is a bank
other than the issuing bank, then sends the documents to the issuing bank stating that it has
accepted the draft and at maturity the reimbursement will be obtained in the pre-agreed manner.
Settlement by Negotiation
This settlement procedure starts with the submission of document by the seller to the negotiating
bank accompanied by a draft drown on the buyer or any other drawee, at` sight or at a tenor, as
specified in the credit. After scrutinizing that the documents meet the credit requirements, the
bank may negotiate the draft, this bank, if than the issuing bank, and then send the documents
and the draft to the issuing bank. As` usual, reimbursement will be obtained in the pre-agreed
manner.
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4.6 Operational Flow of Export & Import

The complete Import and Export process in includes the following stages. Both the importer and
exporter are involved in this flow. Some tasks are done by importers side and some are done by
exporters side and some are done by others. The process is very much like the following:

Operational Flow of the Import-Export Process

15

14

Importer
13
2

12

Issuing Ban
7
4

Reimbursing B

Description of the Flow:

1. Establish a buying and selling contract between the buyer and the seller.
2. Submission of application with necessary documents to the bank to issue an L/C
3. L/C issue and advise it to the advising bank
4. Issue reimbursing instruction to the reimbursing bank
5. Advise the L/C to the exporter by the advising bank after verification of the L/C
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6. Asking for the confirmation of the L/C to the importer

7. Issuing request letter by the issuing bank to the confirming bank (as per exporters
requirement) to confirm the L/C
8. Issuing confirmation by confirming bank
9. Shipment of the goods
10. Submit required document to the negotiating bank for negotiation
11. Negotiate the bill by the negotiating bank and make payment to the exporter
12. Claim to the issuing bank or reimbursing bank for payment
13. Payment reimbursed by the issuing bank or reimbursing bank
14. Ask the importer to collect the documents from the bank
15. Collect documents from the issuing bank by paying the banks dues.

4.7 Foreign Exchange Risk

Foreign Exchange risk may be defined as the exposure to DBLs net interest income to
movements in exchange rates. When assets in one currency exceed the liabilities in the same
currency mismatch may add value or erode value depending on the currency movement.
Foreign currency positions are recorded managed on daily basis by Treasury.
All foreign exchange transactions are revalued at mark-to-market rate as determined by
Bangladesh Bank at the month end. Mid office has been opened during the year as per instruction
of head office. DBL remained within the prescribed holding limit set by Bangladesh Bank. The
treasury Manual was reviewed and updated. All nostro accounts are reconciled on monthly basis
and outstanding entry beyond 30 days is reviewed by the Management for its settlement. The
nostro accounts are verified by the external auditors and reports are submitted to Bangladesh
Bank. These positions would be approved by the ALCO and managed on a daily basis by
Treasury.

Exchange gain net off exchange losses

The gain on foreign currency isbcaused from the volume of exchange amount and the
exchange rate of the currency. In 2012 the gain was lower than the previous year because
of the fluctuation in exchange rate and the lower income from export than higher
payment of import.
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 L/C Income & Total Income

This section shows the total income and L/C income of DBL. Here L/C income represents
the interests, charges and commission from opening import & export L/C.

CHAPTER 5
L/C OPERATION: EXPORT

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5.0 Concept of Export

Export/Exporter: "Exports" consists of transactions in goods and services (sales, barter, gifts or
grants) from residents to non-residents. Export means flow of goods and services produced
within the domestic country but purchased by economic agent i.e. individuals, firms,
governments of other countries. The persons/firms selling the goods and services to another
country is called exporter.
An exporter of a country having a trade relation with an importer of another country may not
have enough money to conclude the deal. He may as such need finance from the Bank.

Page 41 of 75

5.1 Export Policy of Bangladesh

Export policy of Bangladesh is formulated by the Ministry of Commerce to provide the overall
guideline and incentives for promotion of exports. It has been decided to formulate this policy to
cover a three-year period to make then contemporaneous with the five year plans and to provide
continuity to the policy regime. However, the policy will be valid until the next export policy is
announced. If required, Government may review this policy once in every year and may take
decision as deemed fit.

5.2 Objectives of Export Policy

1. To achieve higher growth rate of export by increasing exports to regional and
international markets.
2. To reduce trade deficit by achieving exports target.
3. To assist production of export items in competitive price to protect existing market and
explore new markets.
4. To make efforts for exploiting new opportunities offered by the liberalization and
globalisation process in world economy.
5. To diversify and improve the quality of exportable items.

5.3 Regulatory/Promotional Organs of Export

1

National Committee for Export: Headed by the Prime Minister and comprising
Ministers of Foreign Affairs, Finance, Commerce, Industries, Planning, Jute and Textile.
The committee will review the export situation and provide necessary direction and
resolved problems.

Export Council: Consultative body comprising of Chambers, Exporters Associations

and institutions of public sector.

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Export Promotion Bureau (EPB): Main functions of EPB:

Quota allocation for export of RMG.

Participation in international trade fairs.

Arrangement of fair and exhibition both at home and abroad.
Arrangement of training programs for boost up exports.

5.4 Documents used in Export

When a firm sells its goods abroad, it must arrange for each export shipment to be accompanied
by various documents. Depending on the country to which the goods are being sent, these
documents will vary. But for exporting we can divide those documents in two types. These are
1

Substantive Document

Auxiliary Documents

(5.4.1)- Substantive Document

Substantive Documents are given belowDraft or bill of exchange: Bill of Exchange is an instrument in writing containing an
unconditional order or at a fixed determinable future time a certain sum of money only to, or to
the order of a certain person or to the bearer of the instrument.
Commercial Invoice: Commercial Invoice is the export firm's invoice, addressed to the foreign
importer describing the goods shipped and the total price that it must pay. However, some
countries require the commercial invoice to be prepared on their own forms. Such forms are
called customs invoices.
Bill of lading or Airway Bill: Bill of Lading is a document supplied to the exporter by the
shipping company that is transporting the goods to their foreign destination, listing, item by item,
the goods being shipped.

It serves three basic purposes:

To acknowledge receipt by the carrier of the exporter's goods.

Page 43 of 75

To indicate the carrier's contractual obligation to transport the goods to their

destination in exchange for payment.

To record transfer of title from the seller to the buyer when payment for the goods
takes place. Airlines use what is called an Air Waybill.

(5.4.2)- Auxiliary Documents

Auxiliary Documents are given belowCargo manifest or packing list: When quantities, weights or contents of the various packing
cases in an export shipment vary, it is usual to prepare a separate list for each case indicating its
contents, weight and measurements. Usually, cargo manifests or packing lists are not specifically
required by the Customs authorities, from various importing countries. However, they serve as
useful supplements to the commercial invoice that accompanies the export shipment.
Certificate of Origin: Certificate of Origin is a document, which indicates the country in which
the goods were produced, is required whenever preferential duties are claimed. Sometime,
consular legalization of the document is necessary. Also, certification of the document by a
Chamber of Commerce is required.
Quality control certificate: While exporting products for which quality control certificate is
obligatory, the exporter will have to submit, to the Customs Authorities, a quality control
certificate issued by the appropriate authority.
Consular Invoice: Some country required consular invoice. Countries that require a consular
invoice also require a commercial invoice as additional proof of the details of the export
shipment.
Inspection Certificate: Some purchasers and countries may require a certificate of inspection
attesting to the specifications of the goods shipped, usually performed by a third party. Inspection
certificates are often obtained from independent testing organizations.
Certificate of free sale: This certificate required for pharmaceuticals and certain chemicals
entering a number of countries.

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5.5 Export Finance Activities of the Bank

Financing exports constitutes an important part of a banks activities. Exporters require financial
services at four different stages of their export operation. During each of these phases exporters
need different types of financial assistance depending on the nature of the export contract.
1
2

Pre-shipment credit
Post-shipment credit

(5.5.1)- Pre-Shipment Credit

Pre-shipment credit, as the name suggests, is given to finance the activities of an exporter prior
to the actual shipment of the goods for export. The purpose of such credit is to meet working
capital needs starting from the point of purchasing of raw materials to final shipment of goods
for export to foreign country. Before allowing such credit to the exporters the bank takes into
consideration about the credit worthiness, export performance of the exporters, together with all
other necessary information required for sanctioning the credit in accordance with the existing
rules and regulations. Pre-shipment credit is given for the following purposes:

Cash for local procurement and meeting related expenses.

Procuring and processing of goods for export

Packing and transporting of goods for export
Payment of insurance premium
Inspection fees
Freight charges etc.

Credit Facilities under Pre-shipment

An exporter can obtain credit facilities against lien on the irrevocable, confirmed and
unrestricted export letter of credit in form of the followings:
a Export cash credit (Hypothecation)
b Export cash credit (Pledge)
c Export cash credit against trust receipt.
d Packing credit.
e Advance against Cheque/Drafts received as advance payment
f Back to back letter of credit.
a. Export cash credit (Hypothecation)
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Under this arrangement, a credit is sanctioned against hypothecation of the raw materials or
finished goods intended for export. Such facility is allowed to the first class exporters.
As the bank has got no security in this case, except charge documents and lien on exports L/C
or contract, bank normally insists on the exporter in furnishing collateral security. The letter of
hypothecation creates a charge against merchandise in favor of the bank. But neither are the
ownership nor the possession is passed to it.
b. Export cash Credit (Pledge)
In this case, limit is sanctioned against the pledge of the goods meant for export. The borrower
signs a stamped letter of pledge surrendering physical possession of the goods under the banks
effective control. The ownership, however, remains with the borrower. The pledge creates an
implied lien in favor of the bank. In the event of failure of the borrower to liquidate the debt, the
bank can sell the goods after giving due notice to the exporter. Normally no collateral security is
obtained in case of pledge.
c. Export cash credit against trust receipt
In this case, credit limit is sanctioned against trust receipt (TR). Here also unlike pledge, the
Exportable goods remain in the custody of the exporter. He is required to execute a stamped
export trust receipt in favor of the bank, he holds wherein a declaration is made that goods
purchased with financial assistance of bank in trust for the bank. This type of credit is granted
when the exporter wants to utilize the credit for processing, packing and rendering the goods in
exportable condition and when it seems that exportable goods cannot be taken into banks
custody. This facility is allowed only to the first class party and collateral security is generally
obtained in this case.
d. Packing Credit
Packing Credit is any loan or advance granted or any other credit provided by a bank to an
exporter for financing the purchase, processing, manufacturing or packing of goods prior to
shipment, on the basis of letter of credit opened in his favor or in favor of some other person, by
an overseas buyer or a confirmed and irrevocable order for the export of goods from the
producing country or any other evidence of an order for export from that country having been
Page 46 of 75

placed on the exporter or some other person, unless lodgment of export orders or letter of credit
with the bank has been waived.
e. Back to Back L/C
Bangladesh is a developing country. After receiving order from the importer, very frequently
exporters face problems of scarcity of raw material, because some raw materials are not available
at domestic market. These have to be collected from abroad. In that case, exporter gives lien of
export L/C to bank as security and opens an L/C against it for importing raw materials. This L/C
is called Back To Back L/C. Sometimes there is provision in the export L/C that the importer
can use the certain portion of the export L/C amount for importing accessories that are necessary
for the making of the product. Only in that case, BTB is opened.
Besides, the normal formalities and requirements (for L/C opening) the following formalities and
documents are also required for opening back-to-back L/C:

Master L/C

Valid bonded warehouse license

Quota allocation for quota items
ERC in addition to IRC
Indemnity/undertaking
No objection from previous banker (if any)
Factory inspection certificate
BGMEA Membership

f. Credit against Red-clause letter of credit

Under Red clause letter of credit, the opening bank authorizes the Advising Bank/Negotiating
Bank to make advance to the beneficiary prior to shipment to enable him to procure and store the
exportable goods in anticipation of his effecting the shipment and submitting a bill under the
L/C. as the clause containing such authority is printed in red ink, the L/C is called Red clause and
Green clause respectively. Though it is not prohibited, it is very rare in Bangladesh.
(5.5.2)- Post Shipment Credit Dhaka Bank LTD

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This type of credit refers to the credit facilities extended to the exporters by the banks after
shipment of the goods against export documents. Necessity for such credit arises as the exporter
cannot afford to wait for a long time for without paying manufacturers/suppliers. Before
extending such credit, it is necessary on the part of banks to look into carefully the financial
soundness of exporters and buyers as well as other relevant documents connected with the export
in accordance with the rules and regulations in force.
Types of Post Shipment Finance
Advance against claims of Duty Drawback. Banks in our country extend post shipment credit to
the exporters through:
a

Negotiation of documents under L/C

The exporter presents the relative documents to the negotiating bank after the shipment of the
goods. A slight deviation of the documents from those specified in the L/C may arise an excuse
to the issuing bank to refuse the reimbursement of the payment already made by the negotiating
bank. So the negotiating bank must be careful, prompt, systematic and indifferent while
scrutinizing the documents relating to the export.
b Foreign Documentary Bill Purchase (FDBP)
Sometimes the client submits the bill of export to bank for collection and payment of the BTB
L/C. In that case, bank purchases the bill and collects the money from the exporter. DBL
subtracts the amount of bill from BTB and gives the rest amount to the client in cash or by
crediting his account or by the pay order.
c

Foreign Documentary Bill for Collection (FDBC)

Exporter can collect bill through negotiating banks on the basis of collection. Exporter in this
case will submit all the documents to the negotiating bank for collection of bills from inspector.
The exporter will get only when the issuing bank gives payment. In this connection bank will
scrutinize all the documents as per terms and conditions mentioned in L/C.

5.6 Export Realization

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For proceed realized first DBL collect advices from their head office. After getting advice from
head office, to the effect that the proceeds are credited to Nostro A/C, the fund is realized from
H.O. A/C and all the outstanding liabilities including PC, BB LC, and FDBP etc are adjusted. If
the maturity date of the BB LC is on a later period the amount is kept in foreign Bill Proceeds
Awaiting foe Remittance A/C.
Contingency Fund should also be build up and party may keep some of the proceeds to retention
quota A/C. Then the rest amount is credited to exporters A/C and the file is closed.
DBL maintains a different register khata for this purpose. The calculation of foreign bills given
belowBill Value Realized Value Back to Back L/C amount Other charges (Courier bill Tax
Buying house commission House building loan)
Bill Value The total amount if export is called Bill value.
Realized Value After deduction of all foreign charges.
Back to Back L/C amount The amount which exporter already used for bring raw materials
from abroad.
Courier bill To send documents DBL uses DHL courier.
Tax A certain percentage of tax deduct of the bill value. DBL cut .25% for tax.
Tax = (Bill Value * .25%)
Buying house commission Sometimes need to gives commission to the buying house. Buying
house commission varies party to party. More or less it varies 2% to 8%.
Buying house commission = (Realized value*2.5%)
House building loan Some exporter may have House building loan. So when export bill come
DBL deduct this loan amount from that bills. House building loan also varies party to party.
Suppose House building loan is 5%.
House building loan = (Bill Value*5%)
Page 49 of 75

5.7 The Procedure of Export

The import and export trade in our country are regulated by the Import and Export (Control) Act,
1950.
Under the export policy of Bangladesh the exporter has to get valid Export registration
Certificate (ERC) from Chief Controller of Import and Export (CCIE). The ERC is required to
renew every year. The ERC number is to incorporate on EXP forms and other papers connected
with exports.
(5.7.1)- Registration for Exporters
To export goods an exporter needs a valid Export Registration Certificate from the Chief
Controller of Import and Export (CCIE). Exporters find an Export Registration Certificate (ERC)
number which is incorporate on Export form and papers connected for obtaining Export
Registration Certificate. A Bangladeshi exporter has to apply to the controller or joint controller
or Deputy Controller or Assistant Controller of Import and Export to get an ERC. An exporter
can do this registration from Dhaka, Chittagong, Sylhet, Comilla, Barishal, Borga, Rangpur,
Dinajpur and from Mymensingh. The following documents are required for ERCa
b

National ID card
Memorandum and Article of Association and Certificate of Incorporation in case of

c
d
e
f

limited company
Trade license
Bank Certificate
Assets certificate
Income Tax certificate etc.

The Export Registration Certificate has to renew every year. The renewal fee given belowExport less than $5000000
TK.3000
Export more than $5000000
TK.5000
(5.7.2)- Securing the Order:
After getting ERC Certificate the exporter may proceed to secure the export order. He can do this
by contacting the buyers directly or through agent.
In this purpose the exporter may get help from:
Page 50 of 75

a. Liaison Office.
b. Buyers local agent.
c. Export Promotion organization.
d. Bangladesh mission abroad.
e. Chamber of Commerce (Local & Foreign)
f. Trade fair etc.

(5.7.3)- Signing the Contract

After communicating buyer, exporter has to get contracted (writing or oral) for exporting
exportable items from Bangladesh detailing commodity, quantity, price, shipment, insurance and
marks, inspection and arbitration etc.
(5.7.4)- Receiving Letter of Credit
After getting contract for sale, exporter should ask the buyer for Letter of Credit (L/C) clearly
stating terms and conditions of export and payment.
The following are the main points to be looked into for receiving/ collecting export proceeds by
means of Documentary Credit:
a. The terms of the L/C are in conformity with those of the contract;
b. The L/C is an irrevocable one, preferably confirmed by the advising bank;
c. The L/C allows sufficient time for shipment and negotiation.

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d. Here the regulatory framework is UCPDC-500, ICC publication

e. Terms and conditions should be stated in the contract clearly in case of other mode of
payment:
f. Cash in advance;
g. Open account
h. Collection basis (Documentary/ Clean)
i. Here the regulatory framework is URC-525, ICC publication
(5.7.5)- Procuring the materials
After making the deal and on having the L/C opened in his favor, the next step for the exporter is
to set about the task of procuring or manufacturing the contracted merchandise.
(5.7.6)- Shipment of goods
Then the exporter should take the preparation for export arrangement for delivery of goods as per
L/C and prepare and submit shipping documents for payment/ acceptance/ negotiation in due
time.
Documents for shipment:
EXP form
ERC (valid)
L/C copy
Customer Duty Certificate
Shipping Instruction
Transport Documents
Insurance Documents
Invoice
Other Documents:

Bills of Exchange (if required)

Certificate of Origin
Inspection Certificate
Quality Control Certificate
Page 52 of 75

G.S.P. Certificate

(5.7.7)- Final Step

Submission of the documents to the Bank for negotiation.
Checking of export document: After getting the documents banker used to check the

documents as per L/C terms.

Negotiation of export documents: If the bank accepts the document and pays the value
of draft to the exporter and forward the documents to issuing bank that is called a
negotiating bank. If the bank does buy the L/C then the bank normally acts as collecting

bank.
Realization of proceeds: This is the period when the issuing bank has realized the

payment.
Reporting to the Bangladesh Bank: As per instruction by Bangladesh Bank the bank

has to report to respective department of Bangladesh bank by mentioning latest payment.

Issue to proceeds realization certificate (PRC): Bank has to issue proceed realization
certificate to export L/C to the supplier/ exporter for getting cash assistance.

After scrutinizes all the documents. If the documents are clean, Dhaka Bank purchases the
documents on the banker customer relationship. This is known as Foreign Documentary Bill
purchases (FDBP).
Export Procedure at a Glance
Exporter: obtaining Export Registration Certificate (ERC) from CCI & E
Exporter: Securing export order from buyer or through agent,
receiving L/C from buyer's bank through an advising bank in

Bank: Certification of Exp. form by authorized dealer.

Shipment of goods
Preparation of export documents by negotiating bank
Scrutinizing export documents by negotiating bank
Are the Docs in order?

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Ask exporter to remove

Negotiate documents

Dispatch documents for collection with Reimbursement bank.

Retire FDBP

Export Procedure of DBL

CHAPTER 6
L/C OPERATION: IMPORT

Page 54 of 75

Chapter

Chapter contents

CTh
apsection
ter is designedtoshowthe Import procedure, typesof import, documents neededtoopenL/Cby the importer, means of payment, financingmechanism, andimport portfolioof dDL.
his

Chapter contents

Import financingmechanism
Conditions for commodity Import
Types of Import
Meaningof Import
Different means of Payment
Import procedure

6.0 Meaning of Import

An import is any good or service brought into a country from another country in a fair and
acceptable fashion, typically for use in trade. Imported goods or services introduce domestic
consumers to newer things by foreign producers. The persons/firms buying the goods and
services from another country is called importer.
Companies usually import goods and services to supply to the domestic market at a cheaper price
and provide goods that are superior compared to goods manufactured in the domestic market.

6.1 Types of Import

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There are two types of import

1

Commercial Import:

Importer does commercial import only for trading purpose. These products are finished goods.
Such as rice, wheat, soybean oil etc.
2

Industrial import:

Importer does industrial import for industrial use only. These products are raw materials and
capital machinery. Such as; raw cotton, Crude oil etc.

6.2 General Conditions for Commodity Import

1

Using of eight-digit H.S Code (Harmonized System of Coding and Commodity

Description) is compulsory according to Import Trade Control Schedule, 1998.

No goods be imported from Israel or produced in Israel and transportation by the Israeli
flag carrying ships is prohibited (also from UN sanctioned countries Serbia and

Montenegro)
Goods must be imported through Bangladesh aid foreign shipping lines can be used. For
individual importers maximum 20 ton and for group importers maximum 100 ton is
allowed to be transported through foreign ships, In other cases, if foreign ship is required,
the Certificate of Waiver must be taken from Directorate of Sea Transportation. General
waiver if Bangladeshi vessels have no route in those ports. If within 7days Bangladeshi
vessels would not be available, then certificate of waiver within 24 hours (otherwise

automatically). Import under foreign

In case of export-oriented industries, shipment is permitted through ships of other

5
6

countries.
Import must be made at highest competitive price.
Importers are bound to submit import-related documents at any time to Chief Controller
of import and Export if required.

Radioactivity certificate is compulsory for the import of food items (except Cigarettes, Cigarette
paper, pipe tobacco, wine, spices, drugs).

8 Production and expiry date is compulsory for food items.

9 Country of origin should be mentioned clearly in case of all imports (excluding coal and exportoriented industries under bonded ware house facilities).
Page 56 of 75

6.3 Import Procedures (Steps Involved In Dealing with

L/C)

Procurement of IRC from the concerned authority.

Signing purchase contract with the seller
Requesting the concerned bank importers bank/ issuing bank to open L/C on behalf

of importer favoring the exporter/ seller/ beneficiary.

The issuing bank open/ issue the L/C in accordance with the instruction/ request of
the importer and request other bank (advising Bank) located in sellers/ exporter to
advise the L/C to the beneficiary. The issuing bank may also request the advising

Bank to confirm the credit, if necessary.

The Advising Bank advises/ inform the seller that the L/C has been issued.
As soon as the exporter/ seller receive the L/C and is satisfied that he can meet the

L/C terms and conditions; he is in a position to make shipment of the goods.

After making shipment of goods in favor of the importer the exporter/ seller submit

the document to the negotiating bank for negotiation.

The negotiation Bank scrutinized the documents and if found ok negotiates the

documents and sends the documents to the L/C issuing Bank.

After receiving the documents the L/C issuing bank also examines the documents

and if found ok makes payment to the negotiating bank.

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

The importer after paying all dues receives the documents from the L/C issuing
bank and then releases the importer goods from the port authority.

Import Procedure at a Glance

Importer: Application, IRC, Indent/ Proforma Invoice

Banker: LCA form, application agreement for confirmed L/C, Check sanctioning,
approval, Credibility of Importer & supplier, IPO, HS code, ascertain duty etc.
Opening L/C: creating contra liability by taking margin
Dispatch or transmit the L/C to the beneficiary through banks correspondent in the
beneficiarys country
Receiving import documents from collecting/ negotiating bank.

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Scrutinizing import documents

Are the Docs discrepant?

Lodgments of import bills

Inform opener, reimbursing bank,

negating bank about discrepant.

Is discrepancies agreed?

Inform the opener to take the delivery of documents for realese of goods.
Importer or opener pays the further margin to the bank.

Retirement of Import bill.

Collect customs bill of entry for matching with IMP form.

Import Procedure of DBL

6.4 Documents need to open a cash L/C

To open cash LC DBL wants some documents from importer. These are given below:

Valid IRC

Valid Trade license

TIN Certificate
VAT Certificate
Up to date income tax certificate
CIB (Credit Information Bureau) report
Pro-forma invoice
Application (in importer pad)
Credit report
Fill up IMP form
LC authorized form
Insurance cover etc.

Page 58 of 75

6.5 Different Means of Payment

a

Cash in advance: Importer pays full, partial or progressive payment by a foreign DD, MT
or TT. After receiving payment, exporter will send the goods and the transport receipt to
the importer. Importer will take delivery of the goods from the transport company.

Open Account: Exporter ships the goods and sends transport receipt to the importer.
Importer will take delivery of the goods and makes payment by foreign DD, MT, or TT at

some specified date.

Collection Method: Collection methods are either clean collection or documentary
collection. Again, Documentary Collection may be Document against Payment (D/P) or
Document against Acceptance (D/A). The collection procedure is that the exporter ships
the goods and draws a draft/ bill on the buyer. The exporter submits the draft/bill (only or
with documents) to the remitting bank for collection and the bank acknowledges this.
Then the remitting bank sends the draft/bill (with or without documents) and a collection
instruction letter to the collecting bank. Acting as an agent of the remitting bank, the
collecting bank notifies the importer upon receipt of the draft. The title of goods is

released to the importer upon full payment or acceptance of the draft/bill.

Letter of credit: Letter of credit is the well-accepted and most commonly used means of
payment. It is an undertaking for payment by the issuing bank to the beneficiary, upon
submission of some stipulated documents and fulfilling the terms and conditions

mentioned in the letter of credit.

Requesting the concerned bank (importers bank /issuing bank) to open a L/C
(irrevocable) on behalf of importer favoring the exporter/seller.

6.6 Import Financing and Mechanism

Financing of import is a major area of investment of a bank financing of import business starts
with the contractual obligation between an importer and the bank. The initial contract for this
type of business starts with the merchandise to be imported.
Financing of import business takes the following forms:

Page 59 of 75

(6.6.1)- Loan against Trust Receipts (LTR)

1

Advance against a Trust Receipt obtained from the Customers are allowed to only first
class tested parties when the documents covering an import shipment or other goods
pledged to the Bank as security are given without payment. However, for such advances
prior permission/sanction from Head Office must be obtained.

The customer holds the goods or their sale-proceeds in trust for the Bank, till such time,
the loan allowed against the Trust Receipts is fully paid off.

The Trust Receipt is a document that creates the Bankers lien on the goods and
practically amounts to hypothecation of the proceeds of sale in discharge of the lien.

(6.6.2)- Loan against Imported Merchandise (LIM)

Advance (Loan) against the security of merchandise imported through the Bank may be allowed
either on pledge or hypothecation of goods, retaining margin prescribed on their Landed Cost,
depending on their categories and Credit Restriction imposed by the Bangladesh Bank. Bank
shall also obtain a letter of undertaking and indemnity from the parties, before getting the goods
cleared through LIM Account.
(6.6.3)- Uses Bills
Sometimes as per terms and conditions of the letter of credit documents may be drawn on Uses
basis with maturity of 30, 60, 90 and 120 days (as the case may be) after the date of acceptance.
Presenting documents to drawee
In such circumstances, the documents shall immediately be presented to the drawee duly
stamped by the Bank ad-velorem (in accordance with the value of the documents as specified in
the Stamp Act) and presented to the drawee for their acceptance of drafts.
Acceptance
The acceptance of the drawee is obtained on the face of the bill of exchange as under accepted
for payment on date signed by the drawee.
Note date in the due diary

Page 60 of 75

Upon acceptance of drafts documents may be date delivered to the drawee after obtaining Trust
Receipt (Banks format). The maturity date should be communicated to the collecting bank after
noting the due date dun the due date diary (Register).
Noting and protesting
If the acceptance of the bill at the time of the delivery of documents or its payment on the due
date is not forthcoming , make immediate arrangements to get the bills noted and protested
through a Notary Public for non acceptance and/o non-payment. However, payment of the bill
may be made creating loan in the name of the party after obtaining approval from the Head
Office.

Payment and realization of charges

On receipt of payment / replenishment of funds from the paying authority, Tasted Telex may be
sent to whom the account of the respective currency is maintained by the Head Office, after
realizing necessary charges as per prescribed rates of the Bank with intimation to the collecting
bank/ negotiating bank.

Page 61 of 75

CHAPTER 7
FOREIGN REMITTANCE

Page 62 of 75

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7.0 Remittance Management of DBL

The word remittance originates from the word remit which means to transit money/fund. In
banking terminology, the word remittance means transfer of fund from one place to another
and when money is transferred from one country to another then it is called Foreign
Remittance.
Dhaka Bank Limited exerted highest emphasis on overseas operation and handling a sizeable
quantum of homebound foreign remittance since beginning. Many arrangements have been made
with different exchange houses and also by establishing subsidiaries abroad for expanding the
banks overseas network in place with high concentration of Bangladeshi expatriates. It was a

Page 63 of 75

breakthrough in getting prompt payment of foreign remittance by the beneficiaries which

encouraged remitter to use legal channel.
The bank introduced different products and technology including Online Banking, EFT and other
automated devices for uninterrupted speedy payments. Furthermore, DBL entered into a deal
with different NGO throughout the country and also with the other private Banks to provide
inward remittance products on behalf of DBL.

7.1 Remittance Procedures of Foreign Currency

There are two types of remittance:
1 Inward remittance
2 Outward remittance
(7.2.1)- Inward Foreign Remittance
The remittance of freely convertible foreign currencies which Dhaka Bank Limited Foreign
Exchange branch is receiving from abroad against which the authorized dealers making
payment in local currency to the beneficiaries may be termed as foreign inward remittance.
Mode of inward remittance
The term inward remittances includes not only remittances by TT., MT., Drafts etc. but also
purchases of bills, purchases of drafts under travelers letter of credit and purchases of travelers
checks. Foreign currency notes against which payment is made to the beneficiary also a part
of inward remittances. Thus the following are the Mode of inward remittances:

Through Banking Channel:

o TT: Telegraphic Transfer.
o MT.: Mail Transfer.
o FD: Foreign Drafts.
o TC: Travelers Check.
o Foreign currency notes.
o RMS (time: 24-48 hours)
Through Exchange House (instant payment):
o X press Money (16 digit, any country)
o SAMBA (8 digit, Saudi Arabia)
o Global Instant Transfer (7 digit, UAE)
o E-Z Remit ( 12 digit, Kuwait, Bahrain)
Through Western Union (10 digit, any country)

Purpose of inward remittance

The purpose of remittance is of various reasons. Such as:
Page 64 of 75

For family maintenance.

Realization of exports proceeds.
Gift.
Donation.
Export brokers commission.

(7.2.2)- Foreign Outward Remittance

The remittance in foreign currency is being made from our country to abroad, is known as
foreign outward remittance.
Mode of outward remittance:
Thus the following are the Mode of outward remittances:
TT. Telegraphic Transfer.
MT: Mail Transfer.
FD: Foreign Drafts.
PO: Payment Order
TC: Travelers Cheque.
Foreign currency notes.

7.2 Facilities for Wages Earners

Bangladeshi national/Bangladesh origin dual citizen working abroad may open

Foreign Currency account (F.C. A/C) in US Dollar and Pound Sterling without

initial deposit.
Nominee can operate the account
Interest is paid on F.C. A/C
Balance in F.C. A/C can be utilized for import of goods
Balance available in the F.C. account may wholly or partially be sent abroad.
Foreign currency brought in by Wage Earners can be deposited in the F.C. A/C
Wage earners Development Bond in Taka can be purchased from the balance of

F.C. A/C
Non-Resident Foreign Currency A/C (NFCD A/C) can also be opened by Wage

Earners.
F.C. A/C & NFCD A/C may be maintained as long as the account holder
desires.

These accounts can be opened from abroad on submission of required papers duly attested by our
Embassy/ Branch/ Representative office abroad.

Page 65 of 75

CHAPTER 8
ANALYSIS

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Page 66 of 75

8.0 Trend Analysis

Five years trend analysis of Export of DBL

From the five years trend analysis

of Export of DBL we can notice
that the export income increasing
trend over the years from 2008 to
2012.

Trend of Export of DBL

Five years trend analysis of Import of DBL

From the five years trend

analysis of Import of DBL
we can notice that there is
an increasing trend in import
over the years from 2008 to
20212

Figure 24: Trend of Import of DBL

Page 67 of 75

Five years trend analysis of total inward remittance of DBL.

From the five years trend analysis

of Remittance of DBL we can see
that there is a increasing trend in
remittance in 2008 to 2012.

Trend of Remittance of DBL

Page 68 of 75

CHAPTER 9
FINDINGS AND RECOMMENDATION

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Page 69 of 75

9.0 Findings
L/C income is not satisfactory to total income.
Back To Back L/C income increased in a decreasing rate.
Foreign Remittance (Inward) through instant payment was higher than through banking
channel.
Increase in Foreign Remittance was satisfactory over the years.
Contribution of foreign Remittance through DBL was very poor to the total foreign
remittance of Bangladesh.
Import and Export trend was downward from 2008 to 2009 but upward in 2010.
Foreign Remittance trend was downward from 2008 to 2009.
There exists positive relation among Import and No. of Branches, No. of employees, and
Total expense.
There exists positive relation among Export and, No. of employees, and Total expense
but negative relation with No. of Branches because export oriented branch did not
increase with the increase of No. of branches.
There exists positive relation among Foreign Remittance and No. of Branches, No. of
employees, and Total expense.
Modern technical equipment such as computer is not sufficient in foreign exchange
department. As a result the exchange process makes delay and its also complicated.
DBL has a very good pool of human resource i.e. Foreign Exchange Officers.
There is no Reengineering Department for quicker customer service and implementation
of newer products; moreover they have no customer care which helps the customer in
case of any product or services.
In case of opening an account some big parties are come to open accounts in reference
with the high officials of the bank. They do not submit all papers that required to open
an account and in future they do not feel any urge to submit those papers, but already
they become accounts holders. I think in this case the authority is violating the rule.

Page 70 of 75

 The bank provides the loans aiming at different clusters like in Belkuchi the weaving
community, in Ashulia the shops at the Markets, In Aminbazar and Joypara the boat
making business community. The bank fixed different strategy to finance a specific
business community in a cluster around the branches.
At Dhaka most of the branches are corporate customer oriented and there are no booths
in the city. So marketing and expanding the SME loan in the city area are very difficult.

9.1 Recommendations

Export oriented branch should be increase while increasing the No. of branch to
maximize the export profit.
Banking is a service-oriented marketing. Its business profit depends on its service
quality. Thats why the authority always should be aware about their service quality.

Facilities like GSP (General System of Preference), EDF (Export Development Fund) etc.
should increased to encourage the exporter to increase export.

Modern technical equipment such as computer should be sufficient in foreign exchange

department so that the exchange process makes fast and easy.

No. of correspondents should be increase in case of drawing arrangement to increase the

foreign remittance.

The exporters should be given 90 percent of the L/C amount from the bank under
irrevocable letter of credit or confirmed contract.

For smoothly executing the foreign trade transaction no. of employees in foreign
exchange department should be increase. Since the employees are limited they cannot
pay much attention to all of its prospective clients. Especially the foreign department
people should get training facilities regarding their assign jobs.

Every fifteen days or thirty days after every desk especially foreign desk must be
monitored by specialist people for either their having any problem or not. Or there must
be a discussion session for every department. There must be an interactive discussion
period for every month.

Page 71 of 75

Maintain an effective communication with the foreign importer banks so the matter of
payment delay might not happen.

The more the local bank communicates with the foreign bank the more reliability;
trustiness would grow up between the local and foreign banks. In that connection matter
of payment will not delay.

To attract the foreign buyers we have to be very careful regarding the quality of the
goods, we have to set an international standard and the bank can do that more fruitfully.
Bank must assure the importer that goods must be international standard.

Need to take AD license for all the branches. Then the branches can do easily their entire
processing for the L/C.

The bank has a provision for internship program, but it is not well organized. Although
the officials are very careful and cooperative with the interns, the authority should be
more structured. If they can properly make them trained it will be very fruitful to recruit
them. Because they learn overall banking in the internship period, so in the beginning of
the job they can work as experienced persons.

The Brochures of the Products and Services of the Bank can be mailed or Circulated by
the Internees to the Potential Customers and Internees can give brief Idea to the
Customers about the Products and Services of Dhaka Bank Limited (DBL).

Page 72 of 75

CHAPTER 10
CONCLUSION

C h a p t e r H in t s .......

C h a p te r C o n te n ts

C T h i a s ps e t c e t i o r n H i s i n d e t s s i g . n . . e . d . . t . o g i v e t h e c o C n h c o l a u n s p i c o t l n e u o r s f C t i h o e n r e t p e o n r t t . s

Page 73 of 75

Conclusion
L/C is a mode of financing in foreign trade acts as a pre-import financing tool for the importer
and a pre-shipment financing tool for the exporter. Like all other commercial banks, L/C
issuance is a very important function that Dhaka Banks offers. Presently the bank has been
functioning with a network of total 75 branches. 13 branches among 75 of DBL deal with Export
and Import. The most widely used L/C in all braches is irrevocable documentary L/C and the
highest number of L/C opened is for import especially for RMG sector. Opening charge for L/C
processing constitutes highest portion of Dhaka Banks income from L/C. There is much scope
for Dhaka Bank to improve its current L/C processing system to make it more efficient.
The Dhaka Bank always tries to increase its foreign exchange performance. As the bank is
located in commercial area it is a great opportunity for the bank to attract customers. Though it
has some problem with its foreign exchange department, it is always trying to accelerate its
foreign trade. The 18 years success story though helped Dhaka Bank to attain a leading role but
to remain unrivalled among new generation banks, the bank must face new challenges.
In recent years of banking business, Dhaka Bank Limited as a leading bank of Bangladesh, DBL
contributes in the business with promising future and has shown better performance comparing
with other first generation banks.
Overall, the Dhaka Bank must make a positive attempt to be more outward looking in their goals
and aware of what is happening. They must also emphasize on the domestic scenario more
closely and analyze any certain trends and strategies of their competitors. The bank must accept
any failures and think of them as an objective to pursue future goals instead of blaming such
failures on other factors. We expect the Dhaka Bank Limited may hold its prospect in future and
can contribute a vital role in the socio-economic prospective.

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References
Rose, Peter S., Commercial Bank Management, New York, Irwin McGrew-Hill, Third
edition, 1996
A Report on practical orientation in Dhaka Bank Limited.
By- Md. Ashraful Islam
Annual report of DHAKA Bank
Website of DHAKA Bank Ltd. - www.Dhakabank.com
Website of Bangladesh Bank. www.Bangladesh-bank.org
Dhaka Bank Limited (DBL)s Brochures, Leaflets and Operational Manual

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