Internship Report On

JAMUNA BANK LIMITED

FOREIGN EXCHANGE ACTIVITIES OF JAMUNA BANK LIMITED

Submitted To

Mokta Rani Sarker

Assistant Professor
Department Of Finance
Jagannath University

Submitted By

Bayzid Hossain Bappy

Department of Finance
10th Batch
ID- B 150203074

Date of Submission: July 25, 2020.

 Letter of Transmittal

Date: 25 July, 2020.

Mokta Rani Sarker

Assistant Professor
Department of Finance,
Jagannath University.

Subject: Submission of the internship report on Foreign Exchange activities of Jamuna Bank
Limited.

Dear Ma’am,

I am pleased to present the final internship report on Foreign Exchange Activities of Jamuna
Bank Limited. This report prepared as per the requirement of BBA Program & it is extremely
valuable to me as it has helped me to gain practical experience regarding foreign exchange
activities. My internship with Jamuna Bank Limited has been a worthwhile experience and the
exposure to such organization is definitely valuable to me.

I sincerely hope that this report will meet your expectations. If you find any misconception
regarding this report, please let me informed.

Sincerely Yours,

--------------------------------

Bayzid Hossain Bappy

Department of Finance
10th Batch
ID – B 150203074
Jagannath University

ii
 Letter of Endorsements

This internship report on “Foreign Exchange Activities of Jamuna Bank Limited” has been
submitted to Department of Finance, Jagannath University. This internship is mandatory for
successfully completion of BBA program. To fulfill this requirement, this report has been
prepared by Bayzid Hossain Bappy (ID: B 150203074), from the three month experience on
working under foreign exchange division of Jamuna Bank Limited.

The report has been accepted and will be presented to the internship defense committee for
evaluation.

Best of luck!

--------------------------------

Mokta Rani Sarker

Assistant Professor,
Department of Finance,
Jagannath University.

iii
 Acknowledgement

At first, I would like to express my gratitude to almighty Allah for enabling me the strength
and opportunity to complete the report in the schedule time successfully. Then I am deeply
grateful to my supervisor Mokta Rani Sarker (Assistant Professor, Department of Finance,
Jagannath University) for her stimulating inspiration, kind guidance, valuable suggestions and
advice during my internship period. Her suggestions & guidance have made the report a good
manner.

Sincere gratitude to Mr. Abul Faisal Mannan (SAVP, HRD) to provide the opportunity to
proceed on internship in Jamuna Bank Limited. Heartiest gratitude to Mr. Biplop Kumar
Chakraborty ( SAVP & Manager, Elephant Road Branch), Mr. Abu Bakar Shibly (AVP &
Manager - Operation, Elephant Road Branch), Mr. Titu Kumar Das (Foreign Exchange In
Charge, Elephant Road Branch), Md. Farukh ( EO, Foreign Exchange, Elephant Road
Branch) for their cordial attitude & extending help which make easy to prepare this internship
report properly.

It will be ungrateful if don’t mention the name of Mr Foysal Ahammed (FEO, Elephant Road
Branch)), Mr. Aditto (Assistant Officer , Elephant Road Branch) and Mrs. Sohan Sanjida
(Officer, Elephant Road Branch) who helped a lot while working in Jamuna Bank Limited &
special thanks to other officers of JBL for giving their valuable time.

iv
 Executive Summary

A bank creates business opportunities by receiving deposit & giving loans, advising and
assurance. In Foreign exchange division a bank performs many activities which help a country
development. Export department helps their client by giving business loan for preparing the
finished goods and deliveries goods easily. On the other hand, Import department act as an
assurer who’s assure the foreign countries on behalf of the bank to make payment timely. In
this report, Critical assessments of the Foreign Exchange Activities of Jamuna Bank Ltd have
been endeavored.

The internship report is based on “Foreign Exchange Activities of Jamuna Bank Ltd.” At the
beginning of the report the scope, objectives, methodology, limitations are discussed. The
main objective of this report is to present the foreign exchange activities of Jamuna Bank Ltd.
The secondary data is collected from the annual report of JBL. Time series analysis used in
forecasting. Considering the Foreign exchange as a dependent variable and Exports, Imports
& Remittances as an independent variable, linear regression method used to forecast Import,
Export & Remittances.

There are some limitations like lack of adequate information, lack of proper experience. The
overview of Jamuna bank ltd. is shown in second chapter. It covers the company profile and
present situation of the bank. In the third chapter foreign exchange activities discussed
elaborately. There are some graphs & charts are shown for overview of analysis. At the end of
the report, some recommendation, conclusion and references have been given which would be
helpful for the proper understanding for the report and also given the appendix.

v
 Table of Contents
Serial. No. Particulars Page No.

Executive Summary V

Chapter 1.0 Introduction 1-4

1.1 Origin of Study 02

1.2 Objectives of Study 02

1.3 Scope of Study 03

1.4 Methodology of Study 03

1.5 Limitations of Study 04

Chapter 2.0 Overview of Jamuna Bank Limited (JBL) 05-10

2.1 Historical Background 06

2.2 Products & Services 07

2.3 Corporate Social Responsibilities (CSR) 08

2.4 Financial Highlights 10

Chapter 3.0 Foreign Exchange Activities 11-18

3.1 Introduction 12

3.2 Import 13

3.3 Export 17

3.4 Remittance 18

Chapter 4.0 Analysis 19-26

4.1 Time series Analysis 20

Chapter 5.0 Conclusion 27-29

5.1 Findings 28

5.2 Recommendations 28

5.3 Conclusion 29

References xxxii

Appendix xxxiii

vi
 List of Table
Table No. Particulars Page No.

Table: 01 Financial Highlights (2014-2018) 10

List of Graphs
Figure No. Particulars Page No.

Figure: 01 Issuing L/C 14

Figure: 02 Presentation of Documents & settlement 15

Figure: 03 Time series of Import of JBL 21

Figure: 04 Time series of Export of JBL 23

Figure: 05 Time series of Remittance of JBL 25

vii
Chapter – One
Introduction
1. Introduction

Internship is an important part for students of BBA program. It provides an on-the-job

experience to students. Real life business experience & practical knowledge can be acquired
by Internship program. As Finance graduate, banking internship can provide the practical
knowledge of banking activities. Bank is a financial organization that works with money. Its
main task managing money effectively & earn profit. Here managing money means Colleting
fund from surplus unit in the lowest possible cost & providing to deficit unit at higher cost.
The different between the loan interest & deposit interest is profit for bank. Banks are different
from other financial institution. Money supply can be affected by bank through lending and
investment. As it is service-oriented business, so customers are the vital part of the business.
Banks have great contribution to the economy of a country. So we can say banks are a profit-
making business that holds the deposits by offering various kinds of accounts and then uses
these funds to make loans.

Jamuna Bank Limited is one of the leading private banks. It makes them brand within very
short time with their decentralized management policies. Employee- Oriented management
also helps to make their success. Less pressure for the workers act as motivation, that makes
them encouraged and inspired to move up the ladder of success. Overall, Working as Intern in
JBL is really a great experience. The nature of this report is descriptive & Analytical. This
Report is mainly depending on secondary data. During the intern period in the Jamuna Bank
Limited, Elephant Road Branch, Foreign Exchange Activities learnt by working under Foreign
Exchange Division under the supervision of Titu Kumar Das (Foreign Exchange In charge,
ERB). The internship report topic is “Foreign Exchange Activities of Jamuna Bank Limited.”

1.1 Origin of the Study

The combination of theoretical and practical knowledge will make education system more
effective & helpful. From the Bachelor of Business Administration (BBA) program can learn
theoretical knowledge only. That is not enough to complete this program. There is no
alternative of practical knowledge. Internship is the process of coordinating between theory
and practice. Therefore, Department of Finance, Jagannath University provides this
opportunity to its potential graduates as academic requirement.

1.2 Objectives of the study

The objective of the internship program is to make realization with the completed course in
BBA program & provide real life business experience. The main objective of this report is to

2
analyze the financial aspects of JBL and their Foreign Exchange Department situation
including the import, export and remittance.

The objectives of the study are mentioned below:

⮚ To complete Internship procedure.

⮚ To describe Foreign Exchange Department, Import, Export, Foreign Remittance Process.
⮚ To provide the recommendation for improvement.
⮚ To have some practical exposures that will be helpful for future time.

1.3 Scope of the study

This report mainly concentrates on the foreign exchange operations of Jamuna Bank Limited
(Elephant Road Branch). The study has wide scope to focus on different aspect of foreign
exchange on banking sector but the study probably will not reflect the practices in the overall
banking sector.

It focuses on:

⮚ An overview of JBL.
⮚ An overview of foreign exchange activities of JBL.

1.4 Methodology of the study

To achieve the specific objective of this study collects the related data from secondary
sources.

Secondary data have been collected from:

⮚ The annual reports of JBL.

⮚ Website of Jamuna bank.

Data Analysis Method:

⮚ Time series (Linear Regression Method)

In the Time series analysis, it provides a future prediction on basis on historical data. There
are various kinds of analysis methods to predict. Linear & Non-Linear, Univariate &
Multivariate are the main methods of time series analysis.

In this report, the linear regression method is used to analyze because the historical data are
very close. & the Coefficient that means the value of R square is more that 80%.
3
In linear model, draw a regression line that can show a positive linear relationship or a
negative linear relationship or no relationship.
The equation of linear model is: Y = β1x +β0.

1.5 Limitations of study

This report is an overall view of Foreign Exchange Operations of JBL. But some limitations
have faced for preparing this report.

Some problem that makes hinders are as follows:

⮚ Limitation of data is the main obstacle because there have lots of restriction in banking
data.
⮚ Report is highly depended on secondary data, there has chance to provide wrong analysis.
⮚ Short time is another limitation of this report.
⮚ The bankers are very busy with their own job which lead me little time to consult with
them.

4
 Chapter – Two
Overview of Jamuna Bank Limited (JBL)

5
2. Overview of Jamuna Bank Limited (JBL)
2.1 Historical Background

Jamuna Bank Limited (JBL) registered under Companies Act, 1994 as banking Company.
Currently its Head Office is at Hadi Mansion, 2, Dilkusha C/A, Dhaka-1000, Bangladesh. JBL
started its operation from 3rd June 2001. It started its operation with an authorized capital of
TK.1600.00 million. In December 2018, Paid-up Capital of the bank raised to TK 7492
million. The bank was established by some entrepreneurs who are well reputed in the field of
trade, commerce, industry and business of the country. At present the Chairman of this bank is
Engr. Md. Atikur Rahman & The Managing Director is Mirza Ilias Uddin Ahmed.

As a 3rd generation Bank, it focuses on;

⮚ Remaining with time

⮚ Managing change
⮚ Developing human capital
⮚ Creating true customer’s value

The Bank provides various kinds of service to trade, commerce, industry and overall business
of the country. The new entrepreneurs are also get finance from JBL to set up promising new
ventures. The bank provides both conventional and Islamic banking via designated branches.
A group of highly educated and professional team manages the bank with their diversified
experience in finance and banking. This team always focuses on customers' needs. As the need
of customers is changing day by day, the bank takes some best strategies and introduces new
products to cope with the change. Jamuna Bank Ltd. has already achieved tremendous
progress since its beginning. The bank has already honoured as one of the best quality
service providers of the country.

At present the Bank has real-time Online banking facilities throughout the country. It has
traditional delivery points, Own ATM, Mobile banking & all kind of online banking
facilities.The business hour of this Bank is 10:00 A.M. To 6:00 P.M. from Sunday to
Thursday & the transaction hour starts from 10:00 A.M. to 4:00 P.M. Friday, Saturday and
any government holidays are banking off day.

Objectives of JBL

⮚ To earn and maintain CAMEL Rating 'Strong'

⮚ To remain one of the best banks in Bangladesh in terms of profitability and assets quality.
⮚ To introduce fully automated systems through integration of information technology.
⮚ To ensure an adequate rate of return on investment.
⮚ To maintain adequate liquidity to meet maturing obligations and commitments.
⮚ To maintain a healthy growth of business with desired image.
⮚ To ensure optimum utilization of all available resources.
6
⮚ To pursue an effective system of management by ensuring compliance to ethical norms,
transparency and accountability at all levels

2.2 Products & services

Jamuna Bank focused on different socio-economic factors to launch its every product.
Products are diversified so that all class of people can get the benefit. JBL has been launching
different products and services since its journey. At present Jamuna Bank is operating with the
following distinctive products and services;

⮚ Deposit products

JBL has wide range of deposit products. Some of them are;

❖ Savings Bank (SB) Account

❖ Current Deposit (CD) Account
❖ Short Notice Deposit (SND) Account
❖ Fixed Deposit Receipts (FDR)
❖ Lakhpati Deposit Scheme
❖ Millionaire Deposit Scheme
❖ Kotipati Deposit Scheme
❖ Mudaraba Hajj Savings Scheme
❖ Monthly Savings Scheme

⮚ Loan Products

Some of loan products of JBL;

❖ SME Loan
❖ Agricultural Loan
❖ Education Loan
❖ Home Loan
❖ Overseas Loan
❖ Personal Loan
❖ Auto Loan

⮚ Corporate Banking

❖ Real Estate Financing

❖ Loan Syndication & Structured Finance
❖ Employee’s House building Loan
❖ Letter of Credit (L/C)

7
❖ PAD
❖ Back-to-Back L/Cs
❖ UPAS L/C (Usance Payable at Sight)
❖ Bid Bond (BB)
❖ Performance Guarantee (PG)
❖ Advance Payment Guarantee (APG)
❖ Suppliers Credit Guarantee
❖ Customs Guarantee

⮚ Credit card

❖ Visa Electron Debit Card

❖ Visa Classic Credit Card
❖ Visa Gold Credit Card
❖ Visa Dual Gold Credit Card

2.3 Corporate Social Responsibilities (CSR)

Jamuna Bank is an ethical business organization. It contributing 3% Pre-Tax Profit to Jamuna

Bank Foundation each Year for helping the destitute people of the society

Jamuna Bank maintains its CSR by Jamuna Bank Foundation. This Foundation conducts
various social activities regularly. It works in wide area like Education, Poor healthcare, Green
environment system, against drug abuse, improving ethical and religious values, preserving
national heritage, humanitarian services, improving the standard of living by creating job
opportunities & so on. At a glance, JBF CSR activities are as follows:

⮚ Education:
❖ Scholarship for the unprivileged & disabled but meritorious students
❖ GPA-5 Scholarship among the Offspring of employees of Jamuna Bank Limited.
❖ Free Primary School for the slum dwellers at Rayerbazar, Dhaka

⮚ Healthcare:
❖ Free Medical camps across the country
❖ Free Medical Service Centre at Bishwa Ijtema, Tongi
❖ Blood Donation program
❖ Donation to National Heart Foundation, Sylhet

⮚ Social:
❖ Anti-Drug Rally & Seminar
❖ Relief distribution for disaster affected people

8
⮚ Others:
❖ Tree plantation program
❖ Financial support to poor Freedom fighters
❖ Distribution of Cloths among the poor people during Eid festival at every year
❖ Contributed towards the development of Bangladesh sports

There are some projects taken by Jamuna Bank Foundation:

⮚ Jamuna Bank Old Home.

⮚ Jamuna Bank Medical College in Narayangonj.
⮚ Jamuna Bank Complex in Mohammadpur, Dhaka.

9
 2.4 Financial Highlight

Key Financial Indicators

Five Years highlights of JBL
Taka in BDT million
Particulars 2014 2015 2016 2017 2018
Net Interest Income 1431 1612 2545 3799 5313
Operating Profit 3069 3629 4180 4335 4741
Profit After Tax 1347 1642 1876 2021 2317

Deposit 114635 118849 141551 167571 188034

Loan 77900 87252 117100 142253 165403
Investment 39964 34723 30114 26062 31649
Assets 139495 142859 168418 197059 225018
Earning Assets 78830 83005 116627 146863 166409
Shareholder's Equity 10811 15708 15849 15433 18074
Total Capital 11058 14597 15809 19894 26430
Paid Up capital 5161 6141 6141 6141 7492

EPS (Amount in Taka) 2.19 2.67 3.06 2.7 3.09

NAV (Amount in Taka) 20.95 25.58 25.81 20.6 24.12
Market Price per share (Amount in Taka) 12.31 12.09 15.61 22 17.6
Price Earnings ratio per share (Times) 5.61 4.52 5.11 8.16 5.69
Cost Income Ratio % 49.61% 47.98% 48.50% 50.62% 51.71%
Return on RWA (after tax) % 1.37% 1.44% 1.30% 1.21% 1.19%
Non-Performing Loan % 5.68% 6.69% 4.05% 4.02% 3.77%
Capital Adequacy Ratio % 11.25% 12.83% 10.93% 11.86% 13.58%
ROA 1.06% 1.16% 1.21% 1.11% 1.10%
ROE 13.68% 12.39% 11.89% 12.92% 13.83%

Import 59751.3 70296.4 87480 105609 130242

Export 64989 67081 74381 80459 106071
Remittance 8200 11726.7 12030 16838 16000
Number of Branch 97 102 112 122 132
Number of ATM 167 215 243 270
Number of Employee 2204 2304 2443 2592 2824

Table – 1: Five Years Highlight of JBL.

10
Chapter – Three
Foreign Exchange Activities

11
3. Foreign Exchange Activities

3.1 Introduction

Foreign Exchange activities are the part of International banking. International banking is an
arrangement of financial service by a schedule bank of one country to the residents of another
country. Foreign exchange department of a bank deals with foreign currency including L/C of
Import & export and foreign remittance. Bank basically works with documents. So the foreign
exchange banking products are Documents. Usually these services provided by International
division of a Bank. JBL – Elephant Road branch also Provides those service through Foreign
Exchange Division. The in-Charge of this department is Titu Kumar Das (Senior Executive
officer). This Branch has plenty of corporate customers like as Square, Standard group,
Rupayan, Hamim group etc. which are straight linked with international banking. JBL is the
permitted dealer of foreign exchange of Bangladesh Bank.

Mode of Payment in International Transaction

 Open A/C: An open account transaction is a sale where the goods are shipped and
delivered before payment is due, which in international sales is typically in 30, 60 or 90
days. Obviously, this is one of the most advantageous options to the importer in terms of
cash flow and cost, but it is consequently one of the highest risk options for an exporter.

 Cash In Advance: With cash-in-advance payment terms, an exporter can avoid credit
risk because payment is received before the ownership of the goods is transferred. This is
good for the Exporters and bad for the importers.

 Documentary Collection: A documentary collection (D/C) is a transaction whereby the

exporter entrusts the collection of the payment for a sale to its bank (remitting bank),
which sends the documents that its buyer needs to the importer’s bank (collecting bank),
with instructions to release the documents to the buyer for payment. Funds are received
from the importer and remitted to the exporter through the banks involved in the
collection in exchange for those documents.

 Letter of credit (L/C): Letters of credit (L/Cs) are one of the most secure instruments
available to international traders. An L/C is a commitment by a bank on behalf of the
importer that payment will be made to the exporter, provided that the terms and
conditions stated in the L/C have been met, as verified through the presentation of all
required documents.

 Consignment: Consignment in international trade is a variation of open account in

which payment is sent to the exporter only after the goods have been sold by the foreign
distributor to the end customer.

12
Foreign Exchange Account

 Nostro Account: Refers to an account that a bank holds in a foreign currency in another
bank.
 Vostro Account: Refers to the accounts that other banks have on its books in its home
currency.
 Loro Account: Current Account Maintained by one Domestic Bank on behalf of other
domestic bank in foreign bank in foreign currency.

Objectives of Foreign Exchange Operations

 To execute all Import & Export business.

 To participate in the socio-economic development of the country.
 To provide investment facility to the depositor of the country.
 Increase relationship network of the Bank.

There are three main activities of foreign exchange.

3.2 Import

Purchasing goods from the foreign country is called import where as people from differ sector
including firms, industries, government of Bangladesh import goods from another country to
satisfy their necessities. As import oriented country, Banks are focused on import related
activities mainly. According to import- export regulation Act 1950, it's impossible to import
without having IRC (Import Registration Certificate) issued by the office of chief controller
import and Export division. Importers should be authorized and seek permission from the
priority department of the government.

To get IRC, One should need following Papers;

● Certificate of taxation.
● Certificate of nationality.
● Certificate which is issued by registered Chamber of Commerce or Registered Trade
Association.
● Clearance certificate from bank.
● Paper of trade licenses.

13
Types of Importer:

 Personal Importer: The importer is insisting to import goods from the abroad for his need this
importer called personal importer.

 Commercial Importer: The importer is insisting to import goods for commercial purpose is called
commercial importer

 Industrial Importer: The importer is insisting to import goods industrial purpose is called Industrial
importer.

3.2.1 Procedure of Import:

There has some specific procedure of importing goods from foreign country. There have two
ways of importing which are direct imported goods from the country outside or imported
through the agents. There are two stage of Importing if you have valid IRC.

Stage 1: Issuing L/C

Step – 1
LC Applicant LC Applicant
(Buyer) (Buyer)

Step – 2 Step – 4

Advising/
Issuing Bank Step – 3 Confirming Bank

Figure – 1: Issuing L/C

Step – 1: Buyer & seller make a sales contract & agreed to use an LC as the method of
payment.

Step – 2: Buyer requests the issuing bank to issue an LC in favor of the seller with specific
conditions.

Step – 3: Issuing bank issues the LC & requests the advising bank to confirm the credit to the
seller.

14
 Step – 4: Advising bank check & Confirm the LC & sends to the seller or LC beneficiary.

Stage 2: Presentation of Documents & Settlement.

Step - 5
LC Applicant LC Beneficiary
(Buyer) (Seller)

Reimbursing
Bank
Step - 12 Step - 11 Step
Step 6 Step –9
7

Step – 8C

Step – 8A
Issuing Bank Nominated/
Negotiating Bank

Figure – 2: Presentation of Documents & settlement

Step – 5: Seller prepares & sent the goods to buyer.

Step – 6: Seller presents the documents to nominated bank.

Step – 7: Nominated bank checks the documents & want correction if there any problem in
presented documents against LC term & conditions.

Step – 8A: Nominated bank forwards the documents to Issuing bank.

Step – 8B: If documents are free from discrepancies, Nominated bank claims reimbursement
from the reimbursing bank.

15
Step – 8C: Reimbursing Bank pays the nominated bank against valid documents received
from the issuing bank & statement from negotiating bank.

Step – 9: Nominated bank credits the amount into the seller’s account.

Step – 10: Issuing bank check documents presented & reimburse the reimbursing bank if all
documents are free from discrepancies.

Step – 11: Issuing Bank forward documents to applicant (buyer) for payment.

Step – 12: Once payment is received from the applicant (buyer), issuing bank provides
documents to the buyer to collect his goods.

3.2.2 Letter of Credit

L/C or Letter of Credits is issued by a bank on behalf of its customers to facilitate payment of
imports. It is a written undertaking of a bank given to the seller (in banking term it called
Beneficiary) at the request & in accordance with the instructions of the buyer (in banking term
it called applicant) to effect payment up to a stated amount of money within a prescribed time
limit against Presentation of stipulated documents. It acts as a payment method in international
trade. With the help of the L/C importers pay to their suppliers for the goods they agreed to
buy. Documents need to open a Letter of Credit:

 Valid Pro-forma Invoice

 Valid IRC
 Copy of Trade License
 VAT registration Certificate
 TIN certificate
 Membership certificate of related trade organization
 Insurance Cover note
 Margin, commission & other charges need to be deposited in the importer’s account
 L/C should be open within the banks approved limit
 Goods price needs to be verified.

Common defects in Documentation:

 L/C has expired prior to presentation of draft.

 Changes in Invoice not authorized in the credit
 Inconsistent description of Goods
 Insurance Documents errors
 Invoice amount mismatch with draft amount, etc.

16
Types of L/C

 Irrevocable L/C: This kind of LC cannot be changed or cancelled without permission of

the Seller.
 Revocable L/C: This kind of LC can be Changed or cancelled by the Bank at the
customer's order. It needn’t any kind of previous permission from Seller. In our country,
there is few existence of this kind LC.
 Stand-by L/C: This LC is kind of bank guarantee. When the Buyer fails to payment,
Bank will pay the amount to seller.
 Transferable L/C: This kind of LC permits Seller to assign some part of LC to other
party. When the Seller cannot meet to provide all desired goods then seller can transfer a
part of a to others who can provide the goods.
 Back-to-Back L/C: Back-to-Back LC permits to issue the second LC on the basis of the
first LC. Primary LC is opened as per the Buyer's instructions and on the basis of this LC
and instructions of the intermediary a new LC is opened as favor of Seller.
 Payment at Sight L/C: Payment of Sight LC means payment is made to the seller
immediately (maximum within 7 days) after the documents have been submitted.
 Deferred Payment L/C: Deferred LC is a kind of LC that means buyer not to pay when
the documents are arrived rather than will pay in future time. Usually at most time of
payment is 360 days.

3.3 Export

Export means to sale of commercial goods to another country. In the other words, exporting
invokes the act of trading in the international market. The export business relies on road, sea
or air as modes of transportation.

Mode of Payment in Export:

 Open Account
 Documentary collection
 Cash in Advance,
 Letter of Credit,

Export L/C:

Exports from Bangladesh are normally made either against firm sale contracts or irrevocable
LC. Shipments are also some times made without cover of an LC on CAD , DP or
consignment basis according to the terms of relevant sale contracts. The sale contracts or LC
must stipulate the requirement of the buyer about the quality, quantity, price, description of
goods, Schedule of shipment, insurance, marks, country of origin & terms of payments,
whether payments to be made against bills drawn at sight, D/P, D.A, or CAD basis.

17
 Procedure of Export L/C:

An export LC is a document whereby the buyer instructs their bank to pay, assuming that the
agreed conditions specified in the original documentary are met. It is an internationally
accepted method of settling trade payments. The following steps needs to be follow to handle
an export LC:

 Receiving the export L/C from the L/C issuing bank.

 Advising the L/C to the beneficiary
 Inform Issuing Bank
 Input L/C details
 Verify details of L/C
 Modify details of Export L/C
 Seek clarification from Issuing Bank
 Confirmation Stage
 Seek Issuing Bank’s Approval
 Create/Modify L/C details
 Store Documents.

3.4 Remittance

Remittance refers to the send or receipt of money from one place to another place. Foreign
remittance refers that the exchange of money between two countries or among several
countries. This is mainly occurred through banking institution. Southeast Bank Limited is not
outside this. All foreign remittance transactions are grouped into following two broad
categories:

 Foreign Inward Remittance: Inward remittance means remittance received from foreign
countries or abroad. The bank makes payment immediately if the amount is less than Tk.
1, 00,000. If the amount exceeds Tk. 1, 00,000. It must wait to get the credit advice from
the issuing bank.
 Foreign Outward Remittance: Outward Remittances means sale of foreign currencies
which constitutes remittances from Bangladesh by TT, MT. FDD, TC etc. to a foreign
country or local currency credited to non-resident Taka account of foreign banks or
convertible Taka account and also endorsement (issue) of Foreign currency including TC
on foreign travel purpose.

18
 Chapter – Four
Analysis of Foreign Exchange

19
4. Analysis
4.1 Time series Analysis

Time series is the sequence of data points that measured the gradual time points in future time.
Time series analysis is basically a forecast or predictions. Forecasting using a time-series
analysis totally depends on past data. In this report, the linear regression method is used to
analyze because the historical data are very close. & the Coefficient that means the value of R
square is more than 80%.

Linear regression model shows the relationship between two variables. The dependent variable
is usually known as Y & the independent variable known as X. In simple linear regression
model, a straight line approximates the relationship between the dependent variable and the
independent variable. When there two or more independent variables are used that called
multiple regression model. The equation used in a simple linear regression model that shows
how y is related to x. The simple linear regression model: Y = β1x +β0. Here, β1 is the Slope
& the β0 is the intercept of Y. In a linear model we draw a regression line that can show a
positive linear relationship or a negative linear relationship or no relationship.

Positive relationship: The regression line slopes upward with the increasing of x. The
positive linear relationship between the two variables means as the value of one increase, the
value of the other also increases.

Negative relationship: The regression line slopes downward with increasing of the value of
x. The negative linear relationship between the two variables means as the value of one
increases, the value of the other decreases.

No relationship: When there is no relationship between the two variables, the graph line will
be flat not sloped.

Importance of Time series Analysis:

Time series analysis usually used in Planning & Management as an important Statistics
Analysis. Time series analysis mostly deals with previous data or historical data & provides an
assumption or forecasting. This analysis tool is also helpful to finance to forecast the future.

 Analysis the past data or past change & determine the future polices & Program.
 Estimation the future value using the historical data.
 Time series is a scientific investigation that measures seasonal behaviors, trend, change
etc.
 It can measure risk by projection of future.
 It can manage budgetary analysis, etc.

20
 Time series of Import of JBL:
YEAR 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Import (BDT
15,457 22,192 30,312 46,685 61,034 55,907 57,705 52,705 59,751 70,296 87,480 105,609 130,242
'Million)

y = 7689.7x + 7354.7
Import R² = 0.8675
140000.00
130000.00
120000.00
Import (BDT 'million)

110000.00
100000.00
90000.00
80000.00
70000.00 Import
60000.00
Linear (Import)
50000.00
40000.00
30000.00
20000.00
10000.00
0 1 2 3 4 5 6 7 8 9 10 11 12 13
Time Period

Figure – 3: Time series of Import of JBL

Trend equation:

Y= a + bt

Here, y = Import of JBL (BDT’ million)

a = Constant

b = Regression coefficient

t = Period of time

From time series analysis, the trend equation can be written as follows:

y = 7689.7t + 7354.7

This equation indicates that period of time increases by 1 unit, import of JBL will increase by
7689.7 BDT’ million and other things remain constant.

21
Forecasting import of JBL for 2019:

y = 7689.7(14) + 7354.7

= 115,010.93 BDT’ Million

So, Total import of JBL of the year 2019 as forecasted by trend analysis is BDT 115,010.93
million.

And, R2 = 0.8675 indicates 86.75% variation of total import of JBL can be explained by
period of time.

Growth Rate = 19.44%. During the year of 2006-2018 the total import of JBL has been
increased at a rate of 19.44%.

Acceleration Rate = -1.37%. The acceleration rate indicated that the growth rate is 1.37% less
than the previous year. As the acceleration rate is negative it indicates that the total import of
JBL is increasing at a decreasing rate.

22
 Time series of Export of JBL
YEAR 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Import (BDT
11,584 13,990 18,617 21,407 41,860 57,929 68,844 64,250 64,989 67,081 74,381 80,459 106,071
'Million)

Export y = 7208.4x + 2731

R² = 0.917
110000

100000

90000
Export (BDT' million)

80000

70000

60000
Export
50000
Linear (Export)
40000

30000

20000

10000
0 1 2 3 4 5 6 7 8 9 10 11 12 13
Time Period

Figure – 4: Time series of Export of JBL

Trend equation:

Y= a + bt

Here, y = Export of JBL (BDT’ million)

a = Constant

b = Regression coefficient

t = Period of time

From time series analysis, the trend equation can be written as follows:

y = 7208.4t + 2731

This equation indicates that period of time increases by 1 unit, Export of JBL will increase by
7208.4 BDT’ million and other things remain constant.

23
Forecasting Export of JBL for 2019:

y = 7208.4(14) + 2731

= 103,648.06 BDT’ Million

So, Total Export of JBL of the year 2019 as forecasted by trend analysis is BDT 103,648.06
million.

And, R2 = 0.917 indicates 91.7% variation of total Export of JBL can be explained by period
of time.

Growth Rate = 20.27%. During the year of 2006-2018 the total Export of JBL has been
increased at a rate of 20.27%.

Acceleration Rate = 0.80%. The acceleration rate indicated that the growth rate is 0.80% more
than the previous year. As the acceleration rate is positive it indicates that the total Export of
JBL is increasing at increasing rate.

24
 Time series of Remittance of JBL:
YEAR 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Import (BDT
2,262 2,506 3,165 2,658 1,594 3,360 4,029 6,859 8,200 11,726 12,030 16,838 16,000
'Million)

Remittance y = 1282.8x - 1962

R² = 0.8451
18000

16000

14000
Remittance (BDt' million)

12000

10000

8000 Remittance
Linear (Remittance)
6000

4000

2000

0
0 1 2 3 4 5 6 7 8 9 10 11 12 13
-2000
Time Period

Figure – 5: Time series of Remittance of JBL

Trend equation:

Y= a + bt

Here, y = Remittance of JBL (BDT’ million)

a = Constant

b = Regression coefficient

t = Period of time

From time series analysis, the trend equation can be written as follows:

y = 1282.8t - 1962

This equation indicates that period of time increases by 1 unit, remittance of JBL will increase
by 1282.8 BDT’ million and other things remain constant.

25
Forecasting Remittance of JBL for 2019:

y = 1282.8(14) - 1962

= 15,996.96 BDT’ Million

So, Total remittance of JBL of the year 2019 as forecasted by trend analysis is BDT 15,996.96
million.

And, R2 = 0.8451 indicates 84.51% variation of total Remittance of JBL can be explained by
period of time.

Growth Rate = 17.71%. During the year of 2006-2018 the total remittance of JBL has been
increased at a rate of 17.71%.

Acceleration Rate = -1.39%. The acceleration rate indicated that the growth rate is 1.39% less
than the previous year. As the acceleration rate is negative it indicates that the total remittance
of JBL is increasing at a decreasing rate.

26
Chapter – Five
Conclusion

27
5. Conclusion

5.1 Findings

The Jamuna Bank Limited Controls their foreign exchange operation based on process
guideline. According to data analysis this study gets some information about clients,
procedure and performance of foreign exchange operation. Those are noticed below:

 Import performance is more than export performance in JBL.

 Letter of Credit is highly regulated by local and international rules and norms and there is
less scope for deviations.

 Jamuna Bank paid 90% credit against Masters L/C as well as Back to back L/C ,but they
can’t give same loan in their all customers, it can vary to client performance.

 If the shipment date, delivery date & expiry date are not match with the L/C condition or
any miss match the bank give the abandon notice, but Jamuna Bank always concern about
their regular client. The bank cannot follow the rules for their valuable client; they
personally inform them and solve it internally.

 In time series analysis shows that the quantity of Import, Export & remittance increase in
every period that means it’s growing.

5.2 Recommendations

Though Jamuna bank providing a very efficient Foreign Exchange services, there is also scope
for improvement to provide their services better. After analysis of the Foreign Exchange
procedures and practices, it is evident that Foreign exchange procedures and activities are
completely structured in JBL. However, based on everyday observation and perception, some
recommendations are given below from which the Bank may be benefited.

 For better service in this competitive banking area, the bank needs a skillful and
hardworking workforce for foreign trade department. There is some lacking in their online
banking services. JBL should pay attention to this issue.

 JBL should give more attention to increase their Customer by innovative advertising.

 More Automated Teller Machine (ATM) should be introduced as soon as possible because
of present market demand of the customer and the educated customer now wants
technology based banking.

 According to past history, increasing branch also increase the revenue & foreign exchange
figure. So JBL should setup new branches.

28
5.3 Conclusion

There are many nationalized commercial bank, Islamic banks, and foreign banks working in
our country. Among them Jamuna Bank Limited is strong in their performing. Jamuna Bank
Limited has received the best "Performing Bank" Award 2015-16 from ICICI Bank. It has also
achieved “11th ICAB National Awards for best Presented Annual Report 2010”. Though
General banking is the heart of the bank but foreign exchange operation is the key of
introducing the home country to host country by trading relationship with others country.
Bangladesh is world’s second-biggest apparel exporter after China. Garments including knit
wear and hosiery account for 80% of exports revenue; others include: jute goods, home textile,
footwear and frozen shrimps and fish. Jamuna Bank Limited plays a vital role in our economy
by foreign trading. After all, growth and performance of foreign exchange operation of
Jamuna Bank is in sound position in Bangladesh local market.

Jamuna bank is playing an important role in socio-economic development of the country.

They are contributing for the state and the society by their CSR activities and also planning to
establish a school and hospital for the common people to get health & education service at a
minimum cost. However, this study can be supportive guideline for future planning and the
successful operation to achieve its goals in the current competitive time. At last it can be said
that, Jamuna Bank Limited will be turned into a dynamic which expand its Banking Business
all over the country. This will help for alleviation of the poverty, income generation, creation
of employment opportunity, upgradation of the standard of living of the lower economic
groups, which will also contribute to the emancipation of national economy of the country.

29
Bibliography

 Trade Service of Banks in Bangladesh - BIBM.

 JBL Banking training course Lecture sheet.
 Bangladesh Bank; Guide lines for Foreign Exchange Transactions.

Internet:

 https://jamunabankbd.com/
 https://www.bb.org.bd/aboutus/regulationguideline/foreignexchange/

Reports:

 Annual Report of JBL- 2006-2018

 Brochures of Jamuna Bank Limited.

xxxi
Appendix

Foreign exchange information of JBL:

Foreign Exchange Data 2014 - 2018

xxxii
Foreign Exchange Data 2009 - 2013

xxxiii
Foreign Exchange Data 2007 - 2011

xxxiv