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Internship Report

On

“Foreign Exchange Operation of

BASIC Bank Limited”

Submitted by

WWW.ASSIGNMENTPOINT.COM

Foreign exchange, like foreign trade , is a part of economic science. The foreign exchange has played a vital role in the last decade or so on guiding the purchase and sale of goods, services and raw materials globally .International trade is the exchange of goods and services between countries, which gives rise to world economy, in which prices, or supply and demand ,affect and are affected by global events .Industrialization, advanced transportation, globalization, multinational corporations, and outsourcing are all having a major impact. Increasing international trade is the primary meaning of “globalization”. As a result of international trade, the market contains greater competition and therefore more competitive prices, which bring a cheaper product home to the customer.

Commercial banks play very important role in international trade of a country by providing credit to the priority sectors and facilitating payment against trade with other countries .In this regard the commercial Banks of Bangladesh are not the exceptions and the name of BASIC Bank Ltd. Can be mentioned here as one of the top ranked bank. BASIC Bank Ltd. Is a bank with slogan “Serving people for progress” ; this slogan has been maintained throughout the passing year by ensuring highest customer care and maintaining competitive market price.

For the bank being different means – being the better bank in terms of operational excellence, unique customer focus, risk management, organizational advancement in terms of state- of- art IT implementation ,expansion of branch network, new business development, implementation of standard operating procedures, training and retraining a pool of efficient and dedicated human resources and ensuring highest level of compliance and transparency in all spheres of operations and performance presentation.

BASIC Bank Ltd is well positioned to meet the challenges of 2009 and will continue to strive to innovate and capture opportunity for growth and value creation .The Bank will focus on its customer base to generate more business from existing customers. This strategy is supported by wide spectrum of product and services and level of customer service delivery.

Here in this report I have tried to explore BASIC Bank’s arena of foreign exchange business and their excellence in services along with the performance highlights during the past few years. An overall comparison also has been made with the total foreign exchange situation of Bangladesh and other competing banks.

Table of contents

Letter of transmittal

Abstract

Acknowledgement

Executives summary

Acronyms

Chapter -1:

Introduction

1.1. Authorization of the study

1.1.1. Understanding

1.1.2. Things are doing here

1.1.3 Personal observations

1.2. Objectives of the study

1.3. Methodology of the study

1.3.1. Sources of data

1.3.1.a Primary data

1.3.1.b Secondary data

1.3.2 Data analysis and interpretation

1.4 Limitations of the study

Chapter-2:

BASIC Bank Limited : An overview

2.1 Background of BASIC Bank Limited

2.2 BASIC Bank Limited : In a brief

2.3 Functions

2.4 Vision ,Mission, Goal, Strategy & Objectives

2.5 Organizational structure

2.5.a Board of Directors

2.5.b Management

2.5.c Organogram of BASIC Bank Limited

2.5.d Branch office Organogram

2.6 Competitive Strategy

2.7 SWOT Analysis

Chapter-3:

Terms used in Foreign Exchange Operations

3.1 Import

3.1.1 Letter of credit

3.1.2 Recoverable credit

3.1.3 Irrecoverable credit

3.1.4 Add confirm credit

3.1.5 Special documentary letter of credit

3.1.6 Import financing

3.2 Export

3.2.1 Receiving the letter of credit

3.2.2 Procuring the materials

3.2.3 Back –to- Back L/C

3.2.4 Export financing

3.2.4.a Pre - shipment credit

3.2.4.b post - shipment credit

3.3 Foreign Remittance

3.3.1 Foreign Demand Draft (FDD)

3.3.2 Inward Remittance

3.3.3 Outward Remittance

Chapter-4:

Foreign Exchange Operations of BASIC Bank Limited

4.1 Introduction

4.2 Foreign trade and foreign exchange

4.3 Functions foreign exchange

4.4 Foreign exchange department

4.5 Service of foreign exchange

5.7.1 Import finance

5.7.1.1 Import financing sectors of BASIC Bank Limited

5.7.1.2 Import financing systems of BASIC Bank Limited

5.7.1.3 Import Registration Certificate (IRC)

5.7.1.4 Import procedure

5.7.1.5 Import scrutiny

5.7.1.6 Import bills retirement

5.7.1.7 Documents used in foreign exchange

5.7.1.8 Letter of credit (L/C)

5.7.2 Export finance

5.7.2.1 Export financing sectors of BASIC Bank Limited

5.7.2.2 Export financing systems of BASIC Bank Limited

5.7.2.3 Pre - shipment and post - shipment

5.7.2.4 Pre - shipment financing of foreign exchange

5.7.2.4.a Export Cash Credit -Pledge

5.7.2.4.b Export Cash Credit -Hypothecation

5.7.2.4.c Packing Credit

5.7.2.4.d Back –to- Back L/C

5.7.2.5 Post - shipment financing of foreign exchange

5.7.2.6 Export development fund

5.7.2.7 Scrutiny of export document

5.8 Foreign Remittance

5.8.1 Inward Remittance

5.8.2 Outward Remittance

5.9 Factors affecting fluctuation in exchange rate

5.10 Evaluation of foreign exchange operations of BASIC Bank Limited

5.10.1 Telex / SWIFT

5.10.2 Advising

5.10.3 Negotiation

5.10.4 Confirmation

5.10.5 Document mailing

5.10.6 Transaction

7.1 Foreign exchange risk management

7.2 Foreign currencies translation

Chapter-5:

Findings of the study

The findings obtained from the study on foreign exchange operations of

BASIC Bank Limited.

Chapter-6:

Recommendations

Chapter-7:

Conclusion

References

Chapter 1: Introduction:

1.1Authorization of the study :

Banking is one of the most important sectors for country’s wealth building activities.

Commercial banks are certainly profit making financial institutions. These institutions

play great role in the money market of every economy.

Due to recent financial crisis (Particularly in U.S.A, G.B , EU , Japan) globalization

technological innovation and deregulation in the banking system all over the world has

been changing rapidly . Now a day’s banks have to complete in the market place not

only with local institutions but also with foreign financial institutions.

The course under BBA program is designed with an excellent combination of theoretical

and practical aspects. The whole course is divided into eight semesters of 6 months

each. After completion of 8th semester consisting of theoretical exposure, the students

are sent to different organizations to obtain some practical exposure in different sectors

which would help them in taking up more professional courses in MBA . As a student of

BBA ,I have assigned to BASIC Bank Limited , Main Branch for my practical orientation.

As our program director directed us to present the report in a way that would be based

on the personal observations from the department I worked in. I have described the

department by the following way :

1.1.1 Understanding :

In this part I have tried to be acquainted with every nook and cranny of foreign

exchange section of BASIC bank limited, Main Branch.

1.1.2 Things are doing here :

In this part I have tried to see the things which are being done in each section,

i.e.; General Banking section , Foreign exchange section , Loans and Advances

section .

1.1.3 Personal observations: