Banks today are performing very well to meet the objectives of various groups. As banking organizations have grown in recent years, the growth of local deposits has simply been inadequate to fund the growing need of customers for loans and new services. But bank’s entry into remittance services that their financial statements are increasing. More and more of them have been engaging in remittance services. In many cases, This development has places management great chance set and meet bank performance goals.
Banking system of Bangladesh has gone through three phases of development-Nationalization, Privatization and Lastly Financial Sector Reform, National Credit and Commerce Bank Limited (NCCBL) started its journey in the financial sector of the country as an investment company back in 1985. The company operated up to 1992 with 16 branches and thereafter with the permission of the Central Bank converted in a full-fledged schedule private commercial bank in May 1993 with serve the nation from a broader platform.
The whole working process of NCC Bank Limited is divided into 3 divisions as under:
(i) General Banking Division
(ii) Credit Division, and
(iii) Foreign Exchange Division.
This report has been prepared based on the information taken from the 3 divisions, specially foreign exchange as mentioned above.
Through foreign remittance is one of the major parts of bank’s income but the loans and advances and other loan schemes play a vital role in success of NCC Bank Limited. NCC Bank ltd. has offered the clients deposit scheme, loan scheme, remittance service and the like.
Part – 1
1.1 Introduction:
Now a days Industries as well as the Non Resident Bangladeshis and persons working outside are the real assets of the remittance business of the country. To motivate and also to ensure increased remittance flow, NCC Bank have made a number of arrangements with various exchange companies. NCC Bank considering to take steps so that the beneficiaries here in Bangladesh can receive the money at their door steps.
Most large remittance come from foreign exchange business including Import and Export. Bank largely depends in its Foreign Exchange Business to ensure profitability. To look after the Business and also to ensure prompt service to the Import and Export, officers having exposure and expertise in Foreign Exchange Business have been posted both at Head Office & Authorized Dealer Branches. During 2009, the Bank handled Export and Import business to the tune. Bank’s wide network of correspondence plays vital role in facilitating its international trading. At present, total number of correspondents is 335.
With a view to facilitating homebound remittance, the Bank made arrangements with a number of exchange companies during the year. This arrangements brought significant development in remittance business. NCC Bank are going to expand this network in near future.
Corporate Governance establishes specific responsibility to ensure accountability. With a view to ensuring accountability and fairness in functions of the company and also to comply with the requirements of regulatory agencies, care has been taken to improve Corporate Governance. Due to this practices the remittance department of NCC Bank has been growing to provide a good participation in the profitability of the Bank.
1.2 Origin of report:
For any business school student only curriculum activities are not enough for handling the real business situation. So it is an important opportunity the students to know about the field of business through the project program. This project is a perfect blend of the theoretical and practical knowledge. This report is originated to fulfill the requirement of the assign project report on Customer Service Of Ncc Bank Ltd. In this regard, I have been working as an employee in NCC Bank Limited, Lal Dighirpar, Sylhet. I leaned how the host organization works with the help of the internal supervisor. On the basis of working experience for this period I have prepared this report and I have tried my best to relate the theoretical knowledge with the practical work situation.
1.3 Objectives of Study:
The objectives of this report are as under:
· Primary objective:
The primary objective of this report is to fulfill the requirement of MBA program. For this reason I had to be attached with an organization so that I can have some practical job related experience along with the academic knowledge.
· Secondary objectives:
The study was conducted to achieve the following secondary objectives:
1. To gain a relationship between theoretical and practical learning and real situation of the customer service of ncc bank.
2. To know the history of NCC Bank Ltd.
3. To understand the major banking activities which a banker performs.
4. To get an idea about the overall performance of NCC Bank Ltd.
5. To have the idea of reporting system by each branch to its Head Office.
6. To know about the rules and regulation of the bank.
7. To study different product handled by NCC Bank.
8. To evaluate customer’s views about the services offered by commercial banks
9. To show the relationship of Bank profitability and different remittance services.
10. Finds and probable solutions.
1.4 Methodology of Study:
a). Study Design:
The study was fully a descriptive in nature. The study was conducted using the participatory method. To know the in-depth information, the topic was discussed with the expert professionals related to bank for several times and review of record of NCC Bank Limited and other related secondary information and other relevant information were gathered from secondary sources including several journals and booklets.
b). Data Collection method:
Data have been collected from two sources. These are as under:
1. Primary source
2. Secondary source
i). The primary sources of data include the followings:
1. Face to face conversation with the bank officers and staffs
2. Tele conversation with the clients.
3. Study of different files of different sections of the bank.
4. Practical Deskwork.
ii). The secondary sources of data include as under:
1. Annual report of NCC Bank Limited
2. Different publications of NCC Bank Limited
3. Unpublished data received from the treasury division.
4. Different text books
Different circulars sent by Head Office of NCC Bank Limited and Bangladesh Bank
1.5 Scope of the report:
National Credit and Commerce Bank Limited (NCCBL) is operating widely with 79 branches all over Bangladesh. This report is strictly confined NCCBL’s Remittance department , Sylhet.
1.6 Limitation of study:
A. The main constraint of the study was insufficiency of information that was highly required for the study. Since the bank officials are very busy with their activities, as a result it was thought to have proper knowledge as was required for the study.
B. The duration was not enough to cover all aspects of banking.
1.7 Historical Background:
National Credit and Commerce Bank Limited bears a unique history of its own. The organization started its journey in the financial sector of the country as an investment company back in 1985. The company operated up to 1992 with 16 branches and thereafter with the permission of the central bank converted into a full fledged scheduled private commercial bank in May 1993 with paid capital of Tk. 39.00 Crore to serve the nation from a broader platform.
During last 12 years of its operation NCC Bank has acquired commendable reputation by providing sincere personalized service to its customers in a technology-based environment.
The bank has up a new standard in financing in the industrial trade and foreign exchange business. Its various deposit and credit products have also attracted the clients both corporate and individuals who feel comfort in doing business with the bank.
The initial authorized capital of the bank was Tk. 75.00 crore and Paid up capital was Tk. 19.520 crore at the time of conversion who is now raised, to Tk.60.00 crore. The sponsors of the new bank consisted of 26 members, who comprised the first Board of Directors. The share price of the bank is currently being quoted at both Dhaka and Chittagong Bourses at an average price of Tk.320/- against per value of Tk. 100.00. NCC Bank based upon its commendable business performance for the year ended 2004 has meanwhile declared stock dividend 30%. The bank which started with 16 branches in 1993, has at present 41 branches and 03 booths are located in prime commercial areas of Dhaka, Chittagong, Sylhet, Feni, Khulna, Jessore, and Rangpur district head quarters, The initial authorized capital of the bank was Tk. 39.00 crore. The present authorized capital is Tk.250.00 crore and paid up capital is Tk.60.00 crore. The sponsors of the new bank consisted of 26 members, who comprised the first Board of Directors. The share price of the bank is currently being quoted at both Dhaka and Chittagong Bourses at an average price of Tk.320/- against per value of Tk. 100.00. NCC Bank based upon its commendable business performance for the year ended 2004 has meanwhile declared stock dividend 30%. The bank which started with 16 branches in 1993, Chittagong, Sylhet, Feni, Khulna, Jessore, and Rangpur district head quarters.
Out of which as many as 17 are authorized dealer branches, fully equipped for dealing in direct foreign exchange business. NCC Bank is now positioned to best suit the best financial needs of its customers and makes them partner of progress.
1.8 Vision:
The vision of the bank is to become the bank of choice in the communities they serve. This by offering to their customers the financial services which are expected by their customers while providing a return to their owners. In accomplishing this mission, the bank has now been free from all the natures of a problem bank though full filling all the conditions set by the central bank. They proudly say “NCCBL is profit making and problem free”.
1.9 Mission:
NCC Bank shall be at the forefront of national economic development by: -
(i) Anticipating business solution required by all NCC Bank’s customers everywhere and innovatively supplying them beyond the expectation.
(ii) Maintaining the highest ethical standards and a community responsibility worthy of a leading corporate citizen.
(iii) Setting industry benchmark of world class standard in delivering customer value through the comprehensive product range, customer service and all the activities.
(iv) Building an exciting team based working environment that will attract, develop and retain employees of exceptional ability who help celebrate the success of bank’s business, of bank’s customers and of national development.
(v) Continuously improving productivity and profitability and thereby enhancing share holder value.
Part – 2
2.1 NCC Bank At present:
Over the years NCC Bank has built itself as one of the pillars of Bangladesh’s financial sector and is playing a pivotal role in extending the role of the private sector of the economy.
Like clothes, shops, bakeshops, food shops, NCC Bank is not a debt shop. The term being used by many to call the present say banks. It is now being called a modern bank that undertakes all its operations at an international standard.
Banks are the pillars of the financial system. Specially, in Bangladesh, the health of the banking system is very vital because the capital market is little developed here. As the banks are still the major source of credit and exercise great influence on the financial system, it is extremely important that the country’s banking system should be in good health in the interest of investment activities, meeting the needs of all kinds and related matters.
Having started its operation as a commercial bank in 1993, recovering from some primary difficulties, NCC Bank has now emerged as a major player in the financial sector. The bank has been able to attain a commendable CAMEL rating and its performance has been outstanding in terms of profitability for the year ended 2000.
Listed in both the Dhaka and Chittagong Bourses since 1993 with an IPO that raised the paid up capital of the bank to Tk.39.00 Crore, the current price level of its share and turn in trading is evidence of its high rating among investors.
The bank is pledged-bound to perform even better in the coming year, opening new branches, adding new and better products and services to its customers at their doorsteps. The bank has a strong branch network nation wide with 51 branches and on booth to effectively address the needs of its cross-segment customer base.
2.2 Target Company:
Due to the predecessor Company’s involvement remittance sector of the country the bank inherited its top corporate customers. Moreover the bank is involved in import trade financing. The bank has financed in textile and apparels sectors. The bank has a tread of choosing customer from diversified groups. Bulk importers of consumer durable, food gains industrial raw materials are its customers. The bank has first class customers in the construction sectors involved in high-rise building, heavy construction and roads and high way construction.
2.3 Authorized Capital
The authorized Capital of the bank remained unchanged at TK. 2500 Million in the year 2006.
2.3 Paid- up capital
The bank raised its paid-up capital from TK 975.04 million to TK 1201.79 million, the capital based of the bank has become strong.
2.4 Reserve fund and other reserve
The reserve fund of the Bank increased of TK. 530.68 million in the year 2010 as against TK. 984.90 million of previous year.
2.5 Deposit
Deposit of the bank at the end of the year 2011 was TK 28147.34 million, which is more than deposit of 2010. From 2007 the bank had a rising position. It had happened for increase competition in banking sector and NCC Bank took a good position in comparison with other banks. This is happen because increasing confidence of customer to NCCBL inspire people to make more and more deposited to NCCBL.
2.6 Trade Finance & Correspondent bank
Successful companies today are fully aware that they need to be able to rely on the services of a bank that can handle international trade with a good hand. Ever since its conversion into a full-fledge bank in 1993, NCC Bank has been an accomplished “Trade Finance” bank. With a highly professional team experienced and competent professionals we are able to provide a wide range of services to companies engaged in international trade.
2.7 Credit
In line with the policy guideline issued by the central bank from time to time, the bank formulates its own credit policy keeping it flexible to accommodate changes that are taking place. At present, several credit schemas are on the offer, which received quit well responses from the customers and may help the bank to expand its customer base. The bank also engaging in syndication with other banks for allowing large loans converging Bangladesh bank’s rules and regulation.
Credit of the bank at the end of the year 2011 was TK. 24678.36 million, which is more than the preceding year. Credit investments of bank are increases as increases in the deposit amount.
Part – 3
3.1 REMITTANCE OF NCCBL
Foreign exchange remittance takes place in NCCBL, as in other commercial banks, in two forms:
*. Outward remittance and
*. Inward remittance
3.1.1 Outward Remittances
Outward remittances may be offered under open general permission or under specific sanction from Bangladesh Bank. Application is required for this remittance to the Bangladesh Bank’s IMP, TM forms. Application for remittances against import is to be made on IMP form, for travel on TM form and for miscellaneous changes on TM form. As per Exchange Control Regulation a traveler can’t take a draft along with him under official rate of exchange. An outward remittance can be affected either under Wage Earner’s Scheme or at rate depending on the kind of sanction.
3.1.2 Inward Remittances
Inward remittances may be affected in the above-mentioned process. All such inward remittances are to be reported to Bangladesh Bank on form if the amount is above $2000 and no “IRV”. In case of Wage Earners Scheme the remittance is to be reported on schedules WSR 1 to 4 and WSP 1 to 10.
3.2 Members of Remittance department
3.3 Types of remittance
Remittance are basically two types:
*. Local remittance.
*. Foreign remittance.
3.3.1 Local remittance
Remittance is significant part of the general banking> The bank receives and transfers various types of bills through the remittance within the country. Obviously the bank charges commission on the basis of bills amount. NCCBL remittances are safe, swift, inexpensive and simple.
3.3.1(a) Types of local Remittance:
A. Pay Order(PO)
B. Demand Draft(DD)
C. Telegraphic Transfer(TT)
D. Mail Transfer(MT)
E. Shanchay Patra(SP)
a) Pay Order(PO):
Pay Order is an instrument that contains an order for payment to the payee only incase of local payment whether on behalf of the bank or its constitution. Unlike cheque there is possibility of dishonoring Pay Order. NCCBL charge different amount of commission on the basis of Pay Order amount.
b) Demand Draft:
By DD any person can send money from one branch to another branch of NCCBL. To send the money he/she must fill up the NCCBL’s prescribed form of DD and paid charge/commission and receives DD block. The following information are included in the DD block:
(i) Name of the sender branch
(ii) Name and account of the party who receives the money.
(iii) For security purpose a confidential test number are included in the DD block
(iv) Amount of money to be transferred
(v) Name of receiver branch
The sender sends this block to the receiver branch of DD. When this DD block is received by the receiver branch, the authorized officer of the receiver branch tests the DD confidential number and if the test number is proofed then he /she gives the money to the payee.
C) Telegraphic Transfer:
1. To send money urgently NCCBL may be requested for TT on payment of a nominal charge and telegram charge.
2. Any person urgently sends money from one branch to another branch within NCCBL through TT.
When a message of TT sends through phone from one branch to another branch in that time the message received by the authorized officer who has a right of power of attorney. After that, he/she fills up the TT form.
Following things are included in the TT form:
i). TT number
ii). TT test number
iii). Name and account number of the payee
iv). Power of attorney number of the sender and receiver of TT.
v). The amount to be transferred.
3. After fill up the TT form, he tests the test number of TT. If he ensures through testing the test number then he credits the account of the payee. On the other hand, if the test number is not proved then he calls back to the sending branch of TT and request to send a new TT.
d) Mail Transfer:
Money can be sent through mail transfer to any body who has an account in any other branch of the same bank for this purpose the sender shall have to furnish the details like:
1. The name of the beneficiary and his account number
2. The amount to be transferred
3. The name of the branch where the account is maintained
3.3.2 Foreign remittance:
NCC Bank is the member of Money Gram and SWIFT networks. Using the services of this global network, non-resident Bangladesh nationals can send money from abroad to their home country within a few minutes without any risk. NCC Bank has also arrangement with foreign money exchange companies like USE Exchange Co., Redha-Al-Ansari Co. etc.
a) Money Gram:
Money Gram is represented in over 115 countries and is available at more than 25,000 locations worldwide. In the USA alone Money Gram is available at more than 15,000 locations. Besides, in the UK Money Gram is available through 1700 Postal Branches and 500 Thomas Cook travel shops making is the UK’s largest money transfer network. Finally using the Money Gram service could not be simpler. All one has to do is to visit a conveniently situated Money Gram agent anywhere in the world and to hand over they money they want to send their relatives or friends along with the one-off transaction fee:
A. Sender completes a “send” form and gets a receipt. Money Gram Agent gives a Ref. No. Which has to be passed to the receiver.
B. NCC Bank makes an enquiry on the Money Gram computer network to obtain authorization to pay recipient and recipient receives the fund.
Money Gram is one of the fastest ways to transfer money. Customers using Money Gram can send or receive money usually within 10 minutes from anywhere in the world.
To get the money the recipient need not to have a bank account with NCC Bank Ltd. NCCBL does not levy extra charge. It gives better exchange rate to the recipient. The recipient can approach at any branches of NCC Bank at his convenience with the reference No. and a photocopy of pass port /Voter ID/Citizenship Certificate.
Graphical presentation of Money Gram in 2006 and 2007:
Operation of Money Gram
(Receive remittance instantly over the counter)
* Sender goes to Send Agent
* Send Agent received Money and enter information into Money Gram System via MW Software and give a Reference Number.
* Sender provide the Reference Number to the Receiver
* Receiver comes to Receive Agent (our bank) with that Reference Number and fill up a form supplied by Money Gram.
* Received Agent gets connected with the Money Gram System via MW Software with that Reference Number, if find OK then pay cash on counter.
* Received Agent (we) keep copy of valid ID (Valid passport, bank certificate) from the receiver.
Cover Fund is credited to our account with SCB, NY on the following day equivalent to the payment made by our branches i.e. we pay first and next day get the fund.
b) PLACID EXPRESS NY
In March 2002, the bank has entered a Taka drawing arrangement with Placid Express NY, for home remittances of Bangladeshi expatriates in the United States. The beginning was good and the bank offered ideal customer services but the volume of remittance through this channel has been reduced very soon because of the following reasons:-
* Removal of one of the Top executives for activities that caused huge losses of the bank;
* Increase in the number of competing companies;
* Longer transaction time in servicing beneficiaries of remote areas beneficiaries where NCCBL does not have any branches;
* Lack of Liquidity; and
* Absence of online mode of payment, which is however sometimes hazardous for transactions.
Graphical presentation of Placid:
Operation of Placid
Bank receive list of invoices via e-mail at the morning and place for test.
Each invoice contains information about the beneficiary such as his name, bank & branch name, account number, phone/address etc.
Then Bank separate the invoices according to the location of beneficiary’s bank branch and nearest branch and prepare branch-wise statement and fax statement to the respective branch by 11:30 am.
If beneficiary maintains account with NCC bank than it credited the fund to his account by noon.
If beneficiary maintains account with other bank than issue P/O in favor of him and sent it by hand/courier service to his bank. Beneficiary’s bank present the P/O at the clearing house and collect the fund from our bank for further credit to the beneficiary’s account. Generally it takes 2-4 days for crediting the fund to the beneficiary’s account.
Cover Fund is credited to our account with Citi NA, NY first then we pay against that fund.
c) Express money:
The X press Money Services would like to welcome NCCBL to their network. X press Money (XM) is a web-based person-to-person money transfer system that allows an individual to send/receive money through any of our network agents instantly. All transactions are done through secure servers using 128-bit encryption technology so as to provide maximum security
System Operation Requirements
PC (Operating system Windows 98 or higher) with connection to Internet and preferably a LaserJet Printer for taking prints.
MAM works well with Internet Explorer version 5.50 (Build 4522.1800) and above.
Flash Player is required (user will be prompted to install when visiting the site, if its not already in the computer)
Wingdings 2 and Wingdings 3 fonts should be installed for best viewing the icons.
d) Al Fardan:
Al FARDAN Exchange, the pioneer in money exchange and worldwide remittance services in the U.A.E., established in 1971, is a trusted name for millions of residents and expatriates. A modern exchange house with advanced infrastructure and courteous staff, has an extensive network of correspondent banks all over the world to facilitate faster, completely reliable transactions.
Al FARDAN Exchange offers the most competitive rates on its array of money exchange services and offers need-based services that cover all transactional needs. Worldwide remittances, purchase and sales of foreign currency banknotes and traveller cheques, cash advance against credit cards are just a few services to mention from a wide range of financial services offered.
e) Habib express:
Habib express is another important medium through which wage earner remittance is accepted by NCC Bank. Here head office at first enter in system server and received necessary information about the amount of remittance, beneficiary who will receive the amount and any reference number which work as security for Bank as well as beneficiary. Head office gives information through fax to it respective branch from where receiver will receive money. Another way, when customer comes to bank than, respective branch where online system is activate, they enter in terminal to get necessary information to pay money.
Bank receive list of invoices via e-mail at the morning and place for test.
Each invoice contains information about the beneficiary such as his name, bank & branch name, account number, phone/address etc.
Then Bank separate the invoices according to the location of beneficiary’s bank branch and nearest branch and prepare branch-wise statement and fax statement to the respective branch by 11:30 am.
If beneficiary maintains account with NCC bank than it credited the fund to his account by noon.
If beneficiary maintains account with other bank than issue P/O in favor of him and sent it by hand/courier service to his bank. Beneficiary’s bank present the P/O at the clearing house and collect the fund from our bank for further credit to the beneficiary’s account. Generally it takes 2-4 days for crediting the fund to the beneficiary’s account.
f) Dhaka Janata:
Dhaka Janata are introduces to provide remittance facilities to emigrant and other people of Bangladeshi who work as contractual basis in the Italy. Here Dhaka Janata also maintain same procedure of getting information from system server including the name, referance number, amount, Phone number etc. But difference with other product is that its respective branch cannot get information from using software. Here head office sends information through fax to all respective branch. All receivers when come to bank, than respective branch check his information with information received from head office.
Operational Procedure:
Hear office ID receive list of invoices via e-mail at the morning.
Invoice contains information about the beneficiary such as his name, bank & branch name, account number, phone/address etc.
If beneficiary maintains account with other bank than issue P/O in favor of him and sent it by hand/courier service to his bank. Beneficiary’s bank present the P/O at the clearing house and collect the fund from our bank for further credit to the beneficiary’s account. Generally it takes 2-4 days for crediting the fund to the beneficiary’s account.
Then Bank separate the invoices according to the location of beneficiary’s bank branch and nearest branch and prepare branch-wise statement and fax statement to the respective branch by 11:30 am.
If beneficiary maintains account with NCC bank than it credited the fund to his account by noon.
g) Tele money:
Tele money is another important product for remittance services. Large number of people of our country works in Saudi Arab. Tele money help those people to send their money within very short moment through Arab National Bank. The operational procedure of this product is same as other. NCC Bank have no branch in all places where beneficiary stay. Here through a software head Office collect the invoice including name, address, secret code etc. People those who have account with NCC Bank, are credited in their account. In tele money bank inform to beneficiary about their money everyday to provide them more facilities. So tele money provides this service through third party. Here mostly Sonali Bank work as third party and a specified commission from this services.
Operational procedure:
Hear office ID receive list of invoices via e-mail at the morning.
Invoice contains information about the beneficiary such as his name, bank & branch name, account number, phone/address etc.
Then Bank separate the invoices according to the location of beneficiary’s bank branch and nearest branch and prepare branch-wise statement and fax statement to the respective branch by 11:30 am.
If beneficiary maintains account with NCC bank than it credited the fund to his account by noon.
If beneficiary maintains account with other bank than issue P/O in favor of him and sent it by hand/courier service to his bank. Beneficiary’s bank present the P/O at the clearing house and collect the fund from our bank for further credit to the beneficiary’s account. Generally it takes 2-4 days for crediting the fund to the beneficiary’s account.
h) Export proceed:
Export Proceed are very vital part in remittance services, as it cover large portion of total remittance of NCC Bank. Most of remittance received from corporate level for their exporting business. Here several types of Bank are engaged with these services. Payment is made through Nostro and Vostro Account.
Here Nostro account means, NCC Bank have an account with listed foreign bank. Foreign remittance come to bank through those foreign bank. Foreign importer pay the money to that foreign bank. Foreign bank credited necessary amount to NCC Bank account. All of remittance come in export proceed as foreign currency. Head office convert this foreign currency into home currency and pay to his respective branch. Foreign Bank who are engaged with this bank are:
Non-interest bearing:
Standard Chartered Bank, Singapore.
Standard chartered bank, Japan.
American Express Bank, New York.
Sumitomo Mitsui Banking Corp.
Bank of Tokyo Mitsubishi, Japan.
Bank of Tokoy Mitsubishi, kolkata.
American Express Bank, Colombo.
Interest bearing:
Standard Chartered Bank, New your.
Mashreq Bank, New York.
Citi Bank N.A, New York.
Standard chartered bank, London.
Uni Credio Italiano spa.
Commerge bank AG, Frankfurt.
SWIFT:
NCC Bank is a member of society for inter bank financial telecommunication. Through this fast, secure, and global communication NCC Bank has gained 24 hours connectivity with 7000 financial institutions in 200 countries for transmission of LCs, Guarantees, funds transfers, payments etc. SWIFT is a bank owned non-profit co-operative based in Belgium servicing the financial community worldwide. It ensures secure messaging having a global reach of 6495 Banks and Financial Institutions in 178 countries, 24 hours a day. SWIFT global network carries an average 4 million message daily and estimated average value of payment messages is USD 2 trillion.
SWIFT is highly secured messaging network enables Banks to send and receive fund transfer, L/C related and other free format messages to and from any bank active in he network.
Having SWIFT facility, Bank will be able to serve its customers more profitable by providing L/C, payment and other messages efficiently and with utmost security.
Part – 4
Trend and Time series analysis
4.1Trend Analysis:
Trend analysis is a general term that embraces a variety of specific tools. For instance, trend analysis relies on the sequencing of movement in remittance of total inward and outward.
The movement of export is relatively increasing position in steady way. Here in 2003 and in 2004 the growth was stably increases and after that it rises in increasing scale. The position of import is different. Because in the year of 2003 and 2004 it declined and after that it increases in 2005 strongly and continue in 2006. The position of remittance is almost same as import because it also decreases in 2003 and 2004 . After that it increases in 2005 and 2006 which provide a good sign for future.
Time series analysis
A time series analysis would show the patterns of change in statistics over time to the projected estimates for the future remittance of NCCBL. The time series analysis helps in locating the scope of adjustments for uncertainty about the future. It is a set of observations taken at specific times, usually at equal intervals. Mathematically.
Time series has revealed certain characteristic movements, or variations, some or all of which are present to varying degrees. Analysis of such movements is of great value in many connections, one of which is the problem of forecasting future movements. It should thus come as no surprise that many industries and government agencies are vitally concerned with this important subject.
Fundamental steps in Time Series analysis:
Collect data for the time series, making every effort to ensure that these data are reliable. Always keep in mind the eventual purpose of the time series analysis, for example, if one wishes to forecast a given time series, it may be helpful to obtain related time series. If necessary, adjust the data for comparability, such as for leap years and holidays.
Graph the time series, noting qualitatively the presence of seasonal variations and of long term trend and cyclic variations.
Construct the long term trend curve or line, and obtain the appropriate trend values by using the least squares, freehand, moving averages or semi averages method.
If seasonal variations are present, obtain a seasonal index and depersonalize the data.
Adjust decentralize data for trend.
4.2.1Time Series Analysis of Export of NCCBL
The linear equation used for the estimated trend of export through NCCBL is
Yc=bx +a;
where Y is the return variable in each year, X=time/year, a=constant
From the above table
A = åY/N,
= 31631.28 / 5
= 6326.26
Here b=åXY/åX2
= 10804.97 / 10
= 1080.4
N=5
Hence we get the equation of the export trend line is
Y= 1080.5X+6326.26, where a= 6326.26 and b= 1080.5
The time series analysis shows positive result in the year of 2002 as it is greater than expected position but in the year of 2003 the position is reversed. In this year expected amount exceed actual figure. Position improved in the year of 2005 and 2006
4.2.2Time Series Analysis of Import of NCCBL
From the above table
a=åY/N,
Here b=åXY/åX2
N=5
Hence we get the equation of the export trend line is
Y= 1134.09X+14777.32, where a= 14777.62 and b= 1134.09
The time series analysis shows positive result in the year of 2002 as it is greater than expected position but in the year of 2003 the position is reversed. In this year expected amount exceed actual figure. Position improved in the year of 2005 and 2006
4.2.3Time Series Analysis of Remittance of NCCBL
From the above table a=åY/N, Here b=åXY/åX2 N=5
Hence we get the equation of the export trend line is
Y= 613.04X+2185.58,
where a= 2185.58
and b= 613.04
Remittance in the year of 2002 are in better position in comparison with expected position. Here in 2003 the position is reversed as the expected earning are exceeded the actual earnings. Same condition are faced by bank in the year of 2004 and 2005. but in 2006 due to better performance the position is reversed and the bank earn much more amount than its expected amount.
Part – 5
Impact of remittance on the profitability of
NCC Bank
Profitability of NCC Bank is the most vital point for the bank which is depend on several factors including deposit of general and corporate personnel, utilization of such deposited amount, providing loan and loan recovery etc. Here remittance transfer play a small but vital role in the organization. Specially for NCC Bank which are highly engaged with remittance cervices. NCC Bank are very much popular for wage earner remittance specially to send money through money gram, which is already rewarded in overseas.
Basically NCC Bank remittance business happened in three form:
1. Wage earner remittance
2. Inward remittance through export.
3. Outward remittance through import.
Bank get a good commission from these remittance process. This remittance forms make good effect on profitability. To make it more clear we can use Coefficient of correlation between Profit and Inward, Outward remittance.
Now to do this calculation we have to know what is coefficient of correlation and what it measure.
5.1Coefficient of Correlation:
The ratio of the explained variation to the total variation is called the coefficient of determination. If there is zero explained variation , this ratio is . If there is zero unexplained variation , the ratio is . In other cases the ratio lies between 0 and 1. Since the ratio is always nonnegative denote it by r2. The quantity r, called the coefficient of correlation(or briefly correlation coefficient), is given
R = xy/ √ (∑x2) (∑y2)
Now we will explain what its calculation measure . Its calculation measure following things.
If the result are between 0 to 0.25 than it measure that Profit and remittance are poorly correlated. That means the change in one taka remittance profit will changes will 0.25 taka or lower.
If the result are between .25 to .50 than it measure that Profit and remittance have medium correlation.
If the result are between .5 to .75 than, it measure that Profit and remittance have good correlation.
If the result are between 0.75 to 1 than, it measure that profit and remittance have very good correlation.
5.1.1Coefficient of linear correlation between Profit and wage remittance:
X ═ 4228.84 / 5
═ 845.77
Y ═ 10927.90 / 5
═ 2185.58
R ═ xy/ √ (∑x2) (∑y2)
═ 1192746.78/ √ ( 333794.61 x 4514491.39)
═ 0.972
So from this result we can say that the correlation between Profit and Wage earner remittance is very good. That is, if the remittance changes in 1 taka than the profit will change in 0.97 taka.
5.1.2Coefficient of linear correlation between Profit and Import:
X ═ 4228.84 / 5
═ 845.77
Y ═ 73886.62 / 5
═ 14777.32
R ═ xy/ √ (∑x2) (∑y2)
═ 2330809.85 / √ (333794 x 17082970.23)
═ 0.98
So from this result we can say that the correlation between Profit and Outward remittance through export is very good. That is, if the outward remittance changes by 1 taka than profit will changes by 0.98.
5.1.3 Coefficient of linear correlation between Profit and Export:
X ═ 4228.84 / 5
═ 845.77
Y ═ 31631.28 / 5
═ 6326.26
R ═ xy/ √ (∑x2) (∑y2)
═ 1999491.23 / √ (333794 x 12356308.32)
═ 0.985
So from this result we can say that the correlation between Profit and Inward remittance through export is very good. That is, if the inward remittance changes by 1 taka than profit will changes by 0.985.
Part – 6
6.1 SWAT analysis
Both manufacturing and service oriented business organizations start to possess some weakness as time elapse. The weaknesses of an organization can be turned into opportunities if recognized on time. Moreover, overlooking any threat may result in loosing valuable business opportunities. For this reason, an assessment of every business organization is required to judge the performance from the aspects of its Strength, Weaknesses, Opportunities and Threat (SWOT).
SWOT analysis of NCC Bank Ltd. is as under:
6.1.1 Strength:
The bank provides quality service to the clients compared to it other contemporary competitors.
Experienced bankers and corporate personnel have formed the management.
Some services of the bank are automated which attract large number of clients. For instance, the bank provides Automated Taller machine (ATM) service s in several locations.
The bank will very recently introduce on line banking which will enable it to automated all of its operations .At present, several banking functions are performed by computers. The bank is also a member of SWIFT (Society for Worldwide Inter bank Financial Telecommunication) alliance Access which enables the bank to exchange critical financial messages swiftly and cost effectively.
NCC Bank has already achieved a goodwill among the clients that helps it
retain the valuable clients.
6.1.2 Weaknesses:
Delegation of authority is centralized which makes the employee to realize less responsibility. Thus, the employee morale is deteriorated.
The credit proposal evaluation process is lengthy. Therefore, sometimes valuable clients are lost and the bank becomes unable to meet targets.
No substantive use of Annual Confidential Report (performance evaluation form of the employee) to reward or to punish the employee. Hence the employee becomes ineffective.
The bank lacks aggressive advertising and promotional activities to get a broad geographical coverage.
The bank has only a few ATM booths and not in proper places. So, the scope of using ATM card is limited.
The bank has no any research and development division.
6.1.3 Opportunities:
The bank can introduce more innovative and modern products and services for then customers.
The bank can offer micro credit business for individuals and small businesses.
It can diversify its portfolio by taking new sector.
Many branches can be opened to reach the bank’s services to the remote areas.
It can recruit more efficient and experienced persons to give fast and efficient service to the customers.
6.1.4 Threats:
The common attitude of Bangladeshi clients is default.
Multinational as well as the fast growing local banks with modern products and services are capturing huge market within a short period and resulting to switch over the existing customers of the bank.
Bangladesh Bank sometimes requires Private Commercial Banks to be abide by such rules and regulations which are not suitable for every commercial bank.
Part – 7
PROBLEMS AND SOME SPECIFICS
7.1 Problems
It include following things.
7.1.1 The Small Branch Network
Due to a small branch network of NCCBL many potential exchange companies feel discouraged to have a remittance arrangement with it. Exchange companies for few years stay with the bank but once they get the approval from other banks with a huge network they terminate the businesses with us gradually.
7.1.2 Lack of Promotional Support from Missions Abroad
While negotiating and making arrangement NCCBL does not receive adequate support from missions of Bangladesh in Foreign Countries. Sometimes the case has been the reverse, and the missions were found to discourage the campaign.
7.1.3 Not all beneficiaries are not the NCCBL Account Holder
In most cases of the existing drawing arrangement, it is found that the beneficiaries do not get their money in time because they are not NCCBL account holders.
7.1.4 Inadequate beneficiary information
In case of remittance received through FTT, sometimes delay in money transfer is caused by sufficient information about the beneficiary.
7.1.5 Lack of education about remittance through former channel
Many unskilled Bangladeshi workers residing in the gulf and middle-east countries do not know how best to send their money home. Too often they rely on transfer through private hands visiting Bangladesh or the Hundi Agents. Further, even if some may know about the formal system of money transfer through secured banking channel, the newly introduced Anti Money Laundering Act guidelines-2002 encourage a large number of them do not use it because they find it difficult to meet the formalities largely because of the lack of education and partly because of the problems in their immigration status.
7.2 Some suggested measures to improve the remittance of NCCBL
7.2.1 Bonds
The Wage Earners Bond and US Dollar Investment Bond and premium bonds are effective in attracting foreign remittances. As the wage earners cannot visit frequently they prefer to invest once a time. The NFCD and NITA accounts are as such not popular to them. To influence Wage Earners Bonds(WEBD) investment should be more user-friendly and easy to understand.
7.2.2 Online Banking
Local or global online banking establishment eases the transaction. Customers will be increasingly attracted to NCCBL remittance services of online banking is established and if the system of remittance transfer through online channel can be introduced.
Under this system a client will to be able to do following type of transactions:
Cash withdrawal from his/her account at any branch of the Bank irrespective of location.
Cash deposit in his/her account at any branch of the Bank irrespective of location.
Cash deposit in other's account at any branch of the Bank irrespective of location.
Transfer of money from his/her account with any branch of the Bank.
Any amount can be deposited or transferred under Prime Line. In the system, however, at present there is a limit for cash withdrawal through bearer or by account holder himself.
7.2.3 Subsidiary offices with the help of Foreign National Bank
NCCBL can establish a subsidiary branch or at least a booth facility overseas where the volume of remittance is increasing and the transactions will be cost effective for future earnings.
7.2.4 Campaign for Remittance
In Bangladeshi Missions abroad, as well the Bangladesh Bank may initiate promotional campaigns highlighting the existing arrangement in NCCBL and other private banks of this country so that Bangladeshi’s men residing around the world become familiar with remittance through banking channel including this procedure and formalities as well as the benefits of the system.
7.2.5 Transparency of Anti-Money Laundering (AML) Act-2002
The newly introduced AML Act-2002 in Banking sector of Bangladesh causes huge delay in transactions and in some cases encourage the clients of bank to shift another account to a different Bank. Although it restricts the illegal transactions through banking channels but lot of questions and formalities are time consuming for executing any transaction. Thus simplifying and arranging it in a more précised and transparent may increase the remittance and deposit increase of the bank.
7.2.6 Electronic Fund Transfer (EFT)
NCCBL can start remitting money from different countries of the world through Electronic Fund Transfer (EFT) system through which Beneficiaries at Dhaka city will get remittances on the next working day and outside Dhaka where courier services are available will be able to get remittances on the 2nd working days of remittances. The beneficiaries, who are maintaining accounts with other NCCBL.
Guidelines of NCCBL Foreign Exchange Transactions
A. Outward Remittances
1. Most outward remittances are approved by the ADs, on behalf of the Bangladesh Bank following declaration of Taka as convertible for current accounts payments from March, 1994. Only a few remittances of special nature require Bangladesh Bank's prior approval.
2. All remittances from Bangladesh to a foreign country or local Currency credited to on resident Taka accounts of foreign banks or Convertible Taka account constitute outward remittances of foreign Exchange. ADs must exercise utmost caution to ensure that foreign currencies remitted or released by them are used only for the purposes for which they are released; they should also maintain proper records for submission of returns to Bangladesh Bank as also for the latter’s inspection from time to time.
3. In all cases of purchase of foreign currency an application must be made to an AD and, wherever necessary to Bangladesh Bank. For Payments against imports into Bangladesh, the prescribed application form is form IMP and for other types of remittances form TM. TM form must be used for reporting by the ADs even when remittance is approved by Bangladesh Bank in any other manner, for instance by issuing a special permit. On receipt of the application in the prescribed form, the ADs may affect the sale of foreign exchange if they are empowered to approve the application. If the transaction requires prior approval of the Bangladesh Bank, the form should be forwarded by the AD to the Bangladesh Bank for Consideration.
4. Applications for Bangladesh Bank's prior approval for outward Remittances, wherever required, should be submitted to Bangladesh Bank only through the ADs and not by their customers directly; all such applications should be forwarded by the ADs to Bangladesh Bank by their own messengers or by post.
5. In respect of the forms or permits etc. approved from the Bangladesh Bank, the ADs should see that these have been approved by duly authorized officers and that they bear the Bangladesh Bank's Embossing seal. In case the authorization is signed by an official of Bangladesh Bank whose specimen signature may not be available with them such authorization should be resented to the nearest office of the
Foreign Exchange Policy Department and the signatures authenticated. It is most important that, once forms have been approved by or on behalf of the Bangladesh Bank, the ADs carry out the transactions only on behalf of the original applicants for whom the forms were approved.
6.Permits issued (where applicable) by the Bangladesh Bank must be utilized within the period of its validity indicated in the permits. The amount released must not exceed the authorized limit. Also, the instructions, if any, given in the permits with regard to the amounts to be released periodically e.g. monthly or quarterly must be strictly adhered to.
7. Remittances made against permits or approval letters of Bangladesh Bank should be reported on TM form. The AD must state on the TM form the number of the permit against which the remittance has been made by him and must certify that the remittance has been endorsed by him on the permit. The remittance must be endorsed on the back of the permit giving the date of the remittance under the stamp and signature of the AD. When the permit is exhausted or no longer required, it should be returned to the Bangladesh Bank by the AD along with the TM form on which the last remittance is reported.
8. All authorizations excepting TM forms approved by the Bangladesh Bank or by the ADs on behalf of the Bangladesh Bank remain valid for a period not exceeding 30 days from the date of approval unless they are expressly stated as valid for a specified longer period or unless they have been revalidated for a further period. TM form approved by the Bangladesh Bank will, however, remain valid for a period of three calendar months from the date of approval by the Bangladesh Bank. Permits issued by the Bangladesh Bank are also valid for specified periods as stated on the permits. The ADs should not affect any remittance against approved Forms or Permits which have lapsed unless they have been duly revalidated.
9. Original copies of all IMP forms, TM forms covering remittances affected by the ADs must be submitted to the Bangladesh Bank along with the appropriate returns for the disposal of the remaining copies of the IMP forms.
10. In the event of any remittance, which has already been reported to the Bangladesh Bank on the prescribed return being subsequently cancelled either in full or in part, the ADs must report the cancellation of the outward remittance as an inward remittance. The return in which the reversal of the transaction is reported should be supported by a letter giving the following particulars:
a) The date of the return in which the outward remittance was reported.
b) The name and address of the applicant.
c) The amount of the sale effected originally.
d) The amount cancelled.
Reasons for cancellation.
B. Inward Remittances
1.The term "Inward Remittances" includes not only remittance by T.T., M.T., Drafts etc., but also purchases of bills, purchases of drafts under Travellers' Letters of Credit and purchases of Travellers' Cheques.
2. The ADs may freely purchase foreign currencies or raise debits to non-resident Taka Accounts of the respective bank branches and correspondents. Remittances equivalent to US$ 2000 and above should be reported oil Form C attached to the appropriate schedule However, declaration on Form C by the beneficiary is not required against remittances sent by Bangladesh nationals working abroad. The purpose of remittances should be clearly stated on the Form C. Where the country of origin of funds and currency in which remittances received are the same, the ADs may submit a consolidated Form C in respect of those remittances attaching therewith a separate list showing details of remittances comprising the amount reported on Form C. Remittances received against exports should be certified and reported on EXP Forms. In case of remittance received in advance for exports the AD should obtain a signed declaration from the beneficiary on the back of the "Advance Receipt Voucher” certifying the purpose of remittance.
3 There is no objection to the ADs obtaining reimbursement from non-resident banks in freely convertible foreign currency in respect of Taka bills and drafts purchased by them under instructions from such a non-resident bank whether under Letters of Credit or under other arrangements.
4. If an inward remittance already reported to the Bangladesh Bank is cancelled, either in full or in part, because of non-availability of beneficiary, the ADs must report the cancellation of the inward remittance as an outward remittance on TM form. The return in which the reversal of the transaction is reported should be supported by a letter giving the (a) reference of the return in which the inward remittance was reported (b) name and address of the beneficiary (c) amount and the reason for cancellation and (d) amount of the purchase as effected originally.
C. Non-Resident Foreign Currency Deposit Account:
1. All non-resident Bangladesh nationals and persons of Bangladesh origin including those having dual nationality and ordinarily residing abroad may maintain interest bearing time deposit accounts named "Non-Resident Foreign Currency Deposit (NFCD) Account" with the ADs.
2. Bangladesh nationals serving with Embassies/High Commissions of Bangladesh in foreign countries as also the officers/staff of the Government/semi-Government departments/nationalized banks and employees of body corporate posted abroad or deputed with International and Regional agencies like IMF, World Bank, IDB, ADB etc. during their assignments abroad may open such accounts.
3. The accounts are in the nature of term deposits maturing after one month, three months, six months and one year. The accounts may be maintained in US dollar, pound sterling, Euro or Japanese yen; initially with minimum amount of US$ 1000 or pound sterling 500 or equivalent. Accounts may be opened against remittances in other convertible currencies after conversion of those into US Dollar, Pound Sterling, Euro or Japanese yen.
4. These Accounts may be maintained as long as the Account-holders desire.
5. Eligible Bangladesh nationals may send application along with a set of specimen signatures of the opener of the account to an AD in Bangladesh duly verified by Bangladesh Mission abroad, or a reputable batik or any other person known to the AD in Bangladesh. The application forms may be had from Bangladesh Missions abroad and from the ADs in Bangladesh or their branches abroad. No set of specimen signatures will be required to be enclosed with the application form if the application is submitted to an AD with whom the applicant has already been holding a foreign currency account. In Such case a reference to the respective FC account number will serve as self-introduction and the account-opening branch will verify the signature with the specimen signature maintained for the FC account.
6. The ADs will pay interest on deposits into the accounts at the euro currency deposit rates. In case of premature repayments, the interest amount will be forfeited to the depositing AD. The interest on deposits into this account is exempt from the tax payable under Income Tax Act. ADs may also apply interest on NFCD Account which is not specifically mentioned as Term Deposit, if balance not less than US Dollar 1000 or Pound Sterling 500 or equivalent for 1 (one) month or longer.
7. The ADs in Bangladesh may at their option sell foreign exchange deposits (in US Dollars only) to the Bangladesh Bank without any lower limit at the Bangladesh Bank's buying rate and repurchase the principal and interest at the Bangladesh Bank's selling rates prevailing on the day of repurchase. The ADs may also invest abroad the amounts deposited with them and pay interest to the depositors out of earnings from such investments.
8. The account holder can freely repatriate the balance and the interest accrue & thereon in foreign exchange to the country of his residence or anywhere he chooses and may at his option, convert the balance into local Taka at the prevailing exchange rate.
9. Foreign nationals and companies/firms registered and/or incorporated abroad, banks, other financial institutions including institutional investors and 100% foreign owned (A-Type) industrial units in the Export Processing Zones in Bangladesh, are also allowed to open and maintain NFCD accounts with the ADs. The minimum amount of time deposits in such cases should be US$ 25,000 or its equivalent in pound sterling, Euro or Japanese yen. Other terms and conditions in respect of these account-holders will be the same as those mentioned above for NFCD accounts of non-resident Bangladesh nationals.
10. Separate monthly statements summarizing currency wise the transactions in the NFCD accounts of all AD branches of a bank should be submitted from the head offices/ principal offices of the banks to the FEPD at the head office of Bangladesh Bank, as per proforma at appendix 5/5, by the 15th of the month following that it relates.
D. Resident Foreign Currency Deposit Account
1. Persons ordinarily resident in Bangladesh may open and maintain Resident Foreign Currency Deposit (RFCD) accounts with foreign exchange brought in at the time of their return from travel abroad. However, proceeds of export of goods or services from Bangladesh or commission arising from business deals in Bangladesh shall not be credited to such accounts.
2. Balances in these accounts shall be freely transferable abroad. Fund from these accounts may also be issued to account-holders for the purpose of their foreign travels in the usual manner (i.e.with endorsement in passport and ticket, up to US $ 1500 in the from of cash currency notes and the remainder in the form of TC).
3. These accounts may be opened in US dollar, pound sterling Euro or Japanese yen and may be maintained as long as the account holders desire. While depositing foreign exchange for credit to such account the depositor shall furnish written declaration, mentioning the date of return from abroad and the amount of foreign exchange brought in, that the foreign exchange
is not a receipt against export of goods or services from Bangladesh,
(ii) is not a commission due from abroad arising from business deal in Bangladesh. The ADs will credit the foreign exchange presented by the depositor to the RFCD account only after examining the passport of the depositor and the FMJ form (if the amount exceeds the equivalent of $ 3000) and after being satisfied about the correctness of the declaration.
4. Interest in foreign exchange shall be payable on balances in such accounts if the deposits are for a term of not less than one month and the balance is not less than US $1000 or £500 or its equivalent. The rate of interest shall be one quarter percent (0.25 percent) less than the rate at which interest is paid on balances of bank in their foreign currency clearing accounts maintained with the Bangladesh Bank.
5. The head offices/principal offices of the banks shall prepare currency-wise consolidated monthly statements of transactions in the RFCD accounts in all their AD branches and send the same to Foreign Exchange Policy Department, Bangladesh Bank, head office by the 15th day of the following month.
E. Letters Of Credit And Remittances Against Imports
1. The ADs may not issue, advise, notify or confirm any LC, authority to purchase, guarantee or similar undertaking covering imports into Bangladesh the implementation of which would involve a payment in Taka to a non-resident account or a payment in foreign currency except in accordance with the instructions prescribed hereunder.
The AD should establish LCs against specific authorization only on behalf of their own customers who maintain accounts with them and are known to be participating in the trade. Payments in retirement of the bills drawn under LCs must be received by the ADs by debit to the account of the concerned customer or by means of a crossed cheque drawn on the drawee's other bankers. These restrictions will not apply to import of articles for the private use of the importer as permitted in the Import Policy Order.
2. (i) All LCs and similar undertakings covering imports into Bangladesh must be documentary LCs and should provide for payment to be made against full sets of onboard (shipped) bills of lading, air consignment notes, railway receipts, post parcel receipts showing dispatch of goods covered by the Credit to a destination in Bangladesh. All LCs must specify submission of signed invoices and certificates of origin. If any particular LCAF require submission of any other document or the remittance of exchange at certain periodical intervals or in any other manner, the LC should incorporate those instructions of the LCAF. Port of entry (destination land port) should be specifically declared or mentioned at L/C in the case of import through land route.
(ii) It is not permissible to open clean or revolving or packing credits. Applications for opening such LCs should be referred to the Bangladesh Bank with full particulars.
(iii) The ADs may open divisible, transferable LCs for imports into Bangladesh under cash LCAF without reference to the Bangladesh Bank. They may also allow without reference to the Bangladesh Bank amendments that do not violate foreign exchange regulations and import control regulations.
(iv) It is not permissible to open import LCs in favor of beneficiaries in countries from which import into Bangladesh are banned by the competent authority.
3. LC covering import of goods into Bangladesh against valid LCAF should be opened within the period, if any, prescribed in the current IPO.
The AD should, before opening an LC, see documentary evidence that a firm order for the goods to be imported has been placed and accepted. The AD should ensure while opening an LC that full description of the goods to be imported are given in each Credit along with the unit price of the merchandise. The ADs should also obtain confidential report on the exporter from their branches or correspondents abroad or in their discretion, unn and Bradstreet in all cases where the amount of the LC exceeds Tk. 2,00,000 against proforma invoices issued direct by foreign suppliers and Tk. 5,00,000 against indents issued by local agents of the suppliers. Such reports should be obtained by the ADs themselves and the reports if submitted by the importers should not be accepted. The ADs may also, at their discretion and in their own interest, verify the standing of the beneficiaries even in cases where the value of the Credit is lower than the limits mentioned above.
4. LC may be established providing for payment to the country of origin of goods or any other country except those countries imports from which are prohibited. The LC may provide for payment or reimbursement in any freely convertible foreign currency, in the currency of the country of the beneficiary or of the country of origin/shipment of goods, or by way of credit to the non-resident Taka account of the concerned bank abroad. Payments for imports under barter agreements or under foreign Loans/Grants can be made only in the manner specified for the concerned barter/loan/grant.
6. An AD may approve on behalf of Bangladesh Bank remittance against imports into Bangladesh provided the conditions set out are complied with the documents covering the import, whether under LC or otherwise, are received through the AD concerned. In case of import by post, the ADs may make remittance without prior approval of the Bangladesh Bank only if the parcel is addressed directly to the AD. Where the parcel is addressed to an individual care of the AD/ to the individual direct, prior approval of Bangladesh Bank should be applied for, in the manner laid down in para 25 below.
5.ADs may allow remittance against discrepant documents/ documents received directly by the importers after the goods have been cleared from the customs, on the basis of the relative LCAF, the exchange control copy of the customs bill of entry for consumption or customs certified invoice in the case of import by post, and the relative invoices.
6. Bank would be prepared to consider approval for advance remittance against goods to be imported into Bangladesh where such goods are of specialized or capital nature. Applications for approval in Form IMP should be submitted to Bangladesh Bank along with the exchange control copy of the relative LCAF, the contract in original (with a spare copy) entered into between the importer and the foreign manufacturer or supplier, and an undertaking as per proforma. Such application will not normally be considered where the advance remittance applied for is more than one third of the total C&F value of the goods to be imported.
(a) All applications for payments for imports into Bangladesh should be made on IMP forms. The IMP forms must be submitted in duplicate by the importer or his duly authorized agent. In cases where empowered to approve the remittances on behalf of the Bangladesh Bank, the AD will endorse its approval on the reverse of the IMP form in the space provided for the purpose. In other cases, the AD will submit the IMP form together with required supporting documents to the Bangladesh Bank for approval.
(b) The AD should mark with a bold letter "G" the IMP form for remittance against an import in the name of a Government department or office for which LC are opened by the AD. In other cases, where LCAFs are issued to private parties and are marked "On Government Account", the IMP forms should be similarly marked with bold "G".
7. In all cases of remittances for imports into Bangladesh, the importer must submit within 4 months from the dates of remittances the relevant exchange control copy of the customs bill of entry. In case of import by post, the importer must submit the invoice certified by the customs authorities in lieu of the exchange control copy f the bill of entry. Where the value of an import by post is less than £ 5 or its equivalent in other foreign currency, the customs authorities will issue a certificate instead of certifying the invoices. In such cases, the certificate may be submitted in place of the certified invoices.
8. The Bangladesh Bank is prepared to consider applications for extension of the time limit beyond 4 months in cases of genuine difficulties, such as delay in the arrival of the ship or difficulties in clearing the goods already landed at a port in Bangladesh etc.
9. (a) The ADs will obtain invoice, in duplicate, both of which will be certified by them as usual. After recording in the IMP form the particulars of the remittance affected, the original copy of the IMP form along with a copy of the certified invoice shall be forwarded to the Bangladesh Bank with the usual monthly returns.
(b) The duplicate copy of IMP form will be retained by the AD. Subsequently when the exchange control copy of the bill of entry/customs certified invoice is submitted by the importer, the particulars therein should be matched and checked with those in the IMP form and invoice filed earlier, to see if the merchandise for which remittance was made has been duly received in Bangladesh. If no material discrepancy is detected, the case should be considered closed.
(c) Cases with material discrepancy between the particulars of merchandise for which remittance was made and the merchandise actually received as evidenced by the exchange control copy of bill of entry/customs certified invoice, and cases of non submission of bill of entry/customs certified invoice within four month of remittance should be reported to the area office of Bangladesh Bank quarterly.
(d) In respect of all imports in the public sector the forms should be kept in separate importer wise folders till final disposal.
10. An the event goods are completely lost, duplicate copy of the IMP form should be forwarded to the Bangladesh Bank giving full particulars of the loss and the manner in which the insurance claim has been collected. In the event of partial loss, the exchange control copy of the customs bill of entry for the goods actually cleared should be submitted giving full particulars of the loss and the manner in which the insurance claim has been collected.
11. ADs may establish LCs for pre-shipment inspection favoring internationally reputed pre-shipment inspection companies if the relative sales contracts or LCs so stipulate, as per terms of contract entered into by the importer with the pre-shipment inspection companies. These remittances should be approved and reported in TM forms.
12. Subject to compliance with other conditions laid down in this chapter and in the current IPO, import LCs may be opened on deferred payment (DA) basis in die following cases:
Capital machinery imports on upto 360 days usance basis;
Industrial raw materials imports for own use of industrial importers (including back to back imports discussed in detail in the next section) on up to 180 days usance basis;
Industrial raw materials imports for own use of industrial importers (including back to back imports discussed in detail in the next section) on up to 180 days usance basis;
13. Subject to compliance with other conditions laid down in this chapter and in the current IPO, import LCs may be opened on deferred payment (DA) basis in die following cases:
Capital machinery imports on upto 360 days usance basis;
Industrial raw materials imports for own use of industrial importers (including back to back imports discussed in detail in the next section) on up to 180 days usance basis.
The above five factors seem to be the minimum requirements for a legal system. Considering these in the context the first one being the criminal law. and the second two being part of civil law in Bangladesh. There are parliament is the legislative body as pointed out in factor 5. (1) 
