This study focuses on the international banking system in Bangladesh. The banking industry as a major promotion of the national economy. Banking is expanding the bank's activities in Bangladesh and is currently being explored in order to serve our customers. The study has been based on the use of information obtained information from government bank, annual reports of Agrani Bank Ltd. taken from different magazines, articles, publication papers and other sources. It has been stressed and trying to find a great way to international banking the real situation in Bangladesh. However, there are a lot of secrets in the banking sector. Because the researchers were unable to reach the core of the analysis is needed to secret information.
This report also tries to find out weak point regarding their international operation and gives some recommendations to improve the Off-shore Banking Unit of Agrani Bank Ltd.
1.2. Objective of the study
. The main purpose is to be familiar with the real world situation and practical experience in a business firm basically International Banking System. Commercial bank, especially Private Bank is one of the important business sectors in Bangladesh. Agrani Bank Limited is a scheduled commercial bank in the govt. sector, which is focused on the established and emerging markets of Bangladesh. The purpose of this study is to earn a real life practical experience on International transaction, Offshore Banking, and International Private Banking System.
The study mainly conducted with the following objectives:
' To find out International transactions and their mechanism.
' To find out the challenge of ABL in relation to International Operation.
' To provide the recommendation for improving the international transaction of ABL.
1.3. Scope of the Study
This report only focused on international banking system of Agrani Bank Ltd. Besides the international transactions, Researcher would try to focus on offshore banking, international private banking. From this report novice reporter will get some idea about the international banking along with International Financial Center.
1.4. Limitation of the Study
The objective of this study is to earn real life practical experience in International Banking System. The lack of available of data is the prominent limitation. Maximum of banking activity are practical. Just reading the manual is not enough. To earn such practical experience, it requires working with those events.
The main limitations are as:
' Banking people are very busy. Sometimes it seems hard to get their attention.
' Lack of published relevant documents.
' Some information is confidential-not open to public.
2.1. Company Overview
Agrani Bank Limited (ABL) was incorporated as a state-owned Commercial Bank (SCB) on May 17, 2007 Company Act 1994. Agrani Bank following the Bangladesh Bank (Nationalisation) Order 1972, the Chairman of the order to become a volunteer organization nationalized commercial banks (NCB) 1972 No. 26. ABL took over the business a going concern basis, through supplier agreements, assets, liabilities, rights and obligations of Agrani Bank, signed on November 15, 2007 between the Ministry of Education and Finance ABL Board of the People's Republic of Bangladesh from July 2007 retroactive director.
Capital and Profit: Agrani Bank Limited is a Bank with an Authorized Capital is BDT 2500 crore and Paid-up Capital of BDT 991.29 crore. The total Operating Profit Tk. 1006.74 Crore as on 31 December, 2012.
Branches and Employees: The bank has 11 Circle offices, 29 Divisions in head office, 62 zonal offices and 902 branches including 27 corporate and 40 AD (authorized dealer) branches. The bank has 13,890 (9,917 officers and 3,973 staffs) employees till 2012.
Management: The board of directors is consisted of 13 (thirteen) member headed by Chairman & chief Executive Officer. The Chairman and Directors are nominated by government.
Agrani Bank Limited, the only commercial bank is won by a group of local entrepreneurs, the idea to create a model of banking financial institutions have a different outlook, provided valuable customers, financial services and innovative products for the sustainable development of the common and the establishment of a comprehensive idea of prosperity. Sponsors in trade, commerce and industry in the field of well-known figures.
The World Bank is managed and operated by a group of well-educated and professional team, in the financial and banking sector diversified experience. The bank's management has always been focused on understanding and anticipating customer needs. Banking situation is changing day by day, so the responsibility of the banks is a policy devices and new products to adapt to a changing environment. Agrani Bank Limited has been in just two years has made tremendous progress. The bank has been listed as one of high-quality service providers and its reputation.
2.2. Hierarchy of Agrani bank
Chapter-3-Product & Service
In a bank where people can do transaction in foreign currency is called foreign exchange transaction. ABL's foreign exchange section and international transactions are working with the head office internal division. The full process is governed by Bangladesh bank. Any kind of transaction in foreign is a sensitive issued.
ABL is rendering various kinds of services in international transaction of their clients. ABL defines their Forex business in three sections. Their details descriptions are the following:-
3.1. Foreign Currency Account
Foreign Currency Accounts (FCA) is an account of a transaction other than the national currency to currency, one can bank in the country (territory) or bank maintained by another country (offshore). Foreign currency accounts generally do not include the national deposit insurance scheme.Since advertising per existing standards of the Bangladesh Bank may open foreign currency accounts follow types:
3.1.1. Non Resident Foreign Currency Deposit (NFCD) A/C
All non-resident Bangladeshi nationals and Bangladeshi descent, including those with dual citizenship, often living in a foreign country, you can maintain interest deposit account name as "non-resident foreign currency deposits (NFCD) account" authorized dealer.
NFCD account by Bangladeshi nationals and the Embassy / High Commission Government of Bangladesh abroad / semi-government / autonomous / bank nationalization deputed abroad or with international and regional organizations like the IMF, World Bank, etc. personnel / service personnel opened allocation process Inter-American Development Bank, the Asian development Bank and other foreign countries may open such accounts. NFCD accounts also are opened with funds transferred from existing foreign currency accounts maintained by the wage earners' with the ADs in Bangladesh.
NFCD deposit accounts are due after one month, three months, six months and one year in nature. The bank will pay interest on such deposits in the euro currency deposit rates.
These accounts can be kept in U.S. dollars, sterling, yen and euro and U.S. $ 1,000 or a minimum amount of ?? 500 or equivalent. Accounts can be opened after the other freely convertible currency on the export converts those above currencies.
These accounts can, as long as the desire to maintain the account holder. Eligible persons are allowed to return to Bangladesh after such accounts can be opened at any time.
In the application form prescribed by the Bangladesh national qualifying opener and specimen signatures of a foreign official in Bangladesh mission, or a reputable bank or any other person known to Bangladesh AD authentication to send.
The account can be freely repatriated balance and accrued interest, foreign exchange, to his residence or country anywhere in the world is.
3.1.2. Resident Foreign Currency Deposit (RFCD) A/C
Ordinarily resident in Bangladesh may open and maintain the resident foreign currency deposits (RFCD) accounts receivable and foreign exchange to introduce in its return from abroad when traveling.
These accounts can be brought by the foreign exchange and customs authorities to declare any amount in the form FMJ is opened, brought up to $ 5,000 without any declaration.RFCD accounts may in U.S. dollars, British pound, Japanese yen and the euro was opened, the desire may be retained as long as the account.
In these account balances should be free to transfer abroad. From the Fund for these accounts can also send their accounts in the usual way travel abroad (purpose, that endorsement of passport and ticket, up to $ 2,000 in cash in the form of banknotes, and the remainder in the form of TC or other currencies).Ads may be issued to holders of accounts in RFCD account balance favoring international credit cards.
The deposition of foreign currency credit to the account of the depositor shall provide a written statement to mention the amount of foreign exchange return date brought from abroad , namely foreign exchange (i) is not a receipt from the export of goods or services in Bangladesh (ii) not commission receivable from abroad due to business in Bangladesh . The ad will be deposited in the foreign exchange after only checking passports and FMJ depositors form ( if the amount is more than 5000 U.S. dollars equivalent ) , and is satisfied that the correctness of the declaration after the deposit by the RFCD account.
Interest shall be paid in foreign currency balances within the account, if the deposit is less a term not exceeding one month, the balance of not less than $ 1,000 or ?? 500 or equivalent. The rate should balance them to keep the foreign exchange settlement account with the Bangladesh Bank cut interest rates a quarter percentage points higher than the Bank of its interest payments.
3.1.4. Exporters Retention Quota (ERQ) A/C
A) Export of goods entitled to repatriate its exports fob 50% of foreign exchange retention quota. However, with a high import content of exports of goods (domestic low-value) as POL products, including naphtha, fuel oil and asphalt, imported fabrics, garments, electronic products and other places are reserved repatriate 10% FOB value.
B) reserved quota accounts can also be regarded as open and save in reply to back inland letter denominated in foreign exporters to provide the name entered. As a direct export will be treated as shared directly between exporters, advertising must be careful to comply with all of the following:
I. Included in the quota reserved for direct export accounts for the total amount paid to the power input deemed export of foreign exchange together shall not exceed the net repatriation of direct export FOB value of exports; and
II. Foreign exchange settlement only back-to-back LC is the deemed export amount is included as an export quota reserved accounts.
a. Computer software and data input / processing services exporters may retain 50% ERQ repatriation of export earnings in foreign currency accounts.
b. 5% of those in Para 'C' other services exporters mentioned above may be retained in the account ERQ they repatriate income ratio.
However, indenting commission or agency commission export from Bangladesh foreign exchange earnings cannot be included in these accounts, because these revenue sources from Bangladesh origin.
3.2. Import Finance
The total import bill (C & F) balance of $ 2011-12 fiscal year, when US$35,516 to pay 5.50 percent higher than imports dollar 33,657 last year billion. Though Early this year, imports increased pay Since the fiscal year in global fuel prices Rising demand for electricity and fuel markets Generations, it slows down for the end This year, as imports of goods were unimportant Discouraged. Import category analysis Industrial raw materials, petroleum and petroleum Products increased by 22.75 percent, 11.15 % and 21.76%, respectively, and the main import of capital machinery and Commodity reduced 13.73% and 25.79 percent, respectively.
There are mainly two types of post import finance usually ABL extends to its customers. They are-
3.2.1. Loan against Imported Merchandise (LIM)
There are two types of LIM. These ares-
a. Forced LIM
Division opened an L / C to understand the marginal part is that the applicant / importer will arrange for customs clearance of the goods in consignment clearance time guarantee deposits to the rest of the banks. But sometimes companies do not come forward to deposit margin, the rest of the delivery of the documents from the bank. There is no other choice, banks had to be settled by creating LIM PAD (the rest of the deposit) liabilities and port charges delivery of the goods from the port authorities. This type is called forced LIM LIM. Here LIM components are:
(a) Rest of the Margin.
(b) Duty, Vat, Taxes applicable for the imported goods.
Causes for creation of Forced LIM.
The causes of creation of force LIM are:-
1. Mis-Assessment of financial ability of the importer.
2. Sudden fall of price of the imported commodity in the local market.
3. Opening of L/C without justifying the market position.
4. Over-invoicing of the goods etc.
Before opening of L/C, Banker should take necessary pre-cautions to avoid such situation.
' Arrangements LIM
There are some customers who are availing bank financing pledge. Lim arrangement is created for these customers. Imports of goods from and through the creation of this LIM LIM adjust to customers after the custom authorities promised A / C in debit.
3.2.2. Loan against Trust Receipt (LTR)
Where a bank under the custody of imported goods stored, the process is called LIM or pledge. However, when the delivery of goods importer custody, the system is called a letter of trust receipt or LTR or the TR. Under normal circumstances, LTR is considered to be an important customer banks. Also banks need to consider additional security LTR facility. LTR component Margin (a) break (b) customs duties, VAT, taxes, etc. in whole or in part if the pre-agreed. Tenor LTR transaction is generally 90 days from the date of creation of industrial raw materials 120 days. When the goods are in pledge, inadequate collateral security may be considered but in case of LTR, the security should be adequate.
3.2.3. Payment against Document (PAD)
Banks deal with documents, not goods. If L / C shipping documents in order to then L / C issuing bank must be paid to foreign banks to amend the credit within 3 days or 72 hours according to the Uniform Customs and Practice of the International Criminal Court (UCPDC) 500.
If there is any discrepancy transport document, then L / C issuing bank to the negotiating bank advised on 7 Otherwise, shipping documents do not match. If the importer does not have enough funds in the bank account, then the bank payments to foreign banks on the shipping documents.
3.3. Export Finance
In the wake of the global financial recovery Recession, Bangladesh's export trade made turn. However, in the sovereign credit crisis Bangladesh is one of the main euro areas Export destination is its impact on exports Trade. Bangladesh's export earnings in the station in the 2011-12 fiscal year, U.S. $ 24,288 million, of which 5.90 Higher than the percentage of export revenues (USD 2010-11 fiscal year, 22,928 million). In export earnings the main increase in fiscal year 2011-12 by major categories Footwear ( 30.10% ) , engineering products ( 21.10% ) , and woven garments ( 13.90% ) of and leather ( 10.80% ) of . On the other hand , On raw jute export earnings dip ( -25.40 % ) , and ceramic products ( -10.20 % ) of And jute products ( -7.50 % ) of . Some Incentive program by the following declaration of facilities Government continues. Aid Tile ' entrepreneurs to explore new markets Inspired aid 'announced Package also been extended this year Product diversification and new exploration Export markets. Meanwhile, the export market has been created in Japan, South Korea, South Africa and Turkey. Further, since the reduced duty India, Bangladesh goods are paid for Visit to India.
3.3.1. Export Cash Credit
In the form of credit to allow exporters before shipment stage, depending on the credit of his main safety requirements of raw materials or finished goods meant for export. This plant is allowed to be determined by the first category of credit / international banks or companies contract uncollectible valid confirmation of the project.
Types of ECC:
Depending on the title, degree of control and physical possession of the goods ECC can be of three types-
1. ECC (Pledge):
Title and control of goods retained by the bank. Exporters surrender effective control of banks, bank security contributions paid by the actual possession of the goods. Commitment on the underlying commodity implied lien. Therefore, the bank can take recourse to the sale of goods to recover its dues, if the exporter fails to repay. Typically, the profit margin from 10% - 25% is retained to prevent loss from a "forced sale" generated. Tenor of credit facility: 60 days to 180 days
2. ECC (Hypothecation):
Exporters pledge letter will not charge for the goods in favor of the bank, but neither ownership nor has been passed to it. Only a right or interest to the banks of the goods created, and when combined with exporters from the bank after he phoned possession of the goods.
3. ECC (Trust Receipt):
Usually allows exporter wants to use the loan for processing this material and cannot easily take into account the bank's custody package to exporters. For example hides.
Execution means goods exporter trust receipts held in trust on behalf of the bank. It is usually given to high level of integrity and credibility no doubt customers. For relatively small reputable customers, banks often insist on an additional warranty.
Settlement of Liability:
On receipt of shipping documents, if the same are in order negotiation shall be made and the credit outstanding shall be adjusted.
Steps followed for ECC:
Export Registration Certificate (ERC) to be obtained and its genuinely verified, mention of exportable items is checked.
Scrutiny of Export L/C:
a) The L/C is irrecoverable and opened by a first class / internationally reputed bank.
b) The L/C is valid.
c) Terms of L/C do not violate exchange control regulations
d) L/C does not contain any term which cannot be fulfilled
e) Negotiation of the documents under L/C is not restricted
f) Authenticity of the L/C is verified
g) Reimbursement clause clearly stated
h) Amount of L/C distinctly mentioned
i) Description, quality, quantities, price, sale terms, payment terms are strictly in terms of the contract.
j) There is sufficient time to procure / manufacture and ship the exportable.
k) Clean payment terms; there is no realization clause.
Scrutiny of the Contract:
I. A firm contract duly executed by the buyer or his agent
II. It is dated and contains all the terms & conditions of the deal.
III. Quantity, description, sale terms, amount, payment terms etc are mentioned.
IV. It is signed.
V. In all other aspects it is in order.
VI. Buyer's credit report is obtained from buyer's bank or an international credit rating agency.
VII. Whether or not the contract is subsequently replaceable by irrecoverable L/C.
VIII. A payment term is clear and contains no restrictive clause/condition.
Charge documents to be obtained
a) D.P. Note.
b) Letter of Arrangement.
c) Letter of Continuity.
d) Letter of Authority.
e) Letter of Pledge / Hypothecation / or Trust Receipt (as the case may be).
Tenor of ECC: 60 days to 180 days.
Settlement of ECC:
On receipt of shipping documents, if the same are in order negotiation shall be made and the credit outstanding shall be adjusted.
3.3.2. Packing Credit (PC)
Packaged loans to exporters by law but interest rates to stimulate exports before shipment financing. Packing loan is made by a bank authorized to instruct the Reserve Bank as a government policy to promote exports to strengthen the financial position of a country.
In order to obtain packing credit facility, exporters will be to their banks and export order. Exporters bank official visit factories, socks and export orders and get confident assessment of the value of goods. Packing credit loans are the best financial assistance to banks, to promote one of the export trades.
Tenor of packing credits: 90 days maximum.
Scrutiny of Export L/C contracts: Same as ECC
3.3.3. Local / Foreign Bills Purchased (FBP)
Foreign bill purchase (FBP) is a post from the future earnings of a particular export bills secured delivery facilities. Working capital financing. Export bills for their tenor. Visual and Usance divided into two categories. Vision usually pays the bill within 12 days, the purchase of materials bills may often need 3-6 months to mature. Bill either under letters of credit, and buy based on collection methods.
3.3.4. Loan against Export Development Fund (EDF)
On request the Government of Bangladesh to promote non-traditional exports of manufactured goods business in Bangladesh, the current balance of Export Development Fund for the International Development Association (IDA) arrangement in 1989 (EDF) and $ 31,200,000 principal and French power company $ 1 million dollars. Establishment of Export Development Fund (EDF) in Bangladesh Bank's main objective is to ensure the continued availability of foreign exchange to meet the import requirements of non-traditional manufacturing projects. This facility is available to non-traditional exporting countries, especially the new exporters; exporters expand to higher export value and export diversification into new markets. An exporter identify above is eligible to avail of EDF facilities on the conditions stated below:
I. He must be an exporter of non-traditional manufacturing items.
II. The value added of these products could be 20% except in the case of garments where it has to be 30% and above.
III. The loan should be utilized in the case of importing raw-materials for manufacturing the exportable products.
IV. The exporter must have an Export L/C.
V. He must create a Back to Back L/C for importing raw materials.
VI. The period of loan is 180 days.
VII. The exporter can borrow as many times in a year on revolving basis.
VIII. The interest rate of EDF is LIBOR + 1%.
IX. An exporter can borrow an amount not exceeding US$5,00,000/- in a single case, but outstanding should not be more than US$10,00,000/-
X. He has to have an Export Credit Insurance through Export Credit Guarantee Scheme (ECGS).
Purposes of EDF:
a) To make the payment of import bill against Back to Back sight L/Cs. For export of goods Bangladesh Bank arrange pre-shipment credit by EDF.
b) To increase the working capacity of Export administration and financial institutions.
c) To encourage the motive of the foreign supplier. Foreign guarantee conferring institutions and foreign commercial banks who provide short time loan to the Bangladeshi exporters.
Overall Import-Export Business of Agrani bank Ltd.
Import business in 2012 stood Tk. 16,963 crore, and export business in 2012 is TK. 8,838 crore.
3.4. Foreign Exchange Market
To control foreign exchange market and cope with this market with Multi-National Bank and Commercial Bank ABL practices various activities. These activities are the following:
' Selling Foreign Currency for Import Payment
' Buying Foreign Currency against Export Proceeds
' Fixation of Exchange Rate
' Foreign Currency Buying and Selling
' Forward Transaction
' Term Placement
Besides those following activities ABL also follows SWAP transaction in international transaction.
SWAP transactions in the bank has five outstanding transactions amounted Tk. 814,912,100 for the December 31, 2010. Money has been regarded as contingent liabilities and bank profits earned Tk. 822.100 has been accounted for in the month January 2011.
Risk Associated with Foreign Exchange Operations
The key risk areas are broadly categorized as follows:
I. Credit Risk
This is defined as a debtor or counterparty fails to perform in accordance with a prescribed conventions / value date AC / settlement arrangements.
II. Liquidity Risk
It is defined as any money when unable to meet debt maturities, due to either a lack of funding from either Contracting Party or in the marketplace, so it is difficult to buy the settlement amount needed to systemic problems. Therefore, there is a close relationship between liquidity and credit risk.
III. Market Risk
It is defined as adverse changes in one location (i.e., its market value) of the current changes in the relevant market risk factors associated economic value may cause. Market risk terminology.
a) Market Factor
It is defined as a variable (i.e. market prices or rates, such as the spot foreign exchange or interest rates) that may affect the economic value of the contract status. It is the market risk management activities to a part of the identity of the relevant market factors, and to consider the establishment of an independent market risk limit framework.
b) Factor Sensitivity
It is defined as a market risk factors (for example, to changes in the spot foreign exchange rate of 1% change in the spot foreign exchange positions of the value) value defines the change in position changes.
c) Volatility & Correlation
This means that for statistical computing market variables / parameters and movement (volatility) which affect the relationship between the variables of the scope of another (correlation) factors. It is used in measuring portfolio risk, such as value at risk (VaR).
d) Value-at-Risk (VaR)
VaR is used to estimate the location of a potential decline in the value of a mine or a portfolio, under normal market conditions, the confidence level required, and within a specific time statistical tools.
3.5. Letter of Credit
Credit has become history can be traced to the cornerstone of international trade at the beginning of the twentieth century. Today, they continue to play a key role in world trade. For any company to enter the international market, the letter of credit is an important payment mechanism, which helps eliminate certain risks.
3.5.1. Letter of Credit ' Sight: If payment is to be made at the time documents are presented, this is referred to as a sight Letter of Credit
3.5.2. Letter of Credit ' Usance: Alternatively, if payment is to be made at a future fixed time from presentation of documents (e.g. 60 days after sight), this is referred to as a term, usance or deferred payment Letter of Credit.
3.5.3. Back to Back L/C
Although not recorded in letters of credit, "back to back" is a term involving two credit irrevocable letter of credit transactions using. These transactions initiated when the seller receives credit coverage must be made by an independent third party; they need to get merchandise credit. After the second letter "second" credit card-issuing bank to pay under the look of the first issuing bank for reimbursement. Back-to-back credits letters and distinguish between letters of credit transfers is that, in the credit transferable credit, assignment of rights under the existing credit. In back-to-back transaction, the actual issuance of letters of credit is different. Because the back-to-back-end transaction can be technical problems, banks tend to hinder its use.
3.6. Letter of Guarantee
Agrani Bank Ltd. does follow the following activities on behalf of letter of guarantee. Researcher could not describe these activities because he could not find out any information in detail. All information is present through superficial ways.
' Advance Payment Guarantee
' Bid Bond
' Performance Guarantee
' Shipping Guarantee
' Standby Credit
3.6.5. Guarantee ' Others
2012, the value of the bank guarantee issued by Tk. 51.501 billion rupees compared, Tk's. 44.205 billion rupees Last year. The guarantee is in the hair Conducive to different government departments, Autonomous organizations, enterprises and multi-national Corporate and other securities on behalf of the right Bank customers.
3.7. Other Foreign Exchange Services
3.7.1. Documentary Bill Collection
Documentary collection is a process in which the seller instructed his bank to the relevant export goods to the buyer's bank documents, and requires the production of these documents, to pay the buyer, under what circumstances, and these documents can be released to the buyer. Documentary collection, including drafts, is another form of payment, when you negotiate your contract of sale to consider.
Collections can be sight (D / P or against payment) or long (D / A or D), depending on whether you have agreed your sales contract payment terms.
Collection can be cheaper than credit. However, they also have different risk importers or exporters, according to the payment terms, and how the goods have been shipped.
Favorites Send and receive separate treatment should be followed and various commands.
3.7.2. Advanced Payment for Import & Export
With the view of the seller's perspective, an advance payment to pay any business, including safe mode export business. Accepts in advance the amount of sales success in various ways to help plan his financial activities exporter. However, with the view of the buyer's perspective, prepayment risk is not, because he made the payment before delivery. Long-term advances in exports and imports is only when he knows that as the seller, the seller in the details of the genuine buyers choose.
The trade balance recorded a deficit of 3.20 rise Per cent to U.S. $ 7,995 million for the financial year 2011-12 Compared to a deficit of U.S. $ 7,744 million in 2010-11 fiscal year. In the meantime, the current account balance recorded a surplus of $ 1.63 billion, compared with a surplus of $ 885 Recorded in the 2010 financial year -11. Deficit of ten thousand US$ the overall balance of the United States to pay $ 494 station In the 2011-12 fiscal year, which is $ 656 million one hundred million U.S. dollars In the 2010-11 fiscal year.
3.7.3. Foreign Remittance (Incoming & Outgoing)
Remittances from abroad can be defined as "a freely convertible currency in accordance with the purchase and sale of foreign exchange management regulations for acceptance."
A loose translation of sending money home to work abroad for some time. Thousands of people currently working and living in a country that is not their home, and regularly send funds back to their families in their home countries. There are two types of remittance which accept ABL. One is Inward remittance and the second one is outward remittance.
Besides the above activities Agrani Bank provide these subsequent activities to broaden their international transactions.
' Foreign Currency Endorsement against Passport
' Issuance of Draft, TT
' Collection of Draft, Cheque, TC
' Opening of Student File, Medical File
3.8. Overseas Employment and Remittance
Although the slowdown in export of human resources 2010-11 fiscal year, due to the impact in the first half. The global economic downturn, particularly in real estate In the Middle East market and industry In some Southeast Asian labor demand Countries such as Malaysia, it begins to increase From January 2011 the amount of remittances An increase of 6.03%, to approximately 11,650.32 Million in the 2010-11 fiscal year compared to the Last year. Bangladesh won the remittances Approximately 12,843.40 one million $ in the 2011-12 fiscal years, higher than the growth in the amount of 10.24% Last year. Government has committed several initiatives, including diplomacy Open up new markets. Up to 69,100 rupees The situation of workers going abroad in search of employment opportunities 2011-12, 57.40 percent higher than the In the last year the number was. Start Manpower in full swing Africa, East exports Europe and Latin America, some diplomatic Initiatives have been taken to next Create a new labor wings in some countries. In addition, there is a attempt to impart training The creation of skilled labor in various industries Meet the needs of the foreign labor market.
3.9. Foreign Remittance Business
The main lifeline inward foreign remittances Rise of Bangladesh's economy. Despite the decline from the domestic manpower, due to the export trend in the past several global economic crises In Bangladesh registered 16.51 percent of Growth in this sector in 2012 as in 2011.Countries on imports of foreign remittances 14,176.91 million dollars in 2012.
Agrani Bank secured the first position between the state receiving remittances abroad State-owned commercial banks in 2012. ABL has Contribution of 10.07%, reaching a total Remittance figure in the country, which is $ 1,427.33 million as the calendar year 2012. ABL There are 22.23 percent growth rate in the past year achievement of $ 1,167.76 this year's results Remittance business. Comparative Study Remittances are other banks as follows:
Source: Bangladesh Bank
ABL and remittance business expansion policy has been exchanged with four new house including the famous Western Union , the United States currency Courier companies , the United States , NBL remittances Sdn. Bhd. , Malaysia, the standard delivery , the United States in 2012.Currently , ABL has been in accordance with the agreement It was 48 in 2011 52 exchange houses. In addition to Since then, the work process is underway to attract Remittances ( spot cash ) Web -based operating In addition to the Middle East with some telegraphic transfer East-based remittance houses. Recently, Agrani Handover Pvt. Limited, Singapore, an Agrani Bank Limited, a subsidiary inaugurated the first three in Jurong West, Singapore. Agrani Remittances home Sdn. Bhd., Malaysia Applicable to expand its branch office Network. To the channel of remittance From Canada a more simple and cost -effective way and Australia, ABL has been approved ,Bangladesh Bank on September 24, 2012 10October 2012 respectively Remittance business license from the authorities Collection of national and expectations Direct remittance quickly from there. In order to facilitate Remittance services, Bangladesh nationals living in the United States of America, ABL is obtaining approval from the permit process Authority.
A large number of Bangladeshi expatriates preferences ABL send money to it through better communication rate , but also for the distribution of its online remittance889 has connected all its branches the use of cash over the counter payment services PIN. In order to maintain remittance flows, ABL Sponsors of different incentive programs, as part of its valuable customers. National wise remittance ABL received in 2012:
3.10. Off-Shore Banking Unit
Foreign investors do not have the opportunity to invoke the various financial institutions from Bangladesh (DFI) credit financing. In order to cater to the financial support of offshore banking facilities are required to provide to the export processing zones in Bangladesh foreign owned / joint registration units. Presently many foreign banks and got the incense to operate Off-Shore Banking unit in EPZ Area to facilities the foreign investor. But Agrani Bank in the pipe-line to have off-shore banking license from Bangladesh Bank
Chapter-4- Risk Management
In essence, the risk is very difficult to predict. This makes it an urgent need for the bank to develop its risk management strategy, the most to protect our interests against any insidious way of trading. Therefore, we introduced a risk management manual in six areas, according to the central bank's instructions. They are: credit risk, foreign exchange risk management, asset-liability management (ALM) risk, internal control and compliance (ICC) the risk of money laundering (ML) risks and IT security risks. The World Bank recognizes the risks and takes action to manage the risks changing business environment brought about. The Bank has established a risk management policy, which aims to balance the risks and rewards will include six processes as follows:
a) Credit Risk
Credit Risk Management Manual has been revised. It acts as a guide, to effectively avoid the risk involved in lending activities of banks. Before we have implemented the concept in the background to ensure separation of duties, calling him the exact responsibilities of each individual region. Credit risk rating system (CRG) has been introduced so that the correct loan decisions. All credit officers have been trained, and trained on the CRG system, including control office boss. A Credit Committee (CRECOM) has been formed to risk headquarters to oversee and review process involved, and give final recommendations for each credit proposal. Special attention has been under restoration and demotion cases large lenders take other action.
b) Foreign Exchange Management Risk
Foreign exchange risk arises from widespread domestic and international market exchange rate changes. Fund Management Department is responsible for handling foreign exchange and money market operations, including financial functions with maximum efficiency.
c) Asset Liability Management Risk
ALCO Bank (ALCOM) continue to regularly review a chance to sit and threats to its liquidity position and balance sheet, and a mature stand of assets and liquidity contingency plans. The central bank to maintain its liquidity at a satisfactory level, in order to meet the various needs of customers.
d) Internal Control and Compliance Risk
Internal control and compliance plays an important role in financial institutions. This is a review of business processes and organizational records. Good internal controls designed to ensure that the goals and objectives are being achieved to reach our long-term profitability of the bank. Bank of risk from the past study guide light, ABL as risk management guidelines to identify, assess and control arising from banking operations based in. Thus, ABL has taken effective measures to control and compliance as well as updating the existing internal control and compliance risks manual ABL. Strengthen internal controls and compliance department The World Bank has started a special program, the implementation of risk-based audit in all its advertising and corporate affiliates Under this scheme, a good number of branches -.. CPAs Internal control is an integral part of an organization's business policies. It helps to reduce waste, inefficiency, and complexity. It ensures the accuracy and reliability of accounting to ensure compliance with the organization's policies and to evaluate the performance level of all organizations units.ICC Division by reviewing departmental control features to ensure their internal control procedures checklist (DCFCL), loan documents checklist another mechanism branch (LDCL) and quality of operational reports (QOR). "Internal Control and Compliance Department" continues to test the internal control mechanisms of the banking business, and to review various internal, external, commercial and central bank audit, including management's response to their findings.
e) Money Laundering Risk
World Bank to continue its anti-money laundering stance, stressing the bank exhaustive internal and external training programs, all of the branches. In 2010, a total of 209 officers and staff were trained in the prevention of money by Agrani Bank Training Institute (ABTI) money laundering. The Bank has a Know Your Customer (KYC) and transaction information (TP), Cash Transaction Report (CTR) and Suspicious Transaction Report (STR), if any, and branch AML Compliance Officer (BAMLCO) wise list the record is sent to the Bangladesh Bank.
f) ICT Security Risk
Increased uses of information and communication technology, there need to be more careful with the risks associated with information and communications technology security related. The bank has developed a clear definition of information and communication technology policy and international best practices and guidelines for the Bangladesh Bank prudential information and communication technology security. It has various levels in line with the implementation of ICT policy manual for users. Information and communication technology audit manual has been prepared and is using information and communication technology audit of the bank's activities to ensure that policies and procedures are strictly adhered to.
Chapter-5-Recommendation & Conclusion
Agrani bank is the third largest Stated-owned bank in Bangladesh. They expand their operation beyond Bangladesh. Today's world is globalized world and most of the people want to swift transaction along with safe. People are busy with work station most the tome in a day, so it is difficult to go to the bank to execute and complete their financial activities. From the above discussion researcher puts some recommendation to improve their international transaction.
- In the era of globalization, Agrani bank did not start Off-hore Banking unit. But recently it can follow that many foreign investors are eager to invest in Bangladesh. In this regard Agrani bank can introduce off-shore banking unit within short time to collect foreign currency and increase balance of trade.
- Agrani bank can introduce internet banking facilities through their entire branches to straightforward and facilitate international banking
From the above discussion it is clear, Agrani Bank play a prominent role to collect inward remittance. Moreover, Agrani Bank wants to help those importers and exporters who have insufficient money to continue their busine
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