internship report ezaz 2
TRANSCRIPT
THE IMPORT DEPARTMENT: CITIBANK N.A. DHAKA, BANGLADESH
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THE IMPORT DEPARTMENT:
CITIBANK N.A. DHAKA, BANGLADESH
by
Efaz Alam Chowdhury
ID – 0620382
An Internship Report Presented in Partial Fulfillment
of the Requirements for the Degree
Bachelor of Business Administration
INDEPENDENT UNIVERSITY, BANGLADESH
May 2010
THE IMPORT DEPARTMENT: CITIBANK N.A. DHAKA, BANGLADESH
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THE IMPORT DEPARTMENT: CITIBANK N.A. DHAKA, BANGLADESH
THE IMPORT DEPARTMENT: CITIBANK N.A. DHAKA, BANGLADESH
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THE IMPORT DEPARTMENT:
CITIBANK N.A. DHAKA, BANGLADESH.
by
Efaz Alam Chowdhury
ID – 0620382
has been approved
May 2010
____________________
Sylvana Maheen Ahmed
Lecturer Finance
School of Business
Independent University, Bangladesh
THE IMPORT DEPARTMENT: CITIBANK N.A. DHAKA, BANGLADESH
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Letter of Transmittal
May 2, 2010
Sylvana Maheen Ahmed
Lecturer, Finance
School of Business
Independent University, Bangladesh (IUB)
Dhaka, Bangladesh.
Subject: Submission of the internship working report.
Dear Madam,
With due respect, I would like to inform you that, it is a great pleasure for me to submit
the working report on “The Import Department, Citibank N.A. Bangladesh.”, as a
requirement for BBA 499 program. My internship period started from 10 March 2010
as is till 11 June 2010.I am working in the trade department of Citibank N.A.
Bangladesh with the office is in Motijheel.
Sincerely Yours
………………………….
Efaz Alam Chowdhury
ID: 06203852
THE IMPORT DEPARTMENT: CITIBANK N.A. DHAKA, BANGLADESH
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Acknowledgement
I am grateful to my academic supervisor Ms. Sylvana Maheen Ahmed for her
guidance and instructions. I am also thankful to Head of HR Division of Citibank N.A.
Bangladesh for giving me the opportunity to do the internship.
I am also grateful to the employees of trade department for their cooperation.
They have been very helpful in showing me the work process and provided relevant
information for my report whenever I approached. They never hesitated or did not feel
disturbed when I asked questions. It was a great opportunity to do internship in such an
organization. The experiences I have gathered will be very beneficial in my career.
THE IMPORT DEPARTMENT: CITIBANK N.A. DHAKA, BANGLADESH
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Table of Contents
Content Page #
Abstract 1
1.0 Introduction 2
1.1. Origin of the Report 2
1.2. Objectives of the Report 3
1.3. Objectives of the Report 3
2.0 Background on Citibank 4
2.1. Citibank Bangladesh 4
2.2. Citibank Bangladesh Trade Operations 4
2.3. The products of Trade in Citibank Bangladesh 5
3.0 The Import Process, LC Issuance and Amendment 6
3.1. The Import Process 6
3.2. Letter of Credit Issuance and Amendment 7
4.0 My Work and Responsibilities 12
5.0 Conclusions and Recommendations 14
5.1. Conclusion 14
5.2. Recommendations 15
References 16
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Appendix 17
Appendix I: LC issuance scan cover sheet 17
Appendix II: LC amendment scan cover sheet 18
Appendix III: LC application form 19
Appendix IV: LC authorization form 20
Appendix V: Import form 21
Appendix VI: LC issued customer copy 22
Appendix VII: LC amended customer copy 25
Appendix VIII: LC issued advising bank copy 26
Appendix IX: LC amended advising bank copy 29
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Abstract
Citibank N.A. is one of the biggest banks in the world and in 1995 they open their
business in Bangladesh. Over the years they have grown in Bangladesh and in trade
services they are one of the best. Trade is one the primary services provided by banks.
Citibank Bangladesh follows up transactions that Citibank India processes. Citibank
Bangladesh has a very efficient system. There are a lot of important documents requires
and so there are check point at almost every step of processing. As a result there is very
little chance of mistake, as mistake may have enormous consequences. It is an honor for
me to be a part of Citibank N.A. Bangladesh Trade Department and I thank IUB for
providing me with this opportunity through their internship program.
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1.0 Introduction
1.1 Origin of the Report
IUB has provided us, the fresh graduates the wonderful opportunity to learn about
the real world through real time working environment. These experiences could never
be gathered from books and are priceless. The course Bus 499 will help us to progress
in to our working career. The requirement of this course is to work in an office for three
months and for the completion of the course, at the end of the three month period a
report has to be made on the experiences gather. Different types of reports can be
prepared. I have chosen to do a working report titled “The Import Department: Citibank
N.A. Bangladesh”. My internship started on March 11, 2010 and will end on June 09,
2010.
My organizational supervisor is Md. Muniruzzaman Molla, Vice President, Trade
Operations, Citibank N.A. Dhaka, Bangladesh. He cooperated fully with me and
without his help completion of the report won’t have been possible. My working report
is on the import section of the Trade Department. In an expanding economy like ours
smooth import procedure is very important and Citibank N.A. Bangladesh provides just
that.
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1.2 Objectives of the Report
My objectives in this Report are to discuss about the Import process in Citibank
N.A. Bangladesh. I am going to talk in details about LC issuance, LC amendment, LC
preparation, LC Recording and LC closing.
I will also discuss about my various work in the trade department.
1.3 Sources of Information
Primary Source:
ü From informal discussions with the officers of the trade the trade department.
ü From daily activities conducted by me.
Secondary source:
ü Web sites.
ü Citibank’s trade manual (L.O.P).
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2.0 Background on Citibank
2.1 Citibank Bangladesh
Citibank N.A. started its operations in Bangladesh in 1987, with the opening of a
representative office. The bank opened its first full-service branch in Dhaka in 1995
(www.bangladeshtrades.com, n.d.). The bank has now has four branches and two
offshore banking units with 175 employees serving both corporate and some individual
customers (www.asia.citibank.com, n.d.).
Since 1987, Citi’s operations encompass primarily on corporate and commercial
banking services under the Institutional Clients Group (ICG). It provide a
comprehensive range of financial services including treasury management, transaction
services, foreign exchange and structured finance to corporate clients, governments and
financial institutions. The bank has been offering its customers the highest standard of
financial services backed by sophisticated technology and innovative product solutions.
The bank also provides remittance services to the expatriate community all across the
world and largely in the Middle East (www.asia.citibank.com, n.d.).
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2.2 Citibank Bangladesh Trade Operations
Citibank offers a robust operational infrastructure to handle large transaction
volumes. The regional and global trade experts forming partnership with the clients
deliver the best-tailored trade solutions that facilitate the complex process of cross-
border trade transactions. The bank has an array of products that facilitate import and
export transactions and offers the unique feature of real-time creation, monitoring and
controlling of international commercial transactions through its world-class CitiDirect
Online Banking platform (www.asia.citibank.com, n.d.).
2.3 The products of Trade in Citibank Bangladesh
• Import
Ø LC Issuance
Ø Import bill under LC
Ø Incoming collection
Ø Delivery order
Ø Advance payments
• Export
Ø Export LC collection
Ø Export collection
Ø Export LC confirmation
Ø Export bill negotiation
Ø Export bill discounting
Ø Export loan
(Source: Muniruzzaman, 2010)
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3.0 The Import Process, LC Issuance and Amendment
3.1 The Import Process
Citibank N.A. facilitates imports of three sections:
• Local
• Export processing unit or EPZ
• Foreign
The steps of the overall import process (Muniruzzaman, 2010):
1. There is a sales contract between Applicant (importer) and Beneficiary (exporter).
2. Applicant gives Letter of Credit (LC) application to issuing bank.
3. The issuing bank issues the L/C and sends to the advising bank for advising.
4. The advising bank delivers the L/C to the beneficiary.
5. The beneficiary ships the good to the applicant.
6. The beneficiary sends the documents to the negotiating bank.
7. The negotiating bank sends the documents and reimbursement claims to the issuing
bank.
8. Applicant pays the issuing bank and collects the received documents.
9. Issuing bank pays off advising bank or negotiating bank.
10. Negotiating bank pays the beneficiary.
11. The applicant picks up the goods.
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3.2 Letter of Credit Issuance and Amendment
I was employed in the back to back LC Issuance and Amendment section of the
import department. Back to back import is only for garments industries, which are given
the privilege by the Bangladeshi government to just keep 20% to the amount they are to
import as collateral. The back to back option is only provided on the sales contract
between the applicant and the beneficiary .This has significantly helped in the
development of our garments industries. Other businesses have to keep hundred percent
of the import amount as collateral to the bank. I am going to explain the steps followed
by Citibank in LC issuance and amendment (Muniruzzaman & Islam, 2009).
Along with the guide lines of Bangladesh Bank, Citibank and TCS (the Indian
Citibank Team) has the following system of LC issuance and Amendment.
For an LC to be issued or amended the documents required are:
• LC applications form (ref. to appendix III). This has to be properly filled by the
applicant.
• LC authorizations (LCA) form (ref. to appendix IV). This has to be properly filled
by the applicant.
• Import (IMP) form (ref. to appendix V). This has to also be filled by the applicant.
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• Valid and firm proforma invoice or indent. This gives detail of the goods or services
which is to be imported by the applicant along with details of per unit prices.
• Insurance. An open insurance policy is valid only for vendor marketing products
which fall under the criteria of back to back imports. An open insurance policy means
that the client has to pay a yearly premium, which will cover all transactions for that
period as long as the transaction amount doesn’t exceed that of the amount on which the
premium is paid (Muniruzzaman & Islam, 2009, TRD 10, Page-2).
There may be imports with unusual risks like related to Gambling, Military arms
and equipment, and Political candidates or organizations. In those cases especial
permission has to obtain in accordance with GCIB credit policies and procedures
(Muniruzzaman & Islam, 2009).
Another important document is beneficiary credit report. This is provided by
Citibank’s partner Dun and Bradstreet D&B. They give a yearly report of the financial
condition of the beneficiary. Without this Citibank cannot proceed with any transaction.
The required documents are received at the Citibank desk and are dated and time
stamped immediately. Then the application set is reviewed and signature is verified.
Then the following sequence is followed till reporting.
(Source: Muniruzzaman & Islam, 2009, TDR-10, Page-2)
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1. Scanning preparation:
• The scan cover sheet is attached which is basically a check list.
• The documents that are to be scanned are original LC application, attachments,
proforma invoice or indent, LCA form and forward cover, if the information is booked
by Citibank then there is a deal slip or if booked by another bank, the letter send to
Citibank and the confirmation of the deal from the other bank.
• If the signature is not proper in the documents or the documents are incomplete, a
deferral is initiated.
(Source: Muniruzzaman & Islam, 2009, TDR-10, Page-3)
2. Scanning:
• The application along with the relevant information is scanned with priority 5 in
TRIMS or trade information management system the data base of trade.
• Then date and time of scanning, the base number and the LC amount is inputted.
• The scanned stamp is then put on the attached cover sheet.
(Source: Muniruzzaman & Islam, 2009, TDR-10, Page-3)
3. Registration:
• The system will generate a registration number.
• This registration number is then written on the physical document.
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• Registration stamp along with the previous scanned stamp (ref. to appendix I &II) is
then put on the cover sheet.
• The soft copy of the scanned and registered transaction is then ready to be picked up
by the TCS (the Indian Citibank Team), who will give the conformation that every thing
is properly done and they will start processing the transaction.
(Source: Muniruzzaman & Islam, 2009, TDR-10, Page-4)
4. Exceptions:
• If there is a problem with the transaction then TCS will find it from the soft copy of
the scanned and registered documents.
• The specific transaction will be obtained by the reference number put during the
registration process.
• The physical documents will be taken by the Dhaka team.
• All expectations will be resolved by sending TCS the necessary information through
mail.
• When all exceptions are resolved TCS will start processing.
(Source: Muniruzzaman & Islam, 2009, TDR-10, Page-4 & 8)
5. Post Transaction processing, dispatching and archiving:
• After all transactions are authorized, the system will show the transaction as
“Opened”.
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• Then LC customer copy and office copy are made (ref. to appendix VI, VII, VIII &
IV). The customer copy is dispatched and the office copy is foldered with the
previously scanned records.
(Source: Muniruzzaman & Islam, 2009, TDR-10, Page-4)
6. LC closure:
• LC expired over 15 days is to be closed in TRIMS and on a monthly basis a report is
received from TCS giving LCs within the period closure. Based on this report the LC
containing folders are sorted out.
• Cancellation prior to the expiry date will be done only at the written request from
the applicant and the beneficiary’s consent through the advising bank.
(Source: Muniruzzaman & Islam, 2009, TDR-10, Page-4)
7. Reporting (Source: Muniruzzaman & Islam, 2009, TDR-10, Page-5):
• This is the last and most crucial step.
• TCS will send all reports to Bangladesh and fortnightly LC outstanding reports to
customers and credit officers.
This concludes the LC issuance and amendment process. Then the transaction
moves to the billing section where negation takes place and payments are made which
then leads to the collection of goods or services from the port by the applicant.
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4.0 My Work and Responsibilities
I joined Citibank N.A. as an intern on 11 March 2010. I was placed in the back to
back import section. My daily works included sorting out the LC and then attaching the
scan cover sheet and pass it onto the scanning section. Then I sorted the beneficiary
credit reports and pointed out any irregularities with them. I also sorted the sales
contract on which the back to back LC where issued or amended.
I was sometimes sent to the export bill collection section. This was the busiest
section of the office. There I had to sort bills. I also put export for entries in to the
register which is directed by the Bangladesh Bank. I also prepared the duplicated and
triplicate of the export form which is to be reported to Bangladesh bank. I sometimes
did DHL entries which keeps tract of the bill that are dispatched from this section. I had
to write down the DHL number and the bill reference number. I also entered the
proceed realization certificated to the LCs of Square Fashions Ltd. for period 2007 to
2009. This closed all the LCs and Square Fashions and got their proceeds. There was
also a discrepancy report from Bangladesh Bank that in the period 2007 to 2008 there
was numerous amounts of bills whose proceeds where less than 90%, where as the
Bangladesh Bank regulation is to keep proceeds to minimum 95%. I was given the work
to find bills reference whose proceeds where less than 90% from the report register of
2007 and 2008. After this I reported the bill numbers which where in turn reported to
the Bangladesh bank. I had to also endorse bill of lading (BL) so that the clients could
release the goods from the port by showing the authorized BL.
THE IMPORT DEPARTMENT: CITIBANK N.A. DHAKA, BANGLADESH
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I was also sent to the import bill collection section. There I sorted the bills and
helped prepare the bill scanning copy by attaching the import bill scan cover. Then once
the documents where scanned and registered I had to file the documents and store it in a
fire proof cabinet. I also helped in LC advising.
There were other sections in this department but I haven't been needed there yet.
Citibank is very information sensitive. They do not allow any interns to access the
computers connected to the network. As a consequence all my work was manual.
THE IMPORT DEPARTMENT: CITIBANK N.A. DHAKA, BANGLADESH
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5.0 Conclusions and Recommendations
5.1 Conclusion
1. Citibank is very efficient in trade transaction; this is brought about by their
smooth system flow.
2. There are partners to Citibank Bangladesh. Infact in the trade service Citibank
N.A. Bangladesh is not a separate entity it falls under Citibank India. So for
processing Citibank Bangladesh has to wait for Citibank India to give the go
ahead before they can do anything. Basically Citibank Bangladesh provides
follow up to Citibank India.
3. Citibank is underemployed. This puts a lot of pressure on employees during the
rush days of the week. Even though office hours are till 6 almost every one stays
back till 8 and some leave regularly at 10. And these extra hours don’t even
count as over time.
4. Even thought Citibank is automated compared to most of the banks in
Bangladesh, it still has a lot of paper works. This paper work is very time
consuming and take a lot of place to store.
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5.2 Recommendations
1. More automation is needed. It won’t be very expensive plus expenses related to
paper documentation can be saved. One small example is export form
registration. The serial number can be simply printed and the amount can be
stored in a simple data base. This would reduce the time taken for manual entry
and the huge register doesn’t need to be maintained. Another small thing that
can be done is that instead of giving the customers a printout of the LC copy and
soft copy can be mailed to them.
2. Citibank needs to really think about employing more employees in the trade
department. When someone does not show up one day it leaves a lot of pressure
on the rest, who already have enough work of their own and then they have to
also do the work of their absent colleague.
3. Citibank Bangladesh has not seen gone for loss. This proves their efficiency. If
they are given more authority by Citibank India regarding processing, they will
be able to serve the clients faster and better.
THE IMPORT DEPARTMENT: CITIBANK N.A. DHAKA, BANGLADESH
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References
Foreign Banks in Bangladesh (n.d.). Retrieved April 10, from a Bangladesh bank
website :http://www.bangladeshtrades.com/banks-in-bangladesh/foreign-banks-
in –bangladesh.html
Munirruzaman, M. M. (2010, February 23). “Core Banking – 2010: Trade operations”
[PowerPoint slides]. Retrieved from Citibank N.A. Bangladesh trade O&T
department.
Munirruzaman, M. M. and Islam, M.R. (2009, 31 August), ``TRD – 10 LC Issuance
and Amendment'', L.O.P Citibank N.A. Bangladesh Trade Department, 2-9.
Trade Service. (n.d.). Retrieved April 10, from Citibank N.A. Bangladesh official
website: https://www.asia.citibank.com/CBKWebPortal/appmanager/
citibanker/hm_bd_co_en?_nfpb=true&_windowLabel=extLandPageLeft_1_6&e
xtLandPageLeft_1_6_actionOverride=/cbk/control/pageflow/extLandPageLeft/s
howContent&_pageLabel=bd_en_co__desktops_external_bd_corporate_en_ho
me_portal_page_39
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Appendix