south east bank foreign exchange operation decla
TRANSCRIPT
Internship Reporton
Foreign Exchange Operation.
Submitted To:
Md. Ifte Kharul AlamAssistant Prof. (HOD Finance)
Department of Business AdministrationStamford University.
Submitted By:
Mst. Acia SiddikaID No # 03509621
Batch # 35th
Department of Business AdministrationStamford University.
STAMFORD UNIVERSITY, BANGLADESHBusiness Administration Department
Dhanmondi CampusDhaka, Bangladesh.
Date of Submission: 18th March’2010
Letter of Transmittal
Date:
MD Ifte kharul Alam
Assistant Prof. ( HOD Finance )
Department of Business Administration,
Stamford University
Dhanmondi, Dhaka
Subject: Submission the Internship Report on “Southeast Bank Ltd.” .
Dear Sir,
This is great gratification to submit the Internship Report on “Foreign exchange
Operation Of Southeast Bank Limited- A Case Study of Dhanmondi Branch”, which
has been assigned to me in December, 01. The report is based on primary and secondary
observation data, personal experience and some other informal information sources.
I believe that the knowledge and experience I have gathered during my internship period
will enormously help me in my future professional life. Your kind acceptance and any
type of appreciation would surely inspire me. I would always available and ready to
explain any further clarification of the report whenever asked. .
Sincerely yours.
Acia Siddika
Id: 03509621
Declaration
I am Mst. Acia Siddika, a student of Masters of Business Administration (MBA)
Major in Finance
of
STAMFORD UNIVERSITY, BANGLADESH
Dhanmondi Campus, Dhaka.
Do hereby declare that the Internship Report on “Foreign Exchange Operation of
Southeast Bank Ltd”. I have not submitted it for any degree, Diploma, title and
recognition before.
-------------------------
Mst. Acia Siddika
ID No# MBA 03509621
Batch # 35th
Stamford University, Bangladesh.
Supervisor’s Certificate
This is to certify that the internship Report on “Banking Activities of SEBL: Focus
on Foreign Exchange Operations” is a bona fide record done by Acia Siddika as
partial fulfillment of the requirement of MBA of Stamford University.
The report has been prepared under my guidance and is a record of the bona fide
work carried out successfully.
_______________________Signature of the supervisorDate: ______________
Acknowledgement
It becomes especially possible for me to make the report more effective and authentic for
the constructive assistance of many individual of the bank and of the different
organization. I like to express my profound thanks to my honorable Supervisor teacher
Md Ifte kharul Alam, assistant professor Department of Business Administration
Stamford University, whose direct supervision and guidance helped me a lot to write
this report. We also want to provide thanks to Vice Chancellor, and
Stamford University Because of his support to prepare the report.
I also grateful to Mr. Abdul Hamid mia, EVP and manager of the branch whose active
support inspired and helped me to work at the branch and to gather practical knowledge.
I also express my thanks to the officers and stuffs for providing information and
guidelines at the time of practical work and special thanks- to Mr Tanim Shakur. ,
Assistance Vice President, All of Senior principal officer, Senior Officer and Officer of
SEBL for Their kind guidance.
I would really grateful to all employees of SEBL Dhanmondi branch, for friendly
cooperation. I would like to express thanks to all my teachers, friends and staffs of
Stamford University for their cooperation and assistance.
EXECUTIVE SUMMARY
I joined the Southeast Bank Limited - Dhanmondi Branch on the 1st December , 2009
with an Office order issued by the Head office of the Southeast Bank Limited.
Dhanmondi Branch is an active branch of The Southeast Bank Limited, full of ideal
commercial activities through authentic performance. This branch performs the entire
banking role as a result; one can easily get all the simple and intricate banking operations.
In a word, this branch was appropriate for me as an intern. Dhanmondi Branch serves the
people by the three sections, General Banking, Investment and Foreign Exchange.
This Internship Report Entitled " Foreign exchange Operations Of Southeast Bank
Limited- A Case Study of Dhanmondi Branch” has focused on the general banking
activities in Southeast Bank Limited. I have worked there three for months as an intern to
fulfill the requirement of MBA program. Internship program in SEBL – Dhanmondi
Branch has given me practical orientations with the real professional life. During the
internship period I worked with Foreign Exchange & General Banking Department and
gathered practical experiences. This report will give a clear idea about Foreign Exchange
Activities of SEBL – Dhanmondi Branch.
There have five chapters in this report. In the first chapter I discuss about “Company at a
Glance” (introduction, vission, mission, corporate information, management team and so
on.). In the second chapter I discuss about “General Banking Activities of SEBL –
Dhanmondi Branch” (introduction, activities, account opening department, cheque book
and so on.). In the third chapter I discuss about “Information about Dhanmondi Branch”.
In the fourth chapter I discuss about “Work Area and Learning Experience” & finally I
discuss about “SWOT Analysis, Recommendation and conclusion”.
So, considering the service sector of Bangladesh, SEBL – Dhanmondi Branch should
become more conscious to deal with its customers as the customers have now more
choice to bank with and there are institutions that are intensifying competition by
focusing more on online customer service.
Table of Contents
The Preparatory Parts:Title FlyLetter of TransmittalDeclarationSupervisor’s Certificate AcknowledgementExecutive Summary
Chapter -1 Page No1.1 Introduction 011.2 Origin of the Study 021.3 Background of the Study 021.4 Objective of the Study 031.5 Methodology 041.6 Data Analysis 051.7 Scope of the study 051.8 Limitation of the study 05
Chapter -2 General Banking Activities2.1 Introduction 072.1.1 Activities 072.2 Account opening Department 092.2.1 General Instruction while open an account in local currency 092.2.2 Account opening /Deposit Mobilization 102.2.3 Opening of Different types of Mudaraba saving deposit 102.3.1 Special savings (pension) scheme 102.2.3.2 Education saving scheme 112.2.3.3 Opening of different types of current deposit 112.3 Cheaque Book 132.4 Remittance 132.5 Demand Draft 142.6 Issue of T.T 142.7 Pay Order 142.8 Clearing (Department) 15
2.9 Cash Department 172.9.1 Control Procedures of Cash Counter 172.9.2 Remittance of Cash 18
Chapter-3 Organizational Profile3.1 Background of Southeast Bank Ltd. 193.2 Vision of the Bank 203.3 Mission of the Bank 203.4 Strategy 203.5 Southeast Bank Ltd. (Dhanmondi Branch) at a glance 213.6 Southeast Bank Ltd. (Dhanmondi Branch) management at a glance 233.7 Corporate Profile 243.8 Board of Directors 253.9 Special features of the Bank 263.10 SEBL Performance at a glance 273.11 Business Activities 28
Chapter-4 Internship Position & Duties4.1 Duties in General Banking Division 294.2 Duties in Account Division 294.3 Duties in Foreign Exchange Division 30
Chapter-5 Analysis and Findings5.0 Foreign exchange operation 315.1.1 Foreign exchange accounts 325.1.2 Foreign exchange buying rates 325.1.3 Foreign currency exchange rates 335.2 Import 335.2.1 Regulation of Import 335.2.2 Import Procedures followed by SEBL 345.2.3 Different means of payment 355.2.4 Forms of Letter of Credit 365.2.5 The Banks involved in L/C 365.2.6 Documents used in operation of L/C 375.2.7 Procedure of opening the letter of credit and payment 385.2.7.1 The importer submit the following documents with the application
for opening the L/C 395.2.7.2 The bank will provide the following documents before opening the L/C 39
5.2.7.3 L/C Authorization form (L/CAF) 395.2.7.4 The L/C conforming process 415.2.7.5 Forwarding documentary credit by confirming bank 415.2.7.6 Submission of necessary documents by exporter to the Negotiating Bank 425.2.7.7 Lodgment and Retirement of shipping documents 425.2.8 Import financing 435.2.8.1 P.A.D 445.2.8.2 L.I.M 455.3 Export 475.3.1 Regulation of Export 475.3.2 Export Procedures 475.3.3.1 Registration of Exports 475.3.3.2 Securing the order 485.3.3.3 Processing and opening of Back to Back L/C 485.3.3.1 Features of Back to Back L/C 485.3.3.4 Preparation of Export Documents 495.3.3.5 Procuring the materials 495.3.3.6 Shipment of Goods 505.3.4 Export financing 505.3.5 Negotiation of Documents under L/C 525.3.6 Foreign Documentary bill for purchase 525.3.7 Payment of Back to Back L/C 525.3.8 Export document Chack list 525.4 Foreign Remittance 545.4.1 Inward foreign remittance 545.4.2 Outward foreign remittance 555.4.3 Export import procedure 55
Chapter-6 Swot Analysis6.1 Strength 576.2 Weaknesses 586.3 Opportunities 596.4 Threats
59
Chapter-7 Conclusion & Recommendation7.1 Conclusion 617.2 Recommendation 62Bibliography & References 63
Appendix 70
1.1 Introduction
Banking system occupies an important place in a nation’s economy because of its
intermediary role; it ensures allocation and reallocation of resources and keeps up the
momentum of economic activities. A banking institution is indispensable in a modern
society. It plays a pivotal role in the economic development of a country and forms the
core at the money market of any country. In a developing country like Bangladesh the
banking system as a whole has a vital role to play in the progress of economic
development. The overall purpose of banking is to collect money from surplus unit and
transfer it to the deficit unit. The Subject of my Report is “Foreign exchange
Operation Of Southeast Bank Limited- A Case Study of Dhanmondi Branch ”.So
my focus is mainly on Foreign Exchange activities of SEBL for contributing total profit
of the bank.
Foreign trade plays an important role in economic development of a country. The
economic development of a country is comprised with domestic production and foreign
trade (especially the balance of export and import). It plays a vital role in the Balance of
Payment (BOP) of a country. Surplus (export-import) is favorable for a country.
Although Bangladesh usually exercise deficit BOP (import-export) it has to continue
foreign trade.
To conduct foreign trade of a country, bank plays an important role; usually this duty is
played by commercial banks. As a commercial bank, Southeast Bank Limited (SEBL)
also engaged in the dealing of foreign trade in Bangladesh. Foreign trade operations play
a significant role in the overall business of SEBL in order to strengthen its position.
SEBL has further consolidated its relationship with the existing network of international
correspondents.
The revenue earning sources of banks are mainly loans and advances. The credit facility
can be of two types: funded & non-funded. Funded credit can be expensive as the bank
has to pay interests. Non-funded credit includes LC, which is the main source of income
for the Foreign Exchange business.
If a bank can increase its import and export transactions, its profit will obviously reach a
higher level, as the costs are negligible.
In order to conduct a worthwhile report preparation of SEBL, it is necessary to go
through the profiles of the banks understudy.
.
1.2 Origin of the Study
This report is originated as the course requirement of the MBA program under the
business studies faculty Stamford University Bangladesh. Under this program students
of every department of this faculty must go through an internship program of 3 months
duration. As practical orientation is an integral part of the MBA degree requirement, I
was sent by the department of Finance to take real life exposure of the activities of
Financial Institutions from December 01, 2009 to February 28, 2010.
1.3 Background of the study
In the last two years Masters classes, we studied our courses on business studies from
theoretical aspects. There was no scope to learn practical knowledge about business and
its environment, theory and practices are inter-related and are equally important.
Knowledge is not fruitful one unless it is a combination both theory and practical
knowledge. MBA program allows its students to study and analysis a selected
organization in order to get practical knowledge which also facilitates use of theoretical
knowledge, students have already gathered. As a part of MBA program, I was also
assigned to prepare a report “Foreign Exchange Operations of Southeast Bank Ltd.”
1.4 OBJECTIVE OF THE STUDY
The prime objective of this report is to achieve practical knowledge about the
Foreign Exchange of SOUTHEAST BANK LIMITED, specific objectives are as
follows:
To oversee the nature and relationship among different components of
Foreign Exchange transaction Operation regarding the business of
commercial Banks viz. reduction, exchange rates and so on.
To acquire practical experience about work environment, to know relation
among staff, discipline and behavior of an organization that will help me to
buildup future working life.
To reveal the nature of foreign exchange transactions & Operation.
To Identify Foreign Exchange activities.
To distinguish Export- Import procedures.
To acquire practical knowledge about foreign exchange activities of SEBL.
To recognize the performance of SEBL in Foreign Exchange aspect.
To know, if there is any relationship among SEBL profit and foreign
exchange operations.
Try to find out the growth rate of Export-Import operation & Credit
Procedure of SEBL.
To know how a credit proposal is treated in this branch.
To learn about the credit analysis process of the branch.
To point out the problems in fund utilization and recovery thereon.
To analyze classified loan and advances.
1.5 METHODOLOGY
The report is prepared on the extensive use of secondary data available in different text,
reports, journals etc. as well as primary data collected from the bank personnel by means
of informal interview. I consulted banks Annual report (Income Statement) and made
discussion with the officials of Dhanmondi Branch, international division and other
department about methods and procedures of export-import business, problems related to
foreign exchange transactions I also had to talk to the exporters and importers for getting
impression about SEBL. The methodology that was followed through out the study may
be summarized below: For this study I have relied on both primary and secondary source
of Data. The sources are as follows:
Primary sources:
Officials records of Southeast Bank Limited.
Oral and informal interview of officers and employees in SEBL
Informal interview with the exporters and importers.
Secondary Sources:
Annual report of NBL.
Printed forms and documents supplier by SEBL.
Booklets of international Division of SEBL.
Relevant Books, Journals, Booklets etc.
Study of old & current files and vouchers.
1.6 DATA ANALYSIS
To make this report successful one researcher will analyze the data as follows:
The analysis of this report is qualitative. In qualitative analysis researcher will
cover the foreign Exchange Operation under commercial banking system.
This researcher will also show some Ratio analysis for making comparisons
among three month of this branch.
Statistical comparison among three month of this branch will be described by
spread sheet analysis.
1.7 SCOPE OF THE STUDY
Now in this global arena the activities of commercial banking are very fast. This report is
an attempt to analyze the every banking operation of the Southeast Bank Ltd. This study
focuses on the Foreign exchange division of Southeast Bank Ltd. This report has the
crisp details of the procedure of the Foreign exchange division. Along with that, a
relevant stream of discussion has been made on the theory and policy issues relating to
Foreign exchange division. I had a great opportunity to have an in depth knowledge of
all the banking activities practiced by the Southeast Bank Limited.
1.8 LIMITATION OF THE STUDY
It may agree to by the readers of the report that of such a report especially to
enrich with empirical findings, wherever necessary, is a time to consuming matter. As
the report prepared with a short span of time, the report could not be made
comprehensive and conclusive. Mainly the report could be made descriptive. Some usual
constraints I did face during the course of my investigation.
These are as follows:
The main limitation of the study is availability of literature and data and in many cases the up-to date information is not yet published.
Time constraints impede me to make in depth study.
Entrance to every corner of the bank was not possible to me.
Relevant paper and documents were not available sufficiently which can my writing this paper.
I had to base on secondary data for preparing this report.
This Bank has some policy for not disclosing some date and information for obvious reasons that could be very much essential.
Only 12 weeks were not sufficient to visit all the desks of the division.I may be impaired by resource constraint and limited experience and exposure in
the field of foreign exchange Operation.
2.1 Introduction:
General banking is one of the major areas of formal sector. Through this section bank
receive and disburse money to develop banker-customer relationship by opening different
types of accounts and providing prompt services to the customers. It is called the nerve
center of a bank. The officers’ staffs engaged in this department not merely deal with
cash but also take important role rendering the better customer services. So cash offers
should have well experienced and well behaved towards the valued customers by offering
prompt services in receipt and payment of cash with always presenting smiling face.
Since bank make profit by investing people’s money, so it need to collect money from
customer by various way and need to make sure best services for attracting customers.
2.1.1 Activities:
Commercial Based Banking Activities of this Bank are as following:
I. FORMAL SECTOR:
A. Deposit :
1. Current Deposit Account
2. Term Deposit Account
3. Foreign currency Account
4. Fixed Deposit Account
Different Schemes Accounts:
I. Monthly Profit Deposit Account
II. Education Saving Deposit Account
III. Special Savings (Pension) Scheme Account
IV. Millionaire Scheme Account
V. Monthly Savings Based Term Deposit Account
VI. Lakhopoti Deposit Scheme Account
VII. Double Benefit Deposit Scheme Account
VIII. Foreign Currency Term Deposit Scheme Account
IX. Marriage Savings Scheme Account
B. Remittance:
The bank remits clients’ money both at home and aboard and completes all formalities of
remittance in respect of Bangladeshi living abroad and other customers.
C. Special Banking Services:
In Addition, the bank:
Issues Guarantees,
Provides Safe Deposit Locker service for safe custody
Discharges responsibility as investment trustee
Carries on transactions on client’s behalf
Acts as Banker to the issue on behalf of the companies
Provides consultancy service to the customers
Also provides all other banking services
D. Information Technology Services:
As regards to information technology, SEBL – Dhanmondi Branch has uploaded its
website, which makes easy access in the world of communication technology.
Introduction of Bank Ultimuse software at SEBL – Dhanmondi Branch enables to
provide better service to valued clients.
I. NON-FORMAL SECTOR:
Southeast Bank Limited – Dhanmondi Branch has been successfully operating Family
Empowerment Micro-Credit & Micro-Enterprise program under Non-Formal Banking
Sector since the inception of the Bank in 2002. Meanwhile SEBL has become able to
create job opportunities among significant numbers of Micro-credit & Micro-enterprise
clients under SME(s) financing. Many of those clients manage to establish them as
successful entrepreneurs and graduated them from Micro-Credit to Micro-Enterprise
Program.
2.2 Account Opening Department:
Southeast Bank gives special Importance on savings. The objectives and
principles of the savings policy are:
• To encourage people to save for so if and for the country as a whole.
• To develop a sustained savings habit among the people.
2.2.1 General Instruction While Open An Account In Local Currency:
I.
Stepwise work flow
Any one of the following should properly introduce the account
An existing account holder of the bank.
Officials of the bank not below the officer provided that prospective account
holder know the rank of an assistant officer.
A respectable person of the locality well known to the manager / sub-manager of
the branch concerned.
II. Determine the type of account the customer wishes to open and supply a set of
printed forms / cards required for opening the account, which will normally
include:
Advice of new account (2 copies)
Specimen signature cards (2 copies)
Cheque book requisition slip
Account agreement (where necessary)
Request the customer carefully read the printed form / cards supplied to him or her and
fill-up the same properly according to the type of account wishes to open and get each of
these forms signed at the appropriate place / columns of the forms. The responsible
personnel should obtain signature of the customers on the reserve of the signature card.
Any special instruction with regard to operation of the account should be noted on the
relevant signature card duly authenticated by the A/C holder, obtained A/C number for
the new account, from the opening register.
III. Obtained the signature and A/C number of the introducer on the advice of
new account and signature card at the placement for the purpose and get the
signature properly verified by an authorized official of the bank.
2.2.2 Account Opening / Deposit Mobilization
By deposit mobilization, it means bringing of potential deposit or idle savings of the
people to the banking channel. In a wider sense, it may also mean bringing potential
savings of the people to the banking channel. Deposit is the money kept by the
customers, which are repayable on demand and withdraw able by cheques, drafts, order
or using other acceptable instrument from bank. Bank gives profit to depositor for
keeping money but also cut servicing charge from client. From collecting this deposit
from depositor bank invest this deposit and earn profit from borrower. As more and more
deposits are mobilized by a bank its entire activity enlarges and the bank starts making
higher returns making profitable returns. The total process of deposit mobilization is
showing in the following diagram:
2.2.3 OPENING OF DIFFERENT TYPES OF MUDARABA SAVING
DEPOSIT:
2.2.3.1 SPECIAL SAVINGS (PENSION) SCHEME
Generally people wants save a portion of their income for economic assurance at old
ages. For this reason a unique kind of savings scheme has to be introduced so that a
portion of income can be deposited regularly for a long time span. This enables a person
to get quite a considerable amount after maturity.
Taking the above reasons into account Southeast Bank Ltd, have introduced monthly
installment based " Special Savings (Pension) Scheme".
Under this scheme any person can deposit a fixed amount monthly and after maturity the
depositor will get a handsome amount with increased profit. The depositor may in cash
the total amount at a time or can take as monthly pension until a stipulated time.
Intentions and Goal of the scheme:
1. To create awareness to deposit among average income people.
2. To create a chance for attractive deposit scheme.
3. To create an interest free investment.
2.2.3.2 EDUCATION SAVINGS SCHEME
Education expenditure especially for higher studies is increasing day by day. In many
cases children loses the chance of education as their guardians become unable to adjust
with the expenditure. But if proper financial planning is adopted earlier then it is easier
for the parents to bear the expenses.
For these reasons SEBL has introduced "Education Savings Scheme". This scheme would
enable the parents to Dear child's educational expenses in a planned manner.
2.2.3.3 OPENING OF DIFFERENT TYPES OF CURRENT DEPOSIT
Drawings are allowed from such an account without any restriction within the -ends
available in its credit, no interest is paid on this deposit.
If someone open CD (Current Deposit), he fill up form and enclosed this type of paper
shown as below:
1. For Sole Proprietorship
• Trade License
2. For Partnership
• Trade License
• Partnership Deed
3. For joint stock Company
• A Certificate Copy of the Memorandum and articles of Association
duly attested by the signatory of the amount.
• Certificate of Incorporation
• Certificate of Commencement of Business
• Copy of the Last Balance Sheet
• List with Name Designation and Specimen signature of Person
authorized to operate the account duly certified of the chairman
• Minutes of Board of Directors Meeting Authorizing the opening of
accounts with us duly certified by the chairman / managing Director
• List of Directors with address.
Requirement For Opening Accounts
Bank prescribed account opening form.
Introduction of account to the bank (in all cases except limited company,).
2 (Two) passport size photographs duly attested by introducer of A/C in
Signature card.
Valid trade license (in case of proprietorship partnership & limited company
account).
Cheque requisition form.
Memorandum of articles & Articles of Association, Resolution of the company,
certificate of In-corporation, Registration of RJSC, Letter of Commencement, List
of Directors in case of limited company account.
Prescribed nominee form with photograph of nominee except limited company
account.
Declaration of anti money laundering in the account (as per Bangladesh Bank
prescribed form) in all cases.
Rubber stamp of the firm in case of proprietorship, partnership & limited
company.
Transaction profile in case of all account.
Partnership deed in case of partnership A/C.
2.3 Cheaque Book:
Negotiable Instrument act, 1881, says that cheques, bill of exchange and Promissory'
notes are negotiable instruments (Section 13). The term cheque is defined under section 6
of Negotiable Instrument Act 1881 which states that "a cheque is a bill of exchange
drawn on a specified banker and not expressed to be payable otherwise than on demand."
If we analyze this section: a cheque has the following characteristics:
• A cheque is a bill of exchange.
• A cheque is always drawn upon a banker.
• A cheque is always payable on demand.
There are three parties to a cheque:
a. Drawer i.e., a person who draws the cheque on a bank, such a person is usually a
customer of the bank.
b. Drawee of a cheque i.e., a bank on which a cheque is drawn by the drawer (Customer).
c. Payee i.e., a person to whom the payment is to be made by the bank on whom the
cheque is drawn.
2.4. Remittance:
Remittance means sending money for one place to another place without physical transfer
of cash. If such transfer takes place between the two regions of a country it is, then
'Inland Remittance'. If the transfer involves two sovereign countries it is, then 'Foreign
Remittance'.
Remittance through a bank is done in any of the following manner:
By issuing demand draft,
By issuing mail transfer,
By issuing telegraphic transfer.
2.5 Demand Draft
Of these three types of remittance, issuing of demand draft is the most popular one.
Demand draft is an order, issued by one branch of a bank upon another branch to pay
certain amount to certain person or the order on demand.
A demand draft can also be issued by one bank upon another bank if prior arrangement
exists.
Parties involved:
The Drawer (Issuing Branch),
The Drawee (Paying Branch),
The payee (Beneficiary),
The purchaser (Remitter).
2.6 Issue of T. T.
The basic difference between the other types of remittance and T. T. is that; in other types
of remittance the 'Message of remittance is either sent by ordinary mail or registered mail
but in this type of remittance the message, duly tested coded is sent by urgent Telegram /
Telephone or Telex.'
The message, in other words, the telegraphic order upon the drawer branch, is given
along with test number at the beginning to prove that the same is genuine.
2.7 Pay Order
Pay order is one type of remittance, which is also one of the popular in business circle of
the country.
A payment can be made to one person to another person through pay order. Which is
made authenticated & assured than the cheque. Moreover, it is more safe for payment
rather carrying the cash from one place to another place.
2.8 Clearing (Department)
In the clearing department the work is to clear and pay order through Bangladesh Bank
that is submitted for cash collection. Everyday clearinghouse takes a place in Bangladesh
Bank, once in the morning called house (1st house) another in the evening called return
house (2nd house). In the house all the banks representative sit together and change their
money receive instrument of the particular banks to clear and transfer the money to their
particular accounts. There are two types of clearing:
Inward Clearing: The cheques or instruments of Southeast Bank Limited that are
submitted to another Bank for collections are called Inward clearing.
Outward Clearing: The cheques of other banks that are submitted to the Southeast Bank
Limited, for collection are called outward clearing.
Clearing house is a place that provides an arrangement by which various representative of
each clearing banks assemble there act business day to exchange local cheques, drafts,
bill of exchange etc. which are received by them for collection from their customers. Its
object is to settle balances between the bank of the city, town or a region with minimum
of inconvenience and labor. Before the establishment of clearinghouse, the bank had to
send their bill of clerks to other banks for getting cash against those cheques. Obviously
this was a laborious and time consuming process and waste full procedure.
A. INWARD CLEARING BILLS:
It refers the instrument drawn on Southeast Bank Limited Foreign Exchange Branch
Limited, received from other banks in the clearing house by their representative(s).
Settlement process is shown under below-
SETTLEMENT PROCESS OF INWARD CLEARING BILLS
Bills collected from other Banks through clearing house By Main Branch Drawn on SIBL Forex. Br.
BB debits the A/C of SIBL Maintained with BB.
Main Branch sendsThe bills to SIBL
Forex. Branch with anIBDA
SEBL Forex. Branch debits customer's respective A/C
• ACCOUNTING ENTRY PASSED BY TINS BRANCH
Respective A/C -----------------------------------------------------Dr.General A/C (Main Br.)----------------------------------------Cr.
If cheques are returned, Southeast Bank Ltd. Forex. Branch passes a IBDA to Main Branch. Then the necessary accounting entries will be-
General A/C (Main Br.)-------------------------------------Dr.Respective A/C -----------------------------------------Cr.
B. OUTWARD CLEARING BILLS
It refers the instruments drawn on the other banks received by Southeast Bank Ltd. Forex. Branch. They are of three kinds as follows –
a) Cheques drawn on another branch of SIBL. The settlement process -
b) Cheques drawn on another Bank which is situated within clearing house area.
2.9 Cash (Department)
The cash department is one of the most important parts of General Banking Department.
So many banking activities are conducted by the cash department, which relate to cash or
valuables. So, it is called a nerve center of the bank. The officers / staffs engaged in this
Cheques are directly sent to the respective branch
OBC received along the instrument by the respective
branch
Entry passed in OBC register of that branch
When IBCA comes, customer’s account is credited
IBCA is sent from that branch to this branch
Forex. Branch collects cheques
IBDA along with bills are sent to Forex. Branch
These bills are sent to clearing house from Forex. Br. through main branch
Depositor’s account is credited with SIBL Forex. Branch.
department merely deal with cash but they also take important role rendering the better
customer services. So cash officers should have well experienced and well behaved
towards the valued customers by offering prompt services in receipt and payment of cash
with always presenting smiling face. Service should be the motto of all bankers.
Briefly summarize the functions of the Cash Department as under:
2.9.1 CONTROL PROCEDURES OF CASH COUNTER
Opening: Before the bank opens for business, each morning, each payment cash
officer has to obtain his / her cash box directly from the vault with the
acknowledge receipt in respective register.
Cash Drawers: Cashiers / Officers working in each counter and maintain all their
cash inside their respective drawers -as soon as received from the vault. During
office hours drawing cash to be kept under the sole responsibility and single
custody of the concerned officers with lock and key arrangement and payment
should be made from the cash over the counter.
Additional cash obtained from the Cash In-Charge during the day: Whenever
additional working supply of cash is required by the payment officer in counter
that has to be obtained from the chief Cashier / Cash In-Charge by signing cash
transfer / respective register whenever cash surplus is found to be deposited to the
Chief Cashier / Cash In-Charge with acknowledge receipt in case of receipt
counter.
Cash returned to Chief Cashier / Cash In-Charge at the end of the business
hour: Branch or Bangladesh at the end of the business hours both payment
(Surplus Cash) and receipt cash to be handed over to the cash In-Charge through
obtaining acknowledge receipt or having signed in the cashier receipt books if
balanced with computer scroll.
Functions of Chief Cashier / Cash In-Charge: The Chief Cashier / Cash In-
Charge should always look after the over all functions of Cash Department as
Cash Manager. He will supervise the Cashier / Cash Officers working in the
counters whether the counter insurance limit has exceeded, if so, the excess cash
to be shifted in Value / Safe immediately.
2.9.2 Remittance of Cash/Vault maintenance
Branches have regular vault / safe limit holding of cash in UK-II custody as advised /
approved by Head Office with the insurance cover. In cash of surplus cash branch has to
remit to Principal Bank it is called only and renitence. On the other hand, whenever cash
found shortage do to smooth withdrawal of cash by the clients the remittance is made
from the principal branch / Bangladesh Bank is called inward remittance.
3.1. Background of South East Bank Limited:
Southeast bank is a schedule commercial bank in the private sector established under the
under the ambit of a bank company act,1991 and incorporated as a public limited
company under company act,1994 on march 12,1995.It started commercial banking
operation on may 25,1995. during the short span of time the has succeeded in positioning
itself as a progressive and dynamic financial institution in the country.
Southeast bank is one of the few banks permitted by the Bangladesh Bank in the early
90’s and fortunate to remain immune from the bad loan culture. Its performance is being
reflected in its good loan being the 3.5 percent as against the national average of 33
percent in the private banking sector.
Southeast bank has been licensed by the government of the Bangladesh as a schedule
commercial bank in the private sector in pursuance of the policy of liberalization of
banking and financial services and facilitates in Bangladesh. within a period of 14 years
of its operation Southeast bank achieved remarkable successfully meeting capital
adequacy requirement of Bangladesh Bank.
As evident from the financial statement for the last 10 years, it has been growing rapidly
as one of the leaders of the new generation banks in the private sector in term of business
and profitability.
The Bank philosophy – “A Bank with Vision” has been preciously the essence of the
legend of banks success.
It has been growing faster as one of the leaders of the new generation banks in the private
sector in respect of business and profitability as it is evident from the financial statement
for the last 4 years.
3.2. Vision of the bank:
To stand out as a pioneer banking institution in Bangladesh and contribute significantly
to the national economy.
3.3. Mission of the bank:
“Would become the most earning, focused for equitable growth based on diversified
deployment of resources, and nevertheless would remain healthy and gainfully profitable
bank”. Others are:
Fast and accurate customer service.
Steady return on shareholders equity.
Attract and retain quality human resource.
Innovative banking at a competitive price.
Balanced growth strategy.
High standard business ethics.
3.4. Strategy
SEBL has executed a consistent strategy over the past decade by focusing on highly
scalable, fee based security servicing. The bank is following low cost saving strategy by
increasing their selling. their strategies are as follows:
1. Partnership
2. on-line banking
3. new service offering
4. integration between service channels
5. market focus
6. customer based expand and diversity.
A perfect organization must be supported with its structure. SEBL consists of Head
office, principal branch and other branches throughout the country. The management
style mostly resembles bureaucratic and authoritarian style. It imposes strict control and
monitor over the activities of its employees. Head office is considered as a cost center in
a whole and branch is known as investment and profit center. branch operates under the
control of head office. All business functional activities are supervised by head office and
the branches are executing the decisions made by the Head office.
3.5. South East Bank Limited (Dhanmondi Branch) at a
glance:
Southeast Bank Ltd. Dhanmondi Branch is one of the profitable Branch for the bank. It is
opened on 18th November,1998. this branch provides a great amount of profit per year.
The name of the HOB is Abdul Hamid Miah (Executive vice President). A huge number
of transactions are held per day. The total number of current, savings & STD accounts are
3608. Total deposit in this Branch is Tk.5,156,631 up to December,2009. The total
amount of invested amount is Tk.3,754,609 up to December,2009. There is foreign
exchange division in this Branch which contributes a lot to the income of this branch. The
amount of profit of this branch is increasing day by day. The increment of the profit of
this branch can be shown through the graph.
Net Profit
(Tk. in
hundred)
November December January
7903 21810 10808
Nov Dec Jan
0
5000
10000
15000
20000
25000
7903
21810
10808Net profit(Tk. in"000")
Table1: Net profit earned by Dhanmondi Branch for last 3 months of the year2009.
This graph shows that Dhanmondi branch contributes a lot to the total profit of the bank
Assistant Vice President
Senior Principal Officer
Principal Officer
Senior Officer
Officer
Probationary Officer
Managemen trainee Officer
Trainee Cash Officer
Executive Vice President
3.6. South East Bank Limited (Dhanmondi Branch) at a
glance:
The management hierarchy of southeast Bank Ltd. Dhanmondi Branch is given below-
3.7. Corporate Profile
Name of the company: South East Bank Limited
Chairman: Alamgir kabir,FCA
Vice chairman: Ragib Ali
Managing Director(CC): M.A. Muhith
Company secretry: Muhammad Shahjahan
Legal status: Public Limited Company
Date of Incorporation: March12,1995
Registered Office: Eunoos Trade Center, 52-53,Dilkusha
C/A,Dhaka.
Authorized Capitral: TK.3500 million
Paid up capital: TK.2852.20 million
Reserve: TK.7657.01 million(31/12/2008)
Year of IPO: 1999
Stock Exchange Listing: April 10,2000(DSE)&April 24,2000(CSE)
Phone: 957115,7160866,7173793,955466&9550081
Fax: 9550086,9550093,9563102
Swift: SEBDBDDHXXX
E-Mail [email protected]
Website: www.sebankbd.com
3.8. Board of Directors:
Chairman Executive CommitteeAlamgir Kabir, FCA
Vice Chairmain ChairmanRagib Ali Alamgir Kabir, FCA
Directors MembersM. A. Kashem Ragib AliAzim Uddin Ahmed M. A. KashemJusna Ara Kashem Azim Uddin AhmedDuluma Ahmed Tahnoun A. HarunBangla Capital Limited represented by Dr. Zaidi SattarTahnoun A. Harun M. A. MuhithSyed Shahid AliSirat MoniraKarnafuli Tea Co. Limited represented by
Abdul Hye Audit CommitteDr. Zaidi SattarA. H. M. Moazzem Hossain Chairman
Azim Uddin Ahmed
Managing Director Members(Current Charge) M. A. KashemM. A. Muhith Dr. Zaidi Sattar
Coompany SecretaryMuhammad Shahjahan
Shariah Council
ChairmanProfessor Moulana Mohammad Salah- Uddin
3.9. Special features of the bank:
It has been performing conventional commercial banking activity and striving to
introduce Islamic Banking functions.
It is the pioneer in introducing and launching different customer friendly deposit
schemes to tap the savings of the people for channeling the same to the productive
sectors of the economy.
For uplifting the standard of living of the limited income group of the population
the bank has introduced Consumer Credit Schemes by providing financial
assistance in the form of loan to the consumers for procuring household durables,
which have had encouraging responses.
The Bank is committed to continuous research and development so as to keep
pace with modern banking.
The operations of the bank are fully computerized so as to ensure quick, prompt
flawless and services to the customers.
The Bank has introduced camera monitor system (CCTV) to strength the security
services inside the Bank premises.
3.10. SEBL PERFORMANCE AT A GLANCE:
Particulars 2008 2007 2006 2005 2004
Authorised Capital 3,500.00 3,500.00 3,500.00 2,500.00 2,500.00
Paid-up Capital 2,852.20 2,281.76 2,112.74 1,056.37 880.31
Reserve Fund 4,804.81 4,186.60 2,828.18 1,180.47 769.13
Equity Fund
(Capital and
Reserve)
7,657.01 6,468.36 4,940.92 2,236.84 1,649.44
Deposit 68,714.67 55,474.05 46,056.18 38,258.15 27,930.84
Advance 60,281.26 48,164.60 41,147.28 32,551.09 22,001.70
Investment 12,299.61 8,462.86 6,265.55 5,113.14 3190.15
Import Business 58,019.77 38,470.34 35,125.12 29,079.30 20,229.62
Export Business 42,178.60 28,771.36 25,874.61 13,511.10 6,761.93
Guarantee Business 15,078.99 9,008.32 8,656.80 7,975.00 4,717.82
Total Income 10,250.13 8,670.47 6,766.11 4,689.55 3,043.49
Total Expenditure 7,237.55 5,754.27 4,703.45 3,216.11 2,234.83
Operating Profit 3,012.58 2,916.20 2,062.66 1,473.44 808.66
Net Profit afterTax
and Provision 887.24 1,222.97 909.88 374.20 294.69
Fixed Assets 2,685.56 1,708.11 1,300.39 790.62 313.73
Total Assets 81,181.53 64,370.69 54,824.83 43,294.81 33,744.96
Earning per Share
(Taka)31.11 53.60 67.16 42.51 43.52
Dividend Cash (%) 15%- 15%- 20%- - -
Bonus Shares 20% (5:1) 25% (4:1) 8% (12.5:1) 20% (5:1) 30% (10:3)
Return on Equity
(ROE)12.06% 19.90% 19.62% 17.64% 17.87%
Return on Assets
(ROA)1.09% 1.90% 1.66% 0.86% 1.00%
Non performing
Loans as % of
Total Loans
4.12% 3.77% 3.97% 4.37% 4.96%
Capital Adequacy
Ratio11.12% 13.02% 11.05% 6.90% 7.83%
Number of
Correspondent
Banks
145 140 138 130 122
Number of Foreign
Correspondents587 598 536 507 463
Number
of Shareholders12,536 9,636 8,855 5750 4704
Number of
Employees 1231 1116 998 913 835
Number of
Branches 46 38 31 31 27
Source of the table: Annual Report 2008-2009.
3.11. Business activities:
SEBL has been able to achieve appreciable progress in all areas of its operations during
the year 2007 and earned a pre-taxed profit of Tk.1222.97 million registering a growth of
38% over the profit of the previous year. We attribute the success to the dynamism
displayed by all those who worked hard for the growth of this organization.
4.0. Internship position & duties
During my internship I have worked in following area:
General Banking Division (15 Days)
Accounts Division (15 Days)
Foreign exchange (60 Days)
4.1. Duties in general Banking division:
In general banking I have worked in account opening section. So that I have talked with
clients about how to open or what are the requirements for open different types of
account such as :
Deposit per scheme(DPS)
Saving account (SB)
Current Account (CD)
To open DPS account, customers first needed to fill up a DPS application form. I usually
help them to fill up the form.
At the same time opened this kind of account and posted them in the banks internal server
named “Bank Ultimus”.
4.2. Duties in accounts division:
Accounts division keep the records of all the transactions performed by the branch. All
kinds of statements of the bank is recorded here. In Dhanmondi branch clearing
department is attached with accounts division. In accounts division I performed
Completing audit trial.
Monthly statement positioning
Thursday positioning
Voucher checking
IBCA positioning
IBDA poisoning
OBC registrar maintaining
IBC registrar maintaining
Matching clean cash
Online forwarding transaction to inter branches
4.3. Duties in foreign exchange division:
In foreign exchange division I was spent 45 days. In this division I have done different
types of task which is more essential for banking operation and this is done every day
basis. Those are given below:
New Back to Back L/C opening register book maintaining.
Voucher making and issuing.
Acceptance of bill while bill received.
Due date register maintaining
Performance register maintain.
FDBC & FDBP register book maintaining.
Filling up IMP & EXP form which is needed to give information the BB about
Import and Export.
LC advising issuing and register book maintaining.
Amendment register book maintaining
BLC register maintaining
L/C opening register book maintaining.
Stamping of import L/C files.
Helping to prepare lodgment voucher and charges realization sheet.
Preparing a Foreign Documents Endorsement.
Foreign Exchange Division
5.0. Foreign Exchange Operation:
Every country has certain natural advantages and disadvantages in producing certain
commodities while they have some natural disadvantages as well as in other areas. As a
result we find that some countries need to import certain commodities while other need to
export their surpluses. Foreign trade brings the fruits of the earth to the homes of the
humblest among the countries. This transactions are on the basis upon which
international trade is made. As one currency is involved in foreign trade, it gives rise to
exchange of currencies which is known as foreign exchange. In exercise of the powers
conferred by sec-3 of the foreign exchange regulation-1947, Bangladesh bank issues
license to scheduled banks to deal with foreign exchange.
Foreign exchange operation is divided into three sections.
1. Import
2. Export
3. Foreign Remittance
5. 1.1. Foreign exchange accounts:
Nostro account: It means “Our account with you”. It is a foreign currency
account bank maintained by its foreign correspondents abroad. For example, US
dollar account of Southeast Bank Ltd. Is maintained with Citibank N.A, New
York, USA, is a nostro account of Southeast Bank Ltd. i.e. from the point of view
of Southeast Bank Ltd., it is their Nostro account.
Vostro account: It means “your account with us”. It is a foreign currency account
bank maintained by its foreign correspondents in a bank of a particular country is
known as Vostro account. For example, State Bank of Indias Taka accont is
maintained with Southeast Bank Ltd. Is the Vostro account . from the point of
view of Southeast Bank Ltd., it is a Vostro account held for State Bank of India.
Loro account: It means “their account with you”. Account maintained by third
party is known as Loro account. Suppose Southeast Bank Ltd. Is maintained an
account with Citi Bank N.A and at the same time Dhaka Bank is also maintaining
an account with Citi bank N.A. . from the point of view of Southeast Bank Ltd.,
Dhaka banks account with Citi N.A is the Loro account.
5. 1. 2. Foreign exchange buying rates:
The rates at which the banks are willing to purchase foreign currencies are said to be
buying rates, i.e. at these rates foreign currencies are converted into home currency. The
various types of buying rates are:
T.T (Clean): The T.T clean buying rates is the basic rate of exchange
from which other types of buying rates are computed, since in case of
T.T.s fund are paid over at the other end on the same day involving no loss
of interest, but may attract only small charges for Telex.
T.T (Documentary): This rate is applicable in which the handling of
document is involved. Bank recovers handling charges on the transaction.
OD (Sight): This rate is applied for transaction resulting in the purchase or
negotiating of export bills. OD (Sight) buying rates vary from TT buying
rates to the extent of loss of interest for the period the bank remains out of
funds i.e from the time the bank pays out cash at home.
5. 1.3. Foreign Currency Exchange Rates:
Indicative Rates to customers:FCY in Terms of Bangladesh Taka
Spot Selling Spot Buying
TT & OD B.C. Currency TT Clean
69.5700 69.6000 USD 68.6000
Import Section
5.2. Import:
Import means purchase of goods or services from abroad. Normally consumers, firms and
government organization import foreign goods or services to meet their necessities. So, in
brief, we can say that import is the flow goods and services purchased by economic agent
staying in the country from economic agent staying abroad.
5.2.1. Regulation of Import:
Import of goods into Bangladesh is regulated by the ministry of commerce in terms of the
Import and Export (control) Act, 1950 with Import policy order issued periodically and
public notices issued from time to time by the office of the Chief controller Import Policy
(1997-2002), which has come into effect on June14, 1998. And the import policy directs
certain Import procedure, which administers the whole activity.
5.2.2. Import procedures followed by SEBL:
As an authorized dealer, Southeast bank, dhanmondi branch is always committed to
facilitate import of different goods into Bangladesh from the foreign countries. Import
section, which is under Foreign Exchange Department of the branch, is assigned to
perform this job. And to serve its clients demand to Import goods , it always maintains
required formalities that are collectively termed as the Import procedure.
1. At first, the Importer must obtain Import registration certificate (IRC) from the
CCI & E submitting the following papers:
Up to date trade license.
Nationality and Asset Certificate
Income tax certificate
In case of company, Memorandum & Articles of Association and
certificate of Incorporation.
Bank solvency certificate
Required amount of registration fee
2. Then the Importer has to contact with the seller outside the country to obtain the
Proforma Invoice. Usually an indenter, local agent of the seller or foreign agent of
the buyer makes the communication. Other sources are:
Trade Fair
Chamber of Commerce
Foreign Missions in Bangladesh
Journals etc
3. When the Importer accepts the Proforma Invoice, he/she makes a
purchase contract detailing the terms and conditions of the Import
4. After making the purchase contract, importer settles the means of payment with
the seller. An Import procedure differs with different means of payment. The
possible mean are in cash in advance, open account, collection method and
Documentary letter of Credit. In most cases Documentary letter of Credit in our
country makes the import payment. Purchase contract contains following which
payment procedure has to be applied.
5.2.3. Different means of payment:
a. Cash in advance: Importer pays full, partial or progressive payment by a
foreign DD, MT or TT. After receiving payment, exporter will send the
goods and the transport receipt to the importer.
b. Open account: Exporters ships the goods and sends transport receipts to the
Importer. Importer will take the delivery of the goods makes payment by
foreign DD, MT or TT at some specified date.
c. Collection method: Collection method are either clean or documentary
collection. Again documentary collection Document against Payment (D/P)
or Document against Acceptance (D/A). the collection procedure is that the
exporter ships the good and draws a draft/bill on the buyer. The exporter
submits draft/bill to the remitting bank for collection and the bank
acknowledges this. Then the remitting bank sends the draft/bill and a
collection instruction letter to the collecting bank. The title of goods is
released to the importer upon full payment or acceptance of the bill/draft.
d. Letter of Credit (L/C): The method by which a commercial bank
undertakes to make payment on behalf of the importer to the Exporter is
known as Letter of Credit (L/C). on the other hand it is a credit contract
whereby, the buyers bank is committed to place an agreed amount of money
at the sellers disposal under some agreed conditions. Since the agreed
conditions include amongst other things, the presentation of some specified
documents. The letter of credit is called documentary.
An Importer of a country requesters his banks to open a Credit in foreign
currency in favor of the exporter at a bank in the letters country. The Letter
of Credit (L/C) is issued against payment of the amount by the by the
Importer. The Letter of Credit (L/C) authorized the exporter
5.2.4. Forms of Letter of Credit:
Letter of credit is basically classified in to two:
Revocable L/C
Irrevocable L/C
Revocable L/C: if any L/C can be amendment or changed of any clause or cancelled
by consent of the exporter and importer, it is known as revocable L/C.
Irrevocable L/C: if any L/C can not be amendment or changed of any clause without
any consent of all concern parties –importer, exporter, issuing bank, and confirming
bank is known as irrevocable L/C.
5.2.5. The banks involved in L/C:
The Issuing Bank(Opening Bank): The opening bank is one that issues the
letter of credit at the request of the buyer. By issuing a letter of credit it takes
upon itself the liability to pay the bills drawn under the credit.
The Advising Bank: The letter of credit is transmitted to the beneficiary
through a bank in the letters country. The bank may be a branch or a
correspondent of the opening bank. The credit is sometimes advised to this bank
by a cable and then transmitted by it to the beneficiary on own its specified form
The Negotiating Bank: This the bank that honored the documents presented as
per letter of credit. The negotiating bank has to be careful scrutinize that the
draft and the documents attached there to are in conformity with the condition
laid down in the letter of credit. Any discrepancies may result in refused in the
part of the opening bank to honor the instrument is such an eventually the
negotiating bank has to look back to the beneficiary for refund of the amount
paid to the beneficiary.
The Reimbursing Bank: It is the bank in which the issuing bank maintains a
Nostro account and this will make the payment to the beneficiary.
5.2.6. Documents Used in operation of L/C:
Pro forma Invoice: Performa Invoice is the sale contract between seller and
buyer in import-exporter business. The sale contract, which is direct
correspondence between importer and exporter, is called Performa Invoice. This
is no intermediary between them. On the other hand, there may be an agent of
exporter in importer’s country. In this regard, if the sale contract is occurred
between the indent of exporter and importer then it is called indent.
Import Registration Certificate(IRC): The importer collects from the C.C.I &
E office by submitting required documents and payment of required fees.
Bill of exchange: The Bill of exchange is a negotiable instrument through
which payment is effected in the trade deals. It is an unconditional order or
writing , addressed the buyer to seller by which the seller can obtain payment
from the buyer for the invoiced value of the goods.
Bill of Lading: It is the list of goods being shipped which the captain gives to
the person sending the goods to show that the goods have been loaded.
Airway Bill: Sometimes goods are transported through small bulk or those are
perishable in nature then the mode of transport other that shipping may be
resorted to far carriage of the goods, Airway Bill receipt take place of loading
depending on the nature of the carrier.
Commercial Invoice: It is the sellers bill for the merchandise. It contains a
description of goods, the price per unit, total value of the goods, packing
specifications etc. the seller under his own form and signature in the name of the
buyer issues the invoice.
Certificate of Origin: This is the certificate issued by a recognized authority.
In the exporting country certifying the country of origin of the goods. It is
usually made by the chamber of commerce.
Packing list: The exporter prepares an accurate packing list showing item by
item. The content of the consignment to enable the receiver of the shipment to
check the contents of the goods and marks of the packages, quantity, weight etc.
of the goods exported.
Bill of Entry: It is a document, which contains the particulars of the imported
goods as well as the amount of customer duty payable.
Clean Report of Findings: The certificate is provided by the Pre shipment
Inspection concerns. The entire world has been brought under the three
supervision of the three pre shipment inspection concerns based on different
territory.
5.2.7. Procedure of opening the letter of credit and Payment:
NBL identify whether the goods (will be imported) are in the import list, which is selected by the government of Bangladesh.
Justify the clients credit worthiness by collecting social status- information form after business or from after bank credit report.
Judge whether the importers goods bear good quality and more is a market of goods.
Secures the documents efficiently.
If every thing is OK, then the client proposes to fill up the prescribed form,
The sum percent of total amount of L/C should be deposited and get admonition form.
Then it is registered in L/C register book.
Three copies of L/C are prepared.
Two out of three is sent to advising bank and rest are sent to reimbursing bank with order to pay claim to the negotiating bank.
Advising bank sent one copy with advice to ship to the importer.
Exporter submits necessary documents to the negotiating bank and receipts his/her claim.
Negotiating bank sent two same letter of payment to the issuing bank and importer. Simultaneously the negotiating banks demand his/her claim from reimbursing bank.
5.2.7.1. The importer submit the following documents with the application for
opening the L/C:
Tax Identification Number (TIN)
Valid trade license
Import registration Certificate (IRC)
5.2.7.2. The bank will provide the following documents before opening the L/C:
LCA form
IMP form
Necessary charger documents for documents
5.2.7.3. L/C Authorization Form (L/CAF):
The letter of credit authorization form is the form prescribed for the authorization of the
Letter of Credit against importer and used in lieu of import license. The authorized
dealers are empowered to issue LCA Form to the importer as per basis of licensing of the
import policy order in force to allow import into Bangladesh. In foreign exchange is
intendment to be bought from Bangladesh Bank’s against an LCAF. It has to be
registered with Bangladesh bank registration unit located in the concerned area office of
the CCI&E. The LCAF form contains the followings-
o Name and address of the importer
o IRC no. and year of renewal
o Amont of L/C applied for
o Description of items to be imported
o HS Code no.
o Signature of the importer with seal
o List of goods to be imported goods.
Accounting Treatment:
APPLICANT Appollo
Ispat
Complex
LTD.
134410010020FCY AMOUNT
USD 45,600.00
L/C TypeAt Sight/ Defer Payment @ 69.60
L/C DATE 14/01/2010 TAKA 3,173,760
Particulars A/C No DEBIT TkCREDIT Tk
Margin 5.00%9030315040
2 159,000
Commission 0.40%9040201000
3 12,695
Vat 15.00%9030637032
9 1,904
ADD Conf.com 0.00%9040201000
3
Courier/Post9040207000
9
Telex/Swift9040207006
2 3,000
PSI Handing Charge9040207000
9
Handing Charge9040207000
9
Stamp In Hand9010721050
2 150
L/C Application Set9040207000
9 200
Vat on Swift,PSI,Handing Charge
90306370329 503
APPLICANT ACCOUNT1110000994
7 177,452TOTAL 177,452 177,452
LiabilityParticulars A/C No DEBIT Tk CREDIT Tk
Customers Liability 90109110107 3,174,000
Bankers Liability 90309110106 3,174,000
5.2.7.4. The L/C Confirming Process:
Southeast Bank
Dhanmondi Br.
(L/C issuing
Bank)
Issue L/C & request to add
confirm
HSBC (L/C
confirmrng Bank)
USA Exporter
(L/C Beneficiary)
5.2.7.5. Forwarding Documentary credit by confirming bank:
There are usually two banks involved in a documentary credit operation. The issuing
bank and the 2nd bank, the advising bank is usually a bank in the sellers country. The
issuing bank asks another bank to advise or confirm the credit.
If the advising bank is confirming the credit, this mention that the confirming bank,
regardless of another consideration, must pay accept or negotiate without recourse to
seller. Then bank is also called a confirming bank.
5.2.7.6. Submission of necessary documents by exporter to the Negotiating
Bank:
As soon as the seller or exporter receives the credit and is satisfied that he can meet its
terms and conditions, he is an position to load the goods and dispatch them. The seller
then sends the documents evidencing the shipment to the bank.
Generally the documents are:
Bill of Exchange
Commercial Invoice
Bill of Lading/ Air way bill/ Truck Receipt
Certificate of Origin
Packing List
Clean Report of Findings (CRF)
Insurance Cover Note
Pre-shipment certificate
5.2.7.7. Lodgment and Retirement of shipping documents:
After scrutinizing the import negotiating department, if no discrepancies is found then it
is treated to be accepted after the end of seven banking day following the day of receipt
of the document under “Article 1(b) of UCPDC-500”. If any discrepancy found then the
banker inform it to the importer that whether he accepts the bills with discrepancies or
not. If the importer does not accept, the banker informs it to the negotiating bank within
seven banking days from the date of receipt of the documents, otherwise it is treated to be
accepted and the opening bank must bound to pay against the bill and no complain
against the bill will be accepted more than 4 banking days following the date of receipt of
the documents.
The local office oases the following vouchers after negotiation:
Accounting treatment:
BLC (Payment against document) A/C Dr.
H.O. International A/C Cr.
Reverse Entry is given:
Bankers liability A/C Dr.
Customers liability A/C Cr.
Then shipping document then stamped with PAD number and entered in the PAD
register. As soon as the above formalities are completed, the importer is served with PAD
bill information for retirement of concerned import documents.
5.2.8. Import Financing:
Import financing can be divided into two types:
Pre shipment finance
Post shipment finance
PRE SHIPMENT FINANCE:
This types of finance refers to the facilities extended to the importers in the form of Letter
of Credit.
Actually Banks do not invest any fund at this stage of financing. But from the definitions
of Letter of Credit we understand that by Opening L/C on behalf of the customer, Bank
undertakes to make payments to the supplier of goods against the L/C subject to
submission of certain documents. Normally bank allows the customer to open L/C
against certain margin i.e, without having full coverage of the L/C value. As such Letter
of credit is a sort of direct finance of the customer.
Before allowing Pre shipment finance, a bank normally considers:
Credit worthiness
Import performance
Import Regulation
Marketability of goods.
POST SHIPMENT FINANCE:
This types of finance refers to the credit facility refers to the credit facility refers to the
importer after shipment of goods. Post shipment finance is allowed in the following
forms:
Payment against Documents (PAD)
Loan against Imported Merchandise (LIM)
Loan against Trust Receipt (LTR)
5.2.8.1. PAD:
The bank who established Letter of Credit is bound to honor the suppliers claim when
these are presented in strict conformity to the terms and conditions of the Letter of Credit.
Upon receipt of documents, the duty of opening bank is to carefully examine the same. If
everything is all right, bank arranges payment against the bills to the debit of PAD A/C.
In most of the cases documents are received with comments that Negotiating Bank has
already claimed reimbursement if the bill is drawn in restrict conformity to the L/C. In
that situation Opening Bank responds the debit entry of their Nostro account to the Debit
of PAD A/C.
Soon after lodgment of documents in, PAD, opening bank inform the customer regarding
receipt of the bill and request them to retire the documents by depositing the value of the
documents with interest of any.
5.2.8.2. LIM:
Loan again Imported Merchandise (LIM) is a facility provided by the bank provided by
the bank to the importer who are in short in fund to retire the import bills and thus to
clear the goods from the authority.
On the arrival of goods and lodgment of import documents, importer may request the
bank of a clearance of goods from the port(custom) and keep the same to bank
warehouse. proper sanction from the competent authority is to be obtained before
clearance of consignment.
For giving this types of loan, officer makes loan proposal and sends it to H/O for
approval. After getting approval from H/O, bank grants loan in the form of either LTR or
LIM.
ACCOUNTING TREATMENT:
LIM/LTR creation:
LIM/LIR (Importer) A/C Dr.
BLC A/C Cr.
After payment of the loan or delivery of goods:
Party;s A/C Dr.
LIM/LIR A/C
Interest A/C
Cr.
Cr.
Total Import Business of last three months as a chart in Dhanmondi
Branch :
Month November December January
Tk. 3448891 3774590 322742
Nov Dec Jan0
1000000
2000000
3000000
40000003448891
3774590
322742
TK.
Table-1: Performance of Import Business of last Consecutive 3 Months.
Import Business of last five years as a graph of Southeast bank :
Year 2008 2007 2006 2005 2004
Tk. 58019.77 38470.34 35125.12 29079.3 20229.62
2008 2007 2006 2005 2004
010000200003000040000500006000070000
58019.77
38470.34 35125.1229079.3
20229.62
TK.(in million)
Table-2: Performance of Import Business of last 5 years of Southeast bank.
Here we clearly see that both graph indicates the increment of Import business of
Southeast bank ltd. along with Dhanmondi Branch.
Export Section
5.3. Export:
Export is the process of selling goods and services to the to other countries. Export L/C
operation is just reverse of the import L/C operation. For exporting goods by the local
exporter, bank may act as advising Banks and collecting bank (negotiating bank) for the
exporter.
5.3.1. Regulation of Import:
Export policies formulated by the Ministry of commerce , GOV provide the overall
guideline and incentives for promotion of exports in Bangladesh. Export policies also set
out commodity-wise annual target. It has been decided to formulate these policies to
cover a five year period to make them contemporaneous with five year plans and to
provide the policy regime. The export oriented private sector, through their representative
bodies and chamber are consulted in the formulation of export policies
and are also represented in the various export promotion bodies set up by the
government.
5.3.3. Export procedures:
The import and export trade in our country are regulated by the Import and
Export(Control) Act,1950. under the export policy of Bangladesh the exporter has to get
valid export registration Certificate (ERC) from chief controller of Import &
Export(CCI&E). the ERC is required to renew every year. The ERC number is to
incorporate on EXP forms and other papers connected with exporters.
5.3.3.1. Registration of Exports:
For obtaining Export Registration certificate(ERC), intending Bangladeshi exporters are
required to apply to the controller/ assistant controller of Imports and Exports in the
prescribed form along with the following documents:
Nationality and Asset Certificate
Memorandum and Article of Association and Certificate of Incorporation in case
of limited company
Bank certificates
Income tax Certificates
Trade License etc.
5.3.3.2. Securing the order:
After getting ERC certificate the exporter may proceed to secure the export order. He can
do this by contacting the buyers directly or through agent.
In this purpose the exporter may get help from:
License officer
Buyer’s local agent
Export promotion organization
Bangladesh Mission Abroad
Chamber of Commerce
Trade fair etc.
5.3.3.3. Processing and opening of Back to back L/C:
Back to Back L/C is set in such that it can be paid out of export proceeds.
It is simply issued to the clients against an import L/C. Back to Back mechanism involves
two separate L/C. One is master Export L/C and another is Back to Back L/C. on the
strength of Master Export L/C bank issues back to back L/C. Back to Back L/C is
commonly known as Buying L/C, on the country Master Export L/C is known as selling
L/C.
5.3.3.3.1. Features of Back to Back L/C:
An Import L/C to procure goods /raw materials for further processing.
It is opened based on Export L/C.
It is a kind of Export Finance.
No margin is required to open Back to Back L/C.
Application is registered with CCI&E.
Applicant has bonded warehouse license.
L/C value shall not exceed the admissible percentage of net Free on Board (FOB)
value of relative Master L/C.
Period will be up to 180 days.
The import L/C is opened for 75% of the value of Export L/C.
Here L/C issued against the lien of export L/C.
Arrangements re such that export L/C matures first then out of this export profit,
import L/C is paid out.
5.3.3.4. Preparation of export Documents:
Bill of Exchange or Drafts
Commercial Invoice
Bill of lading
Inspection Certificate
Packing List
Export license
Shipment Advice
Certificate of origin
Weight Certificate
Certificate of Analysis
Quality Certificate
EXP Form
Documents received through courier.
5.3.3.5. Procuring the materials:
After making the deal and on having the L/C opened in his favor, the next step for the
exporter is to set about the task of procuring or manufacturing the contracted
merchandise to shipment of goods.
5.3.3.6. Shipment of goods:
Then the exporter should take the preparation for export arrangement for delivery of
goods as per L/C and inciters, prepare and submit shipping documents for
payment/Acceptance/negotiation in due time.
Documents for shipment:
EXP form
ERC(valid)
L/C copy
Customer duty Certificate
Shipping instruction
Transport documents
Insurance Documents
Invoice
Other Documents
Bill of Exchange
Certificate of Origin
Inspection Certificate.
Then the documents are submitted to the bank for Negotiation.
5.3.4. Export Financing:
Financing export constitutes an important part of a bank’s activities. Exporters require
financials services at four different stages of their export operation. During each of these
phases exporters need different types of financial assistance depending on the nature of
the export contract.
Export financing can be divided into two types:
Pre shipment finance
Post shipment finance
PRE SHIPMENT FINANCE:
This types of finance refers to the credit facility extended to the exporter prior to the
shipment of goods for export. Pre shipment finance is allowed in the following forms:
For procurement of Raw materials
For processing the raw materials
For packing of finished goods
For payment of transportation cost.
Before allowing Pre shipment finance, a bank normally considers:
Credit worthiness
Import performance
Import Regulation
Marketability of goods.
Pre shipment finance can be allowed in the following forms:
Export cash credit
Back to Back Letter of Credit
Export credit against Trust receipt
Packing Credit
Back to Back Letter of Credit under EDF
POST SHIPMENT FINANCE:
This type finance refers to the credit facilities extended to the exporter against export
documents after shipment of goods. Post shipment finance is allows in the following
forms
Negotiation of documents under L/C
Foreign Documentary bill for purchase
Advanced against Export Documents sent for collection
5.3.5. Negotiation of documents under L/C:
The exporter presents the relative documents to the negotiating bank after the shipment of
the goods. A slight deviation of the documents from those specified in the L/C may raise
an excuse to the issuing bank to refuse to reimbursement of the payment already made by
the Negotiating bank. So, the Negotiating bank must be careful, prompt, systematic and
indifferent while scrutinize the documents relating to the export.
5.3.6. Foreign Documentary bill for purchase:
Here the exporter are also made on the basis of contract between the buyer and the seller
without the cover of the letter of credit. In such case, documents are delivered to the
buyer through the intermediary of the foreign correspondence of the authorized dealer
against payment.
5.3.7 .Payment of Back to Back L/C:
In case of Back to Back L/C as 60-90-120-180 days maturity period, deferred payment is
made. Payment is given after realizing export proceeds from the L/C issuing Bank.
5.3.8. Export Document Checklist:
1. General verification: L/C restricted or not. Exporter asked to submit documents
before expiry date of the credit. shortage of documents etc.
2. Particular examination: each and every documents should be verified with the
L/C.
Total Export Business of last three months as a chart in Dhanmondi
Branch:
Month November December January
Tk. 1293967 1394750 117147
Nov Dec Jan
0200000400000600000800000
100000012000001400000
12939671394750
117147
TK.
Table-3: Performance of Export Business of last Consecutive 3 Months.
Export Business of last five years as a graph of Southeast bank :
Year 2008 2007 2006 2005 2004
Tk. 42178.6 28771.36 25874.61 13511.1 6761.93
2008 2007 2006 2005 20040
10000
20000
30000
40000
50000
42178.6
28771.3625874.61
13511.16761.93
TK.(in million)
Table-4: Performance of export Business of last 5 years of Southeast bank.
Here we clearly see that both graph indicates the increment of Export business of
Southeast bank ltd. along with Dhanmondi Branch.
Foreign Remittance section
5.4. Foreign remittance: Foreign remittance section of SEBL,Dhanmondi branch is
an integral part of foreign exchange department. And this section of section of Foreign
Exchange department deals with
Inward foreign remittance
Outward foreign remittance
Opening foreign currency accounts
Governing wage earners bond
Opening student file etc.
But first two Inward and Outward foreign remittance are the main functions.
5.4.1. Inward foreign remittance:
Normally, Inward foreign remittance comprises all incoming foreign currencies.
Remittance issued by the correspondents banks situated in the foreign countries and
thereby drawn on SEBL, dhanmondi branch are considered to be its Inward foreign
remittances. Following are the Inward foreign remittances of SEBL, Dhanmondi branch.
FDD Payable
FTT Payable
TC Payable
Encashment of foreign currencies
Purchase of foreign currencies
5.4.2. Outward foreign remittance:
Remittances issued by the Southeast bank, Dhanmondi branch to there foreign
correspondents to fulfill their customers needs are considered to be the Outward foreign
remittances. It comprises the following
FDD Issued
FTT Issued
TC Issued
Endorsement of foreign currencies in the passport
Sale of foreign currencies
5.4.3 EXPORT-IMPORT PROCEDURE
1 Seller and Buyer conclude a sales contract, with method of payment usually by letter of credit (documentary credit).
2 Buyer applies to his issuing bank, usually in Buyer's country, for letter of credit in favor of Seller (beneficiary).
3 Issuing bank requests another bank, usually a correspondent bank in Seller's country, to advice, and usually to confirm, the credit.
4 Advising bank, usually in Seller's country, forwards letter of credit to Seller informing about the terms and conditions of credit.
5 If credit terms and conditions conform to sales contract, Seller prepares goods and documentation, and arranges delivery of goods to carrier.
6 Seller presents documents evidencing the shipment and draft (bill of exchange) to paying, accepting or negotiating bank named in the credit (the advising bank usually), or any bank willing to negotiate under the terms of credit.
7 Bank examines the documents and draft for compliance with credit terms. If complied with, bank will pay, accept or negotiate.
8 Bank, if other than the issuing bank, sends the documents and draft to the issuing bank.
9 Bank examines the documents and draft for compliance with credit terms. If complied with, Seller's draft is honored.
10 Documents release to Buyer after payment or on other terms agreed between the bank and Buyer.
11 Buyer surrenders bill of lading to carrier (in case of ocean freight) in exchange for the goods or the delivery order.
SWOT:
Swot analysis enables an organization to have a comprehensive insight about its current
position in the industry compared to the competitors. It provides the organization a scope
to strategically improve its position in the market. Here, the internal strength of Southeast
Bank limited is discussed as below:
6.1. Strengths:
Company reputation:
SEBL has created a good reputation in the banking industry of the country among the
new comers. It is created a strong grip in the banking sector in terms of deposit and profit
within its sixth operation year.
Capital adequacy ratio:
Southeast Bank Ltd. Is maintaining a strong capital base. By the end of the end of
December 2008,capital adequacy ratio of the bank was 11.12% that is well above the
stipulated requirements of 9%. Positioning the Bank as one of the strong capital based
Bank of Bangladesh.
Customer service:
The Bank has a strong relationship with its customer. The Bank believes in maintaining
personal relationship with the clients. One of the major goals of the Bank is to build long
term relationship with the customer and to create value for them. For this, SEBL waiver
high charges for the valued clients who are linked with the Bank for long period of time.
Top management:
Top management is the key strength to contribute heavily towards growth and
development for any Bank. SEBL top management officials have the reputation of
experienced banking skills, efficiency and proficiency.
Corporate culture:
Corporate culture of SEBL is an interactive compare to other commercial Banks. This
interactive environment encourages employee to work attentively. As the job is very
much routine oriented, its friendly environment encourage the working capability of the
employee in their respective field.
6.2. Weaknesses:
Advertising and Promotion:
Advertising and Promotion is one of the weak point of SEBL. It doesn’t have effective
work force in marketing activities. This lacking pushes the Bank far behind from the
competitive environment.
Reference employment:
Reference employment is very much effective in SEBL. For this reason a lot of people
drawing salaries at the end of the month with minimum contribution to the organization.
It creates problem with other employees who work hard but they are not appreciated
accordingly.
Limitation of Information System(Bank Ultimus):
Bank Ultimus is not comprehensive software. It is desirable to set more comprehensive
and effective software for online banking for providing instant service to its clients.
Recovery system:
The recovery system is not very much effective. For this a huge amount money of the
Bank is being defaulted.
6.3. Opportunities:
Diversification:
It is a system of expansion strategy. By doing this SEBL can expand its current line of its
business. With the help of top management SEBL can start merchant bnking.
Credit Card & Tele banking:
By expanding services through Credit Card and Tele Banking SEBL can enter into new
form of retail banking, which will create another earning source.
Branch expansion:
SEBL is growing quickly all over the country. Besides expanding in the urban areas,
SEBL has prospects to open more branches in sub-urban areas, which will eventually
enhance the government effort at receiving rural economy as well as reaching more
people by providing better service.
6.4. Threats:
Level of competition:
Competition is always a major threat for any organization. In recent years. The number of
private bank is increasing . these bank is always pose a threat for others by coming up
with new product line, innovative technology, quality technology etc. thus the level of
competition rises and create threat for SEBL.
Technological Advancement:
With time, technology is getting advanced and most of the private banks are upgrading
their operating system to survive in the industry. SEBL is lagging behind in this
department and still mostly dependent on manual work rather than technology.
Advancement technology is posing great threat of SEBL.
Contemporary Banks:
Contemporary Banks like SEBL others are its major rivals. They are carrying out
aggressive campaign to attract lucrative corporate clients and big depositors. The bank
should have to take some steps to compete for its growth as well as its expansion.
Multinational Bank:
Rapid expansion of multinational Bank poses potential threats to the new comers. Since
foreign banks are financially healthy and this will be a threat for SEBL to sustain in the
long run if it does not take any strategy.
7.1. Conclusion:
From the practical implementation of customer dealing procedure during the whole
period of my practical orientation in SEBL, I have reached a firm and concrete
conclusion in a very confident way. I believe that my realization will be in harmony with
most of the banking thinkers. It is quite evident that to build up an effective and efficient
banking system to the highest desire level computerized transaction is a must.
Success in the banking business largely depends on
Effective lending
Good customer service
A good management
A good training program
Effective implementation of plans and
Southeast is an emerging Bank. To achieve the confidence of the customers, the Bank
must execute some improvements in its marketing and operational areas-SEBL should try
to win customers faith by providing them efficient and dependable services, credit facility
and updating with user friendly modern technologies. The Bank should redesign all sorts
of banking procedures to be more user friendly, attractive and impressive.
Southeast Bank Ltd. Started with a vision to be the most efficient financial intermediary
in the country and it believes that the day is not far off when it will reach its desired goal.
SEBL looks forward to a new horizon with a distinctive mission to become a highly
competitive modern and transparent institution comparable to any of its kind at home and
abroad.
In the branch where I’ve worked for three months are all the procedures are positive
order in spite of this some prances are not properly done which is very effective an all
respect it will increase profit and the strength of working capacity in all the departments
in the branch.
7.2. Recommendation:
From findings and analysis of the report, the following recommendations are formulated
for the SEBL management.
In foreign exchange department it is required to communicate with foreign banks
frequently and quickly. They should used the modern communication media.
Database networking is one of the most recent technologies to transfer from
branch to branch . They should use this technology in Foreign Exchange Division.
Against master L/C SEBL should not provide percent margin. The follow the
BB’s rules and regulation.
The Bank should increase its ATM booth in different locations and improve its
facility throughout the country.
It should emphasize more on customer relationship management to retain the
existing customer and attract the potential customer.
The Bank should apply to transform the branch as in AD branch to facilitate the
foreign transaction or trade as the Foreign Exchange is the most profitable
department of each branch.
The Bank should take realistic and effective step to recover default loan.
References:
1. Annual Report of Southeast bank ltd., 2003-2008.
2. Jeff madura, Financial market & Institution, 8th edition.
3. Report from southeast bank ltd.
4. State of Affairs of the bank.
5. The brochure of Southeast Bank Ltd.
6. Website of Bangladesh Bank.
7. Website: www.southeastbank.com.bd
Financial Performance at a glance:
PROPERTY AND ASSETS2008Taka
2007Taka
Cash:
In hand (including foreign currencies) 486,061,422 440,911,732
With Bangladesh Bank And its agent Bank (s)(including foreign currencies) 3,429,227,784 2,966,460,168
3,915,289,206 3,407,371,900
Balance with other banks and financial institutions:
In Bangladesh 534,541,610 1,258,788,896
Outside Bangladesh 80,834,747 899,318,546
615,376,357 1,546,988,175
Money at call and short notice 119,900,000 310,000,000
Investment:
Government securities 10,515,269,078 7,563,544,454
Others 1,784,337,793 899,318,546
12,299,606,871 8,462,863,000
Loans and advances:
Loans, cash credits, overdrafts, etc. 56,223,855,904 45,531,630,718
Bills discounted and purchased 4,057,404,485 2,632,973,432
60,281,260,388 48,164,604,150
Fixed assets 2,685,557,650 1,708,110,172
Other assets 1,264,537,446 770,752,643
Non-banking assets - -
Total assets_______________81,181,527,919
_______________64,370,690,040
LIABILITIES AND CAPITAL
Liabilities:
Borrowing and other banks, finincial institutionbs agents 1,561,993,125 6,509,000
Deposites and other accounts:
Current deposits and other accounts 5,235,642,551 3,939,794,945
Bills payble 852,132,286 688,281,765
Savings Bank/Mudaraba Savings deposits 3,477,918,663 3,433,491,229
Fixed deposits/Mudaraba fixed deposits 59,148,979,075 47,412,480,169
68,714,672,575 55,474,048,109
Other liabilities 3,547,587,789 2,745,663,830
Total liabilities 73,824,253,489 58,226,220,939
Capital/shareholder's equity:
Paid up capital 2,852,197,800 2.281,758,300
Share Premium 485,930,025 1,056,369,600
Statutory reserve 1,975,251,800 1,544,287,000
General reserves 247,650,000 247,650,000
Other reserves 1,253,453,849 570,619,810
Retained earnings 542,790,957 443,784,391
Total shareholders' equity 7,357,274,431 6,144,469,101
Total liabilities and shareholders' equity 81,181,527,919 64,370,690,040
OFF BALANCE SHEET ITEMS
Contingent liabilities:
Acceptances and endorsements 15,359,632,013 7,377,208,948
Letters of Guarantee 6,165,108,183 5,335,371,383
Irrevocable Letters of Credit 8,010,077,676 7,415,596,834
Bills for Collection 1,768,093,138 1,282,374,580
31,302,911,010 21,410,551,744
Other contingent liabilities:
Value of travelers' cheques on hand 2,801,600 8,505,835
Value of Bangladesh Sanchaya Patra on hand 273,991,000 251,551,000
276,792,600 260,056,835
Other Commitments:
Documentary credits and short term trade related - -
transactions
Forward assets purchased and forward deposites placed - -
Undrawn note issuance and revolving facilities - -
Undrawn formal standby facilities credit lines and other commitments - -
Claims against the bank acknowledged as debt - -
- -
Total off balance sheet items including contingent liabilities
31,579,703,610 21,670,608,579
Account opening form:
southeast Bank Ltd.______________________________________ Branch
Account No
Date …………………….ACCOUNT OPENING FORM
Photographs
NATURE OF ACCOUNT:
Current Personal Partnership Others
Savings Proprietorship Wage Earner
TITLE OF ACCOUNT:
Proprietor’s Name :
Father’s /Husband’s Name :
Mother’s Name :
Present address :
Telephone No :
Office
Residence
Permanent address :
Banking reference, if any :
Please supply me/us with a Cheque Book containing 10/25/50 leaves.
SPECIAL INSTRUCTIONS: SIGNATURE OF APPLICANT (S)
NAME SPECIMEN SIGNATURE
Cheque Book issued: Initial Deposit :From _________________ To ____________ Cash : Tk.
Cheque etc : Tk.Initial Signature of the Introducer: Opened By:
Approved By:
Name: _____________________________Account No: ________________________
Manager
a Back to Back L/C opening Form
Southeast Bank Ltd.
ORIGINAL/ADVISING BANK COPY/APPLICANT COPY/OFFICE COPYDate of expiry: Place of expiry:
Irrevocable Documentary Credit Date and Place of issue:
Applicant: Beneficiary:
Advising Bank: Amount:
Partial shipment : Allowed
Transshipment : Not AllowedCredit available with: Any bank in Bangladesh.By: Acceptance.
Drafts At:Loading on board/dispatch/taking in charge at/fromSupplier’s FactoryNot later than For transportation to :
Number:
Description of goods and/or Services:Chemicals for 100% export oriented readymade garments industry: Description, quantity, quality, unit price and all other details of the merchandise are as per beneficiary’s pro-forma invoice No. . CFR Buyer’s Factory.Authenticated copy of the P/I is enclosed herewith, which constitutes an integral part of the credit but the terms and conditions of P/I not stipulated in this Credit are void.
Documents Required:(X) Signed Invoices in Fold certifying merchandise to be of Bangladesh origin.(X) Signed Delivery Challan in copies marked “Freight Prepaid” evidencing shipment by
made out to the order of Southeast Bank Limited, . Notify Applicant and us.
(X) Detailed packing list in Fold.(X) Beneficiary’s certificate confirming the goods shipped are strictly in accordance with pro-forma
invoice as stated above in good order & condition.(X) Satisfactory Credit Report of the Beneficiary must accompany the original documents.(X) Certificate of Origin issued by the beneficiary of the L/C.
Additional conditions Marked (X) Below:(X) All documents are to be dispatched in lot by any courier service to us.(X) Prior acceptance of Bill of Exchange is not acceptable.(X) No documents should be dated earlier than the date of this L/C.(X) All documents must bear this LC number.(X) T/R to indicate the gross and net weight of the goods.(X) All Bank Charges outside our counter are on beneficiary’s Account.(X) If the credit is available by negotiation, maturity date to be counted from the date of acceptance by
issuing bank.(X) Delivery Challan and Truck receipt to be jointly signed by the Managing Director of
. and Bank’s representative with date and stamp acknowledging receipt of goods in good order and condition.
(X) All documents must indicate that the import is being made under Export L/C #.(X) A Discrepancy Fee of will be deducted from bill amount for presentation of each set of
discrepant documents.(X) No interest will be paid for the usance period.
Documents to be presented within days after shipment date but within the validity of the credit.Instructions for Negotiating Bank :
Upon receipt of documents complied with credit terms we will inform you maturity date and at maturity we shall arrange payment of draft as per instruction of Negotiating bank .
Documents presented with discrepancy (ies) must not be negotiated against guarantee or under reserve.
Your advising, negotiating including the reimbursement bank charges will be on account of beneficiary.
Amount of the draft negotiated/received for collection should be endorsed on the reverse of the credit which should be certified in the Documents Forwarding Schedule.
Except so far as otherwise expressly stated herein this credit is subject to the Uniform Customs and Practice for Documentary Credits (2007 Revision) ICC Publication No. 600. Reimbursement under this Letter of Credit are subject to URR-525.
Authorised Signature Authorised Signature
Glossary
AD : Authorize Dealer
A/C : Account
ACH : Automated Clearing House
ADV : Automated accounting advice
ATM : Automated Taller Machine
BARE : Balancing Modernizing Rehabilitation and Expansion
CC : Consumer Credit
CD : Current Deposit
CDBL : Central Depositary Bangladesh Limited
CEO : Chief Executive Officer
CL : Consumer Credit
CRR : Cash Reserve Rate
DD : Demand Deposit
DMD : Deputy Managing Director
DPS : Deposit Pension Scheme
ADD : Foreign Demand Deposit
DD : Foreign Demand Draft
FDR : Fixed Deposit receipt
HO : Head Office
L/C : Letter of Credit
AIM : Loan against Imported Merchandise
LO : Local Office
LR : Local Remittance
LTR : Loan against Trust Receipt MDManaging Director
MT : Mail Transfer
Ti-FCD : Non-Resident Foreign Currency Deposit
P--\D : Payment against Documents
PD : Primary Dealer
PL S : Personal Loan scheme
PO : Pay Order
PS : Pay Slip
RFCD : Resident Foreign Currency Deposit Account
SHBL : Staff House Building Loan
STD : Short Term Deposit
SVT : Senior Vice President
TC : Travelers Cheque
TL : Large and Medium Scale Industry (Term Loan)
TT : Telephonic Transfer
NBL : National Bank- Limited
USBL : Uttaran Small Business Loan
CMD : Credit Management Department
CRM : Credit Risk Management
PPG : Product Promotion Guide
CAD : Credit Administration Department