Internship report on Foreign Exchange Operation: A Study on BASIC Bank Limited

This report aims toward providing an overview on the Foreign Exchange Banking system in BASIC Bank Limited. The report is prepared within the broader framework of Internship Program of the Department of Banking, University of Dhaka (While preparing this report it has been tried to reveal the insights of the foreign exchange banking system of the bank a few recommendations and suggestions were also prescribed based on the observation and findings).

While discussing the different aspects and functions of the bank, priority has been given to depict the real situation as far as appraisal and management system in BASIC Bank Ltd. are concerned by employing the experience gathered during the internship program. Analysis on the findings is basically done to sort out the major aspects of the Foreign Exchange Banking system and to draw some significant inferences. At the same time for easier understanding of the report, supporting topics and terms are explained in light of textbooks and regulatory guidelines.

To examine the efficiency of the Export management system, Letter of credit has been taken as the prime factor. Simultaneously analysis on the foreign exchange, foreign LC advising has also been done. Utmost care has been given to explain all necessary aspects related to the subject matter for easier and quick understanding of the report. For reflecting the actual performance of the bank different analytical tools is used i.e regression analysis, analysis of risk index and probability of insolvency, ration analysis etc.

1.1 Background of the report:
The BBA program is designed to focus on theoretical and professional development of people open to take up business as a profession a well as service as a career. The course is designed with an excellent combination of theoretical and practical aspects. As a student of department of Banking we have studied several books and attended some seminars on different bank related topics in our four years BBA program. So we have gathered theoretical knowledge about different activities of banks, policies related to banking applications, technologies adopted by banks and banking businesses in other countries of the world. So we have an overview of different banking activities. It is necessary to gather practical experience for making us compatible in this competitive sector to prove us as the best. This internship provides the students to link up their theoretical knowledge into practical fields. In this connection, I am assigned to BASIC Bank Ltd.(Bangladesh Small Industries and Commerce Bank Limited), Shantinagar Branch for my practical orientation.Students are required to prepare an internship report under the guidance of supervising teachers on a selected subject matter to highlighting his experience and to conduct an in depth analysis on the subject matter. I have tried my level best to present my experience of the practical orientation in this report.

1.2 Statement of the Problem:
As a blend of development and commercial banking BASIC Bank provides it’s clients with full range of service to help them grow their assets and net worth. This bank offers term loans to clients, especially to develop small scale enterprises, collection of deposits, short term trade finance, working capital finance in processing and manufacturing units and financing and facilitating international trade. Coping with the competitive and rapidly changing financial market of the country this bank maintains close connections with its clients, the regulatory authorities, the shareholders (the government of Bangladesh), other banks and financial institutions. BASIC Bank provides different types of foreign exchange facilities to customers through this it facilitate export, import, exchange dealings etc. For the last few years this service sector experiencing a severe competition with other banks who also offering same types of foreign exchange facilities and innovative packages to customers. Coping with the competitive and rapidly changing financial market of the country this bank maintains close connections with its clients, the regulatory authorities, the shareholders (the government of Bangladesh), other banks and financial institutions. Then there is also an effect of world financial crisis on foreign exchange department that is observed on the financial statement of 2009.

1.3 Objective of the Study:
General Objective:
The general objective of the report is to know about the International Trading system of BASIC Bank Limited as a private commercial bank as well as its formation, and its functional, operational, and financial aspects.

Specific Objective:
Ø To introduce all the functions of foreign exchange department.
Ø Describe the different types of documentary credit and the detail process of opening letter of credit and its settlement procedure.
Ø Procedure of settlement different types of inward and outward remittance such as FDD (Foreign Demand Draft), FTT (Foreign Telegraphic Transfer/ Both inward and outward) and TC etc.
Ø Five years performance analysis of the shantinagar Branch through different charts.
Ø Overall performance analysis of the bank through ratio analysis, regression analysis, trend analysis, SWOT analysis, calculation of probability of insolvency and through different types of line, bar and pie charts.
Ø SWOT analysis of foreign exchange department.
Ø Different types of laws relating to the operation of foreign exchange department.
Ø Finally to identify problems and to provide some suggestions for the improvement of all transactions & other services of BASIC Bank Ltd.

1.4 Scope of the study:
This report is about the overview of BASIC Bank Limited, overall discussion of foreign exchange business of BASIC Bank Limited comprising L/C opening, lodgment, retirement of documents, L/C advising regarding export and import and operations of foreign remittance.

1.5 Limitations of the Study:
The major limitations of this report are as follows:
ü Relevant date and document collection were difficult due to the organization confidentiality.
ü Non availability of data in a systematic way.
ü Non availability of the reference book is another limitation.
ü Bankers are so busy and that’s why employees get very little time to teach theoretical knowledge to the trainee.