Internship Affiliation Report

FUNCTION OF FOREIGN EXCHANGE DEPARTMENT OF STANDARD BANK LTD

II INTRODUCTIONa. RationaleFor Masters of Business Administration (MBA) student only theoretical knowledge is not enough for handling the real life business situation. It is a great opportunity for the student to know about the real business operations through the internship program. Internship program is the perfect blend of the theoretical and the practical life experience. It is mandatory for any MBA student of American International University of Bangladesh. Banks are the pillars of the financial system of any Country. Specially, In Bangladesh, proper banking system is very important and essential to play a vital role, because our capital market system is not advanced like other countrys Capital market. The commercial banking activities of the encompass a wide range of services like accepting deposits, making loans, discounting bills, conducting money transfer and foreign exchange transaction . Foreign exchange operation is one of the significant functions of the bank. It plays a vital role in overall economy of the country. I am proposing this study, as I am a student of MBA and moreover my major is in Accounting & Finance, this study is very much related to my future career. While making the report, I will be able to learn the foreign trade system and its overall process. The proposed study can enhance knowledge about the foreign currency or goods trade of the Standard Bank Ltd. which includes the study of various international trade financing tools and settlement process and financial analysis of the SBL. In this internship program, I was a part of team of Standard Bank Ltd with all my responsibilities from the very first day. I was mainly engaged in foreign exchange department where I have gone through a number of meaningful projects and targets set by the bank management. In this regard, I have prepared the affiliation report titled Function of foreign exchange department of Standard Bank Limited.

b. Background

Standard Bank Limited was incorporated as a public limited Company on May 11, 1999 under the companies Act, 1994 and the bank achieved satisfactory progress from its commercial operations on June 03, 1999. SBL has introduced several new Products on credit and deposit schemes. It also goes for corporate or retail banking etc. The bank also participated in fund syndication with other banks. Through all these myriad activities SBL has created a positive impact in the market. Standard Bank Limited is a third generation bank in Bangladesh. Standard Bank has its head office at 122-124 Motijheel, Chamber building, Dhaka, Bangladesh as a public limited company with the permission of the Bangladesh Bank. The founder of SBL is committed to setting a new standard of banking. The Authorized capital of the bank is BDT 15000(million) and its Share holders Equity is BDT 6871(million) in 2011.The bank provides a broad range of financial services to its customers and corporate clients in retail banking, corporate banking, and international trade. The whole banking activities are divided into 3parts,General banking, Loan & Advances and Foreign Exchange. One of the largest businesses carried out by the commercial bank is foreign trading .The trade among various countries falls for close link between the parties dealing in trade. The situation calls for expertise in the field of foreign operation. The bank which provides such operation is referred to as rending international banking operation. Mainly transactions with overseas countries are respects of import, export, and foreign remittance come under the preview of foreign exchange transactions. International trade demands a flow of goods from seller to buyer and of payment from buyer to seller .In this case the bank plays a vital role to bridge between the buyer and seller. The foreign exchange department divides into three parts-export, import and remittance. The export department deals with export L/C, Amendment of L/C, Transfer of L/C, EXP issue charge. When the L/C amounts have to be changed, then the amendments of L/C are needed. The expenses sectors of export are Courier/mailing cost, Stationary cost, Printing cost, Salary of the employee. Salary of the employee is the administrative cost. But here to analyze the actual earning of export, Ive to find out the totla expenses to operate export department. Import sector is the most profitable sector in foreign exchange department of SBL. The Export sector is also doing their level best. The import earning sectors are-commission for L/C opening, Amendment of local L/C, Service charges, Collection of credit report of the beneficiary. From commission for L/C opening and service charge, import department earns most. The expenses of export, import, and remittance are almost the same. The remittance earning consist from-Issuance of cash and endorsement of passport, remittance by TT, Cash incentives handling charge etc. The portion of foreign exchange earnings from total earning is also satisfactory. So Standard Bank Limited is one of the best leading bank in Bangladesh and this bank have to continue its performance analysis and have to find out the ways how it can perform its activity much better.

Vision of Standard Bank Ltd.To be a modern Bank having the object of building a sound national economy and to contribute significantly to the Public Exchequer.

Mission of Standard Bank Ltd.

To be the best private commercial bank in Bangladesh in terms of efficiency, capital adequacy, asset quality, sound management and profitability.

Core Values of Standard Bank Ltd. Shareholder: By ensuring fair return on their investment through generating stable profit.

Customer: To become most caring bank by providing the most courteous and efficient service in every area of our business.

Employee: By promoting the well being of the members of the staff.

Community: Assuring our socially responsible corporate entity in a tangible manner through close adherence to national policies and objective.

Objectives of the bankThe Motto of the Standard Bank limited is to explore a new horizon of innovative modern banking creating an automated and computerized environment providing nonstop service and prepare itself to face the new challenges of globalization and 21st century. The main objectives of Standard Bank Limited are:

To provide high quality products and service to attract its potential market. To caters to the need of its corporate clients and provides a comprehensive range of financial services to national and multinational companies. Act as a media of exchange. To contribute to gross domestic product. Maintain a satisfactory deposit mix. To help to grow entrepreneurship. Increase loan portfolio diversification and geographical coverage. To help to solve unemployment problem. Provide finance and specialized services to the export. To help to boost economic development. To earn profit. The bank has already co-opted technological revolution in all its spheres. Branches of SBLFrom the year 1999 to year 2011 Standard Bank Limited established 68 numbers of branches in different districts of Bangladesh. The principal Branch located in Metropolitan Chamber Building (Ground Floor), 122-124 Motijheel C/A, Dhaka 1000, and Bangladesh.

Organization Offerings: Standard Bank Limited is always conscious of the changing needs of customers and strives to develop new and improved services for its valued customers. Ban offers various deposit and lending products and services to meet all kinds of financial needs of customers. Such as Maintain all types of account. Make investment. Handle foreign exchange business. Intend other banking sector etc.

SBL also collect TITAS bill, WASA bill, Telephone bill and Electricity bill.

Communication intensity between managers, assistant or the work team is moderately high. Or achieving any kind of organization goal, most of the frequently communicate with each other. They are bound to maintain frequent relationship with each other.

Organogram:In the line of policy formulated by the management under approval of Board of director proposal are forwarded by relationship Manager (RM) through Head of corporate at Head Office to Head of GB who in term will make a through scrutiny of the proposal in terms of General Banking assessment for according approval/ decision to the proposal for sufficing the purpose a preferred organizational structure is to be developed under :

Board of Directors

Managing Director

Executive Vice President

Senior Vice President

Vice President

Senior Assistant Vice President

Assistant Vice President

First Executive Vice President

Senior Executive Officer

Executive Officer

Senior Officer

Officer

Assistant Officer

Functions of SBLThe key function of the organization is as follows To mobilize deposits. To disburse investments To handle foreign exchange and foreign business Remittance: To remit money to home and abroad through T.T, D.D, Pay-order, Travelers cheque, etc. Other services: e.g. Locker service, to receive different types of bills of clients to issue Guarantees and counseling etc. Major Division of SBLThe banking system of Standard Bank Ltd. is divided into three major divisions. These divisions are 1) General Banking2) Advance & Loan Banking3) Foreign Exchange Banking.

C. Objectives:To know about overall Foreign Exchange sector of Standard Bank Limited, Gulshan Branch.To know how a bank manages its Foreign Exchange Department.

3.0 ACTIVITIES UNDERTAKEN :

3.1 JOB AS AN INTERN(Work-Related):During the internship period at Standard Bank Ltd, I was placed in different departments on rotation basis. At first I was in General banking section for a week, then in Credit section for a week and finally in Foreign Exchange section for 10 weeks. So it was a great experience for me to work in different departments.

FOREIGN EXCHANGE :Foreign exchange covers all business activities relating to import, export, inward and outward remittance and buying and selling of currency. One of the largest businesses carried out by the commercial bank is foreign trading. The trade among various countries falls for close link between the parties dealing in trade. The situation calls for expertise in the field of foreign operations. The bank, which provides such operation, is referred to as rending inter Standard banking operation. Mainly transactions with overseas countries are respects of import; export and foreign remittance come under the preview of foreign exchange transactions. Inter Standard trade demands a flow of goods from seller to buyer and of payment from buyer to seller. In this case the bank plays a vital role to bridge between the buyer and seller. In Standard Bank Ltd ( Gulshan-2) foreign exchange division has one part which is foreign trade.

3.1.1 FOREIGN TRADE DEPARTMENT:Mainly foreign trade deals with import and export business that is two parties in foreign trade department in Standard Bank Ltd ( Gulshan-2).1. Import department.2. Export department.3. Foreign remittance.

a. Organization-wide

b. Other relevant activitiesIV CONSTRAINTS/CHALLENGES AND PROPOSED COURSE OF ACTION FOR IMPROVEMENT (Issues and Problems encountered and identified during the internship affiliation with the organization/company.)a. Identified/Observed in the OrganizationThis report might be limited with some constraints. Details of many aspects of the services of Standard Bank Limited have been skipped in this report due to various constraints, including time and space. Moreover, one of the main barriers in writing this report was the confidentiality of data. Besides, for the preparation of this report I found that there are some limitation exists though I have given my greatest effort. Such as:

The bankers are very busy with their job which lead me little time to consult with. Category wise export, import and remittance business; amount originated from the international trade is missing in the report for their restriction. In many cases, up to date information was not published. All the branches of the sample banks were not physically visited. Non-availability of reference books is another limitation. Due to time limitation many of the aspects could not be discussed in the present report. Learning all the functions within just 60 days is really tough.

However, omitting the limitations, the report will help to understand the Foreign Exchange Performance of the Bank.

b. Academic Preparation (Mismatch between assigned tasks and other operational functions of the organization with your academic preparation/major. Relevance of the academic preparation /major to the present assignment and future job requirements of the organization)c. Any missing knowledge and skills that need to be learned in the university which are relevant to the company or to oneself as future professional.V LESSONS LEARNED FROM THE INTERNSHIP PROGRAM (These are the valuable lessons/knowledge /skills/behavior/practices you have learned or acquired from your internship.)a. Implications to Organization/Company Based Affiliationb. Implications to Universitys Internship Programc. OthersVI CONCLUDING STATEMENTSa. Recapitulation /Summaryb. Recommendations for Future Strategic Actions (Over-all Internship Program: Affiliation and University)VII- SUGGESTIONS FOR IMPROVEMENT OR COURSE OF ACTION (Mention specific suggestions to address the problems identified or observed during the affiliation. You may refer to Part IV on Constraints)References:APPENDICES: (Including a 2-page CV)Note: The Report should not be less than 20 pages excluding the Appendices.