Report on

Jamuna Bank Ltd

and

How to stimulate more foreign trade.

By

Kaiser Alam

17264037

An internship report submitted to the Department of Business at BRAC University in partial

fulfillment of the requirements for the degree of
Masters in Business Administration (MBA).

Department of Business Administration

Brac University
April 2020.

©2020. Brac University

All rights reserved.
Declaration

It is hereby declared that

1. The internship report submitted is my own original work while completing my MBA degree

at Brac University.

2. The report does not contain material previously published or written by a third party, except

where this is appropriately cited through full and accurate referencing.

3. The report does not contain material which has been accepted, or submitted, for any other

degree or diploma at a university or other institution.

4. I have acknowledged all main sources of help.

Student’s Full Name & Signature:

___________________________________________
Student Full Name
Student ID

Supervisor’s Full Name & Signature:

___________________________________________
Supervisor Full Name
Designation, Department
Institution
Mr. Mahmudul HAq

Associate Professor,

BRAC Business School

BRAC University

66 Mohakhali, Dhaka-1212

Subject: The submission of my internship report regarding my work experience at Jamuna Bank.

Dear Sir,

It is with great pleasure that I submit this report titled “Jamuna Bank Ltd and how to stimulate more
foreign trade”. This report is mandatory for the completion of my Masters in Business Administration
degree at BRAC university.

I had started work at Jamuna Bank Malibagh branch on the 25th of February 2020, and I was assigned to
the front desk to help out customers with filling up account opening forms, filing documents, processing
remittance transactions and in a couple of occasions even paid a visit to a garment factory to collect
account opening forms of the workers. Overall this experience has provided me with a lot of knowledge
on how a bank generally operates on a daily basis.

I have tried my best to complete this report following the templates and guidelines provided by BRAC
University. I also owe my eternal gratitude to you for showing me your kindness and allowing me to have
ample time to complete my report.

I pray that this report finds your acceptance.

Thank you kindly.

Sincerely yours,

_______________________

Kaiser Alam

17264037

BRAC Business School

BRAC University

Date: 30th April 2020.

 Acknowledgement.

First of all I would like to thank the almighty, for allowing me the strength and health to
complete this report.

My utmost gratitude goes towards my supervisor, Mr Mahmudul Haq, for being gracious with
his time and permitting me to complete my work. I would also like to thank my onsite
supervisors, MR Omar Farook and Ms Sajia Afrin Atique for finding the time out of their busy
schedules to offer me words of encouragement. I also owe deep gratitude to Md. Mamun
Hossain, an officer in the foreign exchange department, who on his own initiative took me aside
to offer explanations as to how the foreign trade processes worked.

Finally, I would like to thank my fellow interns who were courteous and kind enough to share
their knowledge with me, allowing me to adapt quickly.
 Executive summary.

This report has been made for the purpose of completing the MBA program from BRAC
University.

The report is based on a 2 month internship experience undergone in Jamuna Bank Malibagh
branch. The purpose of this report is to share my findings about the operations of the front office
of Jamuna bank. The report explains the duties and responsibilities which I had to undertake. It
emphasizes on the processes involved relating to opening a L/C.

Suggestions have been made as to why foreign trade is still lagging within the small and medium
businesses and how or what might stimulate them to join the foreign market.
Declaration
Letter of transmittal
Acknowledgement
Executive summary
Table of contents
Chapter 1 1
1.1 Duties and responsibilities 1
1.2 Objective of the Study 2
1.3 Scope of the report 2
1.4 Limitations 2
1.5 Methodology 2
2.0 Organizational structure 3
2.1 Overview of JBL 3
2.2 Vision, mission and objectives 3
2.3 Values 4
2.4 Corporate slogan 4
2.5 Organizational structure 5
2.6 Strategic priorities 6
2.7 Services and products of JBL 6
3.0 The foreign exchange dept. 9
3.1 Introduction 9
3.2What is L/C? 9
3.3 The draft 11
3.4 Bill of lading 11
3.5 Road blocks to export and import 11
3.6 Recommendations 11
References 12
Chapter 1.0

Introduction

Banks are the backbone of a nation’s economy. They offer essential services to people that wish
to save and they also offer finance to businesses that might want to invest and expand their
domain.

For my internship I have been fortunate enough to have gotten a chance to work at Jamuna bank
ltd. Malibagh branch. This opportunity has allowed me to witness firsthand the operations of the
front office of a bank.

Jamuna Bank limited is a 3rd generation bank that aims to keep up with the modern banking
systems, manage change, develop human capital and provide the best customer value.

The bank is registered under the Companies act 1994 of Bangladesh, and it opened its doors to
customers on the 3rd of June of 2001.

The bank was founded by a group of Bangladeshi entrepreneurs who are well versed in the fields
of trade, commerce, and business of their mother land. Both conventional and Islamic banking
are practiced by Jamuna Bank and it is operated by professionals who are well educated and
experienced in the domain of finance and banking. The success of Jamuna bank lies on the
shoulders of these professional men and women whose main focus is to anticipate and satisfy
customer needs. Changing times are constantly pushing Jamuna bank to come up with new
products , and overtime Jamuna bank has established a solid reputation of quality service
amongst the people of Bangladesh.

Currently the bank has real time online banking branches all over the country which are linked
together with a sophisticated network that is composed of leading edge IT technology.
Traditional delivery points and ATMs are spread out all across the country to provide convenient
services to the customers.

1.1 Duties and responsibilities:

I started work at Jamuna Bank on the 25th of February of 2020. I had been assigned under the
supervision of Mr. Omar Farook, vice president and head of the branch.

From the very start my duties involved:

1. Helping customers with information on how to fill up account opening forms

2. Filing of documents

3. Binding of credit and debit vouchers

4. Handling remittance customers and processing their transactions.

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1.2 Objective of the study:

The purpose of this internship is to allow myself to gain the practical experience and witness
firsthand how the theories which are taught in the MBA program are applied in real life
situations.

The objectives include:

• To follow correctly the bank procedures.

• To form connections of my learnt theories with real life situations
• To analyze how the foreign exchange department works
• To identify an area in which the performance of the bank may improve and to offer
recommendations.

1.3 Scope of the report:

The report concentrates on the operations of the Malibagh branch of the JAmuna bank. It is
a descriptive report about the operations of the general banking and foreign exchange
banking departments of the branch.

1.4 Limitations:

The following limitations were experienced during my time at Jamuna Bank:

• Access to different data were limited due to confidentiality concerns.

• Due to the COVID-19 outbreak during my internship, my time at Jamuna bank was
cut even shorter and it became difficult to gain primary data from the officers who
worked there.

1.5 Methodology:

Data collected for this report were mostly secondary and few primary information which
was gained through interviewing some of the officers. It has been assumed that the
recommendations will work under normal circumstances when the COVID-19 pandemic
ends.

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2.0 Organizational overview.

2.1 Overview of JBL

Jamuna Bank limited is a 3rd generation bank that aims to keep up with the modern banking
systems, manage change, develop human capital and provide the best customer value.

The bank is registered under the Companies act 1994 of Bangladesh, and it opened its doors to
customers on the 3rd of June of 2001.

The bank was founded by a group of Bangladeshi entrepreneurs who are well versed in the fields
of trade, commerce, and business of their mother land. Both conventional and Islamic banking
are practiced by Jamuna Bank and it is operated by professionals who are well educated and
experienced in the domain of finance and banking. The success of Jamuna bank lies on the
shoulders of these professional men and women whose main focus is to anticipate and satisfy
customer needs. Changing times are constantly pushing Jamuna bank to come up with new
products , and overtime Jamuna bank has established a solid reputation of quality service
amongst the people of Bangladesh.

Currently the bank has real time online banking branches all over the country which are linked
together with a sophisticated network that is composed of leading edge IT technology.
Traditional delivery points and ATMs are spread out all across the country to provide convenient
services to the customers.

The bank remains open 5 days a week except Fridays and Saturdays.

2.2 Vision, mission and objectives.

• Vision.

Jamuna Bank aims to become one of the top banking institutions of Bangladesh and to
play a significant part in the development of the country.

• Mission.
Jamuna bank emphasizes on satisfying the different needs of its customers, with the help

of a variety of products at competitive prices, timely execution of services and with the

use of the right set of technologies that will allow the bank to maintain sustainable

growth, reasonable return and a well oiled and motivated work force.

• Objectives:
1. Maintain a high CAMEL rating.

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 2. Use strategic marketing planning to improve the quality of service and to create
relationships with customers.
3. Maintain higher profitability and quality of assets than other banks in Bangladesh.
4. Use integrated information technology to automate banking systems.
5. Maintain acceptable rate of return on investments.
6. Maintain a low risk position
7. Keep sufficient liquidity at hand to pay maturing obligations and commitments.
8. Maintain respectable image with a healthy growth of business.
9. Keep acceptable control and transparency of procedures.
10. Use efficient human resource management system to develop and retain a high
quality workforce.
11. Use resources efficiently
12. Maintain ethical management system by complying with ethical norms,
transparency and accountability.

2.3 Values

1. Focus on customers
2. Maintain integrity
3. Provide quality
4. Encourage teamwork
5. Respect each and everyone
6. Maintain harmony
7. Exercise courtesy
8. Be committed
9. Respectable citizenship
10. Develop distinctive culture
11. Practice business ethics

2.4 Corporate slogan

Your partner for growth.

2.5 Organizational structure.

An organizational structure demonstrates the hierarchy of an organization. It also shows how

informational flows within an organization. The Malibagh branch of Jamuna bank is a very small
branch with around 15 members working there who are at or above officers’ level. The
organizational structure of Jamuna Bank Malibagh branch is as follows:

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Vice president and head of branch

Senior assistant vice president

Assisstant vice president

Executive officer

Officer

5
2.6 Strategic priorities

• Providing the products that customers truly desire and build good customer relationships.
• Emphasize on export of traditional and non traditional goods in order to maintain
adequate foreign exchange reserve.
• Focusing on quality of assets rather than quantity and rapid expansion.
• Varying the deposit mix to lower the deposit costs.
• Pursue the target group proactively.
• Modifying products to suit the changing needs of the target groups.
• Following practices that would push forward towards a sustainable growth, while
maintaining maxing shareholder value.
• Promote continuous education , growth and motivation of the human capital to maintain
sustainable growth.
• Perform CSR activities to help the underprivileged and pave a better path for the future
generations.
• Bring in more customers who previously had no banking history.

2.7 Services and products of JBL

Jamuna Bank provides many types of services and products to its customers. Below is a list of
some of those products and services.

Schemes:

• Double growth deposit scheme:

The customer’s fixed deposit will grow double with this scheme. Deposits are allowed to

be made in multiples of 1000 taka. The tenor of this scheme is 10 years with an interest

of 6.96%.

• Pension deposit scheme:

Monthly
Payable
Deposit (Taka) Tenor Compound
Amount
Rate of Intt.

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 1. Lac or 3 Years 123,293 7.00%
5 years 141,763 7.00%
Multiple 7 years 162,999 7.00%
The customer may choose one of the given savings plans and continue to deposit until the

end of the tenor.

• Marriage scheme: this scheme allows worried parents to save up for their children’s
wedding.

Tenor Monthly Installment Rate of Intt. Amtt. Payable at the maturity

3 Years 1,000 39,930
1,500 59,895
2,000 7.00% 79,860
2,500 99,825

There are more tenor periods to select from and the scheme also contains pre tenor

encashment benefits.

General banking and deposit management:

1. Provides account opening services.

2. Remittance services.

3. Cash section which deals with deposits and withdrawals.

4. Clearing section.

5. Locker services

Foreign exchange services:

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1. L/C processing

2. Post import services:

Loan against trust receipt.

3. Time loan: support for customers with good credit worthiness reputation.

4. Loan against imported merchandize, LIM. Imported goods are stored under lock and keyof the

bank. Customers release goods through delivery order making partial payments against goods.

Offers for exporters:

• Back to back L/C

• Packing credit
• Overdraft
• Foreign documentary bill purchase
• Local documentary bill purchase.

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Chapter 3: The foreign exchange department.

3.1 Introduction

During my 2 months of internship at JBL, I occasionally got a chance to speak with one of the
foreign exchange officers, called MD. Mamun Hossain Mazumder. One day he was kind enough
to take me aside and explain to me how the processes of issuing a letter of credit to the customer
worked. In this section I shall be explaining some of those processes and also share my opinion
about why there are only a few recurring customers in the foreign exchange department and how
that problem might be alleviated a little.

3.2 What is a letter of credit?

In international trading the letter of credit is a letter made by a bank on behalf of the applicant
(importer) to assure the beneficiary (exporter) that the payment of the goods in concern will be
made on time and at exactly the amount agreed upon in the contract or pro forma invoice. In case
the applicant of the letter of credit defaults, the bank is responsible to make the payments.

The pro forma invoice or P.I is a bill of sale that is sent to the buyer before the shipment of the
goods. It contains necessary information about the shipped goods such as its contents, weight or
amount and even the delivery charges.

Steps involved in the opening of a letter of credit:

1. Applicant needs to provide a valid and signed sales contract or pro forma invoice.

2. Applicant needs to apply to its chosen bank for the issuance of a letter of credit.

3. The issuing bank will request the applicant to fill up a LC application form.

4. The issuing bank examines the letter of credit

5. The issuing bank approves and issues the letter of credit.

1. Applicant needs to provide a signed sales contract or pro forma invoice.

The applicant needs to provide a valid and signed sales contract or pro forma invoice. This
contract or invoice needs to state the necessary information of the terms and conditions of the
trade. Examples of such information include description of the merchandise, delivery date,
quantity being delivered, price agreed upon by both parties and any other important legal data.

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2. Application for the issuance of a letter of credit

The applicant needs to formally apply to its bank for the issuance of a LC. It is important that the
application does not contradict the terms and conditions agreed upon in the sales contract or pro
forma invoice.

3. Filling up the LC application form.

Banks provide an LC application form to be completed by the applicant. A copy of the sales
contract or PI is usually requested along with the completed form so that banks can double check
whether the information in the form is in accordance with the terms and conditions of the sales.

4. Evaluation of the application form.

The issuing bank now evaluates the credibility of the form and its applicant. Checks are made to
ensure that the goods being traded are not illicit in nature. The prices at which the goods are
traded are also scrutinized.

Many multinational companies are guilty of transfer mispricing. This happens when the buyers
show a higher price for the imported goods than their actual market value. One reason why
companies do this is to siphon money abroad and to show a lesser income that eventually
concludes with them paying lesser income taxes.

Any discrepancy found during the evaluation process can result with the LC application being
rejected and the applicant denied of a letter of credit.

5. Approving and issuing the letter of credit.

If the application of the LC passes the evaluation, the issuing bank creates a letter of credit and
sends it to the buyer for approval, at the same time a draft is send to the exporter to eliminate the
need for any future amendments. Once both parties have confirmed their approval, the bank
makes a final version of the LC and takes action to make payment on behalf of the buyer.

What does the bank get out of this?

For its troubles the bank collects a fee for its services. Usually this fee is a percentage of the LC.

Also since the bank guarantees the payment on behalf of the buyer, it needs some sort of
guarantee from the buyer that it will not default on its payments. This is where the margin
amount plays a part. The margin amount is a certain amount that the bank blocks in the buyer’s
account as guarantee for the LC payment. The margin amount depends on the financial

10
relationship between the buyer and the bank. Depending on the credibility of the buyer the
margin amount can be anywhere between 1% and 100%.

3.3 The draft

Once the L/C is obtained by the importer, the exporter can ship the merchandize to the importer.
Draft or bill of exchange as it may be called, is an order made by the exporter to the importer or
the importer’s agent, requesting them to make the payment for the merchandize at the specific
date and amount that was previously agreed upon.

3.4 Bill of lading

The third important document in foreign trading process is the bill of lading which is issued by
the carrier or transporting company to the exporter. It serves as roles;

1. As a receipt it serves as proof that the merchandize was received by the transporting carrier,

2. As a contract, this obligates the carrier to transport the merchandize to the specified
destination in exchange for a specific fee.

3. As a document of title , it can be used to receive payment before the goods are allowed to be
released to the importer.

3.5 Road blocks to export and import.

Despite the excellent work of the officers in the foreign exchange department, there is an
underlying weakness that is holding back the true potential of the foreign exchange department.

The fact is that very few small to medium businesses are participating in the foreign trade
market. One major road block to this dilemma is that most businesses do not know much
information about what foreign market opportunities are out there. This lack of knowledge is
holding back tons of potential foreign trade business.

3.6 Recommendation:

In order to gain more foreign trade customers, it is necessary for Jamuna bank to gather and
share information about foreign market opportunities with its customers. It needs to hold
educational seminars where they can teach businesses about the process of exporting and
importing. Other countries such as the U.S have institutions such as the Department of commerce
that helps to collect data and help in the import-exporter matchmaking process.

As a bank, JBL needs to be forward thinking and start a research department that can collect
these information and effectively present them to local businesses.

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References:

[1] Hill, C.W. International Business. McGraw Hill International edition, 2017.

[2] Jamuna Bank website, Available from https://jamunabankbd.com/front/productdetails/20/114

[3] Zaman A. Jamuna Bank, Financial Performance Analysis. 2018, 5th April

[4] Enam F. Jamuna Bank , foreign exchange operations, 2019, 30th April

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