Letter of Transmittal

March 08, 2021

Dr. G. M. Azmal Ali Quaosar
Associate Professor & Supervisor
Department of Management Studies
Comilla University, Cumilla – 3506

Subject: Submission of an Internship Report.

Sir,
I am pleased to submit this Internship report as you entitled me. I tried my best to present this
internship report on “Foreign remittance and customers satisfaction: A Study of Sonali
Bank Limited” according to your guideline. I tried my best to work sincerely to cover all
aspects regarding the matter. Though I faced some limitations in preparing this report, I have
thoroughly enjoyed in preparing this internship report which has contributed significantly to
my understanding on the essentials and importance practical knowledge.

I sincerely hope that you will appreciate my effort.

Sincerely yours,

…………………………….
Purnima pal

i
 Declaration

I, Purnima pal, a student of Department of Management Studies at Comilla University,

Cumilla, hereby declare that the internship report on “Foreign remittance and customers
satisfaction: A Study of Sonali Bank Limited” is an original work done by me for partial
fulfillment of the requirements for Bachelor of Business Administration (BBA) degree as a
part of my academic curriculum. It or any part of it has not been copied from any other
report. It has also not been submitted to any other university or institute for any degree or
diploma.

------------------------------
Purnima pal

ii
Certificate of the Organization

iii
 Certificate

This is to certify that the report entitled “Foreign remittance and customers satisfaction: A
Study of Sonali Bank Limited.” presented here has been prepared by Purnima pal bearing the
Registration No: 11605004 and ID No: 11605004 for the submission to the Department of
Management Studies, Comilla University, Cumilla in the partial fulfillment of the
requirements for the degree of Bachelor of Business Administration (BBA). This report is
suitable for submission.
I wish her every success in life.

…………………………………….
Dr. G. M. Azmal Ali Quaosar

iv
 Acknowledgement

No work can be completed by one individual without the help of others. In every step of this
study many individuals and institutional experts supported me. It gives me an immense
pleasure to acknowledge them with my gratitude. First of all I would like to convey my
deepest gratitude to Almighty ALLAH who gave the power, strength and energy to perform
the functions of report preparing. My heartiest gratitude also goes to my parents who helped
me at every steps of my life.

I wish to know my heartiest respect to the following persons for their immense support and
cooperation towards the compilation of this report. I also wish to mention that without their
help, this report could not be accomplished and I would like to extend my heartfelt gratitude
to them for their assistance and empathy.
 Dr. G. M. Azmal Ali Quaosar, Associate Professor & supervisor Department of
Management Studies, Comilla University, Cumilla.
 Amir Sohel Mohammed Ali Ahasan, Manager, Kotbari Branch, Sonali Bank
Limited. Cumilla.

Last of all I would like to convey my cordial thanks to all those Authors, websites, journals
and publications from which I have taken the necessary information in preparing this report.
And finally, I would show my gratitude to all the individuals who have helping me to prepare
this report. As being a human being, it is nature that few names may not be mentioned
forgetfully. I would like to apologize my forgetfulness.

v
 Executive Summary

Sonali Bank was born with a new concept of purposeful banking sub serving the growing and
diversified financial needs of planned economic development of the country. It provides mass
banking services to the customer through its branch network all over the country. From the
diversified range of service my report is done based on a specific service. The main objective
of this report is to examine the Remittance Management of Sonali Bank Limited.
Internship Program of BBA under the faculty of Business Studies is an obligatory part for all
students. The report includes the practical knowledge and information observed and obtained
during the program. My report was carried on “Foreign remittance and customers
satisfaction: A Study of Sonali Bank Limited.”

This internship Report is aimed at providing a comprehensive picture to the areas of

Remittance management of Sonali Bank Ltd. The Report has been divided in to six parts. I
bring the general formalities in chapter one to introduce the readers about the report.
Chapter Two provides a broad overview about the banking sector of Bangladesh. Chapter
three focuses on the overall scenario of Sonali Bank Limited, chapter four focuses on the
Foreign exchange and Remittance the main part of the report titled “Foreign remittance and
customers satisfaction” are contains in chapter five. Chapter six focuses the data analysis
and findings of the study and Chapter seven contain the recommendation and conclusion.

Throughout the reports I made every effort to be as current and up to date as possible in the
presentation of theories, concepts, and example. I have completed the report by use the
primary data and secondary data methods. I have found some problem at the time of prepare
this report, which problems are short time period. I also found that Sonali Bank Kotbari
Branch is playing an important role toward the growth and economic development of the
people of this area. After all I provided some recommendations on the basis of my study, the
authority of the bank may be benefited by these recommendations.

vi
 Acronyms used in this Report

 ADs: Authorized Dealer

 AGM: Assistant General Manager
 ATM: Automated Teller Machine.
 DD: Demand Draft.
 DMD: Deputy Managing Director.
 ECGS: Export Credit Grantee Scheme.
 EFT: Electronic Fund Transfer.
 FC: Foreign Currency.
 FCAP: Foreign Currency Account Pound.
 FCAD: Foreign Currency Account Dollar.
 FDR: Fixed Deposit Receipt.
 FER: Foreign Exchange Regulation.
 FET: Foreign Exchange Transaction.
 SBL: Sonali Bank Limited.
 SBSC: Sonali Bank Staff College.
 STD: Short Term Deposit.
 SWIFT: Society for Worldwide Interbank Financial Telecommunications.
 MT.: Mail Transfer.
 OD: On Demand.
 PAD: Payment against documents.
 PO: Payment Order.
 PON: Payment Order No.
 RMS: Remittance Management System
 TC: Travelers Cheque
 TT: Telegraphic Transfer.
 TTPO: Telegraphic Transfer Payment Order.

vii
Table of Contents

SN Contents Page
Letter of Transmittal
Declaration
Certificate of Organization
Certificate
Acknowledgement
Executive Summary
Acronyms
Chapter Introductory Issues
one
1.1 Introduction
1.2 Origin of the study
1.3 Significance of the Study
1.4 Objectives of the Study
1.5 Methodology of the study
1.6 Rational of the study
1.7 Scopes of the Study
Chapter Evaluation of Banking System in Bangladesh
Two
2.1 Literature Review
2.2 Evaluation of Bank
2.3 Development of Banking in Bangladesh
2.4 Banking Structure of Bangladesh
2.5 Lists of Bank in Bangladesh
2.6 New product & services of Bank
Chapter An Over view of Sonali Bank Limited

Three

viii
 3.1 Origin of Sonali Bank Limited
3.2 Management
3.3 Organization Structure of SBL
3.4 Corporate Profile of SBL
3.5 Corporate Mission
3.6 Corporate Vision
3.7 Goals
3.8 Corporate Slogan
3.9 Objectives of the SBL
3.10 The future Thrust
3.11 Corporate culture
3.12 Operational Network
3.13 Product and Services of Sonali Bank Limited
3.14 Social Responsibility
3.15 Sonali Bank Kotbari Branch
Chapter Foreign Exchange & Remittance
Four
4.1 Concept of foreign exchange
4.2 Scope of foreign exchange
4.3 Regulations of foreign exchange
4.4 Functions of foreign exchange
4.5 Remittance
4.6 Modes of Remittance
4.7 Foreign Inward Remittance Foreign
4.8 Foreign Outward Remittance
4.9 Local Remittance
4.10 Home Bond Remittance
4.11 Main Flow of Foreign Remittance
4.12 Contribution of Remittances to the national economy

ix
Chapter Remittance Management System
Five
5.1 Concept of Remittance Management System
5.2 List of Different exchange Company
5.3 List of Different exchange Company Under RMS
5.4 Problems & Suggestions on SBL in case of Remittances
Management
Chapter Analysis & Findings
Six
6.1 Comparative Financial Highlights
6.2 Performance Analysis
6.3 Explanation of Statement of through table and Chart
6.4 Analysis With Questionnaire
6.5 Major findings of the study
Chapter Recommendations and Conclusion
Seven
7.1 SWOT Analysis
7.2 Recommendations
7.3 Conclusion
References
Appendices

x
 Chapter – One
Introductory Issues
 1.1 Introduction

This report is the ending stone of our BBA Program and has the aim to enhance the
capability to study in the field of practical organization arena. The BBA program under
Comilla University is the combination of theoretical and practical of administration. There
we have got the idea about business strategy, policy risks, competency factors management
capabilities, and problems in operating administration and day-to-day business function along
with the remedial measures for such problem etc. As consequences of such gathering we are
to acquire the practical knowledge engaging ourselves in an organizational environment.
Moreover, to cope with the technological advances in industrial and commercial development
in this current world of globalization the capability of the executive must be enhanced with a
view to make themselves efficient and effective in the execution of the duties and
responsibilities they are assigned for.

The students of the BBA program are to conduct an internship program under an
institution for certain period of time so that they can justify the practicality of the theoretical
knowledge they have learned in their academic classes. Since this program is providing a
huge benefit for the students this program to be structured in more organized way and to get
the supreme benefit from such program the time dimension to be enhanced as the
organization is a new environment for everyone and to be settled there it takes few days and
for which the students are deprive of getting practical knowledge which they have gone for.
But it is damn true that this program of course provide a great help in building career on the
basis of their academic knowledge.

Today’s fast growing companies need business banking service that fully meets their
expectations for speed, convenience, efficiency and security. To ensure their optimum level
of satisfaction, regarding their necessity for this type of affluent banking services different
types of local as well as multinational banks are coming up with diverse and dynamic
corporate banking services.
 1.2 Background of the study

Sonali Bank, the largest commercial bank in the country, was established under
Bangladesh bank (Nationalization) order 1972 (presidency order no.26 of 1972). By taking
over branches of former national bank of Pakistan, bank of Bahawalpur limited and premier
bank Ltd. Were two private banks performing class banking over the century in that period
and national bank of Pakistan was government supported bank which was established to
finance the jute sector in East Pakistan in the early period of Pakistan. After the birth of
Bangladesh on 16th December 1971, newly formed Sonali bank for mass banking got special
facilities from the government to work on behalf of Bangladesh bank in those areas where
Bangladesh bank is not available. With the increase of commercial and by virtue of
performance within a few years, it becomes the largest commercial bank of the country with
1187 branches up to now.

1.3 Objectives of the Study

The main objective of the study is to conduct a comprehensive study on the Foreign
Exchange Operation of Sonali Bank Limited and to review the remittance management
system of this bank.

Beside this main objective some other objectives are as follows:

 To accomplish the partial requisite of BBA Program and to achieve of good

judgment with theoretical base.
 To find out the challenges associated with the activities concerned with remittance
department.
 To review the management system of the bank.
 1.5 Rationality of the Study

Knowledge and learning become perfect when it is associated with theory and
practice. Theoretical knowledge gets its perfection with practical application. As our
educational system predominantly text based, inclusion practical orientation program, as an
academic component is as exception to the norm. As the parties; educational institution and
the organization substantially benefit from such a program, it seems a “win-win situation”. It
establishes contracts and networking contracts. Contracts may help to get a job. That is,
students can train and prepare themselves for the job market. A poor country like Bangladesh
has an overwhelming number of unemployed educated graduates. As they have no internship
experience they have not been able to gain normal professional experience of establish
networking system, which is important in getting a job. That’s why practical orientation is a
positive development in professional area. Recognizing the importance of practical
experience, Department of Management Studies, has introduced a practical exposure as a part
of the curriculum of BBA program. In such state of affairs the present aiming at analyzing the
experience of practical orientation related to an appraisal of Sonali bank Ltd at Kotbari
branch.

1.6 Methodology of the study

1.6.1 Study Area:

The area of my study has been encompassed the operation area of Sonali Bank Ltd Kotbari
Branch.

1.6.2 Sample size: 50 clients

1.6.2 Target Group:

To accumulate the required data I have contacted with departmental head along with other
concerned officers of Sonali Bank Ltd. In case of remittance I have got in close with the
responsible personals of remittance department to collect the information.
1.6.3 Sources of Data:
i) Primary Data sources:
The primary data are those types of data, which are collected from the root. It’s also called
the raw data.

ii) Secondary Data sources:

The secondary data are those, which have already collected by someone else and wishes have
been passed through the statistical process.

1.6.4 Data collection Method:

There are number of tools to collect data. Some tools are used to collect primary data and
some are used to collect secondary data.

Direct data collection tools have been used for this report such as:
 Practical Banking work.

 Personal discussion with the officers

 Personal interview with the customers

1.6.5 Data Collection Instrument:

There are various tools of collecting primary data.

 The observation tools
 The interview tools
 The questionnaire tools

Secondary data are collected through these tools :

 Internal tools
 External tools
 Internal tools:
 Bank brochures
 Bank Journal
 Training materials
External tools:
 Website browsing
 Email
 Expert opinion

Performing internship on Foreign exchange department and remittance section. face-to-face conversation with customer, employee.
Primary data

Published term paper, Internet soceurs etc.

Information from indirect Source Term Paper

Secondary data

1.7 Scope of the study

As I was an intern, my scope was limited and restricted for some purpose. I had maintained
some official formality for the collection of data of my report. This study will give a clear
idea about the credit risk management of Sonali Bank Limited as well as the different section
of different products and services of Sonali Bank Limited.

 Information availability.

 Good communication system.

 Have a wide area of gaining knowledge.

 Good working environment.

 1.8 Limitation of the study

I have obtained whole-hearted co-operation from the employee of SBL Kotbari Branch.
All the day they were extremely busy, but they gave me much time to make this report
properly. I have faced the following problem which may be termed as the
limitation/shortcoming of the study. These are:

 Short time period:

The first obstruct is time itself. Due to the time limit, the scope and damnation of the
study has been curtailed. For an analytical purpose adequate time is required. But I was no
given adequate time to prepare such as in depth study.

 No availability of adequate data:

To understand the facts about the study in a realistic way and more clearly the
quantitative expression of information is represented by data. It was very difficult to collect
data, which is very essential, because of the branch of SBL was newly established.

 Lack of records:
Sufficient books, publications, facts and figures are not available. This constrict
narrowed the scope of accurate analysis if this limitations were not been there, the report
would have been more useful and attractive.

 Poor library facility:

Most of the commercial bank has its own modern, rich and wealthy collection of huge
and various types of banking related books, journals, magazines, papers, case studies, term
papers, assignment etc. but the library of SBL is not well ornamented.
 Chapter –Two
Evaluation of Banking System in
Bangladesh
 2.1 Literature Review

There have been many studies undertaken by many Bangladeshi scholar,

specialist,researcher & students which deal with the performance of Sonali bank limited.
Some of the notable ones are: Ahmed and Jamsheduzzaman (1985), Swamy and Vasudevan
(1985), Hossain and Bhuiyan (1990), Bhatt and Ghosh (1992), Avkiran (1997), Al-Shamrnari
and Salirni (1998), Siddique and Islam (2001), Chowdhury (2002), Bhattacharya (2007),
Chowdhury and Islam (2007) and Jahangir, Shill and Haque (2007). Most of these studies
were endeavours to find out the determinants of the performance of sonali bank in different
sector. To measure the performance level of a bank, Swamy and Vasudevan (1985) used per
employee deposits, advances, profits, etc. and found them to be significant. However,
Hossain and Bhuiyan (1990) stated that there is no universally accepted operational definition
of performance measures, but in broad sense performance level of an enterprise can be
measured by ‘the extent to which its work is carried out within established specifications for
goods and services produced, to the general satisfaction of the clientele served, within given
cost and time constraints, and in such a manner as to support or contribute to the achievement
of the organization objectives. Bhatt and Ghosh (1992) observed that the profitability of
Sonali banks depend on endogenous factors like control of expenditure, expansion of banking
business, timely recovery of loans and productivity, and exogenous factors consisting of
direct investments such as SLR (Statutory Liquidity Ratio), CRR (Cash Reserve Ratio) and
directed credit programs.

Foreign exchange exposure is very crucial now a days as cross border trade is increasing day
by day at a very fast pace. But it is also regarded as very complex. One possible reason for
the absence of empirical evidence in the literature may be related to the difficulty in devising
the appropriate measures of a firm‘s ability to construct its hedging strategies. There is a
dearth of good literature on this subject, especially in India. Some of the studies identified in
this area are as follow; Bengt Pramborg, in this study, Foreign Exchange Risk Management
by Swedish and Korean Non Financial Firms: A Comparative Survey, 2002, makes a
comparison of hedging practices of Swedish and Korean Firms. The evidence suggests that
Korean firms are more concerned about fluctuations in their cash flows whereas Swedish
firms focus on accounting numbers. Derivatives usage is more popular for hedging among
Swedish firms as compared to Korean firms. It may be a result of relative immaturity of
Korean derivative markets. In both of the countries, majority of firms use a profit based
approach to evaluate any risk management strategy. The study depicts that the decision to
hedge foreign exchange exposure is driven by the level of exposure and size of a firm.
Bradford Cornell and Alan C. Shapiro, in their article, ―Managing Foreign Exchange Risks,
provide step by step guidance for the formulation of an effective strategy for managing
currency risk.

Foreign Exchange means Foreign Currency and include all deposits cr4edits and balances
payable in Foreign currency as well as all Foreign currency instruments, such as, Drafts,
Travelers Cheques, Bill of Exchange, Hundi, and Promissory Notes payable in any foreign
country. (Foreign Exchange Regulations Act, 1947)

Foreign Exchange as the system or process of converting one national currency into another
and of transferring the ownership of money from one country to another. (Dr. Paul
Einzig,1973)

Foreign remittance, in simple terms, means money remitted in foreign currency. More
precisely, it is termed as remittances in foreign currency that are received in & made out
abroad. Conceptual Issues International remittances are defined as the portion of migrant
workers’ arnings sent back from the country of employment to the country of origin (ILO,
2000).

Different studies on Sonali Bank Limited also undertaken by many business graduates at
several time. To acquire practical knowledge about banking sector business students comes
into Bank.They worked on general banking activities, Credit management, Internal control
system,HRM practices,Foreign exchange business etc. But here there are some lackance on
foreign remittance management system.So I want to conduct my study on foreign exchange
business and giving special emphasis on foreign remittance management system.
 2.2 Evaluation of Bank

The modern banking system is an evolutionary growth right from the middle Ages.
The genesis of modern bank lay in the functions performed by the Merchant with wide
reputation commanding confidence far and near could easily finance domestic and foreign
trade. The famous merchant houses established branches to trade centres at home and abroad
began to use credit devises to accommodate their customers Jagath Seth, for example, had his
branch office in London in the 18th century. Even earlier the indigenous hounds, which
finance domestic trade in India was the innovations of the local merchants. In this credit
operation in these credit operations in the ancient merchant houses lay the germs for the
development of the important credit instrument lately known as bill of exchange and these
merchants were virtually forerunner of the modern exchange banks.

The second ancestor of banks was the moneylender. People with surplus quite
unaccustomed with money lending business and trade secrets could safely keep their surplus
with the moneylender for investment by the letter on firms of a share of profit. The
moneylender thus was an embryonic banker performing duel functions lending money and
mobilization of savings. Exactly the modern bank does this as a lineal descendant of the
ancient moneylender. The third in the chain of ancestors stood the goldsmith have safe vaults
for the safe upkeep or their gold stocks. They were the embodiments of safety and security.
Naturally, people with valuables and jewellers approached goldsmiths for safe custard.
Initially the goldsmiths charged commission for safe upkeep. The practice later on changed as
the goldsmith utilized the deposits for earning profits. A modern Bank then comes in itself
the functions of all the there ancestors like the merchant it makes a specialty of financing
foreign trade like the money lender collects savings and end like the goldsmith provides a
convenient mechanism by which people can make payments to each other.
 2.3 Development of Banking in Bangladesh

Bank system was practiced in the Indian subcontinent from the ancient period. In
Indian subcontinent merchants, goldsmith moneylenders were the primary bankers. During
the Moghal period banking and credit business was enchanted rapidly. Then the agency house
of jagth Seth was similar to the merchant house of Lombardy Street. In 1700 AD “Hindustan
Bank” was established as the first joint stock bank. In 1784 “Bengal Bank” and in 1786
General bank of India was lunched. Then both the bank absolved respectively in 1793 and
1832.During the early period of nineteenth century in 1806 “Bank of Bengal” in 1840 “Bank
of Bombay” and in 1843 “Bank of Madras” was established. These Banks were called
Presidency Bank. Then in 1920 these three banks merged to “Imperial Bank of India”. In
1947 after the separation bank business in our country faced a severe disaster as non Muslim
Bankers left to India. Then “Reserve bank of India” acted as the “Central Bank of Pakistan”
in 1948 to re-build the Bank Business “State Bank of Pakistan” was established as central
bank of Pakistan.In 1971 Bangladesh became independent. After liberation “Bangladesh
Bank” was automated with the assets and liabilities of former “State Bank of Pakistan”. It is
the central bank of Bangladesh. During Pakistan period in our country there were 1090
branches of 12 commercial banks. Three foreign banks were also active with 14 branch
offices. Before liberation 80% of banking activities of our country was controlled by
Pakistan. Consequently Bangladesh traders and industrialists didn’t get notable help from the
Commercial Banks. After liberation reformed the destroyed economy on 26th March 1972
the banking sector of Bangladesh was nationalized. After nationalization government of
Bangladesh changed the entire bank to six banks which are Sonali Bank, Rupali Bank, Sonali
bank, Agrani Bank, Pubali Bank &Uttara bank. Their role in development of trade and
commerce of Bangladesh as well as in the development of economy.
 2.4 Banking Structure of Bangladesh

Banking system of Bangladesh comprises of different types of bank and financial

institutions. The name of our central bank is “Bangladesh Bank” it is the director and
regulator of banking system of Bangladesh. Banking structure in Bangladesh is briefly
described below-

 Bangladesh Bank is the central bank of Bangladesh. It is director of money market in

Bangladesh. It regulates the activities of other banks of Bangladesh through credit
control, exchange control etc.
 Commercial bank both the public and private sectors of commercial bank are active in
Bangladesh. There are 4 nationalized commercial banks- Sonali Bank, Rupali Bank,
Agrani Bank, Sonali bank.
 In 1983 priority gives on private sector of banking business. As a result two
nationalize bank was handed over to private sector, which are Pubali and Uttara bank
and now Rupali bank is supposed to hand over in the private sector.
 Now in our country a large number of private banks are doing banking business.

2.5 List of Banks in Bangladesh

The commercial banking system dominates Bangladesh's financial sector. Bangladesh

Bank is the Central Bank of Bangladesh and the chief regulatory authority in the sector. The
banking system is composed of four state-owned commercial banks, nine specialized
development banks, thirty one private commercial Banks and ten foreign commercial banks.
The Nobel-prize winning Grameen Bank is a specialized micro-finance institution, which
revolutionized the concept of micro-credit and contributed greatly towards poverty reduction
and the empowerment of women in Bangladesh.
2.5.1 Central Bank

 Bangladesh Bank

Pursuant to Bangladesh Bank Order, 1972 the Government of Bangladesh reorganized

the Dhaka branch of the State Bank of Pakistan as the central bank of the country, and named
it Bangladesh Bank with retrospective effect from 16 December 1971.

2.5.2 State-owned Commercial Banks

The banking system of Bangladesh is dominated by the 4 Nationalized Commercial

Banks In which 3 is totally controlled by government and 1 (Rupali Bank) bank is controlled
by both government and private sector , which together controlled more than 54% of deposits
and operated 3388 branches (54% of the total) as of December 31, 2004. The nationalized
commercial banks are:Nationalized Commercial Bank of Bangladesh:

 Sonali Bank
 Agrani Bank
 Rupali Bank
 Sonali Bank

2.5.2 Private Commercial Banks

Private Banks are the highest growth sector due to the dismal performances of
government banks (above). They tend to offer better service and products. Now 52 private
commercial banks are operating in Bangladesh.

2.5.3 Foreign Commercial Banks

10 Foreign Commercial Banks are operating in Bangladesh. These are -

 Citibank
 HSBC
 Standard Chartered Bank
 Commercial Bank of Ceylon
 State Bank of India
 Habib Bank Limited
 National Bank of Pakistan
 Woori Bank
 Bank Alfalah
 ICICI Bank
2.5.4 Specialized Development Banks
Out of the specialized banks, two (Bangladesh Krishi Bank and
RajshahiKrishiUnnayan Bank- only for the development of the agriculture of the north bengal
of Bangladesh) were created to meet the credit needs of the agricultural sector while the other
two ( Bangladesh Shilpa Bank (BSB) & Bangladesh ShilpaRinSangtha (BSRS) are for
extending term loans to the industrial sector.
The Specialized banks are:
 Karmasangsthan Bank
 Bangladesh Krishi Bank
 RajshahiKrishiUnnayan Bank
 Progoti Co-operative Landmortgage Bank Limited (ProgotiBanK)
 Grameen Bank
 Bangladesh Development Bank Ltd
 Bangladesh Somobay Bank Limited
 Ansar VDP Unnyan Bank
 BASIC Bank Limited

2.5 New Products & Services of bank

Besides providing traditional services in the areas like, deposits, advance, import
financing, remittance and collection, treasury operations and lockers, the bank has in the
recent years introduced a good number of new products to meet the increasing demands of
the clients and the members of the public. Such of them are –
 Visa cards,
 Credit cards,
 ATMs,
 Phone banking,
 Pension saving scheme,
 Death risk benefit scheme,
 Monthly income scheme
 Chapter – Three
An Over view of
Sonali Bank Limited
 3.1 Origin of Sonali Bank Limited

Soon after independence of the country Sonali Bank emerged as the largest and
leading Nationalized Commercial Bank by proclamation of the Banks' Nationalization Order
1972 (Presidential Order-26) liquidating the then National Bank of Pakistan, Premier Bank
and Bank of Bhwalpur. As a fully state owned institution, the bank had been discharging its
nation-building responsibilities by undertaking government entrusted different socio-
economic schemes as well as money market activities of its own volition, covering all
spheres of the economy.

The bank has been converted to a Public Limited Company with 100% ownership of
the government and started functioning as Sonali Bank Limited from November 15 2007
taking over all assets, liabilities and business of Sonali Bank. After corporatization, the
management of the bank has been given required autonomy to make the bank competitive &
to run its business effectively.

Sonali Bank, the largest Commercial Bank in Bangladesh was established in 1972
under Presidential Order No. 26 of 1972. The bank is fully owned by the government of the
People’s Republic of Bangladesh. The Bank had 1186 branches including two overseas
branches (Kolkata and Siliguri in India) as on 31st December 2004. Out of total 1186
branches, 696 are operating in the rural areas and 488 in the urban areas. Besides, 25 booths
under different branches are performing specialized functions at different locations.From 10
December 2002 Sonali Bank (UK) Ltd (a joint venture company of Sonali Bank And Govt. of
Bangladesh) has been operating to channelise banking activities covering the whole Europe.

A subsidiary company named Sonali Exchange Co. Inc. was incorporated on 4 April
1994 under the laws of the State of New York; Department of State licensed on 17 October
1994 by the State of New York Banking Department and commenced operation as an
International Money Transmitter from 12 December 1994 through which Bangladeshi
citizens living in the USA are conveniently remitting money to Bangladesh. There are three
representative offices of Sonali bank in Jeddah and Riyadh of KSA and another in Kuwait
engaged in motivating Bangladeshi expatriates living there to remit money through banking
channel.
 3.2 Management

The Management of the bank is vested on a board of directors, subject to overall

supervision and directions on policy matters by the board which is constituted in terms of
Bangladesh bank (Nationalization) order 1972 board of directors constituted by seven
members has authority to organize, operate and manage its affairs on commercial
consideration within the board policy of government. There are directors appointed by the
government. Other members of the board including MD are also government appointed out of
that at least three have the experience in the field of Finance, Banking, Trade, Commerce,
Industry and Agriculture. The managing director is the Chief Executive of bank. He executes
all the activities under the directors of board. All line and staff personnel of bank’s are own
recruitment except member of board of Directors.

Deputy Managing Director (DMD)

General Manager

Deputy General Manager

Assistant General Manager (AGM)

Senior Principal Officer

Principal Officer

Senior Officer

Officer

Fig: Management of Sonali Bank

3.3 Organization Structure of Sonali Bank Ltd.

CEO-1

DMD-2

GM-14

DGM-86

AGM-218

SPO-737

PO-1498

SO-2747

OFFICER-7346

STAFF-11656
 3.4 Corporate Profile of Sonali Bank
Limited
Name of the Company Sonali Bank Limited

Chairman Mr. Md. AshrafulMoqbul

CEO & Managing Director Mr. Md. ObayedUllah Al Masud

Company Secretary Mr Md. Ataur Rahman

Legal Status Public Limited Company

Emerged as Nationalised Commercial Bank in
1972, following the Bangladesh Bank
Genesis
(Nationlisation) Order No. 1972 (PO No.26 of
1972)
Date of Incorporation 03 June, 2007
Date of Vendor's
15 November, 2007
Agreement
35-42, 44 Motijheel Commercial Area, Dhaka,
Registered Office
Bangladesh
Authorised Capital Taka 6000.00 Crore

Paid-up Capital Taka 3830.00 Crore

Number of Employee 18,806

Number of Branches 1211

Phone-PABX 9550426-31, 33, 34, 9552924

SWIFT BSONBDDH

Website www.sonalibank.com.bd

E-mail itd@sonalibank.com.bd

Mr. Md. AshrafulMoqbul

 Director and Chairman

Mr. Md. FazlulHaque

Director

Mr. Md. Mahboob Hossain

Director

Mr. Md. Shaheb Ali Mridha

Director

Mr. KaziTariqul Islam

Director

Mrs. SaberaAktari Jamal

Director

Mr. Afzal Hossain

Director

Mr. MuhammedAsadullah
Director

Mr. A.K.M Kamrul Islam, FCA, FCS

Director

Dr. Md. NurulAlamTalukder

Director

Mr. Md. ObayedUllah Al Masud

CEO & Managing Director
Sonali Bank Limited

Fig: Board of Directors

 3.5 Corporate Mission

 Sustained growth in 'Small & Medium Enterprise' sector.

 Continuous low cost deposit growth with controlled growth in Retained Assets.
 Corporate Assets to be funded through self-liability mobilization growth in Assets
through Syndications and Investment in faster growing sectors.
 Continuous endeavor to increase fee based income.
 Keep our debt charges at 2% to maintain a steady profitable growth.
 Achieve efficient synergies between the bank’s Branches, Credit management
Offices and Sonali field offices for delivery of remittance and Bank are other
products and services.
 Manage various lines of business in a fully controlled environment with no
compromise on service quality.
 Keep a diverse, far flung team fully motivated and driven towards materializing
the bank's vision into reality.

3.6 Corporate Vision

Building a profitable and socially responsible financial institution focused on Markets

and Business with growth potential, thereby assisting SONALI and stakeholders build a
"just, enlightened, healthy, democratic and poverty free Bangladesh.

3.7 Corporate Goal

Sonali Bank Ltd. will be the absolute market leader in the number of loans given to
small and medium sized enterprises throughout Bangladesh. It will be a world-class
organization in terms of service quality and establishing relationships that helps its customers
to develop and grow successfully. It will be the Bank of choice for its employees and its
customers, the model bank in this part of the world.
 3.8 Corporate Slogan

Your trusted partner in innovative banking.

3.9 Objectives of the Sonali Bank Limited

 Alongside up gradation and diversification of banking service to provide maximum

satisfaction to the respected clients, nourishing saving habit among the general
people by offering them attractive savings oriented products, thereby assisting
economic development.
 To build up a deep-rooted and harmonious banker-customer relationships by
dispensing prompt and improved services to the clients.
 Use the hard-earned investment of their valued shareholders. Simultaneously, play
their due part in developing a vibrant capital market by ensuring more effective
participation of the Bank in the share market.
 To make best use of latest technologies for giving the clients a taste of modern
banking so as to encourage them to continue and feel proud of banking with SBL.
 Respond to the need of the time by participating in syndicated large loans financing,
thereby expanding the area of investment of the Bank.

3.1o The Future Thrust

 Full duplex on-line Banking

 Introducing more innovative products and services

 Opening new branches

 Expansion of business network at home and abroad

 SMS Banking

 Introduction of new liability/Asset products.

 3.11 Corporate Culture

Employees of Sonali Bank Limited share certain common values, which helps to create
a Sonali Bank Limited Culture.
 The client comes first and A sense of professional ethics
 Search for professional excellence
 Openness to new & new methods to encourage creativity
 Quick decision making &Flexibility and prompt response.

3.12 Operational Network

The Bank through its 1186 branches- 1184 domestic and 2 overseas (Kolkata and
Siliguri in India) have been providing banking services to its customers. Out of total 1186
branches, 696 are operating in rural areas and 490 in the urban areas. Besides, 26 booths
under different branches are performing specialized functions at different locations. It is note
worthy that during 2003, 37 branches have been closed/ merged for rationalization of he
branches within the country.

The Head office of the Bank is located at the Motijheel Commercial Area, Dhaka
consisting of 41 Divisions and 59 Departments. The Divisions are headed by the DGMs and
the Departments are by AGMs. There are also many Sections under each Department in the
Head Office. The Sections are run by Senior Principal Officers (SPOs).

The Bank has eight (08) GM Offices in six Divisional Headquarters and 27 Principal
Offices and 62 (27+35) Regional Offices. A DGM is the chief of the Principal Office and an
AGM usually run a Regional Office. Principal Offices have jurisdiction over the entire area
of a district, i.e., Principal Offices are the local points of the bank’s administrative zone in the
districts. The Regional Offices, under the control and supervision of the Principal Offices, are
responsible for their performance and activities to the district-level Principal Offices.

The Regional Heads exercise control and supervision over all the branches within their
jurisdictions and keep the Head of the Principal Office informed about the developments of
their respective areas from time to time.
 There are also 21 Corporate Branches existing in different important places over the
country and 11 of them are in Dhaka. The Corporate Branches are nearly equivalent to the
GM office and usually headed by DGMs. They are called “Corporate Branch” as they
provide all the banking services, e.g., general banking, foreign exchange, credit services etc.,
in one place and they have their own discretionary power. From 10 December, 2002 Sonali
Bank (UK) Ltd. (a joint venture Company of Sonali Bank & Govt. of Bangladesh) is
operating to channels banking activities covering the whole Europe.

Besides, the Bank established a wholly owned subsidiary company in New York, USA
in the name of Sonali Exchange Company Inc. to act as an international money remitter
through which Bangladeshi citizens living in the USA are conveniently remitting money to
Bangladesh. There are three representative offices of Sonali Bank in Jeddah and Riyadh of
KSA and another in Kuwait of Middle East engaged in motivating Bangladeshi expatriates
living there to remit money through banking channel.
3.12.1 Offices/ Divisions/Branches of Sonali Bank

SL.No. Office/Branch No.

1 Head Office 1
2 Division of Head Office 30
3 Managing Director’s Office 6
4 Principle Office 42
5 Local Office 19
6 Branch (including 2 Foreign Branch) 1186
7 Sonali Bank UK Ltd. 6
8 Sonali Exchange Co. Ink. (USA) 8
9 Representative Office (Jeddah, Riyadh, Kuyet) 3
10 SonaliBankStaffCollege 1
11 Training Institute 5

(Sources: SBL Staff College)

3.13 Product & Services of Sonali Bank Limited

Products & Services:

Product and services is the main assets of any organization. The following product and
services are available of Sonali Bank Ltd.
 Consumer credit Scheme
 Special Deposit Scheme
 Monthly Saving Scheme
 Saving Insurance Scheme
 Credit Card
 Western Union Money Transfer
 Sonali Bank Ltd ATM Service
 Sonali Bank Ltd Power Card
3.13.1 Consumer Credit Scheme:
Sonali Bank Ltd. Consumer Credit Scheme gives clients a great opportunity to buy
household and office items on easy instalments. This scheme gives clients the advantage of
part payment to cope with the high price tags of many necessary home and office
appliances.Television, Refrigerator, VCR, Personal Computer, Photocopier, Washing
Machine, Furniture, Microwave Oven, Car, and a number of other expensive items are now
within their buying range. With this scheme Sonali Bank Ltd. makes better living possible for
people living on fixed income. Customers can buy those home and office equipment's
without over taxing their budget.

3.13.2 Special Deposit:

For most of the people on fixed income the opportunity to supplement their monthly
earning is a golden one. And Sonali Bank Ltd. Special Deposit Scheme gives a customer just
that. Under this scheme, customers can deposit money for a term of 5 years. The deposited
money is fully refundable at the expiry of the term. At the same time, during the term period
they can enjoy a monthly profit corresponding to their deposited amount. As for instance,
under this scheme a deposit of Tk, 55,000/- gives a monthly income of Tk.500/-.

Deposited Amount Monthly Benefit

Tk. 55,000/- Tk. 500/-
Tk. 1,10,000/- Tk. 1,000/-
Tk. 1,65,000/- Tk. 1,500/-
Tk. 2,20,000/- Tk. 2,000/-

3.13.3 Monthly Savings Scheme:

This scheme is specially designed for the benefit of the limited income group
members. This helps to accumulate small monthly savings into a significant sum at the end of
the term. So, after the expiry of the term period the depositor will have a substantial amount
to appreciate on.A monthly deposit of Tk.500/- or Tk.1000/- for 5 or 8 years period earns in
the end. Tk37, 896 /- or Tk.75, 791/- respectively.
3.13.4 Credit Card:
Credit card is the newest concept in our country. In our country Credit card was
introduced some year ago by the Sonali Bank Ltd. Master card and VISA card are name of
popular credit card band. Credit card is safe, instant and universal money.

3.13.5 Local master and visa card:

Local master and visa card are two types, such as “gold card” and “silver card”.
 Gold card limit is 50000 taka to 1000000 taka
 Silver card limit is 10000 taka to 45000 taka

3.13.6 Requirement for local credit card:

 FDR.STD account Loan
 Tax identification number
 Two copy passport size photo

3.13.7 International master and visa card:

It has also two types, such as gold card and silver card.
 For international purpose gold card limit is $ 4000 above
 For international purpose silver card limit is $ 2000 blow $4000

3.13.8 Requirement for international credit card:

 Pass port photocopy (first five pages)
 Two copy passport size photo.
 TIN number
FDR, STD, SB account lien

3.13.9 Sonali Bank Ltd ATM Services:

ATM means automated teller machine. Sonali Bank Ltd. ATM card give opportunity
to their customer that they can withdraw their money at any time, any days even holidays. By
using ATM subscriber can give various utility bill such as telephone, gas, electricity bills etc.
actually ATM card is a debit card. Sonali Bank Ltd. has introduced ATM service to its
Customers. The card will enable to save their valued customers from any kind of predicament
in emergency situation and time consuming formalities. SBL ATM Card will give their
distinguished Clients the opportunity to withdraw cash at any time, even in holidays, 24 hours
a day, and 7 days a week.

3.13.10 Charges for ATM card:

ATM cardholders have to pay 1000 taka annually and in the case of card lost
subscriber also pay additional 300 taka

3.13.11 Sonali Bank Ltd Power Card:

It is a prepaid card. No need of any account of Sonali Bank Limited. Branch.
Application form available at any Sonali Bank Ltd. branch and card centre. No annual fee for
the first year. Renewal fee Tk. 200.00 only. Local card limit 1000at minimum or its multiple.
International card limit-US$ 500.00 at minimum. Refill through any Sonali Bank Ltd. branch.
Drawing cash from Sonali Bank Ltd. ATMs free of charge & from ATMs under Q-Cash
network-Tk.10.00 per transaction from other ATM-Tk 100.00. Loading fee for international
card will be charged @1% of the loaded amount. Cash withdraw fee (abroad) 2% of the cash
drawn amount or US $.2.00, whichever is higher. Accepted at all VISA POS merchants. Cash
withdrawal at all ATM booths bearing VISA and Q-Cash logo.( Except HSBC Bangladesh).
Utility bill payment. It is a prepaid card. No need of any account of Sonali Bank Ltd. branch.
Application form available at any Sonali Bank Ltd. branch and card centre. No annual fee for
the first year. Renewal fee Tk. 200.00 only. Local card limit 1000at minimum or its multiple.
International card limit-US$ 500.00 at minimum. Refill through any SBL branch.

3.13.13 Saving Insurance Scheme

This is an uncertain World and the threatening silhouettes of future catastrophes are
always looming around. This Sonali Bank Ltd. scheme gives your family protection against
the insecurities of the world. This scheme is the first of its kind in Bangladesh. It combines
the benefits of regular savings and insurance scheme; so, you get the usual rate of interest on
the deposited amount while you enjoy the protection of a comprehensive insurance coverage.
Under this scheme, the beneficiary (ies) get equal the deposit in case of natural death of the
account holder whereas in the event of accidental death of the account holder the beneficiary
(ies) will receive twice the deposit. As for example, if a customer picks up Easy Class (Tk.50,
000/-) he/she will get Tk.50, 000/- for natural death and Tk.1, 00,000/- for accidental death
apart from his/her deposited amount and interest.
3.13.14 Swift and Reuters
The Bank has in its use the latest information technology services of SWIFT and
REUTERS. L/C advising, transferring and quick transfers of remittances as well as other
financial correspondences have become very easy & speedy with the installations of SWIFT.

3.13.15 Small credit program for disbursement

Sonali Bank Ltd. has been continuing its small credit programmed for disbursement
of collateral free agricultural loans among the poor farmers of Local area for improving their
lot. Alongside banking activities.

3.13.16 Support to foreign investors

Sonali Bank Ltd., has now acquired strength and expertise to support the banking
needs of the foreign investors. Sonali Bank Ltd stepped into a new arena of business and
opened its Off Shore Banking Unit at Mohakhali to serve the wage earners and the foreign
investors better than before.

3.13.17 Transparency and accountability:

Transparency and accountability of a financial institution is reflected in its Annual
Report containing its Balance Sheet and Profit & Loss Account. In recognition of this, Sonali
Bank Ltd. was awarded Crest in some year.
 3.14 Social Responsibility of Sonali Bank Limited

3.14.1 Employment:
Sonali Bank Ltd has been continuously creating new fields of employment every year
by way of expansion of its business activities and branch network, the bank created
employment or personnel’s

3.14.2 Education:
Sonali Bank Ltd. Foundation was established in 1989 for fulfilling responsibilities for
welfare of the society .It has been running the Sonali Bank Ltd. public School and college, in
every year brilliant students appeared at the SSC Examination among them students
achieved Golden A+ and  students appeared at the H.S.C. examination among them some
students achieved Golden A+. The bank has been accommodating prospective graduates
recognized universities for completing their internship. Sonali Bank Ltd. also awarded
stipend and scholarship to the brilliant children of the employees of the bank.

3.14.3 Sports & culture:

Nation Bank has a tradition of patronizing and sponsoring sports and cultural of the
country. The “Sonali Bank Ltd. was arranged sport under patronization of the Bank. SBL has
been arranging annual picnic for gathering and recreation o its executives, officers and staff.

3.14.4 Disaster relief:

Sonali Bank Ltd. always extends its helping hands and stands by the suffering and
helpless people in times of natural calamities
 3.15 Sonali Bank Kotbari Branch, Comilla

To find a branch of Sonali Bank nearby you in Comilla; Kotbari would be your best
choice which is located at Kotbari, Comilla is definitely close to your location. Learn
physical address, location, contact number, routing number, SWIFT code, service hours and
what times and days this branch will be open and closed. Dial +88081 76087 to connect the
branch and have experience with its best services.

Bank Name Sonali Bank Limited

Branch Name Kotbari Branch

Address Kotbari, Comilla

Telephone 081 76087

Branch Code 265

SWIFT Code BSONBDDH

Routing Number 200192655

District Comilla

Service Hours Sunday: 10:00 am - 4:00 pm

Monday: 10:00 am - 4:00 pm
Tuesday: 10:00 am - 4:00 pm
Wednesday: 10:00 am - 4:00 pm
Thursday: 10:00 am - 4:00 pm
Friday: Closed
Saturday: Closed

Working Days Sunday - Thursday (Except Holidays)

 Chapter – Four
Foreign Exchange
&
Remittance
 4.1 Concept of Foreign Exchange

Foreign Exchange means Foreign Currency. If we consider Foreign Exchange as a

subject then it means all kinds of transactions related to foreign Currency, as well as currency
instruments such as draft, MT, TT, TC, and Payment Order & Foreign Trade. In other words
Foreign Exchange deals with Foreign Financial Transactions. Foreign Exchange refers to the
process or mechanism by which the currency of one country is converted into the currency of
another currency and, thereby, involves the international transfer of money. It is the means of
method by which rights to wealth in a country’s currency are converted into rights to wealth
in another currency. In banks where we talk Foreign Exchange, we refer to the general
mechanism by which a bank converts currency of one country into that of another’s.

Dr. Paul Einzig defines Foreign Exchange as the system or process of converting one
national currency into another and of transferring the ownership of money from one country
to another.

In the words of Mr. H. E. Evitt, Foreign Exchange is that section of Economic

Science which deals with the means and method by which rights to wealth on one country’s
currency are converted into rights to wealth in terms of another country’s currency.

In terms of Foreign Exchange Regulations Act, 1947 as adapted in Bangladesh,

Foreign Exchange means Foreign Currency and include all deposits cr4edits and balances
payable in Foreign currency as well as all Foreign currency instruments, such as, Drafts,
Travelers Cheques, Bill of Exchange, Hundi, and Promissory Notes payable in any foreign
country.

Foreign Exchange Department is international department of the bank. It deals with

globally and facilities international tread through its various modes of services. It bridges
between importers and exporters. Bangladesh bank issues license to scheduled banks to deal
with foreign exchange. These banks are known as Authorized Dealers.
 4.2 Scope of Foreign Exchange

No country is self sufficient in this world. Every one is more or less dependent on
another, for goods and services. Say, Bangladesh has cheap manpower whereas Saudi Arabia
has cheap Petroleum. So Bangladesh is dependent on Saudi Arabia for petroleum and Saudi
Arabia is dependent on Bangladesh for cheap manpower. In this backdrop Bangladesh earns
huge remittance of Green Back (US Dollar, EURO, Pound Sterling, Yen, Ringit, Rial etc. to
meet up its import payments People of one country is going to another country for education,
medical services etc. one country exports agricultural commodities another country exports
industrial products. All these transactions needs foreign currency and are closely related to
foreign exchange

4.3 Regulations of foreign exchange

Foreign Exchange Regulation (FER) Act,1947 enacted on 30th march, 1983 in the then
British India provides the legal basis for regulating certain payments, dealings in foreign
exchange and securities and the import and export of currency and bullion.

 Basic regulations under the FER Act are issued by the Government as well as by the
Bangladesh Bank in the form of  Notification which are published in the Bangladesh
Gazette. Notification issued by the Bangladesh government and erstwhile
Government of Pakistan and the Bangladesh bank and the erstwhile state bank of 
Pakistan are reproduced at Appendices   and     .directions having general application
are issued by Bangladesh Bank in the form of notifications, foreign exchange circular
letters.

 Authorized Dealer (Ads) in foreign exchange are required to bring the foreign
exchange regulations to the notice of their customers in their day-to-day dealing and
to ensure compliance with the regulations by such customers. The Ads should report
to the Bangladesh bank any attempt, direct or indirect, of evasion of the provisions of
the Act, or any rules, orders or directions issued there under.
  The Ads must maintain adequate and proper records of all foreign exchange
transactions and furnish such particulars in the prescribed returns for submission to
the Bangladesh bank. They should continue to preserve the records for a reasonable
period for ready reference as also for inspection, if necessary, by Bangladesh bank’s
officials.

4.4 Functions of Foreign Exchange

Department

4.4.1 Exports:

Pre-shipment advanced.

1. Purchase of foreign bills.

2. Negotiating of foreign bills.
3. Export guarantees.
4. Advising or confirming letters- letter of credit.
5. Advance for deferred payments exports.
6. Advance against bills for collection.

4.4.2 Imports:

1. Opening of letter of credit.

2. Advance bills.
3. Bills for collection.
4. Import loan and guarantees.

4.4.3 Remittances:

1. Issue of DD, TT, MT etc.

2. Payment of DD, TT, MT etc.
3. Issue and enhancement of travelers check.
4. Sale and enhancement of foreign notes.
 4.5 Remittance

Remittance means transfer of money from one to another. Bank provides this facility
to their customer as a part of essential services provided to them. The transfer of money can
take place either within the country or from one country to another.

The transfer of money can take place either within the country or from one country to
another.

 Foreign Remittance.
 Local Remittance.

When transfer of money occurs from any foreign country to the home country it is
called foreign remittance. The economy of Bangladesh is mainly depended on this sector.
Both the receiver and sender want this money to be transferred. safely and rapidly. Bank
provides these services to them in a secured way.

When money is transferred through one place to another place within the country, it is
called Local Remittance. Sonali Bank has highest number of branches all over the country
and offers various kinds of remittance facilities to the public.

4.6 Modes of Remittances

The term inward remittances includes not only remittances by TT., MT., Drafts etc.
but also purchases of bills,purchases of drafts under travelers letter of credit and purchases of
travelers cheques. Foreign currency notes against which payment is made to the beneficiary also
a part of inward remittances.

The following are the mode of Inward/Outward Remittances.

 TT = Telegraphic Transfer.
 MT = Mail Transfer.
 FD = Foreign Drafts.
 PO = Payment Order.
  TC = Travellers Cheque.
 EFT = Electronic Fund Transfer

4.6.1 Telegraphic Transfer

Telegraphic transfer (TT) is the quickest and self-way of transferring money from
one destiny to another destiny. It is done by telephone massage, telex massage. The message
is authenticated by prefixing of suffixing a check cipher. A check cipher for any remittance is
worked out on test key table and a code block, which is allowed only authorized officer.

Elements of the test code for TT:

 Code for name

 Code for amount
 Code for date
 Code for branch

This test code is generally given by the authorized officer because it is confidential.

TT Sending:

Requirements for sending TT: -

 Client should have account in National at Elephant road branch and sending place.
 Client should paid commission, VAT and telex charge

Procedure for sending TT:

When client want to transfer money from Sonali Bank Ltd, Kotbari branch to Sonali Bank
Ltd, Kotbari branch (suppose) then following ways he should follow: -

 At first collect TT form remittance division

 Deposit money in cash department, which he mentioned in TT form.
 Then client collect cost memo from remittance division, this cost memo works as
evidence in favor of client.
 The authorized officer put test code and registers it in the TT payment register book then
authorized officer send massage to the Kotbari branch by telephone or telex. This massage
contains Client account number, test number, amount.

Commission of TT:

 Up to 25000 commissions is 25 taka

 Above 25000, for every one thousand pay one taka as commission.

VAT: - 10% of commissions

Telex charge: - It is always 40 taka

4.6.2 Mail Transfer

It is an instrument that is drawn by one banker office on another or other banker’s

branch to pay certain sum of money to the named person. This instrument is not given to the
holder but the bank carries it and a message is sent to the particular branch. It is generally
used to remit fund from one corner of the country to another.

Commission for MT, DD, & TT are giving below:

Total Amount Commission

UP to TK 20,000 Tk 20
Above Tk 20,000 Per thousand costs Tk 1

For MT minimum charge is Tk. 15. And for IT in addition to the commission TT charge is
paid Tk. 50 and a VAT is paid on the commission @15%.

4.6.3 Payment Order

Payment Order is an instrument that is used to remit fund within a local area i.e.
within the same clearing house area. For example, if we want to remit fund from one place of
Dhaka to another place, we generally use payment order.
Pay order is an order by an issuing branch or bank upon client for made payment of the
amount mentioned there in that named pay on according to client order. Pay order issued only
for local payment.
For issuing a PO, following formalities are to be maintained. These are:
 Duly filled up the application form by the customer
 Deposit money either in cash or by check with necessary charges
 Prepare the instrument and make necessary entries in the PO register where
payees name, date, PO no and so are noted.
4.6.4 Demand Draft
It is an instrument that is drawn on one banker office to another or other banker’s
branch to pay certain sum of money to the named person. It is generally used to remit fund
from one corner of the country to another. For example,, if we want to remit fund from Dhaka
to Khulna we use DD. DD is very popular instrument for remitting money from one corner of
the country to another.

Characteristics of demand draft (DD):

 It is drawn on one branch upon another branch of the same bank

 Its payment cans only that whose name is mentioned in the pay orders.

Commission:

Up to 30000 taka commission 25 taka.

Above 30000 taka every one thousand carry 1 taka.

VAT: - VAT is 10% of commission

Clearing and Bills Department:

Check, pay order, demand draft, collection of amount of other banks on behalf of its
customer is a basic function of a clearing department.

4.6.5 Differences between Pay Order and Demand Draft

There are some differences between pay order and demand draft. These are given below
 In case of Demand Draft both the payer and payee need to have accounts. But there is
no certain rule for pay order.
  PU is used in the same clearing area; DD is used for all kinds. DD can not be done in
the same clearing area.
 DD is drawn on a certain bank office. But there is no certain rule for pay order(PO).

4.6.6 Foreign Currency Notes (Online Remittance)

A remitter abroad simply has to approach a bank branch there with certain amount
to be deposited beneficiary in Bangladesh either in foreign currency or in equivalent Taka
currency. The Branch so approached abroad usually should have agency arrangement with
the paying banks in Bangladesh. However, in the absence of any such agency arrangement,
remittance may also be made by transferring cover value of the remittance to the paying
bank’s account abroad by the remitting bank.

Two types of Foreign remittance:-

1. Foreign Inward Remittance.

2. Foreign Outward Remittance
.

4.7 Foreign Inward Remittances

The remittance of freely convertible foreign currencies which we are receiving from
abroad against which the Authorized Dealers making payment in local currency to the
beneficiaries may be termed as Foreign Inward Remittance.

4.7.1 Sources of Foreign Inward Remittance

 Expatriate Bangladeshis
 Exporters.
 Visitors.

4.7.2 Purpose of Remittance

In short, remittances are being sent from abroad for the following purposes:-

 Family maintenance
 Indenting Commission
 Recruiting Agents Commission
 Realization of Export proceeds
  Donation
 Gift
 Export broker’s Commission etc.

4.7.3 Payment procedures of MT and Drawn on Sonali Bank Ltd.

The above investments that are drawn on Sonali Bank Foreign Exchange Corporate Branch
may be paid on the spot before making payment the following procedures to be observed by the
authorized dealer:

 To obtain Form-C.
 To verify the signatures of the instrument.
 To convert the foreign currency intoBangladesh TK. with O.D. (On Demand Transfer)
 buying rate prevailing on the date.
 To make entry in TTs, drafts & Mails received register.
 To prepare FET schedule and to send first five copies of FET along with vouchers to
international division, Head Office, Dhaka.

4.7.3.1 Payment procedure of T.T.:

 To verify the 'test number'.

 To inform the beneficiary for submission of "Form - C".
 To confirm from issuing bank or reimbursing bank.
 To covert of foreign currency into Bangladesh currency with T.T.
 To make entry in T.T.s, drafts, M.T.s, received registration.
 To prepare vouchers.
 To prepare FET schedule.

4.7.3.2 Purchase of Drafts &Cheques:

Authorized dealer may purchase drafts &cheques which are not drawing on Sonali Bank at
the request of the beneficiary. Procedures of purchase are as below:

 To obtain an application or undertaking from the beneficiary with 'Form – C’

 To verify the signature of the drafts (ifpossible).
  To make entry in the register for drafts & T.C. purchased.
 To convert foreign currency into Bangladesh currency.
 To prepare voucher.
 To prepare FET schedule.
 To send the instrument for collection.

4.7.3.3 Collection procedure of drafts &cheques:

 To make entry in foreign BillsCollection Register.
 To prepare forwarding schedule in quadruplicate.
 To prepare vouchers on realization of proceeds i.e. on receipt of advice from the
collecting bank.

4.7.3.4 Paymentof traveler's cheque (TC):

 To checkup the custom declaration (ifany).
 To consult with purchase agreement (ifany).
 To obtain signature on TC and to verify the same with the previous signature ofthe
beneficiary of the TC.
 To make entry in register for TC & drafts purchased.
 To convert foreign currency into Bangladesh currency.
 To prepare FET schedule.
 To send the TC for collection.
 To prepare the vouchers.

4.7.3.5 Payment of foreign currency notes:

 To check the custom declaration (if any).

 To made entry in (kateha) raw register.
 To convert foreign currency into Bangladesh currency.
 To prepare vouchers.
 No FET schedule is required to be prepared & sent to head office.
4.7.4 Cancellation of Inward Remittance
In the event of any inward remittance which has already been reported to the Bangladesh
Bank being subsequently cancelled, either in full or in part because of non-availability of
beneficiary. Authorized dealers must report the cancellation of the inward remittance as an outward
remittance of "Form-T/M". Required documents are:

 The date of return in which the inward remittance was reported.

 The name & address of the beneficiary.
 The amount of the purchase as effected.
 Reasons for cancellation.

On the last working day of each month the transaction during the month to be reported to
Bangladesh Bank through the following schedule:
 Schedule -J-l / 0-3 for TK. 5000 & above.
 Inward remittance voucher-1/04 for below TK. 5000.

4.8 Foreign Outward Remittances

The remittances in foreign currency which are being made from our country to abroad is
known as foreign outward remittance.

4.8.1 Purpose of Outward Remittance

 To settle Import Payment.

 To meet Travel Expenses/Medical Expenses/Educational Expenses etc.

4.8.2 Approval of Bangladesh Bank

Bangladesh is always in a scarcity of foreign exchange and foreign exchange business

is restricted and controlled by the Central Bank of the country. For this reason Bangladesh
Bank’s prior permission is required for any remittance to be made to outside the country.

Bangladesh Bank provides permission/approval for outward remittances to the applicants

who are to lodge an application for the purpose on the following prescribed forms with an
Authorized Dealer who forwarded the same to Bangladesh Bank for approval.
Bangladesh Bank provides permission or approval for outward remittances to the applicants who
are to lodge an application for the purpose on the following prescribed forms with an authorized
dealer who forwarded the same to Bangladesh Bank for approval:

 The IMP form (cover remittances for imports).

 Form T/M (Travelling & Miscellaneous).

Issuance procedure of FD, MT. & TT.:

 To prepare the instrument.
 To make entry in DD, MT, TT issued register.
 To prepare draft advice in duplicate one for drawee
bank & one for reimbursing bank.
 To make entry in draft advice dispatched register.
 To send reimbursement authority in case of MT & TT.
 T o prepare FET schedule.

Issuance procedures of traveller cheque:

 To verify the approved T / M form or Bangladesh Bank permit.

 To issue TC by obtaining signature of the purchaser on the TC.
 To endorse in the passport.
 To prepare FET schedule.
 To make entry in the travellers cheque issue register.
 The TC issuing slip of the issued TC to be sent to that bank (whose TC issued)
 With reimbursement instruction.

4.9 Local Remittances

When money is transferred through one place to another place within the country, it is
called Local Remittance. Sonali Bank has highest number of branches all over the country
and offers various kinds of remittance facilities to the public.In case of Local Remittance
Demand Draft,Mail Transfer & Telegram transfer modes are used by Sonali bank.
Here we present some amount of Remittances collected by Sonali Bank, KotbariBranch
through different modes on several year.

Yea DD MT TT A.B.B Total amount

r (TK.)
2017 727504603 8381148 164380 48397081 740889839
2016 667654236 8234677 177934 40097586 716164433
2015 684121000 7866700 308160 39987320 732283180

4.10 Home bound Remittances

More than 40% of home bound remittances are routed through Sonali Bank for its excellent
personalized services and wide network of foreign inlets and domestic outlets. Remittance can be sent
to all the 1203 local branches of the Bank spreading over the urban and remote rural areas of
Bangladesh. To facilitate home bound remittance the Bank has two subsidiary companies, one in the
USA and another in the UK. Besides, it has one representative office in Saudi Arabia and 23 agency
offices in other Middle Eastern Countries.

Sonali Bank has made arrangements to deposit/pay remitted money to the beneficiaries within 48
hours on receipt of the remittance from abroad.

4.10.1 Facilities for Wages Earners

 Bangladeshi national/Bangladesh origin dual citizen working abroad may open Foreign Currency
account (F.C. A/C ) in US Dollar and Pound Sterling without initial deposit.
 Nominee can operate the account
 Interest is paid on F.C. A/C
 Balance in F.C. A/C can be utilized for import of goods
 Balance available in the F.C. account may wholly or partially be sent abroad.
 Foreign currency brought in by Wage Earners can be deposited in the F.C. A/C
 Wage earners Development Bond in Taka can be purchased from the balance of F.C. A/C
 Non-Resident Foreign Currency A/C (NFCD A/C) can also be opened by Wage Earners.
4.10.2 Interest Rates for Wage Earners
Particulars Interest rates (P.A) (Floating)

Wage Earners Development Bond issued for 5 years 12%

Non-Resident Foreign Currency Deposit (NFCD) A/C
Nature of Customer Currency Period (Month) Rates
Private Individual USD 1 Month
3Months
6 Months & above 1.75%
GBP 1 Month 3.60%
3 Months 3.58%
6 Months & above 3.55%
All Foreign Banks/ USD 1 Month 1.90%
Exchange House & 3 Months 1.85%
Financial Institutions 6 months 1.80%
All Foreign Banks/ GBP 1 Month 3.60%
Exchange House & 3 Months 3.58%
Financial Institution
Financial 6 Months & above 3.55%
Resident Foreign Currency Deposit (RFCD) A/C 4.82%
Foreign Currency Account Dollar (FCAD) 4.00%
Foreign Currency Account Pound (FCAP) 5.00%

4.11 Main flow of Foreign Remittances

 Saudi Arabia
 UAE
 Kuwait
 Qatar
 Oman
 Iraq
 Libya
 Bahrain,
 Iran
 Malaysia
 South Korea
 Singapore
 Hong Kong
  Brunei

These are some of the major countries of destination. Saudi Arabia alone accounts for
nearly one half of the total number of workers who migrated from Bangladesh. Labour
market of Bangladeshi workers is not static. During the 1970s Saudi Arabia, Iraq, Iran and
Libya were some of the major destination countries. While the position of Saudi Arabia
remains at the top, Malaysia and UAE became important receivers. In mid-1990s, Malaysia
became the second largest employer of Bangladeshi workers. However, since the financial
crisis of 1997, Bangladeshis migrating to Malaysia dropped drastically. Now UAE has taken
over its place.

4.12 Contribution of Remittances to the National

Economy
Labour migration plays a vital role in the economy of Bangladesh. Bangladesh has a very
narrow export base. Readymade garments, frozen fish, jute, leather and tea are the five
groups of items that account for four-fifths of its export earnings. Currently, garments
manufacturing is treated as the highest foreign exchange earning sector of the country (US $
4.583 billion in 2003).

However, if the cost of import of raw material is adjusted, then the net earning from
migrant workers’ remittances is higher than that of the garments sector. In 2003, net export
earning from RMG should be between US$2.29-2.52 billion, whereas the earning from
remittance is net US$3.063 billion. In fact, since the 1980s, contrary to the popular belief,
remittances sent by the migrants played a much greater role in sustaining the economy of
Bangladesh than the garments sector.8 For the last two decades, remittances have been at
levels of around 35% of export earnings, making it the single largest source of foreign
currency earner for the country. This has been used in financing the import of capital goods
and raw materials for industrial development. In the year 1998-99, 22 percent of the official
import bill was financed by remittances (Afsar, 2000; Murshed, 2000 and Khan, 2003). The
steady flow of remittances has resolved the foreign exchange constraints, improved the
balance of payments, and helped increase the supply of national savings (Quibria 1986).
Remittances also constituted a very important source of the country’s development budget.
Therefore, the importance of migrant remittance to the economy of Bangladesh can hardly be
over emphasized.

Chapter – Five
Remittance Management System
 5.1 Concept of Remittance Management System

Remittance Management System is a customized process of sonali Bank Limited. This is

totally bank’s own system where foreign remittance were processed. Basically bank collects
the remittance from the 41 exchange houses of different foreign countries. This exchange
house collect money from the customers and then send information about the customers to
the bank.

5.1.1 A short over view of RMS is shown below:

There are two processes for sending the information to the bank.

1. EFT(Electronic Fund Transfer)

2. SWIFT(Society for worldwide inter bank fund telecommunication)

After receiving this data bank process this data with the help of a customized software
which is prepared for process this data. This software is called Remittance Management
System (RMS) software. Some high quality, energetic, IT specialist and dynamic young
group are engage to ensure the faster and swift service to the customers.

The exchange house collect information from the customer’s regarding their -
  PON (Payment Order No) No
 Date
 Beneficiary Name
 Account Name
 Amount
 Remitter Name
 Beneficiary Branch Name etc.

The bank has installed RMS at Wage Earner’s Corporate Branch (WECB), Dahka. The
incoming remittances are downloaded and processed at WECB using RMS.

RMS captures various structured remittances from various exchange company and
converts it into a unique structure and imposes a security. After capturing the remittances
RMS receives an administrative password, a part-1 test key holder password, a part-2 test key
holder password and two signatures activation password daily. In RMS there are 20 (Twenty)
parameterized signature. We can change the signatory dynamically per day. RMS has
automated secured test key module. So RMS generates test key automatically for every
amount. Then we accumulate the TRA data of various exchange company and impose three
types of security and validate using RMS Data Center for live outlets.

The RMS module of outlets receives incoming remittance data packet & validate it. After
validation the TRA prints automatically with two signatures and a test number. An authorized
signatory of outlets sign on TRA as third signature and distribute it. The TRA of distance
location is distributed over phone initially and put a seal on TRA as “credit over phone”.

The outlet collects the credit date of TRA from branches and sends a feedback file to WECB.
This feedback is used for Reconciliation and overseas exchange company/Bank.

There are three foreign remittance management processes. These are:

Remittance Through the Direct Arrangement with Sonali Bank

Sonali Bank has arrangement with some foreign bank and transfer agencies in various
countries. When transfer is made from those countries and through any of those financial
institutions, they transfer it directly to the Sonali Bank. This transfer is made through online.
Generally Sonali Bank Wage Earners Branch receives all these remittance and then sends it
to the respective branches of the bank. This is transferred by filling up a TTPO (Telegraphic
Transfer Pay Order) form or FTT (Foreign Telegraphic Transfer) form.

Remittance Through Any Other Bangladesh Banks

When there is no arrangement between the foreign financial institution and Sonali
Bank, the foreign institution transfer it to any other bank in Bangladesh with whom it has
arrangement. Then the bank transfers it to the Sonali Bank. When the transferor and
transferee bank are within the same clear house area, the transferor uses P0 (Pay Order). And
if the two banks are in different clearing house area, the transferor uses DD (Demand Draft)

Remittance ThroughA Foreign Bank

The remitter can send money through any financial institution which has branches in
both countries. In this case, the bank in Bangladesh receives the amount from its foreign
branches and then transfers it to the bank where the client wishes to draw the money. Here
the bank needs to fill up a C’ form if the amount of money is $2,000 or more. It is done for
the declaration for remittance received from foreign country in the amount of $2,000 or more.

5.1.1 Features of RMS for Middle East Remittance

 Credit beneficiary Account within 8-24 Hours.
 Auto TRA issue
 Auto Test Number for any amount (Parameterized)
 Auto Signature (Parameterized)
 Highly secured data transmission
 Auto Feed Back
 Data Ready for Reconciliation
 Unique platform for all exchange company
 Consolidated Data packet for all overseas exchange/Bank
 Missing data packet traceable by outlet software
 Single Copy instrument print
 Additional instrument copy prints with “Care Duplicate”.
 Generate all types of required statements
 100% parameterized Software
 Only local TRA prints at WECB
5.1.2 Ministry of Finance
Ministry of Finance (MoF) is the prime policy making body regarding banking and
remittance. Macro-economic policies that affect exchange rate, monetary and fiscal
mechanisms, foreign exchange reserve etc. are regulated by this ministry.

5.1.3 Bangladesh Bank

Bangladesh Bank (BB) is the central bank of Bangladesh. Among other powers and
functions, BB regulates scheduled bank activities, acts as a clearing-house, maintains foreign
exchange reserves and monitors floating exchange rate mechanism in the current accounts.
Bangladesh Bank encourages the nationalised and private banks to link up with foreign banks
and exchange houses in the destination countries. It has a separate department for regulating
and monitoring remittance entitled Foreign.

5.1.4 Exchange Policy Department (FEPD).

It also generates, analyses, interpretsand distributes data on inflow of remittance.

5.1.5 Nationalized Commercial Banks

Nationalized Commercial Banks (NCBs) of Bangladesh make direct banking facilities
available at the doorsteps of Bangladeshi emigrants specially in those countries where a large
number of Bangladeshis are employed. Five NCBs are deeply involved in remittance transfer.
These are Sonali Bank, Sonali Bank, Agrani Bank, Rupali Bank Ltd. and Bangladesh Krishi
Bank (BKB). Among the NCBs, BKB is solely targeted towards agricultural development in
rural areas. Within Bangladesh these five NCBs have 2945 branches. Through them they can
disburse remittances even in distant areas. Besides their own branches, NCBs have opened
exchange houses in joint collaboration with different banks and financial institutions in
different countries of the world.

5.1.6 Private Commercial Banks

Private Commercial Banks (PCBs) are also involved in remittance transfer. Of the
PCBs, Islami Bank of Bangladesh Ltd. has been found to be most proactive in the area of
migrants’ remittace. National Bank, International Finance and Investment Corporation
(IFIC), Prime Bank and Uttara Bank are other private banks involved in remittance transfer.
Most of their activities are in the Middle East. Saudi Arabia is the major working area of
Islami Bank along with Qatar, Bahrain and UAE. National Bank is operating in Oman,
Kuwait, UAE, Qatar, Bahrain and Saudi Arabia. IFIC has curved out a major niche in
Bangladeshi community in Oman and has its largest share with 41% of the market. It also has
brances and exchange offices in Nepal and someother Middle Eastern countries. Uttara Bank
runs exchange house in Qatar in collaboration with a local financial institution.
Corresponding Relationships In almost all countries of the world, both NCBs and PCBs have
corresponding relationships

5.2 List of Different exchange Company

S NAME OF EXCHANGE COMPANY DAY A/C NO.

L BOOK

1 A. Aziz A. Al-Zamil Co. K.S.A 72 33030012

2 Al Amoudi Ex. Co. K.S.A 63 33027066

3 Al Ansari Exchange, U.A.E 62 33025342

4 Al Mulla International Ex. Co, Kuwait 58 33024955

5 Al Muzaini Exchange Co, Kuwait 47 33016498

6 Al Omary Est. K.S.A (Closed) 56 33024732

7 Al-Moosa Exchange Company. W.L.L, 69 33028683

Kuwait
8 Alrajhi Bank Riyadh, K.S.A 30 A-693

9 Alrajhi Commercial Foreign Ex. Co, Jeddah, 49 33017587

K.S.A
10 Al Rostamani Ex. Co. U.A.E 52 33020855

11 Arab National Bank, K.S.A 65 33028873

12 Bahrain Exchange Company, Kuwait 33 B-110

13 Bahrain Financing Co. Bahrain 32 B-109

14 Bank Al Bilad, K.S.A 64 33028808

15 Citi Bank NA, U.S.A 59 33024872

16 City International Exchange, Kuwait 19 C-25

17 Commercial Bank of Oman/Bank Muscat, 23 C-26
Oman
18 Dalil Exchange Co. Bahrain 55 33023214

19 Daulat Enterprise, Canada 61 33025813

20 Dollarco Exchange Co. Ltd. Kuwait 36 D-103

21 Eastern Exchange Establishment, Qatar 11 E-13

22 Eastern Union Remittance & Exchange Ltd, 67 33029475

UK
23 Gulf Overseas Exchange Co. Oman 26 G-49

24 Habib Exchange Co. U.A.E 53 3302268

25 Indian Bank, Singapur 66 33029293

26 Injaz Money Exchange, K.S.A (Closed) 60 33025846

27 Kuwait Bahrain International Exchange Co, 27 K-121

Kuwait
28 Kuwait Overseas Ex. Co. (Closed), Kuwait 45 33012803

29 Lari Exchange Establishment UAE 71 33029252

30 Mashreq Bank, U. A. E 13 B-16

31 National Bank of Oman, Oman. 17 N-99

32 National Money Exchange, Kuwait 46 33016176

33 Oman & UAE Exchange Centre Oman 70 33029632

34 Oman Exchange Co. Kuwait 10 O-6

35 Oman International Exchange, Oman 22 O-11

36 Redha Al Ansari Exchange 73 33031919

37 Trust Exchange Company W.L.L, Doha, Qatar 68 33029244

38 U.A.E Exchange Co, Kuwait 57 33024897

39 U.A.E Exchange Co. U.A.E 50 33017975

40 Wall Street Exchange, Dubai, U.A.E 41 33011326

Source: Wage Earner’s Corp BR Dhaka.

5.3 List of Different exchange Company Under RMS

S NAME OF EXCHANGE DAY A/C

L COMPANY BOOK NO.
4 Al Mulla International Ex. Co, 58 3302495
Kuwait 5
8 Alrajhi Bank Riyadh, K.S.A 30 A-693
11 Arab National Bank, K.S.A 65 3302887
3
14 Bank Al Bilad, K.S.A 64 3302880
8
16 City International Exchange, Kuwait 19 C-25
23 Gulf Overseas Exchange Co. Oman 26 G-49
34 Oman Exchange Co. Kuwait 10 O-6
35 Oman International Exchange, 22 O-11
Oman
 5.4 Problems & Suggestions on SBL in case of Remittances Management

There are many problems, which affect the smooth and profitable operations of
commercial banks. For Sonali Bank as well these problems pose a great threat of carrying out
its normal operations smoothly. They are summarized below:

Problems in RMS are given below:

a. Lack of skilled manpower

b. Lack of Internet facility

c. Lack of management

d. Lack of data processing system

e. Lack of networking

f. Lack of monitoring

g. Lack of reporting

h. Problems in software (it is now in the ongoing process)

Suggestions:

a. Manpower should be trained

b. High speed internet facility should be implemented

c. Proper computerization should be implemented

d. Networking should be improved

e. Established a proper monitoring cell to control the queries of the customers

f. Reporting system should be developed

g. Problems of software should be managed soon.

OTHER PROBLEMS AND SUGGESTIONS

1. Employment balance:

There are more than 1,000 branches of Sonali Bank all over Bangladesh and outside
Bangladesh. But all the branches are not balanced from employment point of view. Some
branches of Regional/Principal offices have over employment while some faces the problem
of under employment. The balance of the personnel working in each branch has to be set
properly depending on the volume of work.

2. CBA (Cumulative Bargaining Agent):

Probably all the government financial institutions face some sort of problems from
this organization. Sonali bank is also no exception. CBA has its clutches in almost every
affair of banking operations. In employment, promotion, transfer, loan sanction, and overtime
and in other affairs too it spreads it unwanted hands to hinder bank’s progress. The scope and
sphere of CBA has to be diminished in order to make the organization more profitable.

3. Banking Policy:

Banking policies are generally made at the Ministry of Finance and the policies are
scrutinized and implemented by the Bangladesh Bank. Later, the Bangladesh bank enforces
these rules and regulation, interest rates, loan disbursement etc. important banking factors for
other commercials banks and financial organizations. In many cases, the faulty decision-
making and policymaking costs commercial banks dearly.

4. Weak management:

Sonali bank faces severe lack in strong management policy. Most of the top
management are influenced by the government bodies like Bangladesh bank and Ministries.
They are not allowed to work freely rather depend heavily on government organizations as
such. So in most cases independent decisions do not come from bank officials.

5. Online Banking:

Although Sonali Bank has taken the facility of using computers in maintaining cash
and other sections but still it has not taken the full advantage of the modern day wonder of
full fledged computer facilities. Most of the private banks are operating 24 hour basis online
banking – the sector still ignored by Sonali Bank. All the branches do not maintain their
ledgers using computers yet. Money transfer in different modes, wage earners and foreign
exchange etc. has not still taken up by the computers till now.

6. Poor Service:

This is basically due to lack of manpower against huge amount of work the bank
usually deals with. Sonali bank does what a private bank does, apart from that it also works
as the treasury service of the government, utility services, passport services, foreign currency
service and virtually all the services that can be done by a bank is done by Sonali Bank.
Considering huge amount of work some branches notoriously lag enough manpower against
it. It is not the efficiency of the workers that is lagging, but it is the huge amount of work to
be done is not met by mere manpower.

7. Lack of Reconciliation:

The National bank of Pakistan still owes a huge amount of money to Sonali Bank
Limited. The money dispute is yet to be solved. In 1971, Sonali Bank Limited the then
National bank of Pakistan had balance of about 70 core rupees with the latter bank. Which
was not credited to Sonali bank till date. Today (considering interest and time value of
money) the amount would have been too great a value to offset the losses that the bank faces
today. If Bangladesh government had taken appropriate diplomatic measures to reconciliation
all this money the financial condition of the bank would have been much better than what it
seems today.

8. Loan Default:

We have already considered data where we have found the recovery of Sonali Bank’s
credit is very poor. There are many reasons behind it and discussed in the ‘Advances section’.
The culture of loan default has to be overcome taking appropriate measures.

Sonali bank has to follow the above suggestive measures, so that its performance, deposit
disbursement, recovery, investors, importer, goodwill etc. will be increased.
 Chapter – Six
Analysis & Findings
 6.1 Comparative Financial Highlights

Financial Highlights of SBL at a Glance –

Net profit/Loss (after Taxation) 1,493,265,927 548,423,889
 6.2 Performance Analysis

 Compare between Operating Profit and Net profit of SBL from 2014 to2016

Year Operating profit Net profit

2016 4254.58 1493.27

2015 8679.64 548.42

2014 8547.34 6054.64

(BDT in million unless stated otherwise)

9000

8000

7000

6000

5000 2016
2015
4000 2014

3000

2000

1000

0
Operatinf Profit Net Profit

Interpretation:
The graph shows that, The Net Profit of SBL; up to December 2016 is Tk 1493.27Crore
which is lower than Tk.548.42 Crore in 2015. Where, in 2014 the net profit of SBL is tk.
6054.64.
So we can say that, the growth of Net Profit as compared to Operating Profit is respectable.

 Compare between Non- Interest Income and Interest Income of SBL from 2015
and 2016

Year Income Non-interest income

 2016 32359 -14367
2015 29971 -13339
2014 27328 -12870
(BDT in million unless stated otherwise)

Chart Title

35000
30000
25000
20000
15000 Income
Axis Title 10000 Non-interest income
5000
0
-5000 2016
2015
-10000 2014
-15000

Axis Title

Interpretation:
The graph shows that, The Non Interest Income of SBL; up to December 2016 is Tk. -14367
Million which is lower than Tk. -13339 Million in 2015. Where, in 2014 the Non interest
income of SBL is tk -12870. So we can say that, the growth of Non Interest Income as
compared to Interest Income is Dis-respectable.

 Compare between Total Assets and Total Liabilities of SBL from 2014 and 2016

Year Total Assets Total liabilities

2016 1201563 1134444
2015 1026859 968713
2014 935286 875906
(BDT in million unless stated otherwise)
 1400000

1200000

1000000

800000
Total Assets
Total liabilities
600000

400000

200000

0
2016 2015 2014

Interpretation:
The graph shows that, the assets of SBL; up to December 2016 is Tk. 1201563 Million
which is higher than Tk. 1026859 Million in 2015 and 935286 in 2014. So we can say that,
the growth of Total assets as compared to Total liabilities is respectable.
 6.3 Explanation of Statement of through Table and Chart

 Total amount of Deposit (Kotbari Branch, Cumilla for the year 2014, 2015, 2016, 2017)

Year Amount of Deposit(taka)

2018 735453973.18
2017 649927338.13
2016 533491782.52
2015 499876455.38

Amount of Deposit(taka)

2015

2016
Amount of Deposit(taka)

2017

2018

0 200000000 400000000 600000000 800000000

Interpretation:
The graph shows that, Theamount of deposits up to December 2018 is Tk. 735453973.18
which is higher than Tk. 649927338.13 in 2017 and 533491782.52 in 2016. So we can say
that, the growth of amount of deposits is respectable.
  Total amount Local Remittance of SBL Kotbai Branch, Cumilla

Year DD MT TT A.B.B

2018 727504603 8381148 164380 48397081

2017 667654236 8234677 177934 40097586
2016 684121000 7866700 308160 39987320

Chart Title
800000000

700000000

600000000

500000000 DD
MT
400000000 TT
A.B.B
300000000

200000000

100000000

0
2018
2017
2016

Interpretation:
The graph shows that, The amount of Total Demand Draft (DD) up to December 2018 is
Tk. 727504603 which is higher than Tk. 667654236 in 2017 and 684121000 in 2016.The
amount of Mail Transfer(MT) up to December 2017 is Tk.8381148which is higher than Tk.
8234677 in 2016 and7866700 in 2015 So we can say that, the growth of amount of DD, MT,
TT is respectable.
Statement of Foreign Remittance of SBL Kotbari Branch, Cumilla

Name of Exchange Total Number of Spot Total Amount of Spot

House Cash Cash
Western Union 45 1720475
Transfast 63 1907058
IME, Malaysia 33 991470
Xpress Money 47 1380442
Merchantrade Asia 15 741522
EzRemit 11 125044
Prabhu Money 3 142280
RMS+ (SPOT) 71 2220474
RMS+ Other than 1875 45446364
BEFTN
BEFTN 289 1514617

Total Amount of Spot Cash

Western Union
Transfast
3% IME, Malaysia
3% Xpress Money
3% Merchantrade Asia
EzRemit
2%
81% 2% Prabhu Money
1%
RMS+ (SPOT)
4% 0% RMS+ Other than BEFTN
0% BEFTN
 6.4 Analysis With Questionnaire

 Are you satisfied with the current policy of Bangladesh Bank for inward
remittance policy?

Satisfaction with the current policy of BB

40%
40%
35%
30% 24%
25%
20% 15% Satisfaction with the current
13% policy of BB
15%
8%
10%
5%
0%
ee ee ed re
e ee
agr agr cid Ag agr
s s de
di Di gly
lg y Un on
r
r on St
St

(Question no. 4)

Interpretation:
The Graph Shows 40% respondents are agree, 24% Strongly agree and 15% disagree about
the statement that satisfaction with the current policy of Bangladesh Bank for inward
remittance policy. The statement show that employee are satisfied by the policy of BB.
  Financial performance of SBL is better than others Banks.

Financial Performance

33% 1%

Strongly disagree
40% Disagree
Undecided
Agree
Strongly agree

26%

(Question no. 10)

Interpretation:
The Graph Shows 40% respondents are undecided, 26% agree an d 33% strongly agree
about the statement that Financial performance of SBL is better than others Banks. The
statement show that the highest percentage of financial performance of SBL is better than
others Bank s is undecided and average value is 3.75.
  Sonali Ban k Limited gives high facility on Remittance department.

High facility on Remittance department

60.00% 52%
50.00%
37%
40.00%

30.00% high facility on Remittance

department
20.00%
10%
10.00%
1% 1%
0.00%
ee ee ed re
e ee
gr gr cid Ag gr
si a si a e a
d D
Un
d gly
ngly r on
r o St
St

(Question no. 09)

Interpretation:
The Graph Shows 10% respondents are undecided, 37% agree an d 52% strongly agree about the
statement that Sonali Bank Ltd gives high facility on Remittance department . The statement shows that
the highest percentage of gives high facility on Remittance department is strongly Agree and average
value is 4.3. So it can be says that they gives high facility on R emittance department and it’s satisfactory.
  Sonali Ban k Limited give high secure of remittance & foreign exchange.

High secure of remittance & foreign exchange

35%
35.00% 33%
30.00%
25.00%
20.00%
15.00% 17%
10% high secure of remittance &
10.00% 5% foreign exchange
5.00%
0.00%
ee ee
agr gr ed
s e
di si a cid re ee
lg y D de Ag agr
ro
n Un ly
St ong
r
St

(Question no. 10)

Interpretation:

The Graph Shows 5% respondents are strongly disagree, 10% disagree, 35% undecided, 33% agree and
17% strongly agree about the statement that Sonali Bank Ltd gives high secure of remittance & foreign
exchange. The statement shows that the highest percentage of gives high remittance & foreign exchange
is undecided and average value is 3.0.
  Sonali Bank Ltd gives opportunity of rural & urban area by providing
remittance service of many branches

Gives opportunity of rural & urban area

38%
40.00%
33%
35.00%
30.00% 24%
25.00%
20.00% Gives opportunity of rural &
urban area
15.00%
10.00% 5%
5.00% 0%
0.00%
ee ee ed re
e ee
agr agr cid Ag agr
s s de
di Di ng
ly
gly Un o
n r
ro St
St

(Question no. 10)

Interpretation:

The Graph Shows 5% respondents are disagree, 24% undecided, 38% agree and 33% strongly agree
about the statement that Sonali Bank Ltd gives o pportunity of rural & urban area by providing service of
many branches The state ment shows that the highest percentag e of opportunity of rural & urban area is
Agree and average value is 3.75. So it can b e says that the opportunity of rural & urban area by providing
service of many branche s of Sonali bank ltd. is satisfactory.
  Attention on remittance management is the vital task for SBL.

Remittance management is the vital task

22% 2% 18%

Strongly disagree
Disagree
Undecided
Agree
Strongly agree

22%

36%

(Question no. 10)

Interpretation:

The Graph Shows 18% respondents are disagree, 22% undecided, 36% agree and 22%
strongly agree about the statement that attention on remittance management is the vital task
for SBL. The statement shows that the highest percentage of attention on remittance
management is the vital task for SBL is Agree and average value is 3.3.
 6.5 Major findings of the study

 Sonali Bank,kotbari Branch is playing an important role toward the growth and
economic development of the people of this area.

 There are three types of modes of foreign exchange market, which are:Export
Finance,Import Finance & Foreign Remittance.kotbari Branch does remittance activities
vastly.

 With wide network of branches at home and also a large number of correspondent
banks worldwide it is singularly handling the largest volume of export-import business
including homebound remittances.

 Total deposits & advance for the month of December,2018 was respectively
735453973.18 &169683547.46.

 In the Kotbari branch has lack of employees.

 They have slow internet connection.

 There is no ATM service provided by the branch.

 The image of SB is not so good to the customers because of bureaucratic practice.

 Only the cash section of the branch is computerized. Hopefully, management has
decided to provide computerized system for each of its departments soon, which will
bolster services of the bank. Paper-based works are still in existence.

 The liquidity & profitability condition of the Foreign Exchange Corporate branch is
standard.

 It is a leading bank of Bangladesh but it has no attractive appearance in its official

environment.
Chapter – Seven
Recommendation
And
Conclusion
 7.1 SWOT Analysis

STRENGTHS
 Largest commercial bank in Bangladesh.
 Widely recognized and strong brand name.
 Agent of Bangladesh bank.
 Qualified and experienced workforce.
 Strong liquidity and financial condition.
 Strong networks all over in Bangladesh.

WEAKNESS
 Huge amount of bad/debt loan.
 Lack motivation of workers.
 Service is not up to the mark.
 Online banking is not strong.
 Absence of teamwork.
 Weak branch controlling and monitoring system.

OPPORTUNITIES
 Investment potentiality in Bangladesh.
 Increasing demand of customer finance.
 Enormous opportunity in foreign remittance section.
 By implementing e-commerce and online banking remarkable
 Opportunities are created.

THREATS
 High standard Commercial/Foreign bank as well as private bank.
 Illegal interference of CBA in banking activities.
 Highly qualified and experienced bankers leave the bank a very high percentage.
 Cannot take proper action against bad debtor due to political interference.
 Increasing percentage of shifting customer loyalty.
 Low Interest rate compare to private /foreign banks.
 7.2 Recommendations

To make solve the abovementioned problems the following recommendations can be made
so that the problems can be solved.

 Remittance collection from the Bank should be a much easier and hassle free job for
the beneficiaries. Process flow should be smoother so that the waiting time for them
is decreased.
 Sonali Bank Ltd. should be used high speed internet modem for smooth operations
of E-Banking as well as remittance activities.
 A very strong and systematic training program creates the bankers efficient; the
disciplined environment makes them active.
 Sonali Bank Ltd. is now concentrating on the channeling of remittances. This should
be continued and enhanced. The vast network of SBL enables them to reach the
remote rural areas.
 The highest volume of remittances is sent from Saudi Arabia. Effort should be thus
given to ensure the utilization of the remittance coming from that region and hence
can be customized according to the regions specialty or characteristic traits of the
remitters.
 To increase the percentage of foreign remittance earning SBL should be provided the
best E-Banking facility than other bank. For this reason SBL should try to establish
On-line banking system. Because most of the Inward foreign remittance is enter in
Bangladesh via On-line.
 7.3 Conclusion

The Banking arena in recent time is one of the most competitive business fields in
Bangladesh. As Bangladesh is a developing country, a strong banking sector can change the
socio economic structure of the country. So we can say, the whole economy of the country in
linked up with its banking system. Sonali Bank is the largest nationalized commercial Bank
of Bangladesh. This bank performs hundreds of important activities both for the public and
for the government as a whole. It has an outstanding bearing to thrive our business sector. It
has strong performance on General Banking, Loans & Advances, Industrial credit and foreign
Exchange.

In this paper I have tried to highlight Foreign Exchange Business of Sonali Bank and
special emphasis given on foreign remittance system. Its pioneer role in handling foreign trade
and foreign exchange transactions ever before independence of the country still remains
unchallenged. With wide network of branches at home and also a large number of
correspondent banks worldwide it is singularly handling the largest volume of export-import
business including homebound remittances. The effective and efficient Foreign Exchange
Business of the Bank helps in the continuous growth and progress of national economy.
 References

Apte P G. “International Financial Management”, Tata McGraw-Hill,2006.

Bhaumik, S.K., and H. Mukhopadhyay, ‘RBI’s Intervention in Foreign Exchange Market-An

Econometric Analysis’, Economic and Political Weekly, Vol. No.35(5), 2000.

Chowdhury, T.A., an Overview of Banks and Their Services. Reading Materials on Theory &
Practice of Banking (B-101), Bangladesh Institute of Bank Management (BIBM), 2000.

De Bruyn & Kuddus, “Dynamics of Remittance Utilization in Bangladesh, International

Organization for Migration, IOM Migration Series”, 2005.

Gordon, E & Natarajan, K., Banking: Theory, Law & Practice, 9 th edition,Himalaya
Publishing House, Mumbai,1996.

Gulshan, S.S. & Kapoor, G.K. Banking Law and Practice, 11 th enlarged edition ,S Chand &
Company, New Delhi, 1994.

Khan M Y and Jain P K, “Financial Management”, Third Edition, Tata McGraw-Hill

publishing Company Limited, New Delhi-110001.

Mukherji Indra Nath, “Foreign Trade Review”, 2nd edition, 2011.

Azad Abul Kalam, “Banking Structure in Bangladesh : Regulatory Framework and the
reforms”, Dhaka University Journal of Business Studies, Dec-2000.
Annual Report of Sonali Bank Limited (2017 and 2016).

Bangladesh Bank, Guideline for Foreign Exchange Transaction, (vol-2).

Different reports of Sonali Bank Limited.

Murshid et al, A Study of remittance Inflows & Utilization, UNDP & IOM, Dhaka,
November 2002.

www.sonalibank.com.bd/overview.php
www.bankinfobd.com/banks/40/Sonali_Bank

www.bb.org.bd/investfacility/drawing.php

www.slideshare.net/safayet8089/remittance-management-system

www.if4it.com/SYNTHESIZED/GLOSSARY/R/Remittance_Management_System
 Appendices
1. Questionnaire on
Foreign remittance and customers satisfaction: A Study of Sonali Bank Limited
Dear Respondent,
I am Purnima pal , a student of Comilla University doing my BBA Internship on Foreign
remittance and customers satisfaction. You are humbly requested to read the following
statement carefully and mark your degree of agreement. I assure you that this information
will be used only for academic purpose.
Name of respondent
Sex
Age
Designation
Contact Number

1. How long you are serving in this organization?

 Less than 6 months

 6 months – 1 year
 1 year – 3 years
 More than 3 years

2. How you satisfied or dissatisfied with the present situation of the foreign exchange
department of your bank?

 Very Strongly satisfied

 Strongly satisfied
 Neutral
 Dissatisfied
 Strongly Dissatisfied

3. For export & import on which industry they are focusing mostly?

…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
………………………………………………………………………………………

4. Are you satisfied with the current policy of Bangladesh Bank for inward remittance
policy?
  Very Strongly satisfied
 Strongly satisfied
 Neutral
 Dissatisfied
 Strongly Dissatisfied

5. Which formal inflow channels your bank is used now?

 Western Union
 Money Gram
 Others (Please specify)……………………………

6. Are you satisfied with the specific service for transferring inward remittance?

 Strongly satisfied
 Strongly satisfied
 Neutral
 Dissatisfied
 Strongly Dissatisfied

7. Do you think the foreign remittance procedure can improve with friendly and smooth
policy implications?

 Yes            No

8. How do you agree that maintaining accurate customer information could minimize the
foreign exchange risk?

 Strongly Agree
 Agree
 Neutral
 Disagree
 Strongly Disagree

9. Sonali Bank Limited gives high facility on Remittance department.

 Strongly satisfied
 Strongly satisfied
 Neutral
 Dissatisfied
 Strongly Dissatisfied

10. Your opinion on some important issues.

 SL Statements Strongly Disagree Undeci Agree Strongly
disagree ded Agree
i. Financial performance of SBL is
better than others Banks.
II. Sonali Bank Limited give high
secure of remittance & foreign
exchange.
III. Attention on remittance
management is the vital task for
SBL.
IV. SBL holds large number of
customer in compare to other
Banks.
V. I think Sonali Bank Limited (SBL)
is renowned Bank in Bangladesh.
VI. I think SBL give opportunity open
new account specially rural farmer.
VII. SBL earn more profit than another
Bank in yearly.

VIII. Corporate culture of SBL is better

than other Banks.
IX. Interest rate of SBL is lower than
private Bank.

Thanks for your nice co-operation.