Issuing Cheque-Book:

After the completion of above formalities, the bank provides the client a Deposit Book and cheque book. The cheque book can be of 10 or 25 pages. It will depend on the type of the account. The 10 pages cheque book is issued to the Saving A/C holder and 10, 20, 25 pages cheque book is issued to the Al-Wahdia Current or MSND A/C holder. The client has to fill up the Requisition Slip for cheque book. Then the officer will take a new cheque book with filling up account number of the client and the branch name in each page of the cheque book. The name and the account number of the client are then registered in the “Cheque book issue register”. The serial number of the cheque book is also entered in the computer for proper maintenance of records.

Cash Counter Section:

Cash department is the most important part of General banking. Cash is the key instrument of all financial transaction. The cash section plays a significant role. It is a very sensitive part of the bank because it deals with most liquid assets. Social Investment Bank Limited, Banani Branch has a well-equipped cash section. This section receives cash from depositors and pays cash against cheques, Demand Draft, Pay Order and Pay-in-Slip over the counter. This section deals with all types of negotiable instrument and it includes Vault, used as the store of cash and instruments. Operation of this section begins with the banking hour. The cash officer begins transaction with taking money from the Vault, known as “Opening Cash Balance”. Vault is kept in most secured place. The amount of opening cash balance is entered into a register. After whole days’ transaction, the money remains in the cash counter is deposited back into the Vault, known as the closing balance. The main functions of this section are cash receipt and cash payment. Some register books uses in the cash department are mentioned bellow:

 Receiving Cashier’s Book

 Payment Cashier’s Book

 Cash Balance Book

 Vault register

 Key register

 Remittance Register

Cash Receipt

Cash is the blood of a branch. It is the life of a bank.

 At first depositor fills up the deposit amount in slip.

 After filling the required deposit amount in slip, depositor deposits the money.

 Officer of the cash counter receives the money, counts it, enters the amount of money in the scroll register, makes seal the deposit in slip and sign on with the date.

 Then this slip is passed to another officer for counter sign in the deposit slip.

 Then the cash officer keeps the bank’s part of the slip. Other part is given to the depositor.

 The cash in charge gives posting through computer from the deposit slip in the client’s account and write a transaction number.

Cash Payment

 When a client comes to the bank to cash a cheque, he/she gives it to the cash counter.

 The cash officer receives the cheque and checks it very carefully.

 The cash officer checks the date of the cheque, name, the account number of the cheque, amount in ward in figure and also verifies the signature through computer.

 If the instrument is free of all kinds of errors the respected officer will ask the cheque bearer to sign on the back of it.

 He/she will then put his/her initial beside the bearer’s signature.

 There must be two signatures in cash payment cheque. If it is a big amount, cheque must be verified in front of the cash officer.

 The cash officer will then enter the scroll number in his/her register and will pay the money to the bearer.

 Then the cash in-charge gives posting of the cheque through computer and writes a transaction number.

Every employee in the cash counter maintains register. After receiving payment they fill up the following particulars-

After giving the payments they fill up the following particulars-

Cheque Counter

There is also a counter called Cheque counter. Under this counter three types of Cheque are received-

1) Transfer-

Transfer means inter Bank transfer that is same bank same branch.

2) Clearing-

When Cheque comes from the different Bank located in same clearing zone then it is send to the Bangladesh Bank Clearing House for clearing. Normally it takes 2 to 3 days for clearing a Cheque.

3) Collection-

When A Cheque is collected which are from different bank located in different district then it is sending for collection. The Cheque is then send to that bank. From that Bank it is verified and than checked that if there are available fund or not. If there is available fund then it is send to Social Investment Bank Limited. 

 Counter Limit

There is a counter limit in every Bank. The SIBL can keep in the counter only Tk. 25.00 Lac. The Bank can not keep more than that amount.

Vault Limit

Social Investment Bank Limited can keeps in the vault only Tk. 60.00 Lac.


Remittances represent transfer of funds one place to another through official channel. Remittance facilities are very well known and popular service. The word “Remittance” means sending of money from one place to another through Courier service and Telegraph/Telex. A bank provides this facility to its customers by receiving money from one branch of the bank and making arrangement for payment to same/another bank within the country. For giving this facility, the bank uses some instruments, which are used instead of liquid cash. To transfer the cash from one place to another is very much risky that is why; this department uses some transferable instruments instead of cash.

Remittance department uses the following transferable instruments:

Pay Order (PO)

Pay Order means Payment Order. Pay order is an instrument that contains an order for payment to the payee only in case of local payment whether on behalf of the bank or its constituents. Like cheque, there is no possibility of dishonoring PO. The Pay Order is only en-cashed through the issuing branch that means in case of PO the issuing and paying branch are the same.

 Pay Order Issuing Process

                               In the beginning stage, PO was issued only to effect the local payment of bank’s own obligations. But at present, it is also issued to the customers, which they can purchase to deposit as security money or earnest money. PO is in form of receipts and issued by joint signature of two officers. It ensures payment to the payee as the money is deposited by the purchaser of PO is kept in a temporary account named “Pay Order A/C.” For issuing a Pay Order, following formalities are to be maintained:

 Pay Order Working Procedure

 Accounting Entry for PO Issue

Cash A/C ————————————Debit

Pay Order A/C——————————-Credit

Commission A/c—————————–Credit

            If the customer wants to transfer the pay order amount from the beneficiary’s account with SIBL by debiting his account then the procedures are as follows:

Party A/C ————————————-Debit

PO A/C —————————————Credit

Commission A/C —————————Credit

Pay order is a current liability on the part of bank, which is required to be discharged by the beneficiaries against payment in cash or through an account.

Payment of pay order

Payment of PO is made from the branch it has been issued. It is not transferable and therefore it can only be paid to:

            As the bank issues the pay order, it is crossed when it is paid over to the customer. On the other hand the amount is transferred to the payee’s account. To transfer the amount the payee must duly stamped the pay order. The account entries will be:

PO Payable A/C —————————–Debit

SIBL General A/C ————————–Credit

Before the payment is made, it is the duty of the issuing bank to examine whether endorsement was given or not. Payment procedure of PO is described bellow:

Demand Draft (DD)

Demand Draft is an instruction payable on demand. It is a negotiable instrument issued by a particular branch of a bank containing an order to another branch of the same bank to pay a fixed sum of money to a certain person or order on demand. This instrument can be purchased by a customer from a particular bank’s branch for himself or for beneficiary and can be handed over to the purchaser for delivery to the beneficiary. The payee or the beneficiary will claim the amount of money in the instrument by producing the same to the concerned paying branch. Demand Draft may be paid in cash to the payee on proper identification of the amount may be credited to his account (In case of A/C holder of the bank). Bank issues Drafts for a nominal commission.

 Issuance of Demand Draft

            While issuing a Demand Draft an officer must be confirmed about the existence of the branch where the DD is to be issued or drawn as asked for by the applicant or purchaser. The applicant fills up the Demand Draft Application Form. After that the commission is computed correctly and applicant is asked to deposit the amount mentioned in the DD. On receipt of cash, a voucher is passed and scrolled by at least two officers. Then the DD is issued and recorded in the “Demand Draft Issue Register” filling the appropriate columns. The accounting treatment will be as follows:

Cash/ Customer A/C —————————–Debit

SIBL General A/C ——————————-Credit

Commission A/C ——————————– Credit

After giving this entry an Inter Branch Credit Advice (IBCA) is prepared which contains the controlling number, depicted that the branch is credited to whom it is issued.

Payment of Demand Draft            The paying bank as and when it responds to the relative advice receive proceeds so Demand Draft. On receipt of the DD advice from the different branches, the paying bank will verify the genuineness of the advice by way of verifying test numbers and signatures. After receiving the instrument, the IBCA lodgment is done by the branch. Necessary entries are given in DD Inward Register. The controlling number of the IBCA should match with the serial number of this register application. Issuing branch then sends an Inter Branch Credit Advice (IBCA) to the drawn branch against previously issued IBCA. After that the following entries are given below:

SIBL General A/C. ———————————-Debit

Client’s A/C —————————————–Credit

The payment of DD is made with following two procedures. Procedures are as under:

  Before getting Advice (IBCA)

When the paying branch of DD receives the DD before receiving the IBCA then the accounting procedures are:

DD Payable without Advice A/C —————–Debit

Party A/C ——————————————–Credit

After receiving the advice, the accounting will be:

SIBL General A/C ———————————-.Debit.

DD Payable without advice A/C —————–Credit.

 After getting Advice (IBCA):

When the DD paying branch receives the DD and IBCA at a time then the accounting procedure will be:

SIBL General A/C ————————Debit.

Party A/C  ———————————Credit.

 Stopping Payment of the Draft

            The banker cannot stop the payment of draft. Then on receiving instruction from the purchaser after delivery of the draft. This is for simple reason that issuing a bank draft the banker takes upon himself a commitment in favor of third party (the payee) to pay a certain amount of money. This is because a bank draft is as good as a promissory note issued by a banker and it is accepted by all because of the goodwill and the reputation of the banker.

 Loss of the Draft

            A bank can stop payment of a draft in those cases where either the purchase of the draft or the payee of the draft has reported about the draft being lost or stolen. However in such cases bank should maintain extreme caution. It should immediately inform the drawee branch about the loss and enquire whether the draft still remains unpaid and also request the drawee branch to exercise caution if and when the draft is presented for payment.

Issue of Duplicate Draft

            In case a draft is reported lost and a duplicate draft is required to be issued, the banker should take some steps.

Demand Draft Charge

            Bank charges a commission on DD. SIBL, charges 0.15% commission on DD Amount Their minimum commission is Tk. 25.00. The bank charges 15% Vat on Commission Amount. Before making the payment of DD, the paying branch will ascertain the genuineness of its issuance as well as the genuineness of the payee. Open draft may be paid on proper identification of the payee and crossed drafts can never be paid in cash over the counter.

Telegraphic Transfer (TT)

Telegraphic Transfer is another widely used instrument for remittance of fund from one branch to another. TT is quicker than a transfer of amount by DD. Sometimes the customer wants to transfer his money from one branch to another within a very short time. In that case the TT issuing branch uses telephone to transfer the order of paying a certain sum of money immediately to the TT paying branch to its (TT paying branch) client’s account. Telegraphic Transfer is the most rapid and convenient but expensive method. The TT issuing branch takes the telex charge from its customer. It also charges commission and vat from its customer. The drawer and the payee should have accounts with SIBL. After all the formalities of TT are done by the TT issuing branch with its customer, it prepares an Inter Branch Credit Advice (IBCA) for the confirmation of the TT and the bank posts that IBCA to the TT paying branch by Post office at the end of that particular working day.

In case of issuing a TT the following procedures must be considered:

It is important to mention here that SIBL, Principal Branch uses Telephone for sending TT massage instead of Telex.

Accounting Entry for TT Issue

Cash A/C / Client’s A/C …………………………Debit

SIBL General A/C …………………………………Credit

Commission A/C …………………………………Credit

Vat A/C……………………………………………Credit

Telex A/C …………………………………………Credit

Procedure of Incoming TT

After receiving the Telex it is recoded on the TT Receiving Form. The TT serial number, test number are verified. Makes sure all the necessary entries in the TT Payable Register. Finally, Credit Voucher in favor of the beneficiary’s account is prepared and passed.

Accounting Procedure of Incoming TT

SIBL Gen. A/C………………………………………Debit

TT Payable………………………………………….Credit

TT Payable………………………………………….Debit

Party account ……………………………………….Credit

Telegraphic Transfer Charge

Bank charges commission on TT.SIBL, charges 0.15% commission on TT Amount Their minimum commission is Tk. 25.00. The bank charges 15% Vat on Commission Amount. Tk. 30 is taken as Telex Charge.

Outward Bills for Collection (OBC)

If the bill is beyond the clearing range, it is collected by outer bill collection mechanism. Customer deposits cheques, DD, PO etc. for collection, attaching with their deposit slip. Instruments outside the clearing range are collected through OBC. As for example, a customer of SIBL Banani Branch deposits a cheque of a bank, Agrabad Branch, Chittagong, as a collecting bank. Now, SIBL, Banani Branch will perform the following tasks:

¨                  Entry out the bill from the OBC Register.

¨                  Respond the IBCA.

¨                  Makes a debit advice for the party.

 Inward Bills for Collection (IBC)

There is a vice versa relationship between OBC and IBC.  A branch of a bank sends OBC for collecting their bill from its branch. Then OBC getting branch responds that OBC and considers that OBC as IBC for them. The procedure of responding OBC (IBC) is as follow:

  Credit Voucher of SIBL General A/C

  Write down the IBC number and other information in the IBC register.

  To prepare IBCA.

  Give posting to the computer.

 Accounts Department

Accounts Department is one of the most important departments in a bank. Each and every department is closely related with this department. Accounts Department maintains all the records of transactions and all types of statements. At the end of the transaction hour all concerned departments send all kinds of vouchers of transactions to this department. This Department compares all the figures, amount and contains of transaction with supplementary statements automatically arranged by the computer. If any discrepancy arises regarding any transaction then this department reports to the concerned department to repair the mistake. Then Accounts Department does another important task, which is called Voucher Sorting. In this task, the account officer rearranges all the vouchers department wise and divides all the vouchers in to Debit and Credit. After rearranging all the vouchers, the officer concerned counts the vouchers of various departments and ensures that the numbers of the vouchers are equal to the number of vouchers shown in the supplementary statements. Another vital task of this department is to prepare the extract. The extracts statement shows the Inter Branch Transactions during the end of a particular day. The Officer concerned then separates the Inter Branch Transaction Vouchers as Originating and responding basis. The responding IBCA and IBDA have a duplicate sheet for each of them. These duplicate sheets must be separated from the originals and must be kept individually as ‘Extract’. Then the next task is to divide all the Inter Branch Transaction vouchers in to Debit and Credit. Except voucher sorting, Account Department does some other vital tasks.

This Department records its accounts daily, weekly and monthly. We can divide these daily tasks in to two types. They are:

  Before End of the Day:

  Recording the daily transaction in the cash book.

  Recording the daily transaction in general and subsidiary ledgers.

  Preparing the daily position of the branch comprising of deposit and cash.

  Preparing the statement of Originating and Responding.

  Making payment of all the expenses of the branch.

  Making Trial Balance.

  Taking Backup through computer.

After End of the Day

  Preparing Statement of Affairs.

  Statement of back page of affairs.

  Statement of provisional income.

  Statement of provisional expenditure.

Preparing Monthly Report:

  Individual account balance statement.

  Preparing profit and loss report.

Periodical Tasks:

Statement of Affairs

Account section prepares the Statement of Affairs for finding the profit/loss as well as amount of assets and liabilities of concerned branch per day. Theoretically m it is called financial statement. It has following two parts:

  Income and Expenditure Account.

  Statement of Assets and Liabilities.


Particulars of Assets Percentage Furniture and Fixture 10% Office Equipment 20% Office Decoration 12% Automobile 20% Besides the above, the accounts department has to prepare some internal statements that are submitted to the central bank.

  Clearing Department

Clearing stands for mutual settlement of claims made in among member banks at an agreed time and place in respect of instruments drawn on each other. Clearing House is an arrangement under which member banks agree to meet through their representatives, at the appointed time and place to deliver instruments drawn on the other and in exchange to receive instruments drawn on them. The net amount payable or receivable as the case may be, is settled through an account kept with the controlling bank (Bangladesh Bank/ Sonali Bank).

Social Investment Bank Limited, Banani Branch’s cheques are collected through “Clearing”. Social Investment Bank Limited is a scheduled bank. According to the article 37(2) of the Bangladesh Bank Order, 1972, the banks that are members of the Clearing House are called “Scheduled Banks”. The scheduled banks clear the cheques drawn upon one another through the Clearing House. This is an arrangement by the Central Bank where everyday the representatives of the member banks sit to clear the cheques. The place where the banks meet and settle their dues is called “The Clearing House”. The Clearing House sits for two times in a working day. Everyday the first hour starts at 9.30 AM and returns house at 5.00 PM. If the cheque is dishonored, it is returned with the prescribed ‘Return Memo’ showing the cause for dishonoring the cheque and for necessary action. SIBL, Banani Branch clears its cheques as well as cheques of other banks.

The Social Investment Bank Limited, Banani Branch cheques of its client are received for collection from other banks. In case of receiving cheques the following points should be checked very carefully:

  Foreign Exchange:

Social Islami Bank Ltd. Continued to be very active in international trade through financing export import business and mobilizing wage earners remittance. In 2008, the bank opened 21210 imports LCs worth USD 1130.96 million and handled 16234 Export documents worth USD 531.03 million. The bank has also expanded its external business by undertaking export bill negotiation, realization of export proceeds, foreign remittance, etc.


To bring in, from abroad, something in kind of goods or services (to behave lawfully) is import. Import trade finance by SIBL rose to USD 907.08 million (Tk. 6,275.91 crore) in 2007 compared with USD 606.26 million (Tk. 4,245.85 crore) in 2006. The growth in USD increased by 49.62% and in Taka by 47.81%.In reporting year 2008 the Bank opened a total number of 21210 LCs amounting USD 1130.96million in import trade with a growth of 25 percent. Large LCs were opened mainly for importing old ships, rice, wheat, edible oil, fertilizer, capital machinery, fabrics and accessories, petroleum products and other consumer products.

 Import procedure of SIBL:

Import means purchasing products from other countries for further process or to sell in local market. Social Islami Bank Ltd plays a vital role in import financing system. There are some different steps in whole import process. These are as follows:

1.   LC Opening

2.   Document Negotiate

3.   Payment Clear

4.   Bill of entry

5.   File closed

 LC Opening:

               A letter from one banker to another authorizing the payment of a specified sum to the person named in the letter on certain specified conditions commercially. Letter of Credit are widely used in the international import and export trade as a means if payment, the exporter may require the foreign importer to open a letter of credit at the exporter may require the foreign importer to open a letter of credit at the importer’s local bank (issuing bank) for the amount of the goods. This will state that it is to be negotiable at a bank (negotiating bank) in the exporter’s country in favors of the exporter; often, the exporter will give the name of the negotiating bank. On presentation of the shipping documents (which are listed in the letter of credit) the beneficiary’s will receive payment from the negotiating bank.

The rules of LC are established by ICCI (London). The guidelines are provided by UCP 600 (Uniformed Customs & Practice for Documentary Credit). UCP 600 is the latest revision of the Uniform Customs and Practice that govern the operation of letters of Credit. LC is nothing but a guarantee from a bank in favor of a party to pay certain amount in case of transaction.     

Conditions of LC:

There are some necessary conditions and documents are required to open L/C for import goods and services from exporters as fallows:

A. The party must have current account which is treated as a business account.

B. Trade license (valid)

D. TIN Certificate is compulsory.

E. VAT Certificate

F. IRC and IMP

G. Performa Invoice or Indent is needed.

H. Insurance Cover Note

I. Letter of promissory note

J. Letter of Disbursement

K. Letter of Agreement

L. Letter of guaranty

M. Letter of continuity

N. National certificate.

Opening of LC is the first requirement of import. The importer must have account in the certain bank. Some of the most essential documents of LC are described as follows:


IRC is the first essential of LC opening. The meaning of IRC is Import Registration Certificate. It is issued by the Chief Controller of Import & Export. The IRC is compulsory for the trading company.

Trading is a continuous process. It is not for own purpose rather for business purpose. The trading importer imports products, bring into our country and sells into the local market. For this reason IRC is compulsory. The IRC can be renewed by some authorized bank. The authorization is given by Bangladesh Bank. SIBL has this authority. However, in case of industrial purpose like purchasing industrial equipment, IRC is not necessary. Instead of IRC here a permission letter is issued by the Board of Investment.

B) Invoice:

Invoice, quotation, contract all these codes contain same meaning and purpose. This document is issued by the exporter. In the invoice, some important items must be presented. There are major items and additional items.

i. Major items: Quality, quantity, price, description of goods etc.

ii. Additional items: Shipment date, expiry date, code of loading etc.

C) Bank charged documents:

i.          LC Application form

ii.         IMP from

iii.        DP Note/ Promissory Note

iv.        Additional guarantee letter etc.

2. Document Negotiate

3. Payment clearing

4. Bill of Entry

5. File closed

 Document Use in Foreign Trade:

As foreign trade involves transaction in between the country, the formalities attached are complicated and multifarious. The documents used in foreign trade are following:

1. Bill of Exchange: The bill of exchange is a particular through which payment is effected in internal and international trade. The payment for the goods is received by the seller though the medium of a bill of exchange (commonly) called draft or bill drawn on the buyer for the amount depending on the contact. It is a negotiable instrument. Negotiable instrument act 1881 (section -5) define the bill of exchange as “an instrument in writing containing an unconditional order” signed by the maker, directing a certain person to pay a certain sum of money only to, or the order of a certain parson, or to the bearer of the instruments.

2. Bill of Lading: It is a document issued by the shipping company or its agent acknowledging the goods mentioned therein on board the carrying vessel in apparent good order and condition unless otherwise indicated therein, for shipment to the consignee on terms and conditions as agreed upon as to their carriage. Bill of Lading is a document of title to goods entitling the holder to receive the goods as beneficiary on endorsee and it is with help of this document on receipt from the exporter that importer takes possession of the goods from the carrying varying vessel at the port of destination.

3. Invoice/Commercial Invoice: It is seller’s bill for merchandise. It contains a description of the goods, the price per unit, total value of the goods, packing specifications, terms of sale, letter of credit, bill of lading number, etc.

4. Marine Insurance Policy: In the international trade marine insurance policy is must to cover the risk of loss on consignments while they are on seas. The marine insurance is the responsibility of the buyers (consignee) under FAS, FOB and CFR contacts and the seller (consignor/shipper) under GIF contact. The policy must be of the type as specified in the relative contact. It must be properly stamped, negotiable and be endorsed where it is payable to order.

5. Packing List: The exporter must prepared an accurate packing list showing item by item, the contents of the consignment to enable the receive of the shipment to check the contents of the gods, number and marks of the packages, quantity, per package net weight, gross weight, measurement etc.

6. Inspection certificate: Inspection certificate by an established inspection authority is needed under some contracts or by some country.

7. Bill of Entry: A bill of entry is a document which contains the particulars of the imported goods as well as the amount of customs duty payable.

8. Certified Invoice Is an invoice bearing a signed statement by someone in the importers country that has inspected the goods and found that the goods are in accordance with the specific contact of the Performa invoice and the goods are of a specific country of origin.

9. Exp Form: All exports must be declared on EXP Form. These forms will be supplied by the Authorized Dealers for use of the exporter. The Authorized Dealers should, before certifying any export form, ensure that the exporter is registered with the CCI & E under the Registration (Importers and Exporters) Order 1952. The registration number should be quoted on the relative EXP Form.

10. Trust Receive: At times, the documents of title to goods (not the bill) are delivered by the banker to the importer against trust receipt. This is done in exceptional cases to valued customers.

Import Financing:

Loan against Imported Merchandise (LIM):

Loan against Imported Merchandise (LIM) is a facility provided by the Bank to the importers who are in shortage of fund to retire the import bills and thus to clear the goods from the post authority. In other works it may be referred as an advance against merchandise.

LIM Accounts may be created in the following two cases:-

After lodgment of documents, the importers concerned to be intimated for early retirement of the documents by paying outstanding bill amount including other charge. If the importer is not in a position to retire the bill out of his own sources at that moment may request the bank to clear the goods by creating LIM Account. On receipt of the importer request the official of the import bills section will prepare an office note by calculating the total landed cost of the consignment.

To ascertain the landed cost the following points to be considered.

1.         Bill amount i.e. invoice amount                                  :           Tk. …………

2.         Customers duty %                                                      :           Tk. …………

3.         VAT %                                                                        :           Tk. …………

4.         Development surcharge %                                          :           Tk. …………

5.         C & F Agent’s bill (approx)                                        :           Tk. …………

6.         Miscellaneous (approx)                                               :           Tk. …………

Total landed cost of the goods                                               :           Tk. …………

(-) Margin retained at the time of       opening L/C                :           Tk. …………

(-) Farther margin to be realized from the importer                :           Tk. …………

Banker’s Liability will be                                                        :           Tk. …………

Efforts should be taken so that at least 20% to 30% margin of the landed cost may realize from the importer. Realization of margin will depend on the banker customer relationship and also on the marketability of the goods.

i)          DP Note (Demand Promissory note). ii)         Letter of Arrangement. iii)        Letter of Disbursement. iv)        Letter of pledge. v)         Any other document of necessary.

The Bank will send the documents to the port city branch by indorsing the bill of lading in favor of them with certification of invoice for clearance the goods through importers nominated as well as Bank’s approval C & F agent. In the forwarding letter clear instructions to be given for dispatching the goods either by train or by truck duly insured Branch Managers will have to take prior approval from International Division, Head Office to create LIM Account in favor of importers. Before sending the documents to the port city branch and under taking on prescribed from with special adhesive stamp of Tk. 180/- (Flexible) regarding the stipulated period sanctioned to the importer to be obtained.

The following accounting entries and vouchers are generally to be passed in the set of Retirement Vouchers on the same day at the branch:-

Customers A/C………………. Dr

LIM……………………………. Dr

IBTA / Pay Order…………….. Cr

PAD…………………………… Cr

The particulars of LIM A/C must be entered and voucher to be posted in the LIM Register.

After clearance, the goods should be stared either in Bank’s go down or in importer’s go down under bank’s lock and key and the particulars of goods to be entered in the space provided in the LIM Register. At the same time insurance of goods cover fire and other risk to be made. Go down staff salary, go down rent (if the goods stored at the Bank’s go down) and other miscellaneous charges in connection with the LIM A/C will be paid by debit to party’s LIM A/C under advice to the importer.

Forced Lim Account:

Immediately after lodgment of documents, the branch incumbent and concerned dealing official shall vigorously peruse importers far retirement of bills. PAD should not remain outstanding fare more than 30 days from the date of lodgment on as per norms.

If the party fails to retire the documents within 30 days or within the date of arrival of ship which ever is earlier the branch should sent the documents for clearance the goods.

Other formalities in connection with the forced LIM A/C will be the same as in the case of LIM A/C created on importer’s request. No further L/C’s of the party for whom the Bank was forced to clean the consignment and the party failed to take delivery of the goods within the time specified below under the head disposal of LIM stocks should be opened without prior approval from Head Office even if the same is within the discretionary power of branch Manager.

Disposal of LIM Stocks:

a) The LIM liability should be adjusted within a maximum period of 45 days from the date of storage for commercial importer and 60 days for industrial importers. (It may very as per circular)

b) Part delivery against payment may also be allowed if so desired by the party to clear the LIM liability within the aforesaid time, after recovering 30% margin over the landed cost if possible, but such payment should be proportionate with outstanding LIM liability taking into account the interest, go down rent and other charges up to eventual date of final delivery. This should be so arranged that with the last delivery the entire LIM liability is fully adjusted. Special care should however be taken to protect bank’s interest in case where all the packets/bundles are not of equal size, quality and price.

c) Additional 30 days may be allowed to both commercial and industrial import’s, if so approached by them for final adjustment. In the event of importers failure to lift the goods on payment of bank’s dues in full even within the extended period of 30 days, the following steps shall be taken by the branch incumbent:

2) In case of response is received from importer, legal notice shall be served on the bay giving another 15 days time for payment.

3) In such cases branch incumbents may allow further 30 days time only provided he is satisfied that importer will be in position to repay the outstanding dues within the extended period.

 Loan against Trust Receipt (LTR):

By executing the standard letter of trust (or trust receipt) the customer acknowledges receipt of the documents of title to the goods, as the case may be and agrees to hold them and the relative goods, when delivery thereof is taken by him, in trust as agents for the bank until the goods are sold or used for the express purpose for which they were released to him. The customer also undertakes to keep the transaction separate and assign and deposit with the bank the sale proceeds immediately realization but in any case not later than time period stipulated in the letter. Further, the customer undertakes to keep the goods insured and in the event the goods or may part thereof cannot be used by him for the declared purpose or on demand being made by the bank for the return of the documents to the bank’s custody. The trust receipt, thus, enables the importer customer to take re-delivery of the documents pledged to the pledge bank.


SIBL successfully handled export documents of USD 465.78 million (Tk. 3,182.37 crore) during the year 2007 compared to USD 405.33 million (Tk. 2,801.92 crore) in the year 2006. The growth rate was US Dollar in 14.91% and in Taka 13.58%. In 2008 it  handled 16234 export documents valuing USD 531.03 million (Tk. 3690.65 crore) during the reporting year with a growth of 14.01% over the last year. Readymade garments, Knitwear, foreign food, fish, tanned lather, handicraft, tea etc were the major export finance sectors.

 Export Procedure:

After receiving the original letter of credit, The Advising/Confirming Bank sends the original letter of credit, under their own letter of advice or confirmation, to the sellers (Beneficiary).  The next steps are as follows:

Documents Required under Letter of Credit:

Typically, the documents required for presentation by the exporter under a documentary credit are the documents issued in respect of the export of the goods:

Export Financing:

Export of services and goods constitute an important part for long-term development prospect of a country. Exports are, therefore, listed in priority sector and government always provides different sorts of incentive or subsidies for growth of export. The Government and Banks give the financing support to the exporters through the following channels:

I)       Pre-shipment Financing,

II)    Post-shipment financing,

Pre-shipment Financing

          In order to assist the exporters to ship the goods to foreign buyers, the Banks make pre-shipment finance to the exporters in the following ways:

 Post-shipment finance:

            The advance given to an exporter after the shipment is made is post-shipment finance. They are given in the following manners.

 A) Negotiation of documents under L/C: After shipment of goods against L/C, the exporter presents the shipping documents as per condition (Of L/C) to his bank for negotiation. If the documents are all in order/clean, bank purchase the bill and make payment to the exporter. But if the export L/C calls for submission of the documents to a particular bank, only that bank can negotiate the document. If otherwise it is freely negotiable, any bank can negotiate the bill. In order to negotiate a shipping document, a banker must confirm that,

i)          The documents must be presented for negotiation before expiry date of the credit

ii)         The amount of bill must not exceed the amount available in the export L/C.

iii)        All the documents called for in the L/C are submitted and these are prima facie in order.

When the bank is satisfied that the documents submitted are in order, they may negotiate and the bill amount is paid to the exporter on the rate quoted (Export bill buying rate) in the exchange rate circular.

B) Negotiation under reserve or guarantee: If the customer presents a discrepant document but the customer has high ranking in the bank and bank is sure that in the event of discrepant document is non accepted by the L/C opening bank, they may recover the overdraft with full interest from the exporter, Bank may purchase the export bill under reserve. If the customer has a high ranking in the bank but the bank has little doubt about recovery of the purchased bill value, they go for more realistic method by obtaining an indemnity from the exporter. Under this method, the exporter execute an indemnity bond in favor of the bank under which he promises to reimburse the bank for any loss that the bank may be put to on account of negotiation of the document with discrepancy.

C) Purchase of D/A, D/P Export bill. Some times the export L/C or firm contract contains the clause that the bill has to be drawn on D.A or D.P basis, say for 30, or 60 or 90 days from the date of B/L. For such type of bill bank may allow purchase of the bill after careful scrutiny of the export document, credit worthiness, business experience and integrity of the exporter. The bank for such kind of facility considers the customer of undoubted integrity and creditworthiness. For the safety of the bank advance, it is very common in our country that such type of bills are purchased by the banks after obtaining of acceptance of the shipping document by L/C opening bank and confirmation of due date of the bill. While purchasing such bill, appropriate exchange rate is applied as per exchange rate circular.

Advance against bill under collection:

It sometime happens that the exporter has sufficient financial support of his own and presented the document against exports L/C to bank for collection. But all on a sudden he may require fund for meeting emergency need. In such a situation the exporter may approach bank for finance against bill sent for collection awaiting remittance. In such a situation, bank may allow overdraft up to a certain percentage (Say maximum 80%) of the value of the bill under collection. In addition to the export bill as security, bank may ask for collateral security by way of third party guarantee or mortgage of property.

In the event of export failure of exporter for rejection of the   manufactured goods for late shipment or inferior quality of the goods, or any other reason, payment of the BTB L/C commitment is made by creating forced loan in the name of exporter, which is known as SOD (Export) in SIBL. This loan is adjusted by deduction from the future export bills and export of stock lot. Creation of forced SOD export loan is very common in the RMGI and special care is taken for early adjustment of the loan as it carries normal interest rate prevailing in the market. A detail instruction in connection with creation of SOD (Export) is given in our ID Circular No. 139 dated March 05, 1994 and all officials are advised for meticulous compliance of the above circular.

Export Procedure:

The general framework for control of exports is similar to that of imports but the objectives of import and export control are quite different. While import control is aimed at curbing imports to the extent possible, export control mainly aims at regulating the flow of foreign exchange into the country. The objective of the government is to encourage exports t the extent possible so as to earn valuable foreign exchange for the country. All efforts have to be made to boost up exports of the country. Therefore, export control is exercised over for less a number of items as compared to import control. The control on such items which are essentially needed in the country whose indiscriminate exports may affect the domestic economy.

For obtain export registration certificate (ERC) form CCI & E, the following documents are required:

1.                  Application form. 2.                  National certificate. 3.                  Partnership deed (Registered). 4.                  Memorandum & Articles of Association & Incorporation Certificate. 5.                  Bank Certificate. 6.                  Income Tax Certificate. 7.                  Valid Trade License. 8.                  Copy of Rent Receipt of the business firm. 9.                  Free paid as treasury challans.

Checking and Advising of Export L/C:

On receipt of Export L/C is to be recorded in the Banks inward Register and then the signature o the Export L/C or test number for telex L/C is to be verified by an authorized officer of a bank and finally it is to be forwarded to the beneficiary under forwarding schedule.

Processing and Opening of BB L/C:

An exporter desired to have an import L/C limit under Back to Back arrangement. In that case the following papers and documents are required:

On receipt of above documents and papers the back to back L/C opening section will prepare a credit repot. Branch must obtain sanction from Head Office for opening of BB L/C.

Predation of Export Documents:

Disposal of Documents:

Before dispatch:

 Steps for Export:

There are some steps for export is as follows:

1.                  Goods ready for shipment. 2.                  Inspection of the goods from the competent authority as per L/C. 3.                  Prepared invoice and packing list and vessel booking particulars. 4.                  Papers to be sent to C & F agent for shipment. 5.                  C & F agent will do the custom formalities. 6.                  C & F agent will take permission for shipment/handover the goods to shipping co. 7.                  After completing of all customs finalities, the nominating shipping co. received the goods for sail/load in the ship and issues a receipt which is known as mate’s receipt. 8.                  C & F Agent handover the shipping receipts to the exporter or they can take the original B/L in payment of freight and other expenditure etc. 9.                  Export may dispatch the shipment advice to the importer directly as par L/C terms. 10.              C & F Agent receive the original B/L form the relative shipping co. and dispatches the same to the bank for negotiation or receives the (exporter) from the shipping co. directly. 11.              Exporter submits the original and duplicate sets of document to the bank for negotiation. 12.              After negotiation bank should dispatch the documents to the opening bank for delivery of the goods from the port. 13.              Opening bank lodges the documents and makes payment to the negotiation bank as per L/C terms.

Foreign Remittance:

Social Islami Bank Ltd has remittance arrangement with different banks and exchange homes in various countries through out the world. The bank has earned the confidence and reputation as a reliable organization of paying hard-earned money of the expatriate Bangladeshis to their beneficiaries in the country safely and quickly.

The bank handled USD 582.47 million remittances in 2008 showing an increase of USD 179.90 million the previous year 2007which registered an attractive growth of 45%.

Introduction of products like Home Delivery Scheme, Electronic Fund Transfer (EFT) and different instant payment system and modern technologies like SWIFT and inline services have strengthened the position of the bank in channeling remittance proceeds. The remittance cell at the Head Office is working for smooth and speedy delivery of remittances to all the branches through online system. Beneficiaries are also informed through SMS regarding their remittances.

All these efforts have propelled our bank to a higher position with the support of 106 branches at home, 38 Exchange Companies/Banks abroad and a vast network of Western Union all over the world.

SWOT Analysis

SWOT analysis is a tool for auditing an organization and its environment. It can provide information that is helpful in matching organizations resources and capabilities to the competitive environment in which it operates. The following SWOT analysis of Social Islami Bank Ltd is done to have a better understanding of its position. This SWOT analysis will provide an insight of what they can do in future to improve its standing and also how they can compete with their existing competitors.

6.1 Strengths





The total picture of mobilizing and recovering loans and advances are very poor for the NCBs in our country. But Social Islam Bank Ltd, state owned bank has changed the scenario remarkably. The amount of classified loans is reducing year after year. Now it is little over 4.5% that are within the world standard. Foreign Exchange Branch has also a noted picture for the same. Only one (1) loan is defaulted (Outstanding amount is about 14 Lac.) out of Tk. 26 crore loan outstanding. The percentage is 0.53%. Even after there are some loop holes in disbursing and monitoring loans and advances. These are as follows –


During the three months practical orientation program at Foreign Exchange Branch, almost all the desks have been observed more or less. This Practical orientation program, in first, has been arranged for gaining knowledge of practical banking and to compare this practical knowledge with theoretical knowledge. Comparing practical knowledge with theoretical involves identification of weakness in the branch activities and making recommendations for solving the weakness identified. Though all departments and sections are covered in the internship program, it is not possible to go to the depth of each activities of branch because of time limitation. However, highest effort has been given to achieve the objectives the internship program. After evaluating the whole company thoroughly and by considering the overall industry and competitors I would like to conclude that Social Islami Bank Ltd has been successfully created a brand image in the market and is maintaining a strong position in the market. I had the opportunity to work for this banking giant during my internship program. I was placed at the Foreign Exchange Department of Social Islam Bank Ltd Foreign Exchange branch Office, Mothijil, Dhaka. During this time I got an opportunity to observe the overall service process of Social Islam Bank Ltd corporate banking division. I also got the scope to interact with customers and reveal their expectations and perceptions about the bank’s services.

Being the current market leader of local commercial bank Social Islam Bank Ltd has much more potential to explore the existing market and utilizing intelligent promotional campaigns they can come over the obstacle of limited loyal customer base and can increase growth of the profit successfully. So to be the number one forever they have to be very perfect in their business and not allow the customers to find any weakness in their service. So they should always be competitive, technologically advanced and be creative in the business to maintain this position or to do even better then this Finally, I would say that this internship at Social Islam Bank Ltd has increased my practical knowledge of Business Administration and made my BBA education more complete and applied. In this report I got the opportunity to apply various tools and concepts I learned in my BBA courses. Some such courses were Strategic Marketing, Strategic Management, Services Marketing, Consumer Behavior, etc. I look forward to work as a permanent employee of the local banking giant.


Annual Report of Social Islami Bank Limited, 2007.

Social Islami Bank Limited working manual for Foreign Exchange Departments.\


Theory and Practice of Banking (B-101), BangladeshInstitute of Bank Management, Dhaka, 2000.

Andley, K. K & Mattoo, V. J., Foreign Exchange Principles and Practices, Sultan Chand & Sons, New Delhi, 1996.

Balchandran, P., Foreign Exchange: A Mannual for Managers, Skylark Publications, New Delhi, 1991.

Chakraborty, P., The Negotiable Instrument Act, 1881, Swarna Prokashani, Dhaka.

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