National Bank's Foreign Exchange Department

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National Bank’s Foreign exchange department

Executive Summary

National Bank is one of the first leading Bangladeshi banks. It started its operation in 1983. Since then it is doing various operations in banking sector. According to these tasks NBL has different departments. Among them Foreign exchange department is most important one. Since the very beginning, the Bank exerted much emphasis on overseas operation and handled a sizeable quantum of homebound foreign remittance. The Bank established extensive drawing arrangement network with Banks and Exchange Companies located in important countries of the world. Expatriates Bangladeshi wage earners residing in those countries can now easily remit their hard-earned money to the country with confidence safety and speed. In the year 2000, the Bank managed to procure foreign remittance business to the turn of US$88.44 million dollar equivalent to Tk. 662.10 million compared to Tk. 3,986.20 million in the previous year indicating a growth of 16.96%.

It has trade relation with Myanmar and Singapore. It opens Export and Import letter of credit for exporters and importers. It also provides advance loan. It has many customized services for individual and commercial bodies.

NBL is on lie to establish trade and communication with the Prime International banking companies of the world. As a result NBL will be able to build a strong root in international banking horizon. Bank has been drawing arrangement with well conversant money transfer service agency “Western Union”. It has a full time arrangement for speedy transfer of money all over the world. Besides NBL also use other money transfer software and make contract with other financial institutions to exchange currency.

Table of Contents

1.Introduction6
1.1.Background6
1.2.Objectives7
1.3.Scope7
1.4.Limitations8
2.EBL Overview8
2.1.Vision8
2.2.Mission8
2.3.Values9
2.4.Objectives9
2.5.Strategic Priorities of EBL9
3.Financial Performance of EBL11
3.1.Deposit Performance11
3.2.Loans & Advances Performance12
3.3.Capital Adequacy Performance13
4.Overview of Divisions of EBL14
4.1.Business Divisions14
4.2.Support Divisions15
4.3.Subsidiaries16
5.Credit Risk Grading17
5.1.Definition of CRG and CRR17
5.2.Functions of CRG17
5.3.Use of CRG17
5.4.CRG Sheet18
5.5.CRG Score and Corresponding CRR18
5.6.CRG at EBL19
6.Developing Models20
6.1.Data20
6.2.Variables20
6.3.Excluded Variables22
7.Model 122
7.1.Features22
7.2.Output23
7.3.Interpretations24
7.4.Policy Implication25
8.Model 226
8.1.Features26
8.2.Output27
8.3.Causes of Low Reliability of the Model28
9.Conclusion29

List of Tables

Table 1: Financial Overview of EBL (2010)11
Table 2: Risk Weighted Asset & Capital Adequacy13
Table 3: Credit Risk Grading (CRG) Grades19
Table 4: Sample Data20
Table 5: Correlation of Variables22
Table 6: Model 1, Run 1 Coefficients23
Table 7:Model 1, Run 1 R-stats23
Table 8: Model 1, Run 2 Coefficients23
Table 9: Model 1, Run 2 R-stats24
Table 10: Signs of Variables24
Table 11: Model 2 Coefficients27
Table 12: Model 2 R -stats27
Table 13: Model 2 Prediction stats27
Table 14: Data Set30
Table 15: Corporate Banking Products32

List of Figures

Figure 1: Distribution of Deposits in 201012

Figure 2: Distribution of Loans & Advances12

Figure 3: Distribution of Eligible Capital13

Figure 4: Organogram of EBL31

Introduction

1 Background

A bank’s main business can be roughly summarized in to just one word, “LENDING”. Whatever a bank does beyond, that is to facilitate that one goal. The deposits a bank collects is to lend them to the borrowers and...
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