Paper of Ucbl Forign Exchange

Chapter 1

Introduction

1. Background of the Study

The banking sector of Bangladesh played an important role towards economic growth. From the beginning of financial year 2003, Bangladesh Bank took initiatives in reforming financial sector. Steps for prevention of money laundering, loan write off policy and effective measures to gain accountability and transparency made banking operations more acceptable. As a result, the image of banking sector has been elevated. Bangladesh Bank also identified five core risk management, Asset Liability Management, Prevention of Money Laundering, Credit risk Management, Internal Control and Compliance. This initiative will bring in overall discipline in the sector and enhance operational profit.

Foreign Trade is considered as a vital sector in profit generation in banking business as a large portion of earnings comes from the foreign exchange business. Foreign trade refers the imports and exports of merchandise from one country to other countries under contract of sale. Banks earn interest against import-export financing to the customers. A large portion of total commission earnings of a bank comes from foreign exchange business.

Fund management plays a major role in foreign exchange operations as income from the foreign exchange operation may be affected due to lack of proper fund management. In the report we will see how to operate foreign trades in a bank and what are the proportions of earnings from the foreign exchange business.

2. Rationale of the study

The report titled “Foreign Exchange Operation” prepared to fulfill the requirement of the internship program of the BBA degree in department of Business Administration, Stamford University Bangladesh.

The banks provides different type of product and services to its counter parts like, general banking service or finance or investing which result transaction of currency. To do this they also need capital, assets and other resources. These...