An Internship Report on Foreign Exchange Business of Islami Bank Bangladesh Ltd.

Posted on 21st Oct 2024 09:47:13 AM Accounting and Information Systems


Prelude

The banks are the mainstay of the financial system of a country and those are different from other financial institutions. They accept deposits from the public and in turn advance by creating credit. It has become one of the most important economic inventions of the world. The banking systems of different countries vary substantially from one another. Evolution of banking functions is as old as authentic history. But the establishment of bank as an institution is not so ancient. The modern regime of bank was initiated in the 15th century A.D. It is an intermediary profit making instution. Banks are of many kinds: Commercial bank, Savings bank, Investment bank, Industrial bank, Co-operative bank, Central bank etc. But when we use the term ‘bank’ without any prefix, qualifier, it refers to the ‘Commercial’.

The real breakthrough for modern banking was in 1453 after the fall of Constantinople. The rich Jews fled being suspicious of the new conquerors, first to Italy and then to London carrying with them their vast wealth. According to one perspective, the word "Bank" originated from the Italian word for "Bench", as these Jews carried on their business of money lending and money changing on benches. They were called Lombards as they carried on their business in Lombardy. The Lombard Street in present day London, England is named after them. The most famous of these Italian bankers were the Medici Family (Meyer, Duesenberry, Aliber 36) 

An alternative perspective as to the origin of banking is a German one. In 1401 formal banking started in Germany as partnership institutions. According to this theory, the word "Bank" originated from the German word "Bach" which means a partnership firm with a number of partners. 

Modern, present day banking operates mainly by giving interest to people from whom it has borrowed money, and after keeping a small percentage of it [people's wealth or money] as reserves and vault cash, lending or investing the same money [people's wealth] at a higher rate of interest or return and keeping the difference as profit [The major source of revenue for banks]. This is in addition to the profit made by banks on the various bank services provided. 

Economic development is a crafty concept. Commercial Banks are playing a vital role in the economic development of our country and are being considered as integral parts of our financial system. The main functions of Commercial Banks are to receive deposits from the public, making loans and advances, creation of money, providing agency services and general utility services etc. All of the above services may be spread crossing the boundary of a country with the help of Foreign Exchange Business.

Back ground of the report

After completing one hundred and fifty six (156) credit hours from the Department of Accounting and Information Systems, University of Rajshahi, I was placed at IBBL as part of the Internship Program requirement. This report is prepared for the internship program consisting of a major in depth study of the Foreign Exchange Business of Islami Bank Bangladesh Limited.

Practical knowledge is fundamental for the application of theoretical intelligence. Bearing this in mind, an internship program was being included in the MBA curriculum. The goal of this analysis is to expose the student in the organizational work situation and also to provide an opportunity for applying classroom learning in practice. There are some differences between theories and practices. Internship program is a system by which we can accustom ourselves to the practical situation through the application of theoretical knowledge into real life; the gap between these two can be bridged up through this internship procedure. As an indispensable part of MBA I was placed in Head Office of IBBL.

Rationality of the study

Bank is the heart of the economics and banking is the blood circulation of country’s economic growth. Banks perform a significant role to serve the needs of the society in different sectors, such as: capital formation, large scale of production, industrialization, growth of trade and commerce etc. and banks are contributing a lot of aspect. Economic development of a country is very much dependent on the Banking System. Its role to the economic reconstruction of a developing country like Bangladesh can never be ignored. In Bangladesh we have inherited  the British Branch banking prevailing at the preliberation period. The phenomenal growth of bank branches and we expansion of bank business in both volume and dimension posed some serious management problems. Banking sector in Bangladesh thus comprises of Central bank, and nationalised banks for both specialized financial and commercial sector, joint venture private banks including Islami bank, Bangladeshi private banks and foreign banks. This multi-disciplinary banking system plays a dynamic role in shaping the country’s economy to its desired objective.

Islami Bank Bangladesh Limited has already emerged as one of the world wide recognized banks. Islamic banking is a new dimension of interest free banking where ‘Riba’ or interest is strictly prohibited. So I have tried to represent their performance and problems and prospects on the ground of general banking, investment & foreign exchange operation.

Objectives and Philosophy of the Study

The first objective of writing the report is fulfilling the requirements of the MBA program. In this report, I have attempted to give an overview of Islami Bank Bangladesh Limited in general. Following are the main objectives:

· Islami Banking System

· To familiar the history and operations of Islami Banking in Bangladesh.

· To show Foreign Exchange operation systems of IBBL.

· To identify strength and weakness of IBBL.

· To gather practical experience about overall operations of IBBL

Scope of the Report

The scope of this paper is limited to the organizational structure, background, and objectives, functions, and investment performance of IBBL as a whole. The scope is also limited to different investment schemes, modes, mechanism, investment proposal appraisal procedures, monitoring and documentation of IBBL, general banking aspects and foreign exchange operations.

Sources and Methodology of the Study

I have collected data mainly from secondary sources and getting little scope to collect data from primary sources which are given below:

Secondary sources

· Annual report of Islamic Bank Bangladesh Limited.

· Desk report of the related department i.e. IDFD

· Other manual information.

· Different reference books of the library.

Primary sources

· Direct observation

· Expert opinion 

Limitations of the Study

There are some limitations in my study. I faced some problems during the study, which are given below:

· Lack of time: The time period for this study was very short, which was not enough. So, I could not go in depth analysis. Sometimes the officials were busy & were not able to give much time.

· Insufficient data: Some essentials information could not be collected due to confidentiality of business.

· Lack of Supervision: Few officials sometimes felt disturbed, when they were busy with their tasks. Sometimes, they didn’t want to supervise due to pressure of work load.

 

Contact us to read the full 'Internship Report' internshipreport12@gmail.com



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