Foreign Exchange Policy and Operation of Jamuna Bank

Foreign Exchange policy and operation of Jamuna Bank

Jamuna Bank is one of the promising banks in Bangladesh, which is working with pride in Bangladesh since 2001. It is registered under the companies Act, 1994 of Bangladesh, its Head Office currently at Hadi mansion 2, Dilkusha C/A, Dhaka-1000. The bank successfully starts its operation on 3rd June 2001.

It is provides almost all types of financial support to trade, commerce, industry and overall business of the country. It focuses on its retail banking, corporate banking, Islamic banking, SME banking, NRB banking and also in international banking. From the very beginning JBL is promised to inspire the entrepreneurs to set up new ventures and aided to the BGMEA registered garments which is now the blooming industry in Bangladesh. Jamuna Bank itself named third generation commercial bank, which is established by a group of people who are involved with the banking industry since a long time and also those people who have a keen interest on trade, commerce, industry and business in Bangladesh.

The bank avail the opportunity to provide conventional and Islamic banking through its different branches. The bank is managed and operated by a highly qualified and professional team with diversified experience who working in the industry for a long time. The bank is focus on its customer needs which are changes time to time. Moreover, the bank is taking initiative to cope up with customer needs and following the strategies to full fill all the needs which are needful for the customer. Jamuna bank is operating in Bangladesh more than ten years and through its journey it shows a tremendous progress and is able to make loyal customer who are dedicated to take the service from Jamuna bank. The bank has different branches around the rural and urban area of Bangladesh. It has a strong IT infrastructure which leads the bank to provide online baking and its own ATM operations and also it have the opportunity to share ATM of the other banks.

Jamuna Bank is now focusing on:

  • Remaining with time
  • Managing change
  • Developing human capital
  • Creating true customer’s value

Correspondent Banking:

Jamuna bank maintaining correspondent banking relationship with 306 international Banks around 85 Countries in 836 different strategic locations worldwide to ensure the best and steadfast trade services. Presently we are maintaining 20 Nostro Accounts in different Major

Currencies like USD, GBP, EURO, JPY, CHF, SAR, AED & ACU Dollar with various world reputable Banks.

Since we have wider Correspondent Network with sustainable Credit Limit and good relationship globally, we can provide the following services smoothly:

  • L/C Advising
  • L/C Confirmation
  • Bank Guarantee
  • Hajj Guarantee

Purchasing/Discounting/Negotiating of export bills

  • Off Shore Banking Services
  • Trade payment settlement
  • Foreign Remittance

Trade Finance:

International Trade forms the major business activity undertaken by Jamuna Bank Ltd. The Bank with its worldwide correspondent network and close relationships with key financial institutions provides an extensive trade services network to handle your transactions efficiently. Our key branches throughout the country and Offshore Banking Unit (OBU) are staffed by personnel experienced in International Trade Finance. These offices are the focal point for processing import and Export transactions for both small and large corporate customers. We offer a complete range of Trade Finance services. Our professionals will work with you to develop solutions tailored to meet your requirements, through mobilizing our full range of trade services locally, and drawing on our global resources. We can offer you professional advice on all aspects of International Trade requirements, namely:

  • Issuing, advising and confirming of Documentary Credits.
  • Pre-shipment and post-shipment finance.
  • Negotiation and purchase of Export Bills.
  • Discounting of Bills of Exchange.
  • Collection of Bills.
  • Foreign Currency Dealing etc.

Offshore Banking:

An Offshore banking Unit (OBU) of a Bank is a deemed foreign branch of the parent bank located within Bangladesh, and shall undertake International Banking business involving foreign currency denominated assets & liabilities. An offshore bank is simply a bank based in a jurisdiction outside of your country of residence. Accordingly, Jamuna Bank Limited has started its OBU operation on 22nd April 2010 having following objectives:

To widen and diversify JBL’s area of services to the foreign investors as they do not have the opportunity of availing credit facilities from different Financial Institution in Bangladesh. To diversify the sources of foreign exchange earnings by increasing export of Bangladesh through the EPZs.

To encourage and foster establishment and development of industries and commercial enterprises in EPZs in order to wider and strengthen the economic base of Bangladesh. Jamuna Bank Limited offers the following range of Offshore Banking Services:

  • Foreign Currency Deposites( Non Resident entitles and NRBs)
  • Loan in Foreign Currencies
  • Credit Facilities including Trade Financing
  • Negotiation/Purchase of Export Bills
  • Discounting of Export Bills
  • Corporate Treasury Services.
  • Competitive interest rates
  • Easy international transfers
  • Fee free accounts
  • Offshore Bank Accounts

We offer a professional no obligation advice service because we understand that the offshore world offers many advantages but can be complex and sometimes daunting; and we remain independent when it comes to solution provision. This means we have access to the complete spectrum of offshore products and we can assist you to make well-informed, secure and profitable decisions and to select the right offshore bank account for your needs.

Examine Porter’s Five Forces in respect of Jamuna bank:

Threat of New Entry:

If new businesses can be easily started up in your sector without substantial investment, then this is a threat. The Internet has made this a reality in many sectors, especially publishing! So follow these questions to identify the threat:

  • What’s the threat of new businesses starting in this banking sector?

It is very hard to get the permission to establish a bank nowadays in Bangladesh. It will require much more capital as security, licenses, company agenda etc. which makes it tough to start a business in banking sector.

  • How easy is it to start up in this banking business?

It is not easy to set up banking business in Bangladesh. It is not common to find the perfect location for branches, corporate branches in the right place, poor human resource, weaken infrastructure which makes the startup business passes a tough time.

  • What are the rules and regulations?

There are different rules and regulations for banks like foreign exchange rules and regulations, antimony laundering act, financial institution rules and managing core risk etc. which is really complex and have to follow by the bank and regulated by Bangladesh Bank.

  • What finance would be needed to start-up?

To start a banking business directors needs to accumulate the primary fund by their own and after registering with stock and exchange commission they can gather money by selling the company share in the share market to gather the capital to start the business.

  • What are the barriers to entry which give you greater power?

It is tough for any bank at their initial level to operate its operation but after it finished its establishment through its marketing and Far East business mind set will take it up to the mark where it should belong.

Buyer Power:

Where there are fewer buyers, they often control the market. Questions here include:

  • How powerful are the buyers?

In banking sector buyers are really powerful like if customer didn’t find the proper service from the bank they can switch to other banks it is really easy and less cost effective.

  • How many are there?

Every day numerous customers taking banking service from different banks which is roughly numerous in terms of estimation. Their buyer number is high enough to take them the free decision regarding the bank service provider.

  • Can the buyers get costs down?

Sometimes buyer compares a bank with other in terms of cost. Many customers are cost sensitive and they usually compare a bank by their charge and way of bank serve to the customers.

  • Do they have the power to dictate terms?

In every company customer will get the first priority just like the same if customer demand anything a banker always try to follow up to full fill the demand of the customer. It is not like dictating it is like ensuring customer satisfaction through banking service.


Threat of Substitution:

If there are available alternatives then the threat of substitution increases.

  • How easy is it to find an alternative to this product or service?

There are 54 banks in total in Bangladesh and most of them provide almost same banking service in Bangladesh. It is really not hard to find an alternative of banking service providers.

  • Can it be outsourced? Or automated?

In almost every bank they use outsource employees of third party who helps them to full fill the minor work for them. It is not possible to make everything automated and human helps is necessary for some subjects and issues where human judgment is very important.

Supplier Power:

Markets where there are few suppliers who retain the power.

  • Examine how many suppliers are in the market exists?

There are many suppliers in the market who supplies goods like banking software, customize software, AC, chair, table, furniture etc. to the bank and the number of the supplier are many. The switch cost of the supplier is not as high as because there are many more who can take the advantage as a supplier.

  • Are there a few who control prices?

Price is not fixed in Bangladesh for almost every supplier, almost everywhere people like to bargain in term of price of a product which can help them to reduce the cost of the product.

  • Does the supplier hold the power?

It depends on the product. Like if there is software which is high patent issue, sacristy in the market it is obvious that the price of the product will be high.

  • How easy is it to switch, what’s the cost?

As the number of supplier is high the switching cost for the customer is not so high. A bank should always allow two or more supplier not the only one supplier as because for any reason they can switch to other supplier at their wish.

Competitive Rivalry:

Markets where there are few competitors are attractive but can be short-lived. These are highly competitive markets with many companies chasing the same work reduce your power in the market.

  • What’s the level of competition in this banking sector?

The number of banks is high in Bangladesh and most of the banks operations same. It is really tough competition for almost any bank with others. There is always high competition going on among the banks.

  • What’s the competitor situation?

Most of the bank in Bangladesh is quite same in terms of banking service some of them are different in terms of their own traits. Every bank every time tries to beat each other through their banking agent, policy and packaging.

Literature review:

Nowadays commercial bank has its own financial activities. Most of the bank is performing foreign exchange operation and has its own policy. In other words, a bank’s success is now depending on the foreign operational activities and policies it has offered for its customers. In this project paper I am working on the Foreign Exchange policy and operation of Jamuna Bank for Bangladeshi perspective. To identify the basic components I need to find out some components to make my own questionnaire and I have gone through these journal paper:

Singh (September 2005), released a research paper on foreign exchange reserve usage in India. In this journal paper the writer went for foreign exchange management to the development of financial infrastructure. The title itself is self-explanatory “Should India use Foreign Exchange Reserves for Financing Infrastructure?”. In this journal the writer explained how India earns this reservation of the foreign currency and how they have planned to develop it through its own operations.

Chakrabarti (October 2002) revealed a journal paper named “Foreign Exchange Markets in the perspective of India” in the perspective of Bangladesh and in this journal paper they are focusing on the foreign exchange policy India has established, foreign exchange markets in India, intervention in foreign exchange markets, regulation of cross-border currency flows, regulation of cross-border currency flows etc. The journal paper is very useful to understand the concept of the foreign exchange market and who currency flow has been determined for other countries. This journal paper is really milestone for preparing this report.

Khan (04, October 2014) had published a research paper on “Indian foreign exchange market – recent developments” in which he discussed about developments in the Forex market, downside risks, hedging of currency exposures by corporates, foreign exchange derivatives – requirement of underlying exposure, long term hedging – development of forward market beyond one year etc. A wide discussion regarding the Indian foreign exchange development and I have found few similarities which I should include in my research paper by the reference of this research paper. The research paper works a guide line for me to prepare and understanding the foreign exchange policy and operation held in Bangladesh. In addition, Bangladesh and India has the similarity in their economic development and also their financial market and condition is also similar.

Last but not the list, I found only few information regarding my topic. By analyze that research paper, I try to identify those factors that could have been significance and usable for my topic and research paper.


Specific components:

The specific components that I found from my research are,

  • Face interaction,
  • Branches,
  • Reduce some service,
  • Mobile notification,
  • Direction regarding foreign policy.


  • To highlight the foreign exchange policy of Jamuna bank in Bangladesh.
  • To observe the foreign exchange activities of Jamuna bank.
  • To analysis the contribution of foreign exchange on the performance and financial health of national development.


Research method:

In order to reach in my destination or to complete the report with proper and relevant information, I collected data from several sources. I collected data from both primary and secondary sources.

Primary source:

Primary source refers historical data or eye witness information which other organization or company investigates and I can take help from their study to complete my own research paper. The source refers a particular time and a framework of a company or a subject at a time period which is necessarily attached with the study. For my primary source, I have been searching in my university library archive for report,  several assignments, and term paper. I are looking for the statistics and article of variety magazine, books, annual report, Bangladesh Bank report quarterly and yearly to find the foreign exchange activity etc.

Secondary source:

The secondary source is the documents shown by various websites. I also visited several websites to collect relevant information regarding the foreign exchange activities, remittance, how remittance currently process in Bangladesh, how the remittance reach in Bangladesh, how foreign exchange money works and it exchange through one bank to another, why it takes a time duration to reach at Bangladesh, how to minimize the time framework, what is the remittance last received from different countries etc. It is also importance to find some research paper which shows what the usage of foreign exchange in Bangladesh and how it is making an impact in our GDP and economy. I also go through with online journal, research paper, scholar report and quarterly newsletter based on remittance.

Type of Study:

Exploratory research:

For identifying the factors considered by other researchers in their own research paper based on foreign exchange, after analyze those research paper I have decided to conduct an exploratory research. That exploratory research is a qualitative one. I have gone for an indirect approach using projective technique for this research which is also known as random sampling. The questionnaire for that exploratory research is developed in light of association technique. Here, respondents were asked to mention five factors they consider while choosing their expected brands. After exploring the factors, I need to conclude the results.

Conclusive Research:

At the next phase of me study; I have gone for another research which was a conclusive one. I wanted to see whether they explored factors can influence consumer’s decision for choosing bank in respect of foreign exchange service provided by the bank, I went for a causal research to see the cause and effect.

Experimentation was necessary for such a causal research design.

I have mentioned few components earlier and based on the variables I would like to see the response of the customer who is taking the foreign exchange service from the bank and their thoughts and opinion  regarding the questionnaire. It is also identifiable to find the relationship between the selected variables, remittance, customer satisfaction and tendency to recommend the bank to others.


Analysis and findings

  • What type of banking service have you recently taken at Jamuna bank branch?

Among the 25 participants 40% of them take money deposit service and 36% among them take current account service from Jamuna Bank.

  • How frequently bank do you visit Jamuna Bank branch in a month?

In the survey, 23 participants rated that they visit frequently for the banking service and it is less than 5 to less than 10 times.

  • What is the purpose for your foreign exchange transaction?

In my survey, 17 of the participants rated they use their Jamuna bank service for money transfer for different financial issues and 5 of them rated they used it for inward remittance.

  • Are you satisfied with the service of Jamuna bank branch regarding foreign exchange issues?

In the question of satisfaction, 60% and 24% of the participants rated that they are satisfy with the banking service provided by the bank, which represents a positive impact of their loyalty.

  • Do you consider foreign exchange related services at Jamuna bank branch relatively hassle free?

In the question hassle free service, 11 and 6 of my survey participants rated that they got hassle free service from the bank and apart from them 4 participants rated that they are not satisfied with the banking service.

  • Do you think they should have mobile notification system for foreign exchange transaction for confirmation purpose?

In the question mobile notification system for foreign exchange transaction 44% of the total participants rated they should have the mobile notification system for foreign transaction.

  • Is there any possibility for you to switch to the other bank for foreign exchange service?

40% of the total participants rated disagree to switch the bank for the foreign exchange service and another 20% strongly disagree to switch to other bank for the foreign exchange service.

  • Are Jamuna bank’s branches available at your convenient location?

In case of convenient location 16 participants among 25 rated that Jamuna bank’s branches are located at their convenient location and they can easily go to there to take service.

  • Are the employee’s friendly and do they always cooperate with you while providing service?

The graph shows that the employee’s friendliness toward their customers and 48% of my participants scored that they are satisfied and another 40% of them scored neutral in the question.

  • Do you think they sometimes reduce some services in foreign exchange?

In the question to reduce the foreign exchange service 21 participants score to no whereas 4 rated to yes.

  • Do you think Jamuna bank branch takes less time to process any foreign exchange service?

In the question, Jamuna bank takes less time to process foreign exchange transaction, 12 of the participants scored agree and 6 of them rated strongly agree and among rest of them 3 participants rated disagree.

  • Would you recommend others to take foreign exchange service from Jamuna bank?

The graph represent the question to recommend the bank to others and 44% of them participants rated they will and 36% of the rest of the participants rated they have a neutral opinion in the particular question.

  • Do Jamuna bank’s employees provide you clear direction regarding regulatory all requirements for foreign exchange transaction?

In the term of clear direction regarding regulatory policy 18 of the participants rated yes the bank’s employee shows it to them whereas 4 of the total participants rated disagree with the statement in the question.

  • How many times do you visit Jamuna Bank branch in a month for specific financial purpose?

In the term of people visit Jamuna bank with specific financial purpose at Sat branch. In this question participants rated 15 to 10 times to 15 and 10-15 times rated at 6 which shows that people are frequently visit Jamuna bank for any sort of financial purpose.


Conclusion and Recommendation:


From this study I have learned that there is a positive relationship among chosen components like face to face interaction, branches, reduce some service, mobile notification, direction regarding foreign policy etc. It also states to ensure greater customer satisfaction can ensure long term loyal customer for the bank. As I took twenty five random people for the survey and most of them provide their opinion in the favor of Jamuna bank and its means they have a relatively positive view and mind set regarding the service of Jamuna bank. Moreover, the financial highlights also shows that the performance of Jamuna bank in foreign exchange is remarkable and also it going to make difference itself to others. It ensure short possible time to process the paper, LC service, collection which is really business friendly for any businessman.


In my internship period I have identify that when businessman provide their LC paper, bank need to send the paper to the respective authority for checking and it takes 2-3 days. But if the task could be complete in the bank’s end then it might be possible to complete the whole service in 2 days, where it is now takes 4-5 days with proper recommendation and reference. The more banks will be powered the more they will perform. On the other hand, bank could send the documents in online and after checking all the relevant data and terms and condition respective authority could give their feedback to the bank and the bank will initial step to confirming LC at the earliest days. Another, important point is, Jamuna bank should increase its number of branches, according my survey few people rated it wasn’t convenient for them.

Limitation and future study in this field of research:

The significant limitation of the study is the sample size. 30 People’s survey is not enough in this field of survey. This survey result represents the Jamuna bank service and mostly the questionnaire is based on foreign exchange service provided by the bank. In a wide range the components should increase an also the question could be modified and also need to have their own opinion written part in the question. Moreover, it is found that few respondents are not interested to fill up the questionnaire carefully. When I am conducting the survey I have found that the time is limited compare to the work, I would like to suggest that those who conduct new research on “Foreign Exchange Policy and Operation of Jamuna Bank Ltd” they should get much more time to finish the task. This study shouldn’t follow to the other country because their people’s behavior pattern might be different than Bangladeshi consumer. If someone follows the same procedure they might not get the expected result in their country perspective.