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Asian Finance & Banking Review 

Vol. 1, No. 1; 2017 

ISSN 2576-1161   E-ISSN 2576-1188 

Published by Centre for Research on Islamic Banking & Finance and Business 

76 

 

Performance of Foreign Exchange Operation of Private 

Commercial Banks: A Case on Southeast Bank Limited 

 

K. M. Anwarul Islam1 

 

1Department of Business Administration, The Millennium University, Dhaka, Bangladesh 
 

Correspondence: Department of Business Administration, The Millennium University, Dhaka, Bangladesh, 

E-mail: ai419bankingdu@gmail.com 

 

Received: October 02, 2017          Accepted: October 16, 2017      Online Published: October 30, 2017   

 

Abstract 

The banking sector is participating in many events on a daily basis. Conversely, the process of banking is 

become faster, simpler, and more universal all at the same time. They're constantly coming up with various ideas 

and products to meet customer demand. Banks and other financial services organizations all search for service 

improvement opportunities in order to gain a competitive advantage in the financial sector. As a result, every 

person has a banking procedure they should know about. In accordance with their goal, Southeast Bank Limited 

believes in building together towards tomorrow. To accomplish the goal of getting more customers, the bank 

demonstrates excellence in all stages while also fostering continual development. With this fast changing 

competitive climate, banks' strategic plans and networking will help them keep pace with the competition. The 

overall objective of this research had represented the foreign exchange performance of import, export and 

foreign remittance of Southeast Bank Limited. This paper examined about import, export and remittance 

performances have been analyzed and find out some problems relating to foreign exchange activities. Finally 

this research finished with some possible recommendation and concluding remark of the study.   

 

Keywords: Foreign Exchange, Bank, Export, Import.   

 

1. Introduction 

When it comes to producing particular goods, every country has its natural advantages and disadvantages. And 

in other areas, they have natural disadvantages. To understand this finding, think about the economic policies of 

two different countries. The policies of one country require that that country import specific goods whereas the 

policies of another country require that the country export its surpluses. Trade is based on these transactions.  

There are three major definitions of the word “Foreign Exchange.” In addition, it is also a word that is 

used to refer to currencies of other countries, such as referring to the currencies of only one of them. Trade 

instruments such as Bills of Exchange, drafts, travelers Cheque, and other types of foreign remittance are 

usually referred to as bearer instruments. A third definition of foreign exchange, in addition to the previous two, 

is that it is also known as the balance in foreign currencies owned by a country. Section 2(d) of the Foreign 

Exchange Regulations-1947 in Bangladesh describes foreign exchange as foreign currency, including any 



Performance of Foreign Exchange Operation of Private Commercial Banks: A Case on Southeast Bank 

Limited 

 K. M. Anwarul Islam 

 

77 

 

instrument drawn, accepted, made or issued under clause 13 of article 16 of the Bangladesh Bank Order, 1972, 

and all deposits, credits and balances payable in any foreign currency. 

Foreign exchange regulations, Section 3, gives the Bangladesh Bank the authority to provide licenses 

to scheduled banks that permit them to deal with foreign exchange. Authorized Dealers are called upon to 

process all customers' financial transactions (AD). 

In addition to being provided by the Bangladesh Bank, licenses are also issued to individuals or 

businesses for the purpose of exchanging foreign currency instruments, such as T.C. (bills and coins), Currency 

notes, and Coins. Authorized Money Changers are frequently called as Wacky Money Changers. 

Foreign exchange is the method used to convert one country's money into another's. The purpose of 

foreign exchange is to help move assets in one country's currency to another country's currency. 

 

2. Hypothesis Development 

I have developed two hypotheses to test dependent variables because the number of an independent variable is 

one. 

 H1: There is exist significant relationship between export and foreign exchange operation. 

 H2: There is exist significant relationship between import and foreign exchange operation. 

 

3. Research Objectives 

The main objectives of the research are as follows- 

 To analysis of the Import, Export and Remittance performances of Southeast Bank Limited. 

 To find out some problem related to foreign exchange operation of Southeast Bank Limited. 

 To provide some suggestion to solve the problem based on findings 

 

4. Research Methodology 

This study has been completed on the basis of all of the research that was conducted during the course of the 

study. By using various charts and tables, I have shared my research and findings. Which analytical data 

elements are included in the analysis?  

The work plan specifics are listed below:  

4.1 Data Collection Method 

This research has gathered relevant data by going directly to multiple sources of data. 

The operating procedure is documented, and various employees are involved. 

There have been no systematic questionnaires employed. 

The bank has gathered information on office operations through discussing and talking with bank employees.  

4.2 Data Sources Method 

A diverse range of research sources are utilized in the completion of this project. The following information is 

included below:  

4.2.1 Primary Sources: 

 Face-to-face talks with bank employees 

 Face-to-face discussions with clients 

4.2.2 Secondary Sources: 

 Annual report of Southeast Bank Limited. 



Performance of Foreign Exchange Operation of Private Commercial Banks: A Case on Southeast Bank 

Limited 

 K. M. Anwarul Islam 

 

78 

 

 Different papers of Southeast Bank Limited. 

 Files and documents of the branch 

 Unpublished data 

 Different text books. 

 

5. Data Analysis and Discussion 

5.1 Import performance of Southeast Bank Limited. 

Import performance of Southeast Bank Limited from the year 2015 to 2011 is given in the following table:  

   

Figure in million BDT 

Particulars 2015 2014 2013 2012 2011 

Import 151,812.58 155,691.00 131,644.82 111,537.50 99,509.01 

 

 

Figure: Import of Southeast Bank Limited 

 

In this graph we have noticed that the import level of the southeast bank ltd. Increasing severally over 2011, 

2012 and 2013, & 2014. But in 2015 the import level is slightly decreasing.  In 2014 total import was 

155,691.00 million but in 2015 are 151,812.58 million total falls the amount is 3,878.42 million. Other all 

import performance is good. 

 

5.2 Export performance of Southeast Bank Limited 

Export performance of Southeast Bank Limited from the year 2015 to 2011 is given in the following table:   

 

Figure in million BDT 

Particulars  2015 2014 2013 2012 2011 

Export 126,323.89 112,137.60 95,220.40 84,464.20 75,982.06 

 



Performance of Foreign Exchange Operation of Private Commercial Banks: A Case on Southeast Bank 

Limited 

 K. M. Anwarul Islam 

 

79 

 

 

Figure: Export of Southeast Bank Limited 

 

This diagram shows that the positive reaction over the 5 years. The export level is increasing day by day. In 

2015 the export level is catch the optimum level of the curve. In the year 2014 total export was 112,137.60 

million and 2015 is 126,323.89 million total increases are 14,186.29 million. Overall export performance is very 

well and their export operation increasing day by day. 

 

5.3 Foreign remittance performance of Southeast Bank Limited. 

Foreign Remittance performance of Southeast Bank Limited from the year 2015 to 2011 is given in the 

following table:             

 

Figure in million BDT 

 2015 2014 2013 2012 2011 

Foreign 

Remittance 

60,708.50 48,740.50 39,299.10 41,455.40 49,544.10 

 

 

Figure: Foreign Remittance of Southeast Bank Limited 



Performance of Foreign Exchange Operation of Private Commercial Banks: A Case on Southeast Bank 

Limited 

 K. M. Anwarul Islam 

 

80 

 

 

Remittance sector in 2011 was very much positive. But in 2012 the foreign remittance was decreasing and 

2013 was very much decreasing but in 2014 the remittance rate was increased than 2012 and less than 2011. In 

2015 the remittance rate hit the top point of the level over then 2011. If in 2011 then gradually increase of 

foreign remittance then 2015 was more than existing amount. In 2013 was most recession year in last five year. 

 

5.4 Import Vs Export performance of Southeast Bank Limited 

Import Vs Export performance of Southeast Bank Limited from the year 2015 to 2011 is given in the following 

table:                       

Figure in million BDT 

 2015 2014 2013 2012 2011 

Import 151,812.58 155,691.00 131,644.82 111,537.50 99,509.01 

Export 126,323.89 112,137.60 95,220.40 84,464.20 75,982.06 

 

 

Figure: Import vs. Export of Southeast Bank Limited 

 

In this graph we have noticed that import is more than export in last five years. Every years import is 

gradually increase but in 2015 is decrease than 2014. Export is gradually increased in every year. We saw that in 

2011 import is more than export amount is 23,526.95 million. In 2012 and 2013 gradually increase import more 

than export but in 2014 import is more than export last three year amount is 43,553.04 million. But in 2015 

import verses export is decrease than 2014, the amount between import and export is 25,488.69 million.  

 

6. Model Summary 

After  computing  an  average  value  separately  for  all  the  variables  I  have  done regression 

analysis to get the final result. 

Model Summary 

Model R R Square Adjusted R Square Std. Error of the Estimate 

1 .865a .749 .497 5963.959 

a. Predictors: (Constant), IMPORT, Export 



Performance of Foreign Exchange Operation of Private Commercial Banks: A Case on Southeast Bank 

Limited 

 K. M. Anwarul Islam 

 

81 

 

Here R-squire =0.749 means that our three variables have 74.9% influence on the Foreign exchange 

operation. The rest of 25.1% influenced by other Variables I have not considered for this research. 

For testing hypothesis we are considering 5% error. It means that if our p -value is greater than 0.05 our 

null hypothesis will be rejected and if less than 0.05 our null  hypothesis  will  be  accept  and  when  

less  than  0.05,  then our alternative hypothesis will be accepted. Otherwise hypothesis will be rejected. 

 

H1: There is exist significant relationship between export and foreign exchange operation. 

Here p-value= 0.169, so this hypothesis is accepted. 

H2: There is exist significant relationship between import and foreign exchange operation. 

Here p-value= 0.250, so this hypothesis is accepted. 

 

7. Findings and Recommendation 

During my research period in the Southeast bank ltd., I have research for one month. During this period I have 

found that: 

 Import target level is not achieved in 2015. In fact it is the actual import is lower than 2014. 

 Foreign remittance performance is fluctuating over the years. So it is an alarming issue.   

 Export performance is good as it achieve the target level.   

 The Bank undertaken strong policy guideline to regulate and monitor to minimize foreign exchange 

risk due to exposure in currency movement. 

 The foreign exchange department has lack of staff. 

 We can see the performance of Advising of L/C is very good. We know more advising of L/C in 

importer are busy to import Business rather than the export Business. 

I had observed some shortcomings regarding foreign exchange operation and other aspects of their banking. On 

the basis of my observation I would like to present the following recommendations.  

 Whereas the foreign exchange operation is gradually increasing and our business environment is almost 

ANOVAa 

Model Sum of Squares df Mean Square F Sig. 

1 

Regression 211825653.841 2 105912826.920 2.978 .251b 

Residual 71137612.287 2 35568806.144   

Total 282963266.128 4    

a. Dependent Variable: Remittance 

b. Predictors: (Constant), IMPORT, Export 

Coefficientsa 

Model Unstandardized Coefficients Standardized 

Coefficients 

t Sig. 

B Std. Error Beta 

1 

(Constant) 32140.634 16104.320  1.996 .184 

Export .941 .445 2.290 2.116 .169 

IMPORT -.594 .371 -1.733 -1.601 .250 

a. Dependent Variable: Remittance 



Performance of Foreign Exchange Operation of Private Commercial Banks: A Case on Southeast Bank 

Limited 

 K. M. Anwarul Islam 

 

82 

 

foreign trade, it is essential to maintain a good and sophisticated technology and policy in maintaining 

the operations. 

 The import performance is poor in 2015, it should be controlled with right process and provide credit 

facility for the importer. 

 For improving foreign remittance to connect much international money send company.  

 Letter of credit opening procedure and margin requirement may be relaxed for prime customers, 

otherwise new and competitive banks will take the clients away by giving special facilities. 

 The bank should take initiative to develop an effective’s research and development center to promote 

innovative product or service ideas & to sense threat & competitiveness in advance to reduce risks. 

 The bank can diversify its import portfolio by increasing customers to reduce dependency from some 

customers. 

 They always try to keep the motivated skilled employee in the organization. 

 

8. Conclusion 

With regards to the new worldwide economic system, from the very start, banking operations have become a 

very crucial matter. With all of the recent development in the field of banking, private commercial banks are 

now merely waiting for new customers. 

There are many various approaches to think about how to establish an idea. The function that commercial 

banks play in the growth of our economy and financial system is critical in Bangladesh. A strong position is 

maintained in the competitive market today by Southeast Bank Limited. It is continuously aiming for excellence 

in banking by offering a wide range of innovative products and services to the many client groups, including 

individuals, corporations, and small and medium-sized businesses. The Southeast Bank Limited, as well as 

generating a better percentage of profit, also contributes to the total amount earned by Southeast Bank Limited. 

More thorough analysis offers a larger chance of bringing better results in the future. 

Southeast Bank Limited's ability to serve customers is being expanded across the country by establishing 

new branches at new locations. There has been an increase in the dependability of the customer base in 

Southeast Bank Limited through time, making it easier for the company to provide more benefits. However, 

they may offer additional online and ATM services, having a greater range of capabilities, to make their services 

more efficient and easier for customers. They might do the recommended things every day in order to improve 

over time. A critical role in the socio-economic outlook and in the growth of our economy may be played by 

Southeast Bank Limited. 

 

References 

Annual Report of Southeast Bank Ltd. 

A training program book by BIBM 

Islam, K. M. A., Alam, I., & Al-Amin, D. M. (2015). Foreign exchange operation of private commercial banks 

in Bangladesh: A case study on AB Bank Limited. International Journal of Innovative Research and 

Creative Technology, 1(3). 

 

Copyrights  

Copyright for this article is retained by the author(s), with first publication rights granted to the journal. 


