ON

BUSINESS ACTIVITIES
OF
AGC SPINNING MILLS LTD.
[

SUBMITTED TO:
Shahriyar Anam
Head of the Department
Department of Business Administration
The University of Asia Pacific

SUBMITTED BY:
GOUTAM GHOSH
Reg # 08206029
MBA Program (Regular)
Faculty of Business & Marketing
The University of Asia Pacific

DATE OF SUBMISSION: 3RD JULY, 2010

Date: 03-07-2010
Shahriyar Anam
Head of the Department
Department of Business Administration
The University of Asia Pacific

Subject: Submission of internship report.

Dear Sir,
I have the pleasure to submit my internship report after a successful three-month Internship
attachment at the National Credit and Commerce Bank Limited, Head office International
Division. The Internship Report on the topics of "Treasury Function” of National Credit and
Commerce Bank Ltd.

This report covers the comprehensive banking, especially treasury function and its front office
and back office role and limitation of NCCBL. Finally, the report tried to identify the probable
reasons of the limitation and suggestions are made for the treasury division to betterment of the
current situation. Instructions regarding the size of the report and limited time to study affect the
report

Have concentrated my best effort to achieve the objectives of the report and hope that my
endeavor will serve the purpose. The practical knowledge and experience gathered during report
preparation will immensely help in my future professional life. I will be obliged if you kindly
approve this endeavor.

Yours faithfully

Goutam Ghosh
Reg # 08206029
MBA Program (Regular)
Faculty of Business Administration
The University of Asia Pacific
 Foreword
Now a day we live in global village. World becomes smaller to innovation of
Information technology. Over the past ten years banking system becomes
accustomed to accepting the rapid pace of changes in terms of products and
services. Changes such as computerized banking, consumer credit, automatic
tellers etc. has been introduce. Money deepening increased over time as the
marketers became competitive and more funds were channeled through the system.
All these surely helped in economic development.
The study on Treasury Function related with globalization. Globalization is a
combination of much free trade in goods and services combined with free capital
movements. Globalization is not mere trade liberalization and capital movement;
rather it is about growing public awareness. The world knows what is happening in
the field of development and politics. The world economy has witnessed speeding
up in the process of globalization - the broadening and deepening of international
inter-relationships in trade and investment over the last decade and a half. World
trade growth has accelerated since the mid-1980s, outpacing the growth of world
output and Foreign Direct Investment (FDI) flows to developing countries have
increased significantly. The most important causes of globalization are in short,
technological change and liberalization of national and international trade policies.
I organized this report into two parts. First part, containing with the total internship
program and second part, describing the crucial part of internship program.

Finally, I have summarized the findings, problems and probable individual

solution. The mistakes and errors (if any) lie on me for inadequate knowledge.
 Acknowledgements

Several people have been extremely helpful in writing this Internship Report. First
I would like to express my heartily feeling to my Asia Pacific University. I would
like to express my gratitude to my Head of Department renowned associate
professor Mr. Shahriyar Anam for all his kind cooperation to the successful end
to this internship report. I would like to convey my gratitude to Mr. T. M.
Faruque Chowdhury (Senior Executive Vice President, H.R.D) of NCCBL. Mr.
Pijus Kanti Saha (Executive Vice President, International Division) NCC Bank
Ltd for giving me the opportunity to have my internship at his reputed
organization. I also offer my acknowledgement to the Mr. Monzurul Haque
Akand (VP) and Mr. Ashim Kumar Saha (V.P.), special thanks to Mr. Abdul
Motin (A.V.P.) for his good support all the time in my internship. I thank to Mrs.
Sabina Yeasmin (P.O.), Md. Ghulam Shafi Khan (Sr. O), Mr. Parvez Shazzad
(P.O.), Md. Anwar Hossain (A.O.), Shafquat Moula (A.O.) who helps me lot of
purpose and thanks to all officers in International Division for their co-operation
and support for completing this report. Without their help and co-operation, I can’t
complete this report successfully.

Thanks all from the bottom of my heart.

Goutam Ghosh
 Brief Contents

1. Introduction of AGC Spinning Mills Ltd ……………………2

1.1-Corporate Vision & Mission…………………………………………………..4

1.2- Objectives of AGC

SPIN…………………………………………………………4

1.3-Functions of NCCBL…………………………………………………………..5

1.4-Product of NCC Bank………………………………………………………….6

1.5-Loans and Advance Products…………………………………………………..6

1.6-Cards……………………………………………………………………………6

1.7-Remittance Products……………………………………………………………6

2-An Over view of Internship Program………………………………7

2.1-Principle of Liquidity Management……………………………………………8

2.2-Objective of Cash/Liquidity Management……………………………………..9

2.3-Factors Determining Volume of Liquidity…………………………………….9

2.4-Sources- of Liquidity…………………………………………………………..9

2.5-Items of Liquid Assets…………………………………………………………9

2.6-Purpose for Liquidity Requirement…………………………………………...10

2.7-Penal Provision for Default…………………………………………………...10

2.8-Regulation of Liquidity Management………………………………………..10

2.9-Mechanism of Call Market……………………………………………………11

2.10-Some Terminologies………………………………………………………...11

2.11-Liquidity Statement of NCC Bank………………………………………….13

2.12-Foreign Exchange Management…………………………………………….14

2.13-Organization Chart…………………………………………………………..16

2.14- Job Descriptions…………………………………………………………….18

3-Discussion about the Study………………………………………...26

3.1-Reason of the Study…………………………………………………………..26

3.2-Objectives of Study…………………………………………………………..27

3.3- Methodology of Study……………………………………………………….28

3.4- Scope of the Study……………………………………………………………29

3.5-Limitations of the Study………………………………………………………29

4-NCC Bank in the Background of National Economy…………….30

4.1-Bangladesh Economy…………………………………………………………30

4.2-Performances of NCC Bank…………………………………………………..33

5-Treasury Division Operation of NCC Bank………………………41

5.1-Credit risk…………………………………………………………………….42

5.2-Market Risk…………………………………………………………………..44

5.3-Market Factors………………………………………………………………..45

5.4 -Dealing Limit………………………………………………………………...45

5.5-Mandatory Leave…………………………………………………………….46

5.6-Position Reconciliation………………………………………………………46

5.7- Nostro Account Reconciliation………………………………………………46

5.8-Reconciliation Flowchart……………………………………………………..49
5.9-After-hours Dealing…………………………………………………………...50

5.10-Off-premises Dealing………………………………………………………..50

5.11-Stop Loss Limits…………………………………………………………….50

5.12-Mark-to-Market……………………………………………………………...51

5.13-Valuations……………………………………………………………………51

5.14-Model Control Policy………………………………………………………..51

5.15-Internal Audit………………………………………………………………..52

6-Organizational Structure……………………………………53
6.1-Centralized Foreign Exchange and Money Market Activities………………53

6.2-Separate Trading and Risk Management Units……………………………..54

7- Process……………………………………………………………..55
7.1-The Process Flowchart……………………………………………………….56

7.2-Dealing Room………………………………………………………………..56

7.3-Taped Conversations………………………………………………………….57

7.4-Deal Recording……………………………………………………………….57

7.5-Deal Delay……………………………………………………………………62

7.6-Counterparty Limits………………………………………………………….62

7.7-Settlement risk……………………………………………………………….62

7.8-Pre-settlement risk…………………………………………………………..63

7.9-Triggers……………………………………………………………………..63

7.10-Stop Loss Orders…………………………………………………………..63

7.11-Appropriateness of Dealing………………………………………………..64

7.12-One Day’s Foreign Exchange Rate of NCC Bank…………………………67

7.13-Deals Outstanding Limit…………………………………………………..68

7.14-Daily Treasury Risk Report………………………………………………..68

8-Earnings at Risk…………………………………………………...68
8.1-Repricing Schedule………………………………………………………….70

9-Value at Risk………………………………………………………71
9.1-Market Value of Position……………………………………………………71

9.2-Daily Volatility………………………………………………………………71

9.3-Holding Period………………………………………………………………72

9.4-Level of Confidence…………………………………………………………72

9.5-Calculation of Foreign Exchange VAR……………………………………..73

9.6-Calculation of Net VAR for Two Currencies………………………………..75

10-SWOT analysis……………………………………………………76
10.1- SWOT Analysis of NCC Bank Ltd…………………………………………76

11-Findings & Recommendations…………………………………...79

11.1-Implementation of Plan…………………………………………………….79

11.2-Limitations of NCCBL in Treasury Function………………………………79

11.3-The Small Branch Network…………………………………………………80

11.4-Inadequate beneficiary information ………………………………………..80

11.5-Recommendations & Conclusion…………………………………………..80

Goutam Ghosh
1. Introduction oLtd……………………………………2
1.1-Corporate Vision &
Mission…………………………………………………..4

1.2- Objectives of
NCCBL…………………………………………………………4

1.3-Functions of
NCCBL…………………………………………………………..5

1.4-Product of NCC
Bank………………………………………………………….6

1.5-Loans and Advance

Products…………………………………………………..6

1.6-
Cards…………………………………………………………………………
…6

1.7-Remittance
Products……………………………………………………………6

2-An Over view of Internship

Program………………………………7
2.1-Principle of Liquidity
Management……………………………………………8

2.2-Objective of Cash/Liquidity
Management……………………………………..9

2.3-Factors Determining Volume of

Liquidity…………………………………….9

2.4-Sources- of
Liquidity…………………………………………………………..9
2.5-Items of Liquid
Assets…………………………………………………………9

2.6-Purpose for Liquidity

Requirement…………………………………………...10

2.7-Penal Provision for

Default…………………………………………………...10

2.8-Regulation of Liquidity
Management………………………………………..10

2.9-Mechanism of Call
Market……………………………………………………11

2.10-Some
Terminologies………………………………………………………...11

2.11-Liquidity Statement of NCC

Bank………………………………………….13

2.12-Foreign Exchange
Management…………………………………………….14

2.13-Organization
Chart…………………………………………………………..16

2.14- Job
Descriptions…………………………………………………………….18

3-Discussion about the

Study………………………………………...26
3.1-Reason of the
Study…………………………………………………………..26

3.2-Objectives of
Study…………………………………………………………..27

3.3- Methodology of
Study……………………………………………………….28
3.4- Scope of the
Study……………………………………………………………29

3.5-Limitations of the
Study………………………………………………………29

4-NCC Bank in the Background of National

Economy…………….30
4.1-Bangladesh
Economy…………………………………………………………30

4.2-Performances of NCC
Bank…………………………………………………..33

5-Treasury Division Operation of NCC

Bank………………………41
5.1-Credit
risk…………………………………………………………………….42

5.2-Market
Risk…………………………………………………………………..44

5.3-Market
Factors………………………………………………………………..45

5.4 -Dealing
Limit………………………………………………………………...45

5.5-Mandatory
Leave…………………………………………………………….46

5.6-Position
Reconciliation………………………………………………………46

5.7- Nostro Account

Reconciliation………………………………………………46

5.8-Reconciliation
Flowchart……………………………………………………..49
5.9-After-hours
Dealing…………………………………………………………...50

5.10-Off-premises
Dealing………………………………………………………..50

5.11-Stop Loss
Limits…………………………………………………………….50

5.12-Mark-to-
Market……………………………………………………………...51

5.13-
Valuations……………………………………………………………………
51

5.14-Model Control
Policy………………………………………………………..51

5.15-Internal
Audit………………………………………………………………..52

6-Organizational
Structure……………………………………53
6.1-Centralized Foreign Exchange and Money Market
Activities………………53

6.2-Separate Trading and Risk Management

Units……………………………..54

7-
Process……………………………………………………………..
55
7.1-The Process
Flowchart……………………………………………………….56

7.2-Dealing
Room………………………………………………………………..56
7.3-Taped
Conversations………………………………………………………….57

7.4-Deal
Recording……………………………………………………………….57

7.5-Deal
Delay……………………………………………………………………62

7.6-Counterparty
Limits………………………………………………………….62

7.7-Settlement
risk……………………………………………………………….62

7.8-Pre-settlement
risk…………………………………………………………..63

7.9-
Triggers……………………………………………………………………..6
3

7.10-Stop Loss
Orders…………………………………………………………..63

7.11-Appropriateness of
Dealing………………………………………………..64

7.12-One Day’s Foreign Exchange Rate of NCC

Bank…………………………67

7.13-Deals Outstanding
Limit…………………………………………………..68

7.14-Daily Treasury Risk

Report………………………………………………..68

8-Earnings at
Risk…………………………………………………...68
8.1-Repricing
Schedule………………………………………………………….70

9-Value at
Risk………………………………………………………71
9.1-Market Value of
Position……………………………………………………71

9.2-Daily
Volatility………………………………………………………………71

9.3-Holding
Period………………………………………………………………72

9.4-Level of
Confidence…………………………………………………………72

9.5-Calculation of Foreign Exchange

VAR……………………………………..73

9.6-Calculation of Net VAR for Two

Currencies………………………………..75

10-SWOT
analysis……………………………………………………76
10.1- SWOT Analysis of NCC Bank
Ltd…………………………………………76

11-Findings &
Recommendations…………………………………...79
11.1-Implementation of
Plan…………………………………………………….79

11.2-Limitations of NCCBL in Treasury

Function………………………………79

11.3-The Small Branch

Network…………………………………………………80
11.4-Inadequate beneficiary information
………………………………………..80

11.5-Recommendations &
Conclusion…………………………………………..80