An Internship Report on “Foreign Exchange Operation of Social Islami Bank Public Limited Company”

Abstract

This report discusses the application of theoretical knowledge in the work setting, particularly at Social Islami Bank Public Limited Company, thus providing an understanding of the banking industry. It contains many fundamental factors such as core banking, forex business, risk management, Islamic banking, and decision making based on the empirical data. This report provides banking institutions with the scope and benefit areas of operations that need to be improved such as the extent of cost minimization through optimum utilization of economic resources. There are fluctuations in Social Islami Bank Public Limited Company's forex business between 2018 and 2020 which was followed by up surging performance in the year 2022 where it recorded the maximum growth at Tk. 242,893.8 million. The report works on identifying and measuring the risks associated with the foreign exchange market whether exchange rate risk, liquidity risk or counterparty credit risk and recommends appropriate measures which include hedging, risk management measures, forex process automation and management of currency risk. In addition, Social Islami Bank Public Limited Company did come under the effect of COVID-19 during some time of its import business. Nevertheless, by 2022 this had been reinstated, and the volume was above the previous year level by 26.4 percent. Reporting on this matter draws attention to such problems as volatility of foreign exchange rates, sufficiency and quality of documentation as well as disruptions of supplies. Social Islami Bank Public Limited Company has implemented greater procurement management and enhanced credit risk analysis as a means to address the aforementioned issues. The report concludes with how Social Islami Bank Public Limited Company should be regarding the recommendations such as changes in hedging strategies, further strengthening of the risk management systems, better training of the personnel, and better automation of foreign exchange operations in order to become more adaptable to the change in the environment in which the bank operates. Social Islami Bank Public Limited Company managed to further strengthen its control over foreign liabilities, its capital structure and its trade balance but on the other hand was subjected to a very high foreign exchange risk exposure in the year 2022 which means that there should be stricter methods in place to curb these risks.