Money Laundering as a Risk in the Banking Industry of

84 Pages·2014·0.93 MB·English

Internship Report

“Money Laundering as a Risk
in the Banking Industry of
Bangladesh: A study on the
EXIM Bank Ltd, Rajuk Avenue
Branch”
“Money Laundering as a Risk in the
Banking Industry of Bangladesh: A study
on the EXIM Bank Ltd, Rajuk Avenue
Branch”

Prepared For
MR. Muhammad Intizar Alam
Lecturer
BRAC Business School
BRAC University

Prepared By
Khandakar Mevij
ID: 07104096
BRAC Business School
BRAC University

Date of Submission:
Letter of
Transmittal
Mr.Muhammad Intisar Alam
Lecturer,
BBS,
BRAC University.

Subject: Submission of Internship Report.

Dear Sir,
It is a great pleasure to submit the Internship report on “Managing Money Laundering Risk in
the Banking Industry of Bangladesh: A Study on The EXIM BANK Limited” as the fulfillment
of partial requirement of the BBA program.
The topic that you gave me is really an important fact for the finance students. With the textual
studies, acquiring practical orientation of the country knowledge of which you have created a big
chance for me that must help to work with efficiency in future.
I appreciate having this Report. I have prepared this report with sincerity and serious efforts. If
you need any further assistance in interpreting or in implementing this report, please call on me
and I will try my best to make myself available at your convenience.
Sincerely yours
____________________
Khandakar Mevij
ID: 07104096
BBS
BRAC University.
Acknowledgement
I begin by thanking the Almighty & my beloved parents for my successful completion of the
Internship Report, which is a significant part of the completion of BBA Program.

The successful completion of this Internship report has seen many helping hands, without which
this would have not been possible. I specially want to acknowledge Mr. Zoshim Udddin
Bhuiyan-Senior Vice President & Manager and Mr. Tariqul Islam Choudhury-Senior-
Assistant Vice President of EXIM Bank Ltd., Rajuk Avenue Branch for their tremendous
support, guidance and patience. Without their kind supervision, preparing this report would have
been very difficult. I am also thankful to them for providing me all the relevant and available
information to have a clear concept on the subject.

I would also like to take this occasion to thank Mr. Shanti Kumar Roy-Assistant Vice President,
Mr. Muhammad Yunus Ali-Assistant Vice President, Mr. Md. Abdus Salam - Principal
Officer, Mr.Maksudul Hoq-Principal Officer, EXIM Bank, Rajuk Avenue Branch for their
guidance.

My heart full thanks to Mr. Ashraful Alam,-Senior officer, Mr. Belal Hossain(Tuhin)-
Management Trainee Officer, Mr. Md. Moshiur Rahman - Management Trainee Officer and
Mr. Niaj Morshed - Assistant officer, IT, EXIM Bank, Rajuk Avenue Branch who provide me
the guidance and counseling during my entire internship program. Their continuous and well-
thought feedback enabled me to make this report a comprehensive one.

I would like to express my sincere gratitude to my academic supervisor Mr. Muhammad Intizar
Alam-Lecturer, BRAC BUSINESS SCHOOL, BRAC University for his constant guidance,
supervision and feedbacks which enabled me to prepare a well executed report.
EXECUTIVE
SUMMARY
The internship program is called an “Earn while you Learn” program of training. As the
fulfillment of partial requirement of the BBA program I have done the Internship in The EXIM
Bank Limited and prepared report on “Managing Money Laundering Risk in the Banking
Industry of Bangladesh: A Study on The EXIM Bank Limited.” In this study I have tried to
reveal my three months internship experience.
This report contains two parts- the Organizational part and the Project part. In the organizational
part, a brief overview of EXIM Bank has given. In the Project part, I have covered efforts
undertaken previously with the objective of preventing the banking system from Money
Launderer which, has also largely been undertaken by judicial and regulatory agencies at
national level seriously. Money laundering is a criminal offence; bank should not provide any
service to any criminals and assisting a Money Launderer as it is a criminal offence too.
Anticipating the importance of legislation in this arena,the Government of Bangladesh has made
a timely decision by enacting a law titled, “Money Laundering Prevention Act – 2002” and then
“Money Laundering Prevention Act -2009” which are very comprehensive and valuable law. As
the Central Bank mainly regulates this law, i.e. Bangladesh Bank and all its schedule banks, they
must be well comprehended on this law and well equipped to implement it. Therefore, efforts
have been undertaken in this study to focus on the real scenario of the EXIM Bank operating
soundly in Bangladesh in anticipating the importance of the Act efforts to implement the law and
continuity of banking business within legal framework.
For the study, a number of secondary data has been collected from different sources, especially
from The EXIM Bank Limited. According to those collected information and with the light of
Money Laundering prevention Act 2002 & 2009 - a standard prevention procedure has been
described in detail in this report, where I have mentioned different recommendations. To
overcome the limitations and to harvest maximum output of the Anti-Money Laundering Act. in
Bangladesh – Some recommendations have been made in this paper also. To ensure a
consistence and uniform treatment in implementing the law all the banks must work together in
the Banking Industry.
Table Of Contents

Page
Part Chapter No.
A Chapter 1 : Organization Part 1-11
1.1 Company Overview 1-2
1.2 Historical Background 3
1.3 Company Vision 3-4
1.4 Company Mission 4-5
1.5 Key Functions of EXIM Bank 5
1.6 Social Commitment 5
1.7 Products & Services 5-8
1.8 SWOT Analysis 8-11
B Chapter 2 : Job Description 12-16
2.1 Specific Responsibilities of My Job 12-13
2.2 Difference Aspects of Job Performance 13
2.3 A Brief of EXIM Bank, Rajuk Avenue 14-15
Branch
2.4 Observations 15
2.5 Recommendations 16
C Chapter 3 : Introduction 17-19
3.1 Origin of The Report 17
3.2 Objective 17-18
3.3 Scope 18
3.4 Methodology 18
3.5 Limitations 18-19
Chapter 4: History of Money Laundering 20-23
And Evaluation of Laws
4.1 A Brief History of Money Laundering 20-21
4.2 Laws in Money Laundering 21-23
Chapter 5: Overview of Money Laundering 24-29
(ML)
5.1 Definition of Money Laundering 24
5.2 Reasons of Money Laundering 24
5.3 The Cycle Of Money Laundering 25
5.4 Stages in Money Laundering 26-28
5.5 Occurrence of Money Laundering at 28-29
Different Stages

Chapter 6 : Costs of Money Laundering To – 30-36
The Society, Business Ares And
Financial Sectors
6.1 Costs To Our Society 30
6.2 Exposure of Emerging Markets 31-
6.3 Threat to the Economy 31-33
6.4 Undermining the Integrity of the Financial 34-35
Sector
6.5 Reputation Risk 35-36

Chapter 7 : Money Laundering System - 37-39
Hawallah, Hundi, Chop
7.1 Hawallah / Hundi / Chop 37
7.2 Elements of Hawallah system 37-38
7.3 Actual operation of this system 38-39

Chapter 8 : Money Laundering Tools 40-43
Available in Bangladesh
8.1 Hundi Traders 40-41
8.2 Over and Under Invoicing 41-42
8.3 Cash Cultures 42-
8.4 Private Banking Relationship 42-43