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Dutch Bangla Bank Ltd

05. FOREIGN EXCHANGE DEPARTMENT According to Foreign Exchange Regulation Act, 1947, as adapted in Bangladesh, "Foreign Exchange eans !oreign currenc" and includes all deposits, credit and #alances pa"a#le in !oreign currenc" as $ell as all !oreign currenc" instru ents, such as, Dra!ts, %ra&elers 'he(ues, Bills o! Exchange, and )ro issor" *otes pa"a#le in an" !oreign countr"+ An"thing that con&e"s a right to $ealth in another countr" is Foreign Exchange"+ ,n the $ords o! Dr+ )aul Ein-ig, Foreign Exchange as the s"ste one" !ro one countr" to another+ or process o! con&erting one national currenc" into another and o! trans!erring the o$nership o!

5.1. Fundamentals of Fo e!"n E#$%an"e& %here are three !unda entals aspects o! the general  account+  %he con&ersion o! one currenc" into another is e!!ected #" #anks #" #ookkeeping entr" carried out in the t$o centers concerned+  %hese exchange are a!!ected #" trans!er, %elegraphic trans!er etc+ 5.'. Aut%o !(ed Deale s& Bangladesh Bank does not deal directl" $ith the e #ers o! the pu#lic2 the transactions are done #" Authori-ed Dealers in accordance $ith the guidelines gi&en #" Bangladesh Bank+ ,n ter s o! Foreign Exchange Regulation Act, 1947, $ho are authori-ed to deal in !oreign exchange #" Bangladesh #ank, the selected #ranches o! the #ank can transact such #usinesses+ %he" are kno$n as "Authori-ed Dealers"+ 3ulshan #ranch is one o! the Authori-ed Dealer #ranches o! DBBL+ 5.). Fun$t!ons of Fo e!"n E#$%an"e& Foreign exchange depart ent per!or the !unctions under three sections. 49 eans o! credit instru ent &i-, 1ail echanis o! Foreign Exchange. E&er" countr" has its o$n currenc"/legal tender 0 distincti&e unit o!

Bangladesh ,nstitute o! Bank 1anage ent

Dutch Bangla Bank Ltd  , port+   Export+ Foreign Re ittance+

5.).1. Im*o t +e$t!on %he !unction o! , port section deals $ith the !ollo$ing seg ents.     Letter o! 'redit 5L0'6 )a" ent against Docu ent 5)AD6 )a" ent against %rust Receipt 5L%R6 Loan against , ported 1erchandise 5L,16

5.).1.1. ,ette of C ed!t -,.C/& Letter o! 'redit eans, an" arrange ent, ho$e&er na ed or descri#ed, $here#" a

#ank 5the issuing #ank6 acting at the re(uest and on the instructions o! a custo er 5the applicant6 on its o$n #ehal!, is to ake a pa" ent to or to the order o! a third part" 5the #ene!iciar"6, or

is to accept and pa" #ills o! exchange dra$n #" the #ene!iciar",  authori-es another #ank to e!!ect such pa" ent, or to accept and pa" such #ills o! exchange,  authori-es another #ank to negotiate, against stipulated docu ents, pro&ided that the ter s and conditions o! the 'redit are co plied $ith+

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Dutch Bangla Bank Ltd 5.).1.1.1. Pa t!es In0ol0ed !n ,.C1 O*e at!on 2 +ettlement Me$%an!sm& +A,E+.P5RCHA+E CONTRACT MA6E+ PA8MENT AGAIN+T DOC -9/ APP,IE+ IN ;RITING TO I++5E NEGOTIATING DOC5MENT+ -5/ 71



AD7I+E 2. CONFIRM+ ,.C -)/


+53MIT+ DOC5MENT+ -</






O*ene .3u4e .Im*o te & %he person $ho opens the L0' is kno$n as 8pener0Bu"er0, porter o! the L0'+ %he #u"er applies to his #ank 5,ssuing Bank6

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,.C -1/

Dutch Bangla Bank Ltd and opens a docu entar" credit na ing the seller as #ene!iciar" #ased on speci!ic ter s and conditions that are listed in the L0'+  Issu!n" -3u4e ?s/ 3an@& %he #ank issuing the L0' in !a&or o! exporter is kno$n as ,ssuing08pening #ank+ %he opening #ank opens L0' on re(uest o! i porter according to the application o! the i porter+  Ad0!s!n" -+elle As/ 3an@& %he #ank through $hich L0' is ad&ised+ L0' $ill #e sent to the #ene!iciar" through their agent 5correspondent #ank6 a#road+ %he dut" o! the ad&ising #ank is to authenticate the $ithout an" !ear o! !orger" etc+  3enef!$!a 4& 9eller or exporter in $hose !a&or the L0' is opened+ %he #ene!iciar" is nor all" the seller o! goods $ho recei&e pa" ents under docu entar" credit i! he has co piled $ith ter s and conditions thereo!+  Ne"ot!at!n" 3an@& %he #ank, $hich is authori-ed to handle 5purchase6 the docu ents under the L0' in the exporting countr"+ L0' $ill stipulated either an noti!ied #ank to negotiate 5restricted L0'6 or an" #ank can negotiate in the seller:s countr" 5unrestricted L0'6+  Re!mBu s!n" 3an@& %he #ank, $hich is 5#" the L0' issuing #ank6 to e!!ect rei #urse ent+ Rei #ursing #ank is authori-ed to honor the rei #urse ent clai s in settle ent o! negotiation0acceptance0pa" ents lodged $ith it #" the pa"ing0negotiating0accepting #ank+  Conf! m!n" 3an@& A con!ir ing #ank is one $hich adds its guarantee to the credit opened #" another #ank, there#" undertaking the responsi#ilit" o! pa" ent0negotiation0acceptance under the credit in addition to that o! the issuing #ank+ A 'on!ir ing #ank nor all" does so i! re(uested #" the issuing #ank+ essage so that the seller can act on it

5.).1.1.'. T4*es of ,ette of C ed!t& Letter o! credit assu es &arious !or s depending on the initial contract #ased on $hich the credit is issued and ad&ised the parties in&ol&ed the rights and o#ligations o! the di!!erent parties and the degree task o! classi!ication t$o points o! &ie$. First/!ro Bangladesh ,nstitute o! Bank 1anage ent 7;

Dutch Bangla Bank Ltd the Bank<s point o! &ie$, secondl"/!ro classi!ications the &ie$ points o! the custo ers, at $hose

re(uest and on $hose #ehal! the credits in their &arious !or s are esta#lished+ %he a" #e anal"-ed in the !ollo$ing three stages.

+ta"eC1& %he #asic generic classi!ication under these credits is o! t$o kinds that are clean credit = Docu entar" credit+  Clean C ed!t& A 'lean credit is a Letter o! 'redit opened #" a #anker at the re(uest o! a custo er, $hich pro&ides !or pa" ent #" the #anker Bill o! Exchange 5Dra!t6 dra$n on hi + 9uch #ill o! exchange ha&ing non/ co ercial docu ents attached thereto+

 Do$umenta 4 C ed!t& A Docu entar" 'redit is a letter o! credit, $hich in&ol&es pa" ent, acceptance or negotiation against stipulated docu ents, pro&ided that the ter s = conditions o! the credit depend upon the enclosed docu ents and detail exa ination o! the docu ents is re(uired+ +ta"eC'& %he second stage o! classi!ication !ocuses on the nature o! Banks o#ligation $ith regard to the t"pe o! credit esta#lished, under this classi!ication, $e ha&e three kinds o! credit.  Re0o$aBle C ed!t& A re&oca#le credit as the tide i plies, or e&en cancelled #" the issuing #ank at an" the #ene!iciar" in order to protect its o$n interest+  I e0o$aBle C ed!t& A de!inite undertaking o! the issuing #ank pro&ided that the stipulated docu ents are presented and that the ter s and conditions o! the credit are co plied $ith+ An irre&oca#le credit cannot #e a ended or cancelled $ithout the consent o! the #ene!iciar" indeed and irre&oca#le credit can #e a ended or cancelled $ith the consent o! all the parties to the credit+ a" #e a ended

o ent and $ithout prior

notice to the #ene!iciar" has to right to cancel its conditions undertaking to

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Dutch Bangla Bank Ltd  I e0o$aBle Confo med C ed!t& %he credit $hich carr"ing de!inite undertaking o! t$o #anks i+e+ irre&oca#le undertaking o! the opening #ank and the con!ir ation o! the opening #ank<s co kno$n as con!ir ing #ank+ it ent #" another #ank,

+ta"eC)& %his !inal stage enu erates and descri#es #rie!l" so e o! the adaptations o! the a#o&e credit 5stage/1 = ;6 to eet the needs o! the custo ers engaged in ,nternational transactions, $hich are as under.  A$$e*tan$e C ed!t& An Acceptance 'redit is a kind o! ,rre&oca#le 'redit under $hich in addition to su# itting stipulated docu ents, the #ene!iciar" $ill #e re(uired to present dra!t dra$n on the Acceptance #ank !or a speci!ied period o! ti e+ An Acceptance 'redit ena#les the i porter to o#tain credit !ro the supplier, $ho is guaranteed #" the con!ir ing #ank+ ,n case o! non/pa" ent #" the i porter, the con!ir ing #ank is rei #urse ent #" the ,ssuing #ank+ %he tenor o! such dra!t a" &ar" !ro >7 da"s, 47 da"s, or 1?7 da"s a!ter sight or excess o! 1?7 ediu to long/ter contracts+ da"s in case o! special 

T ansfe aBle ,ette of C ed!t& @ith a trans!era#le letter o! credit, the exporter can trans!er all or part o! his rights to another part"+ %rans!era#le letters o! credit are o!ten used $hen the exporter is the i porter<s agent or a supplier and i porter, and not the actual supplier o! iddle an #et$een erchandise+ @ith a a

trans!era#le letter o! credit, the exporter uses the credit standing o! the issuing #ank and a&oids ha&ing to #orro$ or use his o$n !unds to #u" goods !ro ade, the exporter supplier+ Aence, it is a &ia#le pre/export !inancing &ehicle+ Be!ore trans!er can #e ust contact, in $riting, the #ank handling the dis#urse ent o! !unds / the trans!erring #ank+ %rans!era#le letters o! credit can onl" #e trans!erred #ased on the ter s and conditions speci!ied in the original credit, $ith certain exceptions+ %here!ore, it $ith this !inance  a" #e di!!icult to achie&e !lexi#ilit" and con!identialit" a" also #e trans!era#le+ ethod+ An irre&oca#le letter o! credit

3a$@CtoC3a$@ ,ette s of C ed!t -3T3 ,.C/& Back/to/#ack letters o! credit are t$o indi&idual letters o! credit that together o!!er an alternati&e to a trans!era#le

Bangladesh ,nstitute o! Bank 1anage ent


Dutch Bangla Bank Ltd letter o! credit+ %he #ack/to/#ack letter o! credit allo$s exporters 5sellers or iddle en6 to use letter o! credit as a securit" !or a second letter o! credit in !a&or o! a supplier+ ,n other $ords, i! a !oreign #u"er $ill issue a letter o! credit to an exporter, certain #anks and trade !inance co panies $ill issue independent letters o! credit to the exporter<s suppliers so that the re(uired goods can #e purchased+ E&en i! the initial letter o! credit is not success!ull" co pleted, the second re ains &alid, and the issuing #ank is o#ligated to pa" under its ter s+  +tandB4 ,ette of C ed!t& Bnlike a co a pa" ent ercial letter o! credit, $hich is #asicall" o! a #ank guarantee+ ,t

echanis , a stand#" letter o! credit is a !or

a" #e used as necessar" to co&er non/pa" ent o! a !inancial o#ligation+ A stand#" letter o! credit nor all" is intended to #e dra$n on onl" in the e&ent o! non/pa" ent+ %he stand#" letter o! credit is issued #" the #ank and held #" the seller, $ho in turn pro&ides the custo er open account ter s+ ,! pa" ent is ade according to the seller<s ter s, the letter o! credit is ne&er dra$n on+ Ao$e&er, i! the custo er is una#le to pa", the seller presents a dra!t, and all other docu ents as re(uired, to the #ank !or pa" ent+ %he stand#" letter o! credit t"picall" expires $ithin 1; onths+

5.).1.1.). +te*s fo O*en!n" ,.C& +te*sC1& 'usto ers Application !or opening o! L0' $ith indent0 )ro!or a in&oice, +te*sC'& )roposal preparation. 9crutin" o! papers su# itted #" the , porter 5List o! papers6  'redit Appraisal

 Re&ie$0 Assess ent outstanding  Risk Assess ent o! L0'  Reco endation o! L0' = 'onditions+

+te*sC)& 9anction o! proposal/%er

+te*sC<& Fill up the !or s0 For ats supplied #" Bank 5%"ped6 ,CAFC Letters o! credit Authori-ation !or s 5Licensing i! re(uired ,CAC Letter o! credit Application !or + IRC& , port Registration 'erti!icate 5&alid6

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Dutch Bangla Bank Ltd IMPC For ,1) 5Application !or per ission under section 40C o! the Foreign

Exchange Regulation Act, 1947 to purchase Foreign Exchange !or pa" ent o! i ports6 App+D01? L' Ad&ice+ Rei #urse ent Authorit"+ +te*C5& 9crutin" o! L'AF, L'A, ,1), L0' Ad&ice 'op"+ +te*C=& Reali-ation o! +te*sC>& %rans ission o! L0'. B" Air ail 0 B" 'a#le0 B" %elex0 %eletrans ission 0 9@,F% +te*C:& 8pening o! L0' !ile 51arking0 )reser&ingE +te*sC9& A end ent o! L0' 5i! re(uired6 +te*sC10& Extra precaution 5,ncluding Fund !or i port6 5.).1.1.<. Do$uments ReDu! ed fo O*en!n" an ,.C& B" the i porter. 1+ ;+ >+ 4+ C+ 4+ 7+ ?+ 9+ 17+ 11+ 1;+ 1>+ Dalid , port Registration 'erti!icate 5,R'6 ,R' Rene$al challan cop" )arties application in letterhead !or issuance o! L0' 9igned L0' application !or ,nsurance co&er note $ith Dalid 5cha #er o! co erce6 signed #" the , porter $ith re(uisite sta p one" receipt 5co&ering proper risk6 trade organi-ation ,ndent 0 )ro!or a ,n&oice0 )urchase order e #ership certi!icate !ro argin, co ission, postage, charges register entr", nu #ering, passing o! &ouchers+

%ax/pa"ers/,ndex/*u #er 5%,*6 L0' Authori-ation !or Four set o! ,1) !or DBF/4AFor 9pecial papers. i+ Dalid Drug License in case o! i port o! Drug = edicine+ dul" signed #" die , porter

'redit Report o! the supplier 0 #ene!iciar"

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Dutch Bangla Bank Ltd ii+ iii+ i&+ Appro&al !ro the director o! drug Ad inistrator in case o! , port o! ,nternational Reputed 9ur&e" Authorit" concerned depart ent or inistr" in

phar aceutical ra$ aterial+ 17 "ears li!e certi!icate !ro

9pecial Authori-ed Letter !ro

case o! i port !or ne$ ,ndustrial unit+ 5.).1.1.5. ,.C A**l!$at!on& For opening L0' the client ust su# it to the #ank an application in the printed !or at o! L0' authori-e dealer #ranch+ %his L0' application is also an agree ent #et$een L0' authori-e dealer #ranch and the i porter+ Along $ith the L0' application the i porter           ust su# it. )ro!or a ,n&oice+ ,nsurance co&et note+ Four set o! ,1) !or + , porter should pro&ide !ollo$ing in!or ation in the L0' application. Full na e and address o! the #ene!iciar"+ Brie! description o! the goods keeping con!or it" to the L0' indents+ 'urrenc" a ount o! L0'+ Bnit price (uantit", (ualit" o! the goods+ 1ode o! transport+ Last date o! ship ent+ $ith other re(uired docu ents su# itted

A!ter recei&ing the application !or scrutini-ed, are descri#ed #elo$.

#" the opener the" are to #e thoroughl" scrutini-ed+ %he points, $hich shall #e 5.).1.1.=. E#am!nat!on of ,.C A**l!$at!on& Application    ust #e checked care!ull" in the !ollo$ing. %hat the ter s and conditions o! L0' application are consisted $ith exchange control and i port trade regulation, B')D'/C77+ %hat the goods are eligi#le to i port+ %hat it is not di!!icult !or the #ene!iciar" to co pl" $ith all ter s and conditions to #e incorporated in the L0'+

Bangladesh ,nstitute o! Bank 1anage ent


Dutch Bangla Bank Ltd               %he L0' ust not #e opened in !a&or o! i porter+

%hat the i porter signs it, agreeing ter s and conditions+ 3oods are not o! ,srael and &essel used is not o! ,srael+ ,ndenting Registration nu #er+ ,nsurance co&er note $ith date o! ship ent+ @hether ,R' updated or not+ Radioacti&it" report in case o! !ood ite + @hether ,1) !ro %hat the goods are dull" !illed in and signed+ arketa#le+ ore than o! C "ears+ ,n case o! old ore than B9D F

@hether lia#ilit" is under appropriate li it+ ,n case o! car, the li!e is not achiner", sur&e" or certi!icate $hether asked+ 'redit report o! #ene!iciar" in case L' &alue o! ;7,777+ %he a0o and description o! goods in the application rele&ant $ith the indent 0 )+ ,+ or , port 'ontract+ @hether transcription and partial ship ent is allo$ed+

,! all the docu ents along $ith die application are in order, the !inancial position, and credit $orthiness o! the i porter, arket de and o! die good $ill is assessed+ 1argin !or argin depends on the !inancial the i porter either in cash Letter o! 'redit $ill also #e deter ined+ %he rate o! i porter, nature o! goods etc+ this

condition o! i porters, i porters pre&ious per!or ance, status o! relationship $ith the argin is to #e retained !ro or de#iting the i porters current A0' $ith the #ank+ %he i porter is also re(uired to pa" the other concerning charges like / !oreign corresponding charge, telex charge 5i! an"6, handling charge, co ission etc+ aintained/+ ,n this ti e, the !ollo$ing Accounting treat ents are 5.).1.1.>. A$$ount!n" T eatment& )art" A0' Dr+ argin o! L0' Dr+ 9undr" deposit

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Dutch Bangla Bank Ltd 9undr" deposit ,nco e A0' 5co argin Fee 'r+ 'r+ the L0' argin

ission, telex

Afte ma "!n !s eal!(ed& L0' is opened and a separate !ile is prepared+ %he L0' no is gi&en !ro register, $hich includes lia#ilit" a0o, &oucher is released 'usto er<s lia#ilit" +++++++++++++Dr+ Bankers lia#ilit" +++++++++++++++++'r+ 5.).1.1.:. T ansm!tt!n" t%e ,.C& %he L0' is trans itted to the ad&ising #ank !or ad&ising the L0' to the #ene!iciar"2 L0' is generall" trans itted through three ethods+ %he" are / courier 0 9@,F% 59ociet" !or @orld$ide ,nternet Financial %rans ission62 tested telex or !ax+ Be!ore trans ission a !inal exa ination o! the L0' contents is necessar" !or the issuing #ank+ ,t is custo ar" to ad&ise a credit to the #ene!iciar" through an ad&ising #ank+ Ad&ising through a #ank is a proo! o! apparent authenticit" o! the credit to the seller+ Banks corresponding relationship or arrange ent throughout the $orld #" $hich the L0' is ad&ised to the #ene!iciar"+ @hile ad&ising, the ad&ising #ank does not undertake an" lia#ilit"+ Be!ore ad&ising, the ad&ising #ank &eri!ies the signature or test o! the o!!icers o! the issuing #ank+ Ad&ising #ank is generall" the nearest #ank o! #ene!iciar"<s countr" or o! that countr"+ 5.).1.1.9. Add Conf! mat!on& Der" o!ten ad&ising #ank recei&e re(uest !ro the issuing #ank to add their con!ir ation $hile ad&ising credit to the #ene!iciar"+ %he ad&ising #ank can do it i! there is prior arrange ent #et$een ad&ising and issuing #ank or i! it !eels that the issuing #ank is a reputed and relia#le institution and good enough to discharge its o#ligation+ B" #eing in&ol&ed as a con!ir ing agent, the agent the ad&ising #ank undertakes to negotiate #ene!iciar"<s #ill $ithout recourse to hi + 5.).1.1.10. Amendment of ,.C& argin, Foreign correspondent etc+ later on a lia#ilit"

Bangladesh ,nstitute o! Bank 1anage ent


Dutch Bangla Bank Ltd ,t is #ased on agree ent #et$een #u"er and seller+ An" a end ent the" $ant to #ring in L0' should #e in!or ed, to the issuing #ank+ ,ssuing #ank $ill trans it the a end ent to the ad&ising #ank $ith test+ 9er&ice and telex charge is de#ited !ro the part" accounts+ uch popular ,n case o! re&oca#le L0' a end ent can #e #rought $ithout prior notice o! the #ene!iciar" or issuing #ank+ But in case o! irre&oca#le L0', $hich is &er" instruction regarding a end ent should #e co plete and precise+ 5.).1.'. Pa4ment a"a!nst Do$ument -PAD/& )AD procedure is started #" the issuing #ank a!ter getting all necessar" docu ents !ro the exporter as e&idence o! exporting goods+ Docu ents re(uired !or )AD is #elo$.           Bill o! Exchange 'o ercial ,n&oice entioned cannot #e a ended $ithout in!or ing #ene!iciar" or die issuing #ank+ Ao$e&er an"

Bill o! lading 'erti!icate o! origin )acking list @eight list 9hipping list Radioacti&it" report )re/ship ent inspection certi!icate 9hip ent certi!icate

8n receipt o! the docu ents the #ank $ill enter the sa e in the in$ard recei&e register #randed $ith ru##ersta p sho$ing the date o! receipt+ 5.).1.'.1. E#am!nat!on of PAD Do$uments& 9crutini-ing docu ents is &er" i portant !or the issuing #ank+ As a!ter exa ining all the docu ents the issuing #ank $ill the exa ination process ake pa" ent to the negotiating #ank+ 9o an" istake in a" cost issuing #ank+

Bangladesh ,nstitute o! Bank 1anage ent


Dutch Bangla Bank Ltd ,t is dra$n and dull" signed #" the L0' no+ Guoted on it+ %enor o! die dra!t is strictl" in con!or it" $ith the te A ount is identical $ith in&oice and L0'+ A ount in $ords and !igure is sa e+ stipulated in the L0'+ aker indicating as the #ene!iciar"+ dra$ee+

     

,t is dra$n on the i porter indicating hi

,t is prepared in set o! t$o 51st o! exchange and ;nd o! exchange6+ 5.).1.'.'. E#am!nat!on of !n0o!$e&      ,t is addressed to the i porter+ ,t is dated, signed, and su# itted in re(uired nu #er+ ,t ust #ear detail description o! good, $hich ust tall" $ith L0' aid BL+

)rice, (ualit", (uantit" etc+ corresponds to L0'+ 1ust #e prepared in the language o! L0' / ,n&oice rele&ant nu #ers+ 'harges rele&ant to the L0'+ ust #ear L'A, L0' and other

erchandise are included in the in&oice and are per itted #"

5.).1.'.). E#am!nat!on of T ans*o t Do$ument&  %hat is presented in !ull set o! negotia#le and non/negotia#le copies, in as nu #ers as called !or in the L0'+      Date o! ship ent on the B0L is on or #e!ore the date stipulated in the L0'+ B0L ust #e ade out in the na e o! #ank noti!"ing the i porter+ ust agree in&oice = the L0'+ an"

Description o! good in die B0L

)ort o! ship ent destination is as per L0'+ %he shipping co pan" or their agent signs B0L+

5.).1.'.<. E#am!nat!on of ot%e do$ument& 1oreo&er there are $eight list, inspection certi!icate, (ualit" certi!icate, certi!icate o! origin packing list etc+ Al these docu ents should agree L0' ter s and conditions these #e

Bangladesh ,nstitute o! Bank 1anage ent


Dutch Bangla Bank Ltd signed and authenticated #" the appropriate authorit" these certi!icates are usuall" dated #e!ore the date o! ship ent+ 5.).1.'.5. Common D!s$ e*an$!es of t%e !m*o t do$ument Follo$ing are die discrepancies co          ,! an" onl" !ound in the docu entar" operation.

,nade(uate nu #er o! in&oices+ 9u# ission o! docu ents a!ter expir" o! L0'+ Late ship ent+ Late ship ent or transship ent #e"ond L0' ter s+ H8ne #oardI endorse ent unsigned or not date on the B0L+ 9peci!ication o! goods is not as per ter s o! L0'+ %enor o! dra!t $rong+ ,nconsistent docu ents presented+ A#sence o! so e docu ents+ aJor discrepancies !ound in the docu ents it is in!or ed i inor, the" arc o&erlooked+ ediatel" to the #u"er

!or his opinion+ ,! discrepancies arc

5.).1.'.=. ,od"ment and Ret! ement of Im*o t Do$uments& Date of Pa4ment& Bsuall" pa" ent is gi&en $ithin se&en da"s o! docu ents recei&ed other$ise in case o! docu ent purchased #" negotiating #ank, it a" clai !or interest+ Int!mat!on ,ette & Be!ore pa" ent an inti ation letter is gi&en to the international depart ent 5,D6 !or arranging necessar" !und #e!ore !inal pa" ent+ Ret! ement P o$edu e&        Recei&e all kinds o! docu ents 'hecking o! docu ents as per L0' ter s Entr" o! )AD register Douching o! )AD register )osting o! Doucher 9ending 'redit ad&ise to Aead 8!!ice ,n!or ing i porter a#out recei&ing docu ents

Bangladesh ,nstitute o! Bank 1anage ent


Dutch Bangla Bank Ltd

5.).1.'.>. A$$ount!n" T eatment ;%en do$ument !s e$e!0ed& )AD 'ash Account///////////////////////////////////Dr E%'A Aead 8!!ice ,D///////////////////////'r ,nco e Account 9@,F%////////////////////'r ,nco e Account ,nterest on )AD////////'r ,nco e Account Exchange on EarningK'r ;%en ma "!n amount t ansfe ed to PAD& 9undr" Deposit L0' 1argin A0' /////////////////Dr+ )AD A0' ///////////////////////////////////////'r+ ;%en Pa4ment !s made& )art" A0' //////////////////////////////////////////////Dr+ )AD 'ash Account////////////////////////////'r 5.).1.). Pa4ment a"a!nst T ust Re$e!*t -,TR/& %here a" #e situation $here shortage o! collateral in an independentl" controlled !ield a" re(uire the goods !or !urther processing or !or ake the !inal sale+ ,n such cases, a !inancing a" #e $illing to release the erchandise in order to $arehouse is i practical+ An i porter displa"ing the

institution that has a great degree o! trust in the i porter trust receipt+ A!ter the i porter has

negotia#le #ill o! lading and there#" also the goods to the i porter against the signing o! ade his !inal sale and recei&ed the proceeds, he can pa" the !inancing institution that he recei&ed as ad&ance+ 5.).1.<. ,oan a"a!nst Im*o ted Me $%and!se -,IM/& Ad&ances allo$ed !or retire ent o! shipping docu ents and release o! goods i ported through L0' taking e!!ecti&e control o&er the goods #" pledge !all under this t"pe o! ad&ance+ @hen the i porter !ailed to pa" the a ount pa"a#le the exporter against i port L0', then *''BL gi&es loan against i ported erchandise to the i porter+ %he i porter $ill #ear all the expenses i+e+ the go do$n charge, insurance !ees, etc+ and the o$nership

Bangladesh ,nstitute o! Bank 1anage ent


Dutch Bangla Bank Ltd o! the goods retains to the #ank+ %his is also a te porar" ad&ance connected $ith i port, $hich is kno$n as post i port !inance+ 8n the arri&al o! goods and lodg ent o! i port docu ent, i porter !or clearance o! goods !ro the port or custo i porter $ill #ear the all the charges and expenses +B" taking the the i porter $ill release the necessar" goods+ 5.).'. E#*o t +e$t!on %his section negotiates the export docu ents and collects and purchase the export #ill+ %here are t$o t"pes o! credit !acilities allo$ed #" the #ank to the exporter in relation to export credit.   )re/9hip ent Finance )ost/9hip ent Finance trade #et$een t$o traders trading in t$o di!!erent countries+ A a" re(uest the #ank one" !ro the #ank and keep the sa e to #ank go do$n+ %he

Export !inance arises !ro

#rie! idea o! the #oth categor" is gi&en #elo$. 5.).'.1. P eC+%!*ment F!nan$e& @hen an exporter intends to ship the goods to an o&erseas #u"er, he needs !und !or purchasing goods to #e exported+ Ae !or the suppl" o! goods+ 5.).'.'. PostC+%!*ment F!nan$e& )ost/9hip ent Finance is ore concerned $ith Banks than )re/9hip ent Finance+ %his t"pe o! !inance start a!ter the goods has alread" #een shipped+ 5.).'.). Fun$t!on of E#*o t +e$t!on&      Back to Back L0' open Foreign Docu entar" Bill !or 'ollection 5FDB'6 Foreign Docu entar" Bill !or )urchase 5FDB)6 Local Docu entar" Bill !or )urchase 5LDB)6 )acking 'redit 5)'6 a" also depend upon the #ank !or arranging credit

Bangladesh ,nstitute o! Bank 1anage ent


Dutch Bangla Bank Ltd Export 'ash 'redit 5E''6

5.).'.).1. 3a$@CtoCBa$@ ,.C ,t is nothing #ut a secondar" letters o! credit opened #" the ad&ising #ank in !a&or o! a do estic !oreign supplier on #ehal! o! the #ene!iciar" or original !oreign L0', as the original letter o! credit o! #ank #" i port letter, it is called Back to Back Letter o! 'redit+ %he second L0' is opened on the strength o! the original 0 a ount i+e+ axi u aster L0' !or a s aller 7CL is kept under Lien and 17L under packing credit+

5.).'.).1.'. 3a$@CtoC3a$@ ,.C -Fo e!"n/ @hen the Back/to/Back L0' is opened in a !oreign countr" supplier it is called Back/to/ Back Foreign+ ,t is generall" pa"a#le $ithin 1;7 da"s at sight+ 5.).'.).1.). 3a$@CtoC3a$@ ,.C -EDF/ EDF is Export De&elop ent Fund, $hich is pro&ided #" the ADB to Bangladesh Bank !or Export )ro otion o! third $orld countr" like Bangladesh+ @hen the Bank is not in a position to support the a ount o! Back, to Back L0' then the" appl" !or Loans to the Bangladesh Bank !or Back/to/Back EDF+ Bangladesh Bank gi&es a$a" the Loan charging interest rate o! 1+?CL as on the date o! Manuar" 71, ;77;, $here 4+>CL interest is charged #" the DBBL !or this purpose+ 5.).'.).1.<. 3a$@CtoC3a$@ ,.C -,o$al/ @hen the Back/to/Back L0' is opened local purchase o! Back Local+ ,t is generall" pa"a#le $ithin 97 da"s at sight+ 5.).'.).1.5. P o$edu e fo 3a$@CtoC3a$@ ,.C  Exporter should ake application !or #ack/to/#ack+ aterials, it is called Back to

 Export L0' or 1atter L0' is under line+  8pening o! a #ack to #ack L0'

5.).'.).1.=. Te ms and Cond!t!ons fo Ba$@ ,.C Bangladesh ,nstitute o! Bank 1anage ent ?C

Dutch Bangla Bank Ltd  %hat custo er has credit line !acilit" in+  %hat L0' is issued as per B')D9/C77+  %hat on the export L0' a negotiating clause a present indicating that an" #ack in Bangladesh can negotiate+  %hat there is no pro&ision !or #lank endorse ent o! B0L+  %he pa" ent clause is there on the L0'2 issuing #ank ensuring pa" ent+ 5.).'.).1.>. Cons!de at!on fo Ba$@CtoCBa$@ ,.C  @hether client can allo$ing argin+ anu!acture $ithin ti e period+

 %he unit prices o! the !inished )ro!or a ,n&oice should #e considered $hile

 'onsider the expir" date and ship ent date+  8n side inspection $hether anu!acturing is carried out+

5.).'.).1.:. Pa4ment unde Ba$@CtoCBa$@ ,.C De!erred pa" ent is period+ )a" ent $ill #e gi&en a!ter reali-ing export proceeds !ro 5.).'.).1.9. Re*o t!n" of 3an"lades% Ban@ At the end o! e&er" $hole onth reporting o! Bangladesh Bank is andator" regarding the the L0' issuing #ank a#road+ ade in case o! #ack/to/#ack L0' as 47/97/1;7/1?7 da"s o! aturit"

onths i port operation+ %he procedure in this respect is as !ollo$s. onth i port a ount,

 %o !ill in the E/; 0 )/; 9chedule o! 9/1 categor"+ %he $hole (uantit", goods categor", countr", currenc" etc+ all are !or s are attached+

entioned+ Respecti&e ,1)

 %o !ill in the E/> 0 )/> 9chedule !or all in&isi#le pa" ent i+e+ charges and co ission $ith the %01 !or + entioning in&oice &alue+

 8riginal ,1) is !or$arded to Bangladesh Bank $ith

 Duplicate ,1) is kept $ith the #ank along $ith the #ill o! entr"+  %riplicate ,1) is kept !or o!!ice record+ Bangladesh ,nstitute o! Bank 1anage ent ?4

Dutch Bangla Bank Ltd  Guadruplicate !or Bangladesh Bank+ 5.).'.).1.10. E#*o t Me$%an!sm& A person desirous to export should 'erti!icate6 !ro o#tain EN) !ro the #ank+ Ae ake application to o#tain ER' 5Export Registration

''L = E+ %hen the person should step into a #ank along $ith ER' to ust su# it.

 %rade license  ER'  'erti!icate !ro the concerned 3o&ern ent 8rgani-ation+

A!ter satis!action o! the proposal and o! the docu ents, #anker $ill issue EN) to the exporter+ *o$ exporter $ill #e getting shipping and other docu ents !ro procedure+ %he docu ents are usuall" those negotiation+ 5.).'.).1.11. E#*o t do$uments& Follo$ing are the  'o aJor export docu ents. ercial ,n&oice+ the ship ent entioned in the i port chapter+ Exporter

should su# it all these docu ents along $ith a letter o! identit" to his #ank !or

 Bill o! Lading 5B0L6+  Exp+ For +  Bill o! Exchange+  L0' cop"+  )acking list+  'erti!icate o! origin+  Gualit" control certi!icate+  @eight list+  39) certi!icate 5i! re(uired6+  ,nspection certi!icate+  8ther 5i! re(uired6+ Bangladesh ,nstitute o! Bank 1anage ent ?7

Dutch Bangla Bank Ltd

5.).'.).' Fo e!"n Do$umenta 4 3!ll fo Colle$t!on -FD3C/& Exporter can collect the #ill through negotiating #ank on the #asis o! collection+ Exporter in this case, $ill su# it all the docu ents to the negotiating #ank !or collection o! #ill !ro i porter+ %he exporter $ill get one" onl" $hen the issuing #ank gi&es pa" ent+ ,n this connection #ank $ill scrutini-e all the docu ents as per ter s and conditions entioned in L0'+ A$$ount!n" T eatment& Aead 8!!ice A0'///////////////////////////////////Dr )art" A0c////////////////////////////////////'r 3o&+ %ax A0'//////////////////////////////'r )ostage A0'////////////////////////////////'r ,nco e Account )ro!it on Exchange//'r 5.).'.).). Fo e!"n Do$umenta 4 3!ll fo Pu $%ase -FD3P/& @hen exporter sale all the export docu ents to the negotiating #ank is kno$n as FDB)+ ,n this case, the exporter $ill su# it all the docu ents to the #ank+ A$$ount!n" T eatment& Be!ore reali-ation o! proceeds. FDB) A0'///////////////////////////////////////////Dr 'usto er A0'//////////////////////////////'r AdJust ent a!ter reali-ation o! proceeds. Aead 8!!ice A0'////////////////////////////////////Dr FDB) A0'///////////////////////////////////'r 5.).'.).<. ,o$al Do$umenta 4 3!ll fo Pu $%ase -,D3P/&     ,nco ing o! L0' custo er co e $ith the L0' to negotiate Docu ents gi&en $ith L0' 9crutini-ing the docu ents as per L0' ter s and conditions For$ards the Docu ents to L0' opening #ank

Bangladesh ,nstitute o! Bank 1anage ent


Dutch Bangla Bank Ltd L0' issuing #ank gi&e acceptance and !or$ard acceptance letter )a" ent gi&en to the part" #" collection #asis or #" purchasing docu ents

 

A$$ount!n" T eatment& LDB) A0'///////////////////////////////////////////////Dr )art" A0'////////////////////////////////////////////'r 'o ission A0'///////////////////////////////////'r ,nterest A0'/////////////////////////////////////////'r 5.).'.).5. Pa$@!n" C ed!t -PC/& )acking is a short ter ad&ance granted #" a #ank to an exporter against &alid export L0' aterials or !inished goods or anu!acturing, contract !or the purpose o! purchase o! A$$ount!n" T eatment& Doucher to #e passed. )acking credit A0' ////////////Dr 'usto er:s A0' ///////////////'r AdJust ent entr". 'usto er A0' //////////////Dr )acking credit A0' ////////'r 5.).'.).=. E#*o t Cas% C ed!t -ECC/& Export 'ash 'redit is gi&en !or processing ra$ etc+ so that the exporter can 5.).). Fo e!"n Rem!ttan$e& According to Foreign Regulation Act 1947, the co A custo er is per itted to endorse axi u ercial #anks or an" other authori-ed dealer $ho has the Bangladesh Bank authori-ation can do Foreign Exchange+ >777 B9D per "ear !or countries other than 9AAR' countries and B9D 1777 !or 9AAR' countries+ ,! 9AAR' countries are to #e &isited #" road then per "ear FC77 can #e endorsed per passport ensuring that &isa has #een a!!ix $ith that passport+ At a ti e cash cannot #e endorsed o&er FC77+ aterials such as light, gas, $ages, rents anu!acture the goods !or export+

processing, packing, transporting up to $are house0port o! ship ent etc o! exporta#le+

Bangladesh ,nstitute o! Bank 1anage ent


Dutch Bangla Bank Ltd DBBL pro&ides pre iu (ualit" ser&ice !or repatriation and collection o! re ittance $ith

the help o! its !irst class correspondents and trained personnel+ B" introducing on/line #anking ser&ice and #eco ing a 9@,F% Alliance Access 1e #er, $hich ena#le its #ranches to send and recei&e pa" ent instruction directl", that helps pro&ide pre iu ser&ices+ Re ittance ser&ices pro&ided #" DBBL are.   ,n$ard Re ittance. 8ut$ard Re ittance. Dra!t, %% FDD, %%, %' and 'ash 5F'6 Co es*ondent 3an@ ,!st of Nost o A$$ounts of D33, +l No. 1 ; > 4 C 4 7 ? 9 17 11 1; CC8 A'B A'B A'B A'B A'B A'B A'B 3an@ Name %he Bank o! *o&a 9cotia Bnion Bank Li ited Ara# Bangladesh Bank Ltd+ A9B' ,ndia 'iti#ank *+A+, 1u #ai ,',', Bank, 1u #ai A$$ount No 9;;>97 7?7711C1 >77174 719/>4149;/4C7 1C?4?777 474777;44 41;?777?> 711/714479/197 477?71C;4C77 ?1;?1C777 49174?4C 99C >41> +;IFT Code *89' ,* BB B*BLLOL' ABBL,*BB A9B' ,* BB ',%,,*BN ,',',*BB'%9 AE,B ,* DN 'AL A9B')OON '8BA DE FF DRE9 DE FF APDEDE11 B*'R,%11 C!t41 Count 4 1u #ai, ,ndia 'olo #o, 9ri Lanka 1u #ai, ,ndia 'alcutta, ,ndia 1u #ai, ,ndia 1u #ai, ,ndia 'alcutta, ,ndia Oarachi, )akistan Frank!urt, 3er an" Frank!urt, 3er an" 1unich, 3er an" 1ilan, ,tal"

%he A erican Express Bank Ltd+ Aongkong and 9hanghai A'B Banking 'orporation Li ited EBR EBR EBR EBR 'o er- Bank A3

Dresdner Bank A3 Ba"erische A"po/und Dereins#ank A3 Bnicredito ,taliano 9+p+A+

Bangladesh ,nstitute o! Bank 1anage ent


Dutch Bangla Bank Ltd

1> 14 1C 14 17 1? 19 ;7 ;1 ;; ;> ;4

3B) 3B) M)P M)P B9D B9D B9D B9D B9D 'AF 'AD ABD

9tandard 'hartered Bank *ational @est inster Bank )lc %he Bank o! %ok"o/ 1itsu#ishi Ltd+ Bnion de Ban(ues Ara#es et Francaises 5BBAF6 9tandard 'hartered Bank A erican Express Bank Ltd+ 1ashre(Bank )9' A9B' Bank B9A 'iti#ank *+A+, B9A 'o er- Bank A3

71/7744?;9/71 44707;0744;4974 4C>/7444;C1 ;?14C7/771/77/7 >C?;/7C?>?7/771 777>C??4 77+119C71 7771>4C7> >4;74>1; 477?71C;4C77 C;71;7;;7?17 >4;711 7947?>741

9'BL 3B ;L *@BO 3B ;L B8%O M) M% BBAF M) MN 9'BL B9 >> AE,B B9 >> 19AG B9 >> 1R1D B9 >> ',%, B9 >> '8BA DE FF *89' 'A %% AOBAAB;99PD

London, BO London, BO %ok"o, Mapan %ok"o, Mapan *e$ Pork, B9A *e$ Pork, B9A *e$ Pork, B9A *e$ Pork, B9A *e$ Pork, B9A Frank!urt, 3er an" %oronto, 'anada 9"dne", Australia

%he Bank o! *o&a 9cotia A9B' Bank Australia Ltd+

5.).).1. Fo e!"n Rem!ttan$e T% ou"% E#$%an"e House At the #eginning o! the "ear ;77C, our Bank has #een exerting uch e phasis on

IN;ARD REMITTANCE+ B" this ti e the Bank esta#lished extensi&e dra$ing arrange ent net$ork $ith Banks and Exchange 'o panies located in the i portant countries o! the $orld na el" in the Bnited Ara# E irates, 9tate o! Ou$ait, 9tate o! Gatar, 9tate o! Bahrain, ,tal", 'anada and Bnited 9tates o! A erica+ ,n the eanti e, Dut$%C3an"la 3an@ ,!m!ted gained the !aith o! the Bangladeshi @age one" to their respecti&e #ene!iciaries in Bangladesh one" to Bangladesh $ith con!idence,

Earners in sending their hard/earned

in shortest possi#le ti e+ Expatriates Bangladeshi @age Earners residing in those countries can no$ easil" re it their hard/earned sa!et" and speed+

Bangladesh ,nstitute o! Bank 1anage ent


Dutch Bangla Bank Ltd ;este n 5n!on& @estern Bnion Financial 9er&ices ,nc+ B+9+A+ is the nu #er one and relia#le trans!er co pan" in the $orld+ %his odern Electronic %echnolog" #ased one" !ro co pan" has earned $orld$ide reputation in trans!erring another countr" $ithin the shortest possi#le ti e+ Dutch/Bangla Bank Li ited has set up a Representation Agree ent $ith @estern Bnion Financial 9er&ices ,nc+ B+9+A+ as on 14th Fe#ruar" ;774+ 1illions o! people ha&e con!idence on @estern Bnion !or sending one" (uickl" !ro one" to their !riends and !a il"+ %hrough @estern Bnion 1one" %rans!er 9er&ice, Bangladeshi @age Earners can send and recei&e o&er ;;C,777 @estern Bnion Agent Locations in o&er 197 countries and territories $orld $ide/ the $orld:s largest net$ork o! its kind, onl" #" &isiting an" #ranches o! Dutch/Bangla Bank Li ited in Bangladesh+ one"

one" trans!er one countr" to

Name of t%e E#$%an"e Com*an!es and 3an@s& +l No. 71 7; 7> 74 7C 74 77 Count 4 B+A+E+ Ou$ait ,tal" Bahrain Gatar 'anada B+9+A+ Name of t%e E#$%an"e Co..3an@
• • • • • • • • •

Al Ahalia 1one" Exchange Bureau BAE Exchange 'entre L+L+'+ Ou$ait Asian ,nternational Exchange 'o+ Al/1oosa Exchange 'o pan" Bnicredito ,taliano 9+p+A+ Dalil Exchange Doha Bank East Bengal Exchange ,nc+ @estern Bnion Financial 9er&ices ,nc+

3oo@s ma!nta!n B4 t%e de*a tment& L%R Register )AD01argin Register

Bangladesh ,nstitute o! Bank 1anage ent


Dutch Bangla Bank Ltd LDB)0LDB'0,BD Register L'A issue Register L0' Ad&ising Register L0' 8pening Register Bill o! entr" Register

Bangladesh ,nstitute o! Bank 1anage ent