3rd Journal (25th October – 31st October)

SUBMITTED BY:

Name-MD. Seafath Mahmud

ID-1611393030

Course-Bus498.125

Organization-Mercantile Bank Limited

WORK DONE:

In the third week, I was asked to work with the foreign exchange department. Foreign Exchange Department

dealings worldwide. It facilitates international business within its several methods of assistance. It links

between importers and exporters. If the branch is an approved trader in the foreign exchange business, it

can forward foreign exchange from regional countries to foreign countries. In the foreign exchange

department, I was asked to create an LC for our client. And as per our client documents, I need to generate

LC for our customers and send SWIFT (Society for Worldwide Interbank Financial Telecommunications)

to beneficiary companies' banks. In the LC department, I need to open an LC for our client. And after

issuing LC, I need to send it to be advising the Bank. After getting confirmation from the advising Bank, I

need to add some margin portion for our safety. As usual, we need to reserve a minimum of a 5% margin

out of 100. For example, if the importer wants to import USD 1000 amount products, we need to cut 5%

advance from our client. After that, I need to prepare the documents and fill-up the LC form & send it again

to beneficiary banks.
LEARNING & ACHIEVEMENT:

What I learned from the LC department is bellowed:

➢ I have gained an idea about how to apply for the LC opening.

➢ I have gained an idea about how to draw an application form.

➢ I have gained an idea about how import works.

➢ I have gained an idea about how-to fill-up the LC form.

➢ I have gained an idea of how to contact several banks around the world professionally.

➢ I have gained an idea of how to receive and apply for SWIFT.

OBSERVATION:

The clearing method starts with the deposit of a cheque in a bank. The cheque (along with other cheques)

is passed to the bank/branch where it is built. The cheque is delivered for payment if the funds are ready.

The unsettled cheques are repeated to the presenting Bank over different clearing described as Return

Clearing. The realization of the funds occurs after completing return clearing and the absence of an

unavailable fund cheque.

NOTICEABLE EVENTS:

This week, I noticed that while applying for LC, the supplier assures the LC's terms and conditions with

documentary evidence. It is one of the meaningful benefits of LC to an importer/buyer. This support grants

protection to the buyer for a scheduled trading system.

Since the buyer is the owner of an LC, Bank works on behalf of the buyer. The opening Bank pays the

amount only after fulfilling all terms and conditions of LC with the documentary record. This system

defends the importer and reduces time, as Bank operates on behalf of them.
An LC action decreases the peril of non-performance by the supplier, as the supplier prefers LC than other

trades due to several reasons which protect them than the buyer. It is an advantage for the buyer on the

satisfaction of meeting responsibilities on shipments.