Foreign Exchange Operation of National Bank Limited

EXECUTIVE SUMMARY

An internship program is very important & essential for acquiring experience through learning and spreading the scope of Knowledge. I have done my internship program in National Bank Limited, Foreign Exchange Branch, Taranga Complex, 19, Rajuk Avenue, Motjheel, Dhaka-1000.

This internship report is aimed at providing a comprehensive picture to the areas of Foreign Exchange operation of National Bank Limited. The report has been divided into twelve parts. These are- Introduction, Brief History of Banking Sector of Bangladesh, Corporate review of NBL, Foreign Exchange, Documents Used in Foreign Exchange Business, Letter of Credit (L/C), Import, Export, Foreign Remittance, Findings and Analysis, References.

National Bank Limited is one of the largest commercial Bank of Bangladesh. The main objective of the Bank is to provide all of banking services at the doorsteps of the people. The Bank also participates in various social and development programs and takes part in implementation of various policies and promises made by the Government.

National Bank Limited plays a pioneering role in handling foreign trade and foreign exchange transactions. With wide network of branches at home and a large number of correspondent banks worldwide, it is handling the largest volume of export-import business including homebound remittances. For this reason, Foreign Exchange of the Bank is very much essential. But now a day’s banking sector of Bangladesh is suffering the disease of default culture which is the consequence or result of bad performance of most banks.

There are three types of modes of foreign exchange market, which are- Export Financing,      Import Financing and Foreign Remittance. Foreign Exchange Branch does these foreign exchange activities vastly. In this report, I mention the overall operating procedure of foreign exchange transaction of National Bank Limited. I also mention the findings of my report and describe the recommendation to overcome the limitation.

I have taken all the reasonable care to ensure the accuracy and quality to make the report standard. And I believe that it has included all the necessary information to be relevant.

CHAPTER-01

 INTRODUCTIOIN

ORIGIN OF THE REPORT

As a mandatory part the BBA Program, all the students of the faculty of Business Studies, University of Dhaka have to undergo a three month long internship program with an objective of gaining practical knowledge about current business world. After this internship program each and every students have to submit an internship report mentioning their activities during the internship program.

I’ve started my internship at the National Bank Limited, Foreign Exchange Branch, 19, Rajuk Avenue, Taranga Complex, Dhaka, on 9^th August 2009. At the end of the program I am submitting my internship report focusing on the contribution of Foreign Exchange operation to the overall performance of bank especially on profitability perspective under the supervision of Aklima Chowdhury Lima, Lecturer, Department of Accounting and Information System, University of Dhaka.

OBJECTIVES OF THE STUDY

The general objective of the study is to gather practical knowledge regarding banking system and operation. The practical orientation gives us a chance to relate the four year long theoretical learning of BBA Program with the practical experience. This consists the following:

• To get an overall idea about the Foreign exchange Business of National Bank Limited.
• To apply theoretical knowledge in the practical field.
• To describe the organizational structure, management, background, functions and objectives of the bank and its contribution to the national economy.
• To achieve overall understanding of National Bank Limited.
• To analyze the financing systems of the bank to find out any contributing field.
• To examine the profitability and productivity of the bank.
• To acquire knowledge about the everyday banking operation of National Bank Limited.
• To evaluate the effect of world recession on foreign exchange income of NBL, Foreign Exchange Branch.
• To understand the real management situation and try to recommend for improving existing problems.

 SCOPE OF THE STUDY

This study provides those scopes of knowing are the following:

• History and performance of National Bank Limited.
  • Terms used in foreign exchange operations
  • Foreign exchange operations of National Bank Limited
  • Literature review.
  • Total concept of Foreign Exchange Operation.

 METHODOLOGY OF THE STUDY

The report is prepared on the basic of foreign Exchange of National Bank Limited. To conduct the overall study, at first I explored the sources of Primary and Secondary information and data. Different files of the department and statement prepared by FED helped me to prepare this report. I have interviewed the NBL officials for getting more information.  To present numerical data, I used the Annual Report of 2008 and monthly statement of January to October 2009 of National Bank Limited, Foreign Exchange Branch. For preparing this report I have used some graphical representation to find out different types of analytical and interpretation.

SOURCES OF DATA

As mentioned earlier, mainly primary and secondary data has been used. Sometimes the customers gave some important information regarding the services of the Bank:

 PRIMARY DATA

• Official records of National Bank Limited (NBL).
• Face to face conversation with the client.
• Expert opinion.
• Personal Interview – Face-to-face conversation and in depth interview with the respective officers of the branch.
• Personal observation – Observing the procedure of banking activities followed by each department.
• Daily diary
• Practical work exposures on different areas of the branch
• Informal conversation with the clients or customers.

 SECONDARY DATA

• Monthly Statement of NBL.
• Annual Report of NBL.
• Official Files.
• Selected books.
• Other manual information.
• Websites.
• Various publications on the Bangladesh Bank.
• Newspaper reports in this concern.

 DATA ANALYSIS AND INTERPRETATION

Both quantitative and qualitative analysis will be performed on the findings. The quantitative analysis will be done on the trend of export- import, growth pattern of export-import, pre and post facilities provided for easing the export-import operations. Qualitative analyses will be based on the macroeconomic variables and foreign exchange policy provided by Bangladesh bank, the central bank of Bangladesh. Different statistical tools will be used for the analysis of the findings.

 LIMITATIONS OF THE STUDY

To provide current information and to make the report read-worthy, support from various sources is essential. In spite of having my wholehearted effort, I could not collect some information required at the time of the study. So this study is not free from the following limitation:

• Ø Due to unavailability of latest annual report (Annual report 2009), I have to prepare the report on the basis of annual report 2008. As a result, analysis, presentation of data may not show the existing position/present condition of National Bank Limited.
• Ø For the whole internship I had only 90 days, out of which I get 61 days because of late commencement of internship program, which were totally insufficient. So I faced time shortage extremely.
• Ø Lack of previous experience to prepare this type of report and it is totally new to me as an intern.
• Ø Foreign exchange division follows Uniform Customs and Practice for Documentary Credits (UCPDC), but within this short period, I was totally stunned to understand.
• Ø Learning all the banking functions within just two months was really difficult.
• Ø Sometimes the officers of National Bank Limited were very busy. For this reason the  personal did not co-operate me.
• Ø National Bank Limited did not give me any kind of monetary support for this internship program
• Ø Most of the working days in NBL, I have to work in cash department to help in IPO subscription collection, so I get limited time work in other departments to have practical knowledge
• Ø Another limitation of this report is Bank’s policy of not disclosing some data and information for obvious reason, which could be very much helpful.

CHAPTER-02

BRIEF HITORY OF BANKING SECTOR OF BD

 EVOLUTION OF THE WORD ‘BANK’

The word bank originated from Italian word “Banca”. Banca means long tool. In ancient time Italian Jews merchant used to do business of lending money by sitting on the tools.

It is assumed that the word “bank” derived from the word Banca. To meet the expense of war of 1171 one type credit certificate was launched in Italy at an interest rate of 5% it was called as Monte in Italian language and Banke in German language then German language was widely used in Italy. As a result the word Banke gradually changed to the word Banca from which the word Bank originated.

 THE EMERGENCE OF MODERN BANKING

The linguistics and etymologists suggests an interesting story about banking origins. Both the old French word “Banque” and the Italian word Banca were used centuries ago to mean a bench or moneychangers table. This describes quite well what historians have observed concerning the first bankers, who lived more than 2000 years ago. They were money changers, situated usually at table or in a small shop in the commercial district, aiding travelers who came to town by exchanging foreign coins for local money or discounting commercial notes for a fee in order to supply merchants with working capital.

The first bankers probably used their own capital to fund their activities, but it was not long before the idea of attracting deposit and securing temporary loans from wealthy customers became a source of bank funding. Loans were then made to merchant’s shippers and landowners at rates of interests low as 6 percent per annum to as high as 48 percent a month for the riskiest ventures. Most of the early bank was Greek in origin.

The banking industry gradually spread outward from the classical civilizations of Greece and Rome into northern and western Europe. The early bank in Europe was places for safe keeping of valuable items (such as gold and silver bullion) as people came to fear loss of their asset due to war, theft, or expropriation by government. When colonies were established in North and South America, old world  banking practice were transferred to the new world.

DEVELOPMENT OF BANKING IN BANGLADESH

Since early British rule, the history of banking in Bangladesh territory shows that the traditional trade-networks developed before the banks invaded rural areas. And the banking services have slowly flourished in Bangladesh territory. Even today, in many places, moneylenders provide credit services.  Small shopkeepers and businessman use informal credit at high interest rate. Traditional mahjong’s money lending business gradually declined due to expansion of bank and the micro credit programs of NGOs, cooperative banks and government agencies.

 PUBLIC SECTOR BANKS

During the liberation war in 1971, the economic, political, and social system including the banking system was severally damaged. At that time, all big and medium financial institutions except two small banks had their head office in the West Pakistan. The non-beagle owners and managers of the financial establishments that operated in East Pakistan had abandoned them. After independence in 1971, the new government had to take over management and ownership of all such institutions. The banks Nationalization Order 1972 was issued to nationalize banks and financial institutions (except those incorporated abroad) in order to control chaos in the field of ownership, party bureaucracy, the intelligentsia, and pressure group. By several orders the government of Peoples Republic of Bangladesh created-

       Six nationalized commercial banks (NCBs):

1. Sonali Bank

2. Agrani Bank

3. Janata Bank

4. Rupali Bank

5. Pubali Bank

6. Uttra Bank

       One industrial bank (BSB)

       One agricultural bank(BKB)

       One industrial development financial institution(BSRS)

The banks and financial institutions which originated during the Pakistan period and were merged, and renamed and functioning after independence of Bangladesh. In the year 1983, the government allowed private sector to participate in the banking business. The Publi Bank and the Uttara Bank were denationalized in 1985, due to non profitability. This action reduced the number of NCBs to four.   Such restructuring of public sector banks was in order to play their role in industry, agriculture, export, self –employment etc.

PRIVATE COMMERCIAL BANKS

Taking advantage of the liberalization policy of the government regarding participation of private sector in the banking business, a number of private banks were established in –and –after 1983. With the emergence of private banks in Bangladesh, a competitive situation in the sector has been created. Now there are 48 commercial banks in Bangladesh which are enlisted with Bangladesh Bank, among them four (4) are NCBs, five (5) are specialized banks, twenty nine (29) are private commercial banks and ten (10) are foreign commercial banks. The emergence of private banks has added a new dimension to the banking system in Bangladesh. The private commercial banks show a steady growth in terms of number of branches, deposit and advances.

CHAPTER-03

CORPORATE REVIEW OF NATIONAL BANK

 History of National Bank Limited

National Bank Limited has its prosperous past, glorious present, prospective future and under processing projects and activities. Established as the first private sector Bank fully owned by Bangladeshi entrepreneurs, NBL has been flourishing as the largest private sector bank with the passage of time after facing many stress and strain. The member of the board of directors is creative businessman and international economist. For rendering all modern services, NBL, as a financial institution automated all it’s branches with computer network in accordance with the competitive commercial demand of time. Moreover, considering it’s forth- coming future the infrastructure of the Bank has been much more to NBL. Keeping the target in mind NBL has taken preparation branches by the wear 2000-2001.

The emergence of National Bank Limited in the private sector is an important event in the banking area of Bangladesh. When the national was in the grip of severe recession, Govt. took the farsighted decision to allow in the private sector to revive the economy of the country. Several dynamic entrepreneurs came forward for establishing a bank with a motto to revitalize the economy of the country.

National Bank Limited was born as the first hundred percent Bangladesh owned Bank in the private sector. From the very inception it is the firm determination of National Bank Limited to play a vital role in the national economy. We are determined to bring back the long forgotten taste of banking services and flavors. We want to serve each one promptly and with a sense of dedication and dignity.

The President of the People’s Republic of Bangladesh Justice Ahsanuddin Chowdhury inaugurated the bank formally on March 28, 1983 but the first branch at 48, Dilkusha Commercial Area, Dhaka started functioning on March 23, 1983. The 2^nd Branch was opened on 11^th May 1983 at Khatungonj, Chittagong. Today we have total 103 Branches all over Bangladesh.

A representative office was established in Yangon, Myanmar in October, 1996 by our bank and obtained permission from the government of Bangladesh to handle border trade with Myanmar .opportunities is being explored for further business avenues there.

Now NBL is on line to establish trade and communication with the prime international banking companies of the world. As a result NBL will be able to build a strong root in international banking horizon .Bank has been drawing arrangement with well conversant money transfer service agency “Western union”. It has full time arrangement for speedy transfer of money all over the world.

Banking is not only a profit – oriented commercial institution but it has a public bas and social commitment admitting this true NBL is going on with its diversified banking activities NBL introduced monthly Savings Scheme, special Deposit Scheme, and Consumers.

Credit Scheme and savings Insurance scheme etc. To combine the people of lower and middle income group.

A team of highly qualified and experiment professional headed by the managing Director of the bank who has vast banking experience operates bank and at the top three is an efficient Board of Directors for making policies.

Vision of National Bank Limited

Establishing as a top grade efficient bank through best application of modern information technology and business activities, offering high standard client services and Proper coordination of foreign trade business in the core of their vision.

 Mission of national bank Limited

With a view to achieving commercial objective of the bank, their sincere and all out efforts stay put unabated. Respected client and shareholders are attracted to us for our transparency, accountability, social communities, and high quality of clientele services.

 Objective of national Bank Limited

       Bring modern banking facilities to the doorsteps of general public through diversification of services, thereby arousing saving propensity among the people.

       Foreign a cordial, deep rooted and farm banker customer relationship by dispensing prompt and improved clientele services.

       Taking part in the development of the national economy through productive development of the banks resources as well as patronizing different social activities.

       Connecting clients to modern banking practices by the best application of improved information technology, so that they get encouraged to continue and feel proud of banking with NBL.

       Ensuring highest use of the professional workforce through enhancement of their attitude and competence.

       Responding to the need of the time by participating in the syndicated large loan financing with like-minded banks of the country, thereby expanding the area of investment

       Elevating the image of the bank at home and abroad by sustained expansion of its activities.

 Strategies of National Bank Limited

       To manage and operate the bank in the most efficient manner to enhance financial performance and to control cost of fund.

       To strive for customer satisfaction through quality control and delivery of timely services.

       To identify customer credit and other banking needs and monitor their perception towards our performance in meeting those and update requirement.

       To review and update policies procedures and practices to enhance the ability to extend better services to customer.

       To train and develop all employs and provide them adequate resources so that customer needs can responsibility addressed.

       To promote organizational effectiveness by openly communicating company plans, policies, practices and procedures to all employers in a timely fashion

       To cultivate a working environment that fosters positive motivation for improved performance

       To diversify portfolio both in the retail and whole sale market.

       To increase direct contact with customer in order o cultivate a closer relationship

Business Goal

To patronize, sponsor and encouraged games and sports, entertainment and other socio-economic activities alongside providing the best services to the client.

 The Future thrust

       Full duplex on-line Banking

       Introducing more innovative products and services

       Opening new branches

       Expansion of business network at home and abroad

       SMS Banking

       Introduction of new liability / Asset products

Corporate Culture

Employees of NBL share certain common values, which helps to create a NBL culture.

       The client comes first

       Search for professional excellence

       Openness to new ideas& new methods to encourage creativity

       Quick decision making

       Flexibility and prompt response

       A sense of professional ethics

 Growth and Development of NBL

The NBL carries out all traditional functions, which a commercial bank performs such as mobilization of the deposit, investment of funds, financing export and import business, trade and commerce and industry.

The banking sector in the country faced different problems thought the year. Even through the board and management never stopped its effort to maximize wealth, which is reflected by 143.97percent profit growth in 2007, highest ever in the last 15 years.

The bank earned the 676.45 core revenue in 2007 as interest, income from investment and commission & exchange earning, which who Tk. 530:69 crore in the provision year. As a result the total operating profit rode to Tk. 221.51 crore in 2007 from Tk.114.68 crore in the previous year.

Branches of NBL

NBL, which was started at Dilkusha Branch on March 23^rd, 1983, was the first major commercial Bank. In Bangladesh operating throughout the country as well as the age of the bank is only 25 years .During this period it has established total 112 branches over the country and made smooth network inside the country as well as thought the world. The number of branches as well as territory wise is mentioned in the table.

Table 01: Branches of NBL

CHAPTER-03

Foreign Exchange

Meaning of Foreign Exchange

Foreign Exchange means exchange foreign currency between two countries. If we consider ‘Foreign Exchange’ as a subject, then it means all kind of transactions related to foreign currency. In other wards foreign exchange deals with foreign financial transactions.

 H.E. Evitt defined “Foreign Exchange” as the means and methods by which rights to wealth expressed in terms of the currency of one country are converted into rights to wealth in terms of the currency of another country

 REGULATORY REQUIREMENTS OF FOREIGN EXCHANGE

Any import and export of our country is regulated by different local and international laws and regulatory bodies. The core guidelines under the preview of which import and export of our country have to be performed are:

• Import Policy
  • Export Policy
• Guidelines for foreign exchange transaction of Bangladesh Bank (Vol.1 &2).
• Circular issued by Bangladesh Bank
• Circular issued by NBR
• Circular issued by CCI&E
• UCPDC (ICC publication no.600) & ISBP, URC, URR.
• Public Notice
• Ministry of Commerce Circular
• Other Authorization (i.e. NBC Dept)

Among the regulatory bodies, Chief Controller of Import and Export, Bangladesh Bank play major role in monitoring and ensuring compliance of various regulations

WHY Exchange is TO be controlled

 Foreign Exchange is to be controlled for the following reason:

       To stabilize the rate of exchange.

       To protect domestic Industries.

       For proper implementation of plans.

       To increases the bargaining strength.

       To check over invoicing & under invoicing.

       To check the black marketing and smuggling.

       For regulating the international movements of goods.

 FUNCTIONS OF FOREIGN EXCHANGE DEPT.

Foreign Exchange is mainly combination of three parts:

 Foreign Remittance.

 Export.

 Import.

These three parts are most essential part of Foreign Exchange Operations of NBL at Foreign Exchange Branch as well as other AD branches. Not only NBL but also all banks of Bangladesh have to play these roles in Foreign Exchange Operation. I will discuss about these topics in later chapters.

 Foreign Exchange condition of Nbl

Foreign Remittance

Table 08: Foreign Remittance

In 2008, foreign remittance brought into the country through NBL was USD 582.47 million showing an increase of USD 179.90 million over the previous year, which registered an attractive growth of 45%. This growth was possible due to introduction of different instant payment products and technology including extending SWIFT, Online, EFT etc. and further efforts are being made for more speedy payments.

 Import                                                                                                    

Table 09: Import

The bank opened a total number of 21,210 L/Cs amounting USD 1,130.96 million in trade in 2008 with a growth of 25 percent over the previous year. The main commodities were scrap vessels, rice, wheat, edible oil, capital machinery, petroleum products, fabrics & accessories and other consumer items.

Export

Table 10: Export

The bank has been nursing the export finance with a special attention since its inspection. In 2008 it handled 16,234 export documents valuing USD531.03 million with a growth of 14 percent over the last year. Export finances were made mainly to readymade garments, knitwear, frozen food and fish, tanned readymade leather, handicraft, tea etc.      

CHAPTER-05

DOCUMENTS USED IN FOREIGN EXCHANGE

 LETTER OF CREDIT (L/C)

It is the most important and commonly used in connection with foreign trade. Letter of Credit is an undertaking by a banker of the importer to the exporter, to the effect that the amount of the L/C will be duly paid. The banker on behalf of the importer issues the L/C in favor of the exporter (beneficiary) and forwards the same to the exporter to the effect that the bill drawn by him shall be duly accepted and paid.  It creates confidence in the mind of the exporter so far as payment of the bill is concerned. It is also facilitate the exporter to get the benefit of discounting the bill before the date lf maturity.

BILL OF EXCHANGE

A Bill of Exchange is an instrument in writing, containing an unconditional order, signed by the maker, directing a certain person to pay on demand or on fixed or determinable future time a certain sum of money only to or to the order of a certain person or to the bearer of the instrument. From the definition – we get the features of bill of exchange. In generally there are three parties like- Drawer: The person who prepare the bill; Drawee: The person who is ordered for the payment in future specified time; Payee: The person who is the amount of bill receiver as per the order of the drawer to the drawee.

BILL OF LADING

A bill of lading is a document that is usually stipulated in a credit when the goods are dispatched by sea. It is evidence of a contract of carriage, is a receipt for the goods, and is a document of title to the goods. It also constitutes a document that is, or may be, needed to support an insurance claim. The detail on the bill of lading should include:

• A description of the goods in general terms not inconsistent with that in the credit.
• Identifying marks & numbers (if any).
• The name of the carrying vessel.
• Evidence that the goods have been loaded on broad.
• The ports of shipment & discharge.
• The names of shipper, consignee and name & address of notifying party.
• The number of original bills of lading issued.
• The date of issuance.

A bill of lading specifically stating that goods are loaded for ultimate destination specifically mentioned in the credit.

 COMMERCIAL INVOICE

A commercial invoice is the accounting document by which the seller charges the goods

to the buyer. A commercial invoice normally including the following information:

• Date
• Name & address of buyer & seller.
• Order or contract number, quantity & description of the goods, unit price and the total price.
• Weight of the goods, number of packages and shipping marks & number.
• Terms of delivery & payment.
• Shipment details.

 CERTIFICATE OF ORIGIN OF GOODS

A certificate of origin is a signed statement providing evidence of the origin of the goods.

 INSPECTION CERTIFICATE

This is usually issued by an independent inspection company located in the exporting country certifying or describing the quality, specification or other aspects of the goods, as called for in the contract and / or the letter of credit. The buyer who also indicates the type of inspection usually nominates the inspection company he /she wish the company to undertake.

INSURANCE POLICY OR CERTIFICATE

• The insurance certificate document must.
• Be that specified in the credit.
• Cover the risks specified in the credit.
• Be consistent with the other documents in its identification of the voyage and description of the goods.
• Unless otherwise specified in the credit:

       Be a document issued and / or signed by an insurance company or its agent, or by underwriters.

       Be dated on or before the date of shipment as evidenced by the shipping documents or establish that cover is effective at the latest from such date of shipment.

       Be for an amount at least equal to the GIF value of the goods and in the currency of the credit.

 PROFORMA INVOICE OR INDENT

Seller’s quotation or agreement between seller & buyer. In this-the seller declared the rate, quantity, quality, manufacturing & other information about goods and that accepted by buyer.                                                           .

 G.S.P. CERTIFICATE (GENERALIZED SYSTEM OF PREFERENCE)

When tariff concession is sought from those developed countries providing preferential treatment to exporters of the developing countries, a GSP certificate should be obtained from the EPB. In GSP scheme the tariff providing country is payer country & tariff consumer or receiver country is receiver country. Up to the period there are 16 developing countries under this scheme facility. From Bangladesh export development burro the industrialists may get necessary information & practical procedure.

 PACKING LIST

Here the detailed descriptions of goods packed in cases are written. Such as total quantity in lot, per packet, total weight of the shipment, per  packet etc are written.

 DOCUMENTARY CREDIT

In simple terms a documentary credit is conditional bank undertaking of payment. Expressed more fully, it is written undertaking by a bank (Issuing Bank) given to the seller (Beneficiary) at the request and in accordance with the instructions of the buyer (applicant) to effect payment (i.e. by making a payment or by accepting or negotiating bills of exchange) up to a stated sum of money, within a prescribed time limit & against stipulated documents.

These stipulated documents are likely to include those required those required for commercial invoice, certificate of origin, insurance policy or certificate and bill of lading or combined transport document.

There are various types of documentary credits. A revocable credit can be amended or cancelled at any time without prior warning or notification to the seller.

An irrevocable credit can be amended or cancelled only with the agreement of all parties. As there are often two banks involved the issuing bank & the advising bank, the buyer can ask or an irrevocable credit to be confirmed by the advising bank. If the advising bank agrees, the irrevocable credit becomes a confirmed irrevocable credit.

There are four types of documentary credits according to payment methods:

• Sight credit
• Acceptance credit
• Cash credit
• Deferred payment credit

Documentary letter of credit

The documentary Letter of Credit is an arrangement whereby a bank (issuing bank) acting at the request of a customer (applicant of the Letter of Credit):

• To make payment to or to the order of other person (the beneficiary) or to pay accept or negotiate Bill of Exchange (Drafts) drawn by the beneficiary.
• Authorizes such payment to be made or such drafts to be paid, accepted or negotiated by another bank against stipulated documents, provided the terms & conditions of the Letter of Credit are complied with.

Procedure of documentary credit:

Details of the diagram:

• The buyer & the seller conclude a sales contract providing for payment by documentary credit.
• The buyer instructs his / her bank i.e. issuing bank to issue a credit in favor of the seller i.e. beneficiary.
• The issuing bank asks another bank, usually in the country of the seller, to advice or confirms the credit.
• The advising or confirming bank informs the seller that the credit has been issued.
• As early as possible the seller receives the credit & is satisfied that he / she can meet its terms and conditions, he / she is in a position to load the goods and dispatch them.
• The seller then sends the documents evidencing the shipment to the bank where the credit is available in bank. This may be the issuing bank, or the confirming bank, or any bank named in the credit as the paying, accepting or negotiating bank, or it may be the advising bank or any bank willing to negotiate under the credit.
• The bank checks the documents against the credit. If the documents met the requirements of the credit, the bank will pay, accept, or negotiate according to the terms of the credit. In case of a credit available by negotiation, the issuing bank or the confirming bank will negotiate without recourse. Any other bank including the advising bank if it has not confirmed the credit, may negotiate, same for payment.
• The bank if other than the issuing bank sends the documents to the issuing bank
• The issuing bank checks the documents and if they meet the credit requirements, either
• Effects payment in according with the terms of the credit, either to the seller if he / she has sent the documents directly to the issuing bank or to the bank that has made funds available to him in anticipation. Or
• Reimburses in the pre-agreed manner the confirming bank or any bank that has paid, accepted or negotiated under the credit.
• When the documents have been checked by the issuing bank and found to meet the credit requirements, they are released to the buyer upon payment of the amount due, or upon other terms agreed between him / her & the issuing bank.
• The buyer sends the transport document to the carrier who will then proceed to deliver the goods.

CHAPTER-06

LETTER OF CREDIT (L/C)

Letter of Credit is an undertaking by a banker of the importer to the exporter, to the effect that the amount of the L/C will be duly paid. The banker on behalf of the importer issues the L/C in favor of the exporter (beneficiary) and forwards the same to the exporter to the effect that the bill drawn by him shall be duly accepted and paid.  It creates confidence in the mind of the exporter so far as payment of the bill is concerned. It is also facilitate the exporter to get the benefit of discounting the bill before the date lf maturity.

 PARTIES OF LETTER OF CREDIT TRANSACTION

• Issuing Bank: It is the buyer’s bank. The bank that agrees to the request of the applicant and issues its letter of credit in terms of the instructions of the applicant.
• Advising Bank: It is the seller’s or beneficiary’s Bank. The bank usually situated in the seller’s or beneficiary’s country (most of the time with which there exists corresponding relationship with the buyer or issuing bank), request to advice the credit to the beneficiary.
• Confirming Bank: Sometimes issuing bank request advising bank or another bank to add confirmation to the letter of credit. When that bank do this then such bank is called confirming bank. So advising bank can be act as confirming bank.

• Reimbursing Bank: This is the bank that is nominated by the issuing bank to pay (it is also known as paying bank) or to accept drafts. It can be situated in another country. In this connection it is to say that American Express Bank & Nat West Bank act as reimbursing bank in case of National Bank Limited. The account, which maintains National Bank Limited with Nat West Bank & American Express Bank, is called “Nostro Account” and in rivers the account, which is maintained by Nat West Bank & American Express Bank with National Bank Limited, is called “Vostro Account”
• Negotiating Bank: The bank, which makes payment to the exporter after scrutiny, the documents submitted by the exporter with the original letter of credit then it is called Negotiating Bank.
• Nominated Bank: The bank that is nominated by the issuing bank to pay (nominated bank is known as paying bank) or to accept drafts (nominated bank is known as accepting bank) or to negotiate (nominated bank is known as negotiating bank). Usually the advising bank is request & authorized to be the nominated bank unless the credit allows negotiation by any bank.
• Seller: Beneficiary of the letter of credit is seller.

 BASIC FORMS OF DOCUMENTARY LETTER OF CREDIT

 The letter of credit can be either revocable or irrevocable. It needs to be clearly indicated whether the letter of credit Revocable or Irrevocable. When there is no indication then the letter of credit will be deemed to be a revocable L.C. The details are as follows:

• Revocable letter of credit: A revocable credit is one, which can be amended or cancelled by the issuing bank. At any moment without “prior notice” to the beneficiary. So this is clear that revocable credit can be revoked any time without prior notice.
• Irrevocable letter of credit: An irrevocable credit is one, which cannot be cancelled or amendment able any time without the consent of each party. Through this letter of credit the issuing bank gives a definite, absolute and irrevocable undertaking to honor its obligations, provided the beneficiary complies with all the terms & conditions of the credit.
• Government letter of credit: That letter of credits, which are done by the Defense Ministry and other Ministries of the government.
• Master or mother letter of credit: The L.C. which come from outside the country to the exporter from importer that is mother or master letter of credit.

• Other classes of letter of credit:

• Revolving letter of credit: When the L.C. is used again & again in same amount for a specific period of time that is called revolving letter of credit.
• Transferable letter of credit: Exporter can transfer his / her right of letter of credit in full or partly to a third party. In generally, the exporter is not the supplier but act as a middleman with in the supplier & importer.
• Back-to-Back letter of credit: The letter of credit, which done by the security of mother letter of credit.
• Clean or open letter of credit: The letter of credit, which provides assurance of payment bill of exchange without submission, of any export documents that is called clean letter of credit.
• Confirmed letter of credit: When the Irrevocable letter of credit issued by issuing bank to the exporter as assurance of the L.C., then as per advice or documents the authorized representative or representative bank’s provide assurance or payment guarantee that is confirmed letter of credit.
• At sight letter of credit: That letter of credit which expires ninety days i.e. within this period the documents must be sending to the negotiating bank.
• Deferred payment letter of credit: That letter of credit which expires one hundred & eighty days i.e. within this period the documents must be send to the negotiating bank.
• Contract letter of credit.
• Refinance Letter of Credit.
• Marginal Letter of Credit.
• Traveler’s Letter of Credit.

CLASSIFICATION OF LETTER OF CREDIT AS PER FUNCTION:

¨      LC under cash

¨      LC under loan

¨      LC under grant

¨      LC under wage

¨      Back to back LC.

STEPS IN LETTER OF CREDIT OPENING

On receiving the documents or papers from the importer the letter of credit opening bank is to perform the following functions in connection with opening the letter of credit:

1. To scrutinize the documents thoroughly and to consult with import policy, Bangladesh Bank & International Division’s circular.
2.  To prepare an “offering sheet”. This offering sheet is nothing but a prescribed office      note on which the branch manager will sanction the margin to be obtained from the importer.
3.  Commission of letter of credit to be calculated as 50% of the total amount, equivalent to Bangladesh currency.
4. P&T charges to be realized for TK. 100 (fixed charge) if the letter of credit dispatched through Airmail. If it is a cable or telex letter of credit the P&T charges to be realized at actual.
5. Foreign correspondents adjusting charges (FCC) to be realized TK. 1500 (Fixed amount).
6. To make entry in “letter of credit opening register”.
7. Accounting treatment to prepare vouchers in prescribed forms:

• Bank’s charges voucher —

                        Importer’s Current Account… ……………… …..Dr.

                                    Foreign correspondents charges adjusting A/C…. Cr.

                                    P & T charges recovered A/C… ………………… Cr.

                                    Commission Account… ……………………… ….Cr.

• Margin voucher—

                       Importer’s current Account……………………… Dr.

                                    Marginal Deposit A/C (against import L/C)………… Cr.

• Liability voucher—

                       Liability of constituents for acceptance A/C……..Dr.

                                             (For opening letter of credit)

                                    Acceptance for constituents A/C………………… Cr.

                                                                            (For opening letter of credit)

1. To dispatch the letter of credit as follows:

¨      First & second copy – Advising Bank, which in turn forward the original copy to the exporter.

¨      Third copy – Reimbursing Bank.

¨      Fourth & Fifth copy—Importer

¨      Sixth copy—C.C.I. & E.

¨      Seventh to Ninth copy—Letter of credit opening bank’s copy.

REQUIRED DOCUMENTS FOR LETTER OF CREDIT OPENING

  Proposal letter (in proposal letter it must be mentioned that – price of goods, CCI & E registration, pass book number, LCA form dully filled in signed & sealed, Import form  full set, insurance policy & addendum, P.I. number).

  Application and agreement for irrevocable LC with adhesive stamp of TK.150.

  Import license

  HS. Code.

  TIN.

  VAT registration.

  Indenting certificate.

  Performa invoice – two copies (with in this it indicate – Performa bill no. & date, item, particulars, quality, quantity, rate, and amount of goods, total invoice value (E &O.E.)

  LCA (Letter of Credit Authorization) form for industrial consumer – four copies. (Within this – IRC number, total amount)

  Signature of Director of the firm and manager of National Bank Limited.

  IMP form – Four copies (by this the declaration of the firm’s directors)

  Money receipts of insurance policy.

  After preparing the procedure the bank provide offer in prescribed “offering sheet”.

  Approval certificate of Bangladesh Bank on behalf of the importer.

 PARTICULARS INVOLVED IN OFFERING SHEET

  Name of the party, Sanctioned limit, Facility applied for letter of credit (amount & previous outstanding).

  Forward exchange

  Foreign bills purchased.

  Guarantees.

  Trust receipts.

  Clean packing credits.

  Advance against imported goods.

  Goods particulars

  Import license

  Margin already at credit.

  Margin to be obtained.

  Guaranteed by.

  Balance of current account.

  Average Balance of bank account.

   Net worth of the firm.

  Customs duty.

  Country of export.

  Other conditions.

 JUSTIFICATION FOR FITNESS OF LETTER OF CREDIT OPENING

¨      Application from importer.

¨      Bio-data of the applicant.

¨      Current account opened by the applicant in the branch.

¨      Supplier’s acceptance & rate of goods.

¨      Is it a brand item or not?

¨      Contract on prescribed form of bank (stamp TK. 150).

¨      Performa invoice from supplier.

Method of settlement

Based on the method of settlement the documentary letters of credit can be opened in two ways;

  Sight letter of credit

A Sight letter of credit is a credit in which the seller obtains payment upon presentation of documents in compliance with the terms and condition.

  Deferred letter of credit

A Deferred letter of credit is a credit in which the seller will be paid a fixed or determinable future time. The buyer is obligated to pay the face amount at maturity.

 Operation of Documentary Letter of Credit

The following five (5) major steps are involved in the Operation of Documentary Letter of Credit

       Issuing,

       Advising,

       Amendment(if necessary)

       Presentation

       Settlement.

ISSUING A LETTER OF CREDIT

Before issuing a L/C, the buyer and seller located in different countries, concludes a ‘sales contract’ providing for payment by documentary credit. As per requirement of the seller, the buyer then instruct the bank – the issuing bank – to issue a credit in favour of the seller(beneficiary). The credit application which contains the full details of the proposed credit, also serve as an agreement between the bank and the buyer. After being convinced about the “necessary conditions” contained in the application form and ‘sufficient conditions’ to be fulfilled by a buyer for opening a credit, the opening bank then proceeds for opening the credit to be addressed to the beneficiary.

ADVISING A LETTER OF CREDIT

Advising through a bank is a proof of apparent authenticity of the credit to the seller. The process of advising a credit consists of forwarding the original credit to the beneficiary to whom it is addressed. Before forwarding, the advising bank has to verify the signature (s) of the officer (s) of the opening bank and ensure that the terms and conditions of the credit are not in violation of the existing exchange control regulations and other regulation relating to export.

AMENDMENT OF L/C

Parties involve in a particularly the seller and the buyer cannot always satisfy  the terms and conditions in full as expected due to some obvious and genuine reasons. In such a situation, the credit should be amended. Amendment of L/C may be for-

• Time Extension:

The time duration of L/C can be extended by writing an application by the opener of L/C and signature of the opener should be verified provided the LCA is valid or the agreement is valid up to that period.

• Change in L/C amount:

Increase of L/C amount may be done provided that the LCA covers the increase in amount. L/C amount can be decreased provided the relevant contract or indent is amended accordingly and with the consent of beneficiary. For increasing the amount of L/C the following accounting procedure will be passed:

Debit: Acceptance for Constituent Liability

Credit: Constituent liability for acceptance

PRESENTATION OF DOCUMENTS

The seller being satisfied with the terms and conditions of the credit proceeds to dispatch the required goods to the buyer and after that, has to present the documents evidencing dispatching of goods to the negotiating bank on or before the stipulated expiry date of the credit. After receiving all documents, the negotiating bank then checks the documents against the credit. If the documents are founded in order, the bank will pay, accept or negotiate to the issuing bank. The issuing bank also checks the documents and if they are found as per credit requirements, either

• Effects payment, or
• Reimburses in the pre-agreed manner.

SETTLEMENT

Settlement means fulfilling the commitment of issuing bank in regard to effecting payment subject to satisfying the credit terms fully. This settlement may be done under three separate arrangements as stipulated in the credit, these are

1. 1.      Settlement by payment

Here the seller presents the document to the paying bank and the bank then scrutinizes the documents, if satisfied the paying bank makes payment to the beneficiary and in case this bank is other than the issuing bank, then send the documents to the issuing bank. If the issuing bank is satisfied with the requirements, payment is obtained by the paying bank from the issuing bank.
2.      Settlement by Acceptance
Under this arrangement, the seller submits the documents evidencing the shipment to the accepting bank accompanied by the draft drown on the bank at the specified tenor. After being satisfied with the documents, the bank accepts the documents and the draft and if it is a bank other than the issuing bank, then sends the documents to the issuing bank stating that it has accepted the draft and at maturity the reimbursement will be obtained in the pre-agreed manner.
3.      Settlement by Negotiation
This settlement procedure starts with the submission of document by the seller to the negotiating bank accompanied by a draft drown on the buyer or any other drawee, at` sight or at a tenor, as specified in the credit. After scrutinizing that the documents meet the credit requirements, the bank may negotiate the draft, this bank, if than the issuing bank, and then send the documents and the draft to the issuing bank. As` usual, reimbursement will be obtained in the pre-agreed manner.

When using letters of credit, be aware of the following

       A letter of credit is about documents and not goods. It will not insure the quality of the goods received.

       It is important to understand all required documents before signing and it is also important to be sure all stipulated conditions can be met.

       Ensure time frames can be met since the inability to meet time schedules is the number one reason letters of credit fail.

       The failure to produce the required documentation on time can nullify the letter of credit.

       Even minor errors in documentation such as spelling mistakes can render a letter of credit invalid, so it is critical to be careful with the documentation.

A letter of credit is not an absolute guarantee the beneficiary will receive payment. The issuing bank is obligated to pay under the letter of credit only when the stipulated documents are presented, and all the terms and conditions of the letter of credit have been met to the bank’s satisfaction.

How Letters of Credit Work

A letter of credit is a promise to pay. Banks issue letters of credit as a way to ensure sellers that they will get paid as long as they do what they’ve agreed to do. Letters of credit are common in international trade because the bank acts as an uninterested party between buyer and seller.

      A documentary letter of credit is opened by the purchaser’s local bank (the credit-opening bank).

      Via the credit-transmitting bank, the documentary letter of credit reaches the vendor. It checks whether the terms of the documentary letter of credit match the terms of your commercial contract. Only if the vendor is convinced can he send the goods to the purchaser.

      The necessary documents (invoice, transport document, insurance documents) are handed over by the vendor to the credit-transmitting bank. After checking these documents, the credit-transmitting bank pays the sum that the purchaser owes to the vendor directly.

      The credit-transmitting bank sends the documents to the credit-opening bank that, after checking the documents in turn, pays the amount due to the credit-transmitting bank.

      Via the credit-opening bank, the documents finally reach the purchaser, who can use these documents to collect the shipped goods.

      Finally, the buyer pays the amount owed to the local bank.

Presenting a Letter Of Credit

Once a letter of credit has been received, it needs to present to the bank for payment along with other documents which may include:

       Commercial invoice

       Consular invoice

       Insurance documents

       Bill of lading

       Certificate of origin

       Packing list

       Inspection certificates

       Import permits

The bank will not pay if there are discrepancies and the documentation is not in order.

Common Mistakes Made With Letters Of Credit

Exporters make the following common mistakes, which cause them to lose the sale or not get paid.

      Presenting documents late, after the letter of credit has expired.

      Shipping their goods after the specified date.

      Making a partial shipment when partial shipment is not allowed.

      Not presenting the proper documents.

      Not legalizing the documents.

      Not obtaining required insurance.

      Submitting copies instead of originals.

      Spelling mistakes.

      Mathematical mistakes.

CHAPTER-07

 Import

 Meaning of Import

An import is any good or service brought into a country from another country in a fair and acceptable fashion, typically for use in trade. Imported goods or services introduce domestic consumers to newer things by foreign producers.

Companies usually import goods and services to supply to the domestic market at a cheaper price and provide goods that are superior compared to goods manufactured in the domestic market.

Who is an Importer?

The person who deals in import business obtaining import Registration Certificate (IRC) in terms of importers, exporters and indenters (registration) order-1981 from the CCI&E submitting the following papers is treated as importer.

            1. Valid Trade License

            2. National ID Card

            3. Asset Certificate

            4. VAT Registration Certificate

            5. Bank solvency Certificate

            6. Trade Association Certificate

            7. Certificate of Incorporation

            8. Memorandum and Articles of Association

Types of Import

There are two types of import –

1. Commercial Import
   1. Industrial import

1.Commercial Import:

Importer does commercial import only for trading purpose. These products are finished goods. Such as rice, wheat, soybean oil etc.

2.Industrial import:

Importer does industrial import for industrial use only. These products are raw materials and capital machinery. Such as; raw cotton, Crude oil etc.

7.4 Goods are not importable

The following types of goods are not importable-

       Books, Newspaper, periodicals, documents and other papers, posters photographs, films, gramophone records, audio and video cassette tapes etc containing matters likely to outrange the religious feeling and beliefs of any class of the citizen of Bangladesh.

       Unless otherwise specified in this order, old, second-hand and recondition goods, factory reject add goods of job-lot or stock-lot of secondary or sub-standard quality.

       Maps, chart and geographical globes which indicate the territory of Bangladesh but do not do so in accordance with the maps published by the department of survey, Government of the people’s republic of Bangladesh.

       Horror comics, obscene and subversive literature including such pamphlets, posters, newspaper, periodicals, photographs, films, gramophone records, audio and video cassette tapes etc.

       Reconditioned office equipment, photocopier, type-writer machine, telex, phone, computer and fax.

       Unless or otherwise specified in this order, all kinds of waste.

       Goods hearing any words or inscriptions of a religious connotation the use or disposal of which may injure the religious feelings and beliefs of any class of the citizen of Bangladesh.

       Goods bearing any obscene picture, writing inscription or visible representation.

General Provisions for Import

Bangladesh import policy order 2006-2009 places control on the importation of some specific products. The import of a number of products is the sole reserve of nominated government trading organizations. The import regime consists of;

       A banned list: Unless otherwise specified the items banned for import in this list shall not be importable.

       A restricted list: Items which are importable on fulfillment of certain conditions specified in the list shall be importable on fulfillment of certain conditions.

       Freely importable items: Unless otherwise specified, any item, which does not appear either in the restricted list or which has been mentioned as importable subject to certain condition shall be freely importable.

 Import Procedure (Steps involved in dealing with L/C)

       Procurement of IRC from the concerned authority.

       Signing purchase contract with the seller

       Requesting the concerned bank importer’s bank/ issuing bank to open L/C on behalf of importer favoring the exporter/ seller/ beneficiary.

       The issuing bank open/ issue the L/C in accordance with the instruction/ request of the importer and request other bank (advising Bank) located in seller’s/ exporter to advise the L/C to the beneficiary. The issuing bank may also request the advising Bank to confirm the credit, if necessary.

       The Advising Bank advises/ inform the seller that the L/C has been issued.

       As soon as the exporter/ seller receive the L/C and is satisfied that he can meet the L/C terms and conditions; he is in a position to make shipment of the goods.

       After making shipment of goods in favour of the importer the exporter/ seller submit the document to the negotiating bank for negotiation.

       The negotiation Bank scrutinized the documents and if found ok negotiates the documents and sends the documents to the L/C issuing Bank.

       After receiving the documents the L/C issuing bank also examines the documents and if found ok makes payment to the negotiating bank.

       The L/C opening bank then requests the importer to receive the document on payments.

       The importer after paying all dues receives the documents from the L/C issuing bank and then releases the importer goods from the port authority.

Documents need to open a cash L/C

To open cash LC NBL wants some documents from importer. These are given below

             Valid IRC

             Valid Trade license

             TIN Certificate

             VAT Certificate

             Up to date income tax certificate

             CIB (Credit Information Bureau) report

             Pro-forma invoice

             Application (in importer pad)

             Credit report

             Fill up IMP form

             LC authorized form

             Insurance cover etc.

 Procedure to be followed by banks for acceptance/issuance of LCA Forms

(1)Acceptance of LCA Forms by the nominated banks:

1. a.      LCA Forms and other relevant papers shall be submitted by the   recognized industrial units to the private sector and registered commercial importers to their respective nominated bank for the purpose of import by opening L/C.
2. b.      While accepting LCA Forms from a private sector importer the nominated banks shall ensure that the concerned importer has a valid Import Registration Certificate (IRC). Unless a private sector importer specifically is exempted from IRC, LCA Forms shall not be accepted from him/her, or L/C shall not be opened in his/her favour without valid and legally renewed IRC.
3. c.       L/C for import of capital machinery and initial spares for setting up a new industrial unit may, however, is opened without any Import Registration Certificate (IRC) and without obtaining exemption certificate from the Chief Controller. No formal sanction shall be necessary from the sponsoring authority for such import against cash foreign exchange in respect of industrial units in the free sector.

(2) Compulsory recording of ITC Number

Bank shall not process any LCA Form or open L/C without properly recording the appropriate ITC Number on the LCA Form or L/C. Bangladesh Bank shall monitor the compliance by the banks of the above requirements.

(3) Registration of LCA Form and opening of L/C

 In case of import under cash foreign commodity aid, grant, loan and other sources for which registration with Bangladesh Bank is necessary, the nominated bank shall forward the L/C Authorization Form in quintuplicate to the nominated bank concerned and third and the fourth copies thereof to the nominated bank concerned and third and the fourth copies thereof to the concerned Import Control Authority with in fifteen days for record.

(4) LCA Forms under cash foreign exchange

 In case of import under cash foreign exchange L/C Authorization Forms shall be required to be registered with the Bangladesh Bank duty in those instances where prior approval from the Bangladesh Bank is required for buying foreign exchange.

(5) Transmission of the copy of L/C and copy of amendment if any for record of the Import Control Authority within fifteen days.               

 Various Method of Import Financing

There is various method of Import Financing which is regulated by legal framework and import policy. These are –

       Non-Funded Financing

       Post import (funded) Financing

       Non-Funded Financing:

Letter of Credit constitutes the most important Non-Funded Financing in import trade. There are a very common form of import financing because they provide a high degree of protection for both buyer and seller.

       Post import (funded) Financing:

        There are major three forms of funded post import financing offered by the banks.

These are given below-

1.                                            I.      Payment Against Documents (PAD)
2.                                         II.      Loan Against Imported Merchandise (LIM)
3.                                      III.      Loan Against Trust Receipt (LTR)

 I. Payment Against Documents (PAD):

Payment made by the bank against lodgment of shipping documents of goods imported through letter of credit falls under this types. When importer bank finds documents in order and if there is any discrepancies have which is acceptable by the importer, import bill have to give to foreign bank or exporter bank. Payments have to give within 5 working days. Importer bank inform to the importer about arrival of documents. Importer must give payments within 21 days otherwise importer have to give interest to the bank on that amount. PAD generally used when L/C is at sight.

When payment is given by National Bank Ltd, the following entry given

                                             PAD A/C ———– Dr

Nostro A/C   ——————-Cr

   But when party gives payment to National Bank, the following entry given

Party/Applicant A/C ———– Dr

                                           PAD A/C   ——————-Cr

II.Loan against Imported Merchandise (LIM):

This is funded credit facility allowed for retirement of shipping documents and release of goods imported through L/C taking effect control over the goods by pledge in godowns under bank’s lock and key. This is a temporary advance connected with import which is known as post-import finance and falls under the category “Commercial Lending”.

When the importer are unable to retire the import bills from their own sources and approach to issuing bank for clearance of goods under LIM account, the bank examine the proposal and evaluate the credit worthiness of the applicant considering all relevant aspects and may sanction LIM for a very short period on the basis banker-customer relationship.

III.Loan against Trust Receipt (LTR):

National Bank keeps security (such as- land, Building etc) against LTR. Party can repay LTR amount partly. National Bank maintains a different ledger account for LTR in which several information have such as date, particular, debit and credit amount, initial, product name, interest amount, loan A/C no, interest rate, mode of payment, expiry date and margin etc. LTR interest rate varies party to party. Generally National Bank uses 13% to 15% interest rate. LTR validity date may be 30 days/ 60 days/ 120 days which depends on sanction of NBL head office.

LTR interest rate = Days×Balance×Rate of interest / 360 days

 Instructions Issued by Bangladesh Bank for Opening and Operation of Letter of Credit for Import of Goods

       All Letter of Credits and similar undertakings covering imports into Bangladesh must be documentary Letter of Credits and should provide for payment to be made against full sets of onboard (shipped) transport documents (BL, AIB, TR etc.) showing dispatch of goods covered by Credit to a destination in Bangladesh;

       Authorized Dealer is allowed to open divisible, transferable Letter of Credits for import into Bangladesh under cash LCAF (Letter of Authorization Form);

       It is not permissible to open Letter of Credits in favor of beneficiaries in countries from which import into are banned by the component authority;

       The full description of goods to be imported along with unit price and quantity to be given in the Letter of Credit;

       Confidential report of the exporter to be obtained by the AD himself where the amount of Letter of Credit exceeds TK. 2,00,000 in case of import against proforma invoices issued direct by foreign supplier and TK. 5,00,000 against indent issued by local agents of the suppliers;

       Payments against discrepant documents may be made after the goods have been cleared from the customs on the basis of the locative LCAF;

       Advanced remittance against import may be made after getting prior permission from Bangladesh Bank where the goods are of specialized or capital nature.

Preparation of Proposal and submitting it to the Competent Authority for Obtaining Permission of Opening Letter Of Credit

Before opening Letter of Credit the applicant must take permission from the competent authority. Whether the authority has to be taken form the Branch or from the Head Office of NBL depends on the amount of Letter of Credit and the percentage of margin. A proposal for obtaining permission for opening Letter of Credit generally contains the following points:

       Name and address of the importer;

       Name and address of the Guarantor if any;

       Particular of Merchandise to be imported along with name of the item Harmonized System (H.S.) Code, country of origin, quantity, unit price and purpose of import.

       Particulars/ Terms of LC along with name and address of the beneficiary, tenor of payment, port of loading and discharge, shipment validity and expiry date etc.;

       Landed cost of the goods;

       Market price of the goods at Dhaka and Chittagong (if applicable);

       Name of the previous banker with outstanding liability (if any);

       Number of CD accounts and transaction performance through this account;

       Present liability position with the bank;

       Present liability position of allied/sister concerns with the bank

       Letter of Credit performance of the party during the year/previous year;

Documents Receipt and Scrutiny

After opening the Letter of Credit the next step would be to await shipment followed by negotiation of documents by a bank abroad. The beneficiary of the Letter of Credit (supplier), after effecting shipment of the goods as per Letter of Credit terms, prepare or collect necessary documents as required under the terms of Letter of Credit and presents the drafts to the negotiating bank along with the supporting documents for negotiation.

However, generally the following documents are asked to send:

       Bill of lading or Airway Bill or other evidence of shipment (e.g. Railway Receipt, Truck Receipt, Barge Receipt)

       Certificate of Origin;

       Commercial Invoice;

       Draft or bill of exchange;

       Inspection of Survey Certificate;

       Marine Insurance Policy;

       Packing List;

       Quality Control Certificate.

 Import Portfolio of National Bank Ltd

Import portfolio consists of the goods or items are being imported through the bank, total letter of credit opened by the bank, volume of goods etc. National Bank open a total number of 21,210 L/Cs amounting USD 1,130.96 million in import trade in 2008 with a growth of 25 percent over the previous year.

 Import state of affairs of Nbl

Loan against Trust (LTR):

  Table 15: LTR (interest)

From the data we can saw that, in the year of 2006 foreign exchange branch of NBL get interest income from LTR Tk 11, 35, 14,180 million which was higher than last two year.

In the year of 2007 LTR interest was Tk 9, 67, 24,946 million which was higher than the year 2008. The LTR interest position was lowest than previous two year.

PAD (Interest):

Table 16: PAD (Interest)

From the data we can saw that, in the year of 2006 foreign exchange branch of NBL get interest income from PAD Tk. 63, 76,776.71million which was higher than the year of 2007year. From the above data we can also saw that in the year of 2006 this branch earn from PAD interest was increase and it was decreased year of 2007 but this amount again increased in the year of 2008 which was Tk 1,22,32,000 million.                                                                

L/C commission (Cash):                                                                        

Table 17:L/C commission (Cash) 

From the data we can saw that, in the year of 2006 foreign exchange branch of NBL get interest income from L/C commission Tk. 75, 32,859 million which was lower than the last two year. Bit in the year of 2007 the amount of L/C commission was increased which was tk1, 10, 12,310 million. And in the year of 2008 this amount become grew mostly which was Tk. 1, 30, 08, 000 million.

CHAPTER-08

Export

 What is Export?

A good or service that is produced in one country and then sold to and consumed in another country. Because many companies are heavily dependent on exports for sales, any factors such as government policies or exchange rates that affect exports can have significant impact on corporate profits. A good produced in one country and sold to a customer in another country. Exports bring money into the producing country; for that reason, many economists believe that a nation’s proper balance of trade means more exports are sold than imports bought. Exports may be difficult to sell in some countries, as the importers may put up various protectionist measures such as import quotas and tariffs. Most governments seek to promote exports, while they have differing positions on imports.

Currently Bangladesh’s export trading depends on two products -75 percent Readymade Garments and 6 percent frozen food. Government of Bangladesh gives many facilities for the exporters. Such as-

•  Income tax exemption for export earning: Under the income tax law other than the owners of factories not registered in Bangladeshi, all exporters will get 50% exemptions in their income taxes.
•  Exemption in insurance premium.
•  Bond facilities for export oriented industries.
• Facilities for duty free import of capital machineries for export – oriented industries.
•  The export-oriented industries will get the advantage of importing 10 percent spare parts of their capital machineries without duty in every two years.
•  Providing alternative facilities to export-oriented local textiles and RMG other than duty-bond or duty-draw-back.
• Tax holiday.
• Duty-draw-back scheme.                                 

Documents used in Export

When a firm sells its goods abroad, it must arrange for each export shipment to be accompanied by various documents. Depending on the country to which the goods are being sent, these documents will vary. But for exporting we can divide those documents in two types.

1. Substantive Documents
2. Auxiliary Documents

a)      Substantive Document:

Substantive Documents are given below-

              i. Draft or bill of exchange:

Bill of Exchange is an instrument in writing containing an unconditional order or at a fixed determinable future time a certain sum of money only to, or to the order of a certain person or to the bearer of the instrument.

            ii. Commercial Invoice:

Commercial Invoice is the export firm’s invoice, addressed to the foreign importer describing the goods shipped and the total price that it must pay.  However, some countries require the commercial invoice to be prepared on their own forms. Such forms are called customs invoices.

          iii. Bill of lading or Airway Bill:

Bill of Lading is a document supplied to the exporter by the shipping company that is transporting the goods to their foreign destination, listing, item by item, the goods being shipped. It serves three basic purposes:

1. a.      To acknowledge receipt by the carrier of the exporter’s goods.
2. b.      To indicate the carrier’s contractual obligation to transport the goods to their destination in exchange for payment.
3. c.       To record transfer of title from the seller to the buyer when payment for the goods takes place. Airlines use what is called an Air Waybill.

b) Auxiliary Documents: Auxiliary Documents are given below-

                    i. Cargo manifest or packing list:

When quantities, weights or contents of the various packing cases in an export shipment vary, it is usual to prepare a separate list for each case indicating its contents, weight and measurements. It also often includes the outside dimension of each case and the total cubic content and total weight of the shipment.

Usually, cargo manifests or packing lists are not specifically required by the Customs authorities, from various importing countries. However, they serve as useful supplements to the commercial invoice that accompanies the export shipment.

                  ii. Certificate of Origin:

Certificate of Origin is a document, which indicates the country in which the goods were produced, is required whenever preferential duties are claimed. Sometime, consular legalization of the document is necessary. Also, certification of the document by a Chamber of Commerce is required.

                iii. Quality control certificate:

While exporting products for which quality control certificate is obligatory, the exporter will have to submit, to the Customs Authorities, a quality control certificate issued by the appropriate authority.

                iv. Consular Invoice:

Some country required consular invoice. Countries that require a consular invoice also require a commercial invoice as additional proof of the details of the export shipment. Countries that do not require a consular invoice, uses the commercial invoice as the document upon which the import duty is based.

                  v. Inspection Certificate:

Some purchasers and countries may require a certificate of inspection attesting to the specifications of the goods shipped, usually performed by a third party. Inspection certificates are often obtained from independent testing organizations.

                vi. Certificate of free sale:

This certificate required for pharmaceuticals and certain chemicals entering a number of countries.

              vii. Export Declaration Forms:

It is usually necessary for the exporter wishing to ship goods abroad, to fill out a form called an Export Declaration. This form required by the government whenever the value of the shipment exceeds a certain minimum amount or whenever a duty drawback is claimed; it is available at local Customs offices.

The document is also used for statistical purposes so that government authorities know exactly what has been exported from the country in each month and year and to which country. The information required include a description of the goods, their quantity, value and destination of the goods and whether the goods originated in the exporting country or are the goods of foreign origin being re-exported.

Registration for the Exporter

In the export policy of Bangladesh any one can not export goods in abroad. To export goods an exporter needs a valid Export Registration Certificate from the Chief Controller of Import and Export (CCI&E). Exporters find an Export Registration Certificate (ERC) number which is incorporate on Export form and papers connected for obtaining Export Registration Certificate. A Bangladeshi exporter has to apply to the controller or joint controller or Deputy Controller or Assistant Controller of Import and Export to get an ERC. The ERC have to renew every year. An exporter can do this registration from Dhaka, Chittagong, Sylhet, Comilla, Barishal, Borga, Rangpur, Dinajpur and from Mymensingh. The following documents are required for ERC-

1. National ID card
2. memorandum and Article of Association and Certificate of Incorporation in case of limited company
3. Trade license
4. bank Certificate
5. Assets certificate
6. Income Tax certificate etc.

The Export Registration Certificate has to renew every year. The renewal fee given below-

                        Export less than $5000000         TK.3000

                        Export more than $5000000       TK.5000

Processing of export order (export cycle)

1.  Setting up the deal:

First an exporter and importer have to establish sales contract, by either being in possession of an international purchase order or a documentary credit stating exporter as the beneficiary. Now exporter in a position to process the order.

1. Shipping the goods:

Once the deal has been set up, the following steps take place:

      Read the purchase order/documentary credit very carefully and take note of the requirements of the buyer. If there are any pre-shipment actions that must occur, these activities must take place before book the freight and load the container. Pre-shipment activities could include pre-shipment inspections, health inspections or product analyses, all of which must be carried out before the goods have been packed for shipping.

      A declaration is a commitment to the Bangladesh Bank that funds will be brought into the country in exchange for goods.

      Now get ready to pack and label the goods. At this point, exporter can contact freight forwarder to make a booking on the next available carrier..

      Freight forwarder will deliver the goods to the carrier and obtain a transport document as proof of receipt. He is now in a position to arrange for customs clearance, which will require the submission of a customs bill of entry and a transport document (in the case of air, road and rail exports). Then hand over the transport and insurance documents to Exporter.

      Now exporter assemble all  export documentation such as the commercial invoice, packing list, transport document, insurance document, as well as the verification documents issued by third parties.

3.  Getting Paid:

Once all documents are ready and completed in accordance with the documentary credit, exporter now in a position to present the documents for payment. In the case of documentary credits submit the documents to the negotiating bank, which will check the documents, ensuring that they are in accordance with the L/C, and make payment to Exporter. Of course, if selling on an acceptance L/C, the bank will accept drafts, and give payment at maturity of the draft.

4.  Follow-up and service:

The most important part is export market development process has now arrived. It is sometimes more difficult to secure a follow-up order than it is to achieve the first order. It is vital, at this point, to get feedback from the buyer as to whether exporter has met buyer needs. It might be necessary, to plan a follow-up visit to secure exporter position with the buyer and check to see whether his needs have changed.

Making sales contract and receiving l/C

 To export goods an exporter and importer have to do a sale contract. They contract each other and do a sales contract which may be written or oral contract. In this contract given details description of exportable goods, quantity, price, shipment, insurance, inspection of goods etc. After getting sales contract exporter want letter of credit from importer. All activities related to letter of credit are done through Bank. In letter of credit clear stating about terms and condition of export and method of payment. The following main point to be looked into for receiving or collecting export proceeds –

       The terms of the L/C in conformity with those of the contract.

       The L/C is an irrevocable one, preferably confirmed by the advising bank.

       The L/C allows sufficient time for shipment and negotiation.

Terms and condition of the mode of payment should be stated clearly in case of other mode of payment –

                                1. Cash in advance

                                2. Open account

                                3. Collection basis (Documentary or clean)

Export  Finance

Pre Shipment Finance in Export Trade

Pre Shipment Finance is issued by a financial institution when the seller wants the payment of the goods before shipment. The main objectives behind pre shipment finance or pre export finance are to enable exporter to:

      Procure raw materials.

      Carry out manufacturing process.

      Provide a secure warehouse for goods and raw materials.

      Process and pack the goods.

      Ship the goods to the buyers.

      Meet other financial cost of the business.

Types of Pre Shipment Finance

    1. Packing Credit

          2. Advance against Cheques/Draft etc. representing Advance Payments.

          3. Back to back L/C

1. Packing Credit:

Packing Credit is any loan or advance granted or any other credit provided by a bank to an exporter for financing the purchase, processing, manufacturing or packing of goods prior to shipment, on the basis of letter of credit opened in his favor or in favor of some other person, by an overseas buyer or a confirmed and irrevocable order for the export of goods from the producing country or any other evidence of an order for export from that country having been placed on the exporter or some other person, unless lodgment of export orders or letter of credit with the bank has been waived.

2. Advance against Cheque/Drafts received as advance payment:

Where exporters receive direct payments from abroad by means of cheques/drafts etc. the bank may grant export credit at confessional rate to the exporters of goods track record, till the time of realization of the proceeds of the cheques or draft etc. The Banks however, must satisfy themselves that the proceeds are against an export order.

3. Back to back L/C:

Back-to-back L/C means one credit backs another credit. It is new credit in favor of another beneficiary. Sometimes beneficiary/seller of a credit himself is unable to supply goods specified in the L/C and required to purchase from another supplier by opening second credit.

Besides, the normal formalities and requirements (for L/C opening) the following formalities and documents are also required for opening back-to-back L/C:

1)    Master L/C

2)    Valid bonded were house license

3)    Quota allocation for quota items

4)    ERC in addition to IRC

5)    Indemnity/undertaking

6)    No objection from previous banker (if any)

7)    Factory inspection certificate

8)    BGMEA Membership

Vouchers and accounting treatments are the same normal L/C opening except margin. In this case, no margin is taken by the bank.  After lodgment, maturity date of the import bill is intimated to foreign bank as per L/C terms. The documents are delivered to the order of opener duty indorsed for clearance of goods from custom authority. Goods are cleaned through approved clearing and forwarding agent of the bank.

Establishing Back to Back Credits:
Below is given how the whole process works.

1)      Issue of original L/C:
In documentary credit operations buyer (i.e. the applicant) arranges to establish the (original) credit through a bank (the issuing bank or the opener) in favour of the seller (the beneficiary). The buyer and the seller are the primary parties to the contract for that transaction. The issue of a credit is advised through the bank called the advising bank usually located in the city of the beneficiary. The beneficiary receives the original credit through the advising bank and/or his own bank.

2)  Issue of Back-to-Back L/C:
A back-to-back credit is established when the seller-cum-original-beneficiary, after receiving the notification about the issue of the original credit, arranges for a second, stand-alone credit to be established in favour of the (actual) supplier or manufacturer of goods or raw materials. Accordingly, and usually based on the original credit, the advising/confirming bank issues its own letter of credit generally with terms exact or similar to the first i.e. the original L/C .

3) No formal connection between the two L/Cs:
Please be careful to note that there is no legal or formal connection between the original’ LC and the ‘Back-to-Back’ Credit. Each credit stands on its own merit. The terms and conditions of the two are not the same because one has to make sure that the documents coming forward under the second credit come forward to bank  in such a form and in such a time that they can be presented under the first credit within the expiry date .

4) Back-to-Back LCs can be opened as a chain:
If there are several middlemen (or any manufacturers who must again procure input materials from other manufacturers), each may use the credit in his favour as security for the credit that he has to open in favour of his supplier in the chain of contracts, until first buyer in the chain has effectively opened a credit in favour of original supplier.

 Post Shipment Finance

Post shipment finance is a kind of loan provided by a financial institution to an exporter or seller against a shipment that has already been made. This type of export finance is granted from the date of extending the credit after shipment of the goods to the realization date of the exporter proceeds. Exporters don’t wait for the importer to deposit the funds.

BASIC FEATURES

The features of post-shipment finance are:

       Post-shipment finance is meant to finance export sales receivable after the date of shipment of goods to the date of realization of exports proceeds. In cases of deemed exports, it is extended to finance receivable against supplies made to designated agencies.

       A post-shipment finance is provided against evidence of shipment of goods or supplies made to the importer or seller or any other designated agency.

       Post -shipment finance can be secured or unsecured. Since the finance is extended against evidence of export shipment and bank obtains the documents of title of goods, the finance is normally self liquidating.

       As a quantum of finance, post-shipment finance can be extended up to 100% of the invoice value of goods. In special cases, where the domestic value of the goods increases the value of the exporter order, finance for a price difference can also be extended and the price difference is covered by the government.

       Post-shipment finance can be of short terms or long term, depending on the payment terms offered by the exporter to the overseas importer.

In case of cash exports, the maximum period allowed for realization of exports proceeds is six months from the date of shipment. Concessive rate of interest is available for a highest period of 180 days, opening from the date of surrender of documents. Usually, the documents need to be submitted within 21days from the date of shipment.

Financing for Various Types of Export Buyer’s Credit

Post-shipment finance can be provided for three types of export;

Physical exports: Finance is provided to the actual exporter or to the exporter in whose name the trade documents are transferred.

Deemed export: Finance is provided to the supplier of the goods which are supplied to the designated agencies.

Capital goods and project exports: Finance is sometimes extended in the name of overseas buyer. The disbursal of money is directly made to the domestic exporter.

 Types of Post Shipment Finance

The post shipment finance can be classified as:

       Export Bills purchased/discounted.

       Export Bills negotiated

       Advance against export bills sent on collection basis.

       Advance against export on consignment basis

       Advance against undrawn balance on exports

       Advance against claims of Duty Drawback.

1. Export Bills Purchased/ Discounted. (DP & DA Bills):

Export bills (Non L/C Bills) is used in terms of sale contract/ order may be discounted or purchased by the banks. It is used in indisputable international trade transactions and the proper limit has to be sanctioned to the exporter for purchase of export bill facility.

2. Export Bills Negotiated (Bill under L/C):

The risk of payment is less under the LC, as the issuing bank makes sure the payment. The risk is further reduced, if a bank guarantees the payments by confirming the LC. Because of the inborn security available in this method, banks often become ready to extend the finance against bills under LC.

However, this arises two major risk factors for the banks:

1. The risk of nonperformance by the exporter, when he is unable to meet his terms and conditions. In this case, the issuing banks do not honor the letter of credit.
2.  The bank also faces the documentary risk where the issuing bank refuses to honors its commitment. So, it is important for the negotiating bank, and the lending bank to properly check all the necessary documents before submission.

3. Advance against Export Bills Sent on Collection Basis:

Bills can only be sent on collection basis, if the bills drawn under LC have some discrepancies. Sometimes exporter requests the bill to be sent on the collection basis, anticipating the strengthening of foreign currency. Banks may allow advance against these collection bills to an exporter with a confessional rates of interest depending upon the transit period in case of DP Bills.

4. Advance against Export on Consignments Basis:

Bank may choose to finance when the goods are exported on consignment basis at the risk of the exporter for sale and eventual payment of sale proceeds to him by the consignee.
However, in this case bank instructs the overseas bank to deliver the document only against trust receipt /undertaking to deliver the sale proceeds by specified date, which should be within the prescribed date.

5. Advance against Undrawn Balance:

 It is a very common practice in export to leave small part undrawn for payment after adjustment due to difference in rates, weight, quality etc. Banks do finance against the undrawn balance, if undrawn balance is in conformity with the normal level of balance left undrawn in the particular line of export, subject to a maximum of 10 percent of the export value.

6. Advance against Claims of Duty Drawback:

Duty Drawback is a type of discount given to the exporter in his own country. This discount is given only, if the in-house cost of production is higher in relation to international price. This type of financial support helps the exporter to fight successfully in the international markets. In such a situation, banks grants advances to exporters at lower rate of interest for a maximum period of 90 days. These are granted only if other types of export finance are also extended to the exporter by the same bank.

After the shipment, the exporters lodge their claims, supported by the relevant documents to the relevant government authorities. These claims are processed and eligible amount is disbursed after making sure that the bank is authorized to receive the claim amount directly from the concerned government authorities.

In our country Foreign Documentary Bill Purchase (FDBC) is frequently used for post shipment credit.

Foreign Documentary Bill Purchase (FDBC)

Bank gives the credit facilities against the export documents. National Bank Limited also gives the credit facilities to their clients against the export documents. Clients submit the bill of export to bank for collection and payment of the back to back letter of credit. After that bank purchases the bill and collects the money from the exporter.

NBL subtracts the amount of bill from back to back and gives the rest amount to the client in cash or transfer his account or pay by the pay order. For this purpose, NBL maintains a separate register called Foreign Documentary Bill Purchase (FDBC) register. This register contains the following information-

       Date

       Reference number of FDBC

       Name of the drawer

       Name of the collecting bank

       Conversion rate

       Bill amount both in figure and in taka

       EXP form number

       Export L/C Number

Certification of Export Forms by Authorized Dealers

Before the export forms are lodged by the exporters with the Customs/Postal authorities all the copies are required to be certified as under by the Authorized Dealers.

(i)         Certified that the above exporter(s) is / are known to authorized dealer, that he / they is / are bonafide businessman / businessmen and that he / they has / have made arrangements with us for the realization of the export proceeds of the goods declared on this form within the time limit and that we are satisfied with the said arrangements.

(ii)        AD undertake to ensure that export proceeds against shipment on firm contract shall be received by AD within the period prescribed by the Bangladesh Bank.

(iii)       AD undertake that in the event of non-realization of export proceeds against shipment on consignment sale within the stipulated period, AD shall obtain from the exporter(s) and furnish to the Bangladesh Bank a full explanation as to the circumstances resulting in non-realization.

Authorized Dealers shall not certify any export form unless they have satisfied themselves with regard to the following:

  (i)       Arrangements have been made for realization of export proceeds of the goods covered by the relative export forms.

 (ii)       Arrangements have been made for receipt of documents of title to goods like Railway Receipt, Bill of Lading, Airway Bill and Truck Receipt.

(iii)        Genuineness of the charter party where shipment is to be made against a charter party Bill of Lading has been verified.

(iv)   The export form has been signed by the exporter or his authorized agent. In case the form is signed by the agent of the exporter, it should be ensured by the Authorized Dealers that he holds a valid legal power of attorney from the exporter & the terms of the power of attorney are such that the exporter as well as the attorney can be held responsible severally and jointly.

(v)        In the case of re-export of imported goods, export license issued by the Office of the Chief Controller of Imports & Exports is produced to the Authorized Dealer.

Preparing out and Delivery of Shipping Documents

All carriers whether common or private (railway, steamship, and motor trucking or airline companies) and their agents have been directed by the Bangladesh Bank as under:

(i)                 In respect of export of goods from Bangladesh to foreign countries by land route or by sea, the Railway Receipts, Bills of Lading, Truck Receipts or any other documents of title to Cargo should be drawn only to the order of an Authorized Dealer designated for the purpose by the exporter. This restriction will not apply if the exporter produces a certificate to the carriers from the Authorized Dealer concerned in the prescribed form.

(ii)               The certificate will be issued by the Authorized Dealers only if the shipment is being made against an advance payment or against an irrevocable Letter of Credit which calls for drawing of documents of title to cargo to the order of the opening bank, or the importer, or the exporter or to order and blank endorsed.

(iii)       In respect of export of goods to foreign countries by air, the airway bills and any other documents of title to cargo should be drawn to the order of a bank in the country of import nominated by the Authorized Dealer designated for this purpose by the exporter.

The above directions do not apply to the following cases:

(a)        Bonafide trade samples provided the F.O.B. value of each consignment supplied free of charge does not exceed U.S.$1000/-.

(b)        Personal effects, whether accompanied or unaccompanied, of travelers.

(c)        Ship stores and transshipment cargo.

(d)       Exports covered by exemption certificates issued by the Bangladesh Bank.

(e)        Exports of fresh fish, vegetables, fruits, poultry and other goods of perishable nature.

 Endorsement of Shipping Documents by Authorized Dealers

The Authorized Dealers to whose order the relative railway receipts, bills of lading etc., are drawn shall endorse the same to the order of their foreign correspondent but in no case shall they make any blank endorsement thereon or endorse them to the order of the consignor unless they have obtained specific or general approval of the Bangladesh Bank. However, in the case of exports through third country intermediary i.e. under merchanting arrangements, it will be in order for Authorized Dealers to make blank endorsement where advance payment has been received or where documents are negotiated under letters of credit which call for such blank endorsement.

Submitting of EXP Form to the Authorized Dealers

All exporters must be declared on the EXP Form. On EXP Form statutory declaration is furnished by exporter before shipping goods to countries outside Bangladesh and certificate on it is given by their banker (Authorized Dealer). The Foreign Exchange Regulation Act in force prohibits export of goods outside Bangladesh unless a declaration is furnished on EXP Form that foreign exchange representing the full export value of the goods has been or will be disposed of in a manner and within a period specified by Bangladesh Bank. The period prescribed by Bangladesh Bank is four months for receiving full foreign exchange proceed of export by the exporter.

Check list for handling EXP form:

On receipt of EXP Form the same shall have to be scrutinized to ensure the following-

 All columns of EXP Form have been properly filled in.

 The exporter is registered with CCI&E and the export registration number has been quoted on the EXP Form correctly.

 A Photostat copy of valid ERC is obtained for branch’s record duly verified with the original.

 The export form has been duly signed by the exporter or his duly authorized agent as recorded with us.

 Arrangement has been made with the branch for payment of customs duty on export where applicable.

 Goods intended for export are permissible for export provided the destination the goods are not in Israel or South Africa.

 The exporter must submit all the exp documents to the authorized dealer. There are four types of EXP documents. NBL only works with the three copies.

Four types of EXP documents are –

1. Original copy–

The Customs authorities will detach the original copy and after filling in the portion relating to them and affixing their seal and signature thereon forward it to the Bangladesh Bank.

2. Duplicate copy–

 Duplicate copy submits to Bangladesh Bank with 14 days of shipment through bank with invoice.

3. Triplicate copy–

 Triplicate copy submit to Bangladesh Bank after realized the export proceeds

4. Quadruplicate copy–

Quadruplicate copy keeps by NBL for their own record.

Retention Quota for Exporter

Retention Quota is a system where authorized dealer retained a certain percentages of the total exported or bill amount for meeting up the emergency need of the exporter. NBL also keeps retention Quota to fill up the emergency need of the exporter. This retention quota may be maintained by FC account with the concerned AD in US Dollar, pound sterling, Deutschemark or Japanese Yen up to the realization of the export proceeds.

There are many purposes to keep retention quota. Such as –

       Exporters visit abroad

       Import raw material

       Participate in export fairs and seminars

       Establishment and maintenance of offices abroad

       Purchase of machineries and spares etc.

The percentages keep for retention quota it’s depend on policy of different Bank. Generally NBL keeps retention quota 10% of total export bills. But always NBL does not keep 10% for retention quota rather what percentages keep for retention quota it’s also depend on different exporter. This retention quota will be more than 10% or less than 10%. The exporters who have loan or more packing credit they find less amount of retention quota of total export payment. But the exporters who have no loan or less packing credit they find more amount of retention quota of total export payment. A Bangladeshi exporter can transfer this amount but he or she cannot withdraw cash from Bangladesh. This transfer can do by telephone telegraph or by demand draft. Deposit in Foreign currency will be debited when transfer occurred.

 Shipment of goods under FOB and CIF terms

One of the fundamental decisions of international trade is how to structure the terms of sale between buyers and sellers. In the case of imports, foreign importer can either allow their overseas suppliers or exporter to handle the shipping and insurance of goods or they can take these responsibilities on themselves. There are benefits and downsides to each, so it important to understand how these factors may affect in business.

 Shipment of goods on CIF terms

Cost, Insurance and Freight (CIF):

An international trade term of sale in which, for the quoted price, the seller/exporter/manufacturer clears the goods past the ship’s rail at the port of shipment (not destination). The seller is also responsible for paying for the costs associated with transport of the goods to the named port at destination. However, once the goods pass the ship’s rail at the port of shipment, the buyer assumes responsibility for risk of loss or damage as well as any additional transport costs. The seller or exporter is also responsible for procuring and paying for marine insurance in the buyer’s name for the shipment. The Cost and Freight term is used only for ocean or inland waterway transport.                                                                                                                 

►Why ship CIF?

Generally speaking, importers prefer CIF terms when either they’re new to international trade or they have relatively little freight volume. These importers often find CIF simpler in that their suppliers or exporter are responsible for arranging freight and insurance details. Under these terms the importer relinquishes control of choosing freight carriers, routing and other shipping specifics. For these companies, convenience outweighs the need for enhanced shipment control and associated freight savings.

Shipment of goods on FOB terms

Free On Board (FOB):

An international trade term of sale in which, for the quoted price, the seller/exporter/manufacturer clears the goods for export and is responsible for the costs and risks of delivering the goods past the ship’s rail at the named port of shipment. The Free On Board term is used only for ocean or inland waterway transport.

► Why ship FOB?

Buying Free On Board has two major benefits over CIF, more competitive freight rates and enhanced shipment control. When shipping CIF, companies must be careful that they’re shipping rates are competitive since overseas suppliers are inclined to mark up their freight cost for the extra service provided in arranging shipments. Importers quickly learn that they can obtain very competitive shipping rates even with small to medium freight volumes. While cost is always important, there is another major reason for buying FOB.

Export Proceed Realization

For proceed realized first NBL collect advices from their head office. After getting advice from head office, to the effect that the proceed is credited to Nostro A/C, the fund is realized from H.O. A/C and all the outstanding liabilities including PC, BB LC, and FDBP etc are adjusted. If the maturity date of the BB LC is on a later period the amount is kept in foreign Bill Proceeds Awaiting foe Remittance A/C.

Contingency Fund should also be build up and party may keep some of the proceeds to retention quota A/C. Then the rest amount is credited to exporters A/C and the file is closed.

NBL maintains a different register khata for this purpose. The calculation of foreign bills given below-

Bill Value – Realized Value- Back to Back L/C amount – Other charges                    (Courier bill – Tax – Buying house commission – House building loan)

Bill Value – The total amount if export is called Bill value.

Realized Value – After deduction of all foreign charges.

Back to Back L/C amount – The amount which exporter already used for bring raw materials from abroad.

Courier bill – To send documents NBL uses DHL courier.

Tax – A certain percentage of tax deduct of the bill value. NBL cut .25% for tax.

Tax = (Bill Value * .25%)

Buying house commission – Sometimes need to gives commission to the buying house. Buying house commission varies party to party. More or less it varies 2% to 8%.

Buying house commission = (Realized value*2.5%)

House building loan – Some exporter may have House building loan. So when export bill come NBL deduct this loan amount from that bills. House building loan also varies party to party. Suppose House building loan is 5%.

House building loan = (Bill Value*5%)

Export Development Fund

Export Development Fund (EDF) is a source of foreign currency loan from Bangladesh Bank, initiated originally under co-sponsorship of International Development Association and the government of the Bangladesh. This fund enables an Authorized Dealer (AD) to issue sight import letter of credit against lien of export letter of credit giving away the need to open usance letter of credit. The Authorized Dealer uses its own fund to pay import bills and claims re-financing under EDF scheme from Bangladesh Bank. Bangladesh Bank lands to AD at prevailing London Inter Bank Offered Rate (LIBOR) plus 1% as instructed by Bangladesh Bank from time to time. The AD is entitled to a spread of 3.5% on financing to new non-traditional exporter and 2.50% on all other financing.

 Overdue Export Bills

Overdue Export Bill will be reviewed by the Manager, export periodically to protect the interest of bank through appropriate action with due reference to the track of the goods dispatched / shipped. Insurance and guidelines for foreign exchange transactions and other relevant instructions etc.

All export bills, overdue for 21 days in case of sight bill or after expiration, must be monitored closely for realization. Necessary follow up has to be made with the DC issuing bank or collecting bank/exporter for earliest realization of export proceeds. Under no circumstances, export bill should be overdue for more than four months.

 Export Portfolio of National Bank Ltd

The National Bank Ltd has been nursing the export finance with a special attention since its inception. In 2008 it handled 19,234 export documents valuing USD 531.03 million with a growth of 14 percent over the last year. Export portfolio consists of the items exported, the value of export bills that National Bank gets from issuing banks from foreign countries as well as Bangladesh. Export finances were made mainly to readymade garments, knitwear, frozen food and fish, tanned leather, handicraft, tea etc.

 Packing Credit:

Table 18: Packing credit Analysis

From the data we can saw that, in the year of 2006 foreign exchange branch of NBL give packing credit tk.79,83,486 million which was higher than 2007. In the year of 2007 this amount was tk.76, 26,352 million. In the year of 2008 this amount was grew up from 76, 26,352 to 87, and 16,000.

 Secured over draft (SOD):

Table 19: Secured over draft (SOD)Analysis

From the data we can saw that, in the year of 2006 foreign exchange branch get secured over draft Tk 1, 02, 95,691.60 million which was higher than the year of 2007. Year 2007 secured over draft go down than previous year but in the year of 2008 the amount of SOD recover and may higher than previous two year which was tk.1,03,01,000 million.       

]8.17.3 BTB L/C (Commission)

Table 20: BTB L/C (Commission Analysis

From the data we can saw that, in the year of 2006 NBL get commission for back- to- back L/C Tk 1,25,4411.00 million which was lower than last two year. But in the year of 2007 this amount was higher than previous and last year which was tk.1, 47, 87,657.00 million. In the year of 2008 this rate slightly decline which was tk.1, 34, 49,000 million.

Local documentary bill purchase (LDBP)

Table 21: LDBP Analysis            

From the data we can saw that, in the year of 2006 NBL get Tk 64, 15,500 million which was lower than last two year. This amount growing up year to year and it was up most the year of 2008 which was tk.1, 11, 39,000.

CHAPTER-09

 Foreign Remittance of Nbl

Meaning of Remittance

The word remittance originates from the word “remit” which means to transit money/fund. In banking terminology, the word “remittance” means transfer of fund from one place to another and when money is transferred from one country to another then it is called “Foreign Remittance”.

National bank limited is an authorized dealer to deal in foreign exchange business. As an authorized dealer, a bank must provide some services to the client regarding foreign exchange and this branch provides these services through foreign remittance department.

The basic function of this department is outward and inward remittance of foreign exchange from one country to another country. In the process of providing this remittance service, it sells and buys foreign currency. The conversion of one currency into another takes place at an agreed rate of exchange, which the banker quotes, one for buying and another for selling. In such transactions the foreign currencies are like any other commodities offered for sales and purchase.

Remittance procedures of foreign currency

There are two types of remittance:

1. Inward remittance
2. Outward remittance

INWARD FOREIGN REMITTANCE

The remittance of freely convertible foreign currencies which National Bank Limited Foreign Exchange branch is receiving from abroad against which the authorized dealers making payment in local currency to the beneficiaries may be termed as foreign inward remittance.

Mode of inward remittances

The term inward remittances includes not only remittances by TT., MT., Drafts etc. but also purchases of bills, purchases of drafts under travelers letter of credit and purchases of travelers cheques. Foreign currency notes against which payment is made to the beneficiary also a part of inward remittances. Thus the following are the Mode of inward remittances:

• TT: Telegraphic Transfer.
• MT.: Mail Transfer.
• FD: Foreign Drafts.
• TC: Travelers Cheque.
• Foreign currency notes.

Purpose of inward remittance

The purpose of remittance is of various reasons. Such as:

• For family maintenance.
• Realization of exports proceeds.
• Gift.
• Donation.
• Export brokers commission.

About” Form-C”

The authorized dealer should obtain ‘Form – C’ from the beneficiary to know the purpose of the remittances in all cases and they are to submit the “Form – C’ to Bangladesh Bank along with the monthly returns where the proceeds of the remittances is TK. 5000/= & above. ‘Form – C’ is a prescribed declaration form & this ‘Form -C’ is to be filled up and signed by the beneficiary himself.

Payment procedure of FD, MT, & PO Drawn on NBL

The above investments that are drawn on NBL Foreign Exchange Branch may be paid on the spot before making payment the following procedures to be observed by the authorized dealer:

• To obtain Form-C.
• To verify the signatures of the instrument.
• To convert the foreign currency into Bangladesh TK. with O.D. (On Demand Transfer)
• Buying rate prevailing on the date.
• To make entry in TTs, drafts & Mails received register.
• To prepare FET schedule and to send first five copies of FET along with vouchers to international division, Head Office, Dhaka.

 Payment procedure of T.T.:                                

• To verify the ‘test number’.
• To inform the beneficiary for submission of “Form – C”.
• To confirm from issuing bank or reimbursing bank.
• To covert of foreign currency into Bangladesh currency with T.T.
• To make entry in T.T.s, drafts, M.T.s, received registration.
• To prepare vouchers.
• To prepare FET schedule.

Purchase of Drafts & Cheques:

Authorized dealer may purchase drafts & cheques which are not drawing on NBL at the request of the beneficiary. Procedures of purchase are as below:

• To obtain an application or undertaking from the beneficiary with ‘Form– C’
• To verify the signature of the drafts (if possible).
• To make entry in the register for drafts & T.C. purchased.
• To convert foreign currency into Bangladesh currency.
• To prepare voucher.
• To prepare FET schedule.
• To send the instrument for collection.

Collection procedure of drafts & cheques:

• To make entry in foreign Bills Collection Register.
• To prepare forwarding schedule in quadruplicate.
• To prepare vouchers on realization of proceeds i.e. on receipt of advice from the collecting bank.

Payment of traveler’s cheque (TC):

• To checkup the custom declaration (if any).
• To consult with purchase agreement (if any).
• To obtain signature on TC and to verify the same with the previous signature of the beneficiary of the TC.
• To make entry in register for TC & drafts purchased.
• To convert foreign currency into Bangladesh currency.
• To prepare FET schedule.
• To send the TC for collection.
• To prepare the vouchers.

Payment of foreign currency notes:

• To check the custom declaration (if any).
• To made entry in (kateha) raw register.
• To convert foreign currency into Bangladesh currency.
• To prepare vouchers.
• No FET schedule is required to be prepared & sent to head office because in this case there is no transaction with head office.

Cancellation of inward remittance:

In the event of any inward remittance which has already been reported to the Bangladesh Bank being subsequently cancelled, either in full or in part because of non-availability of beneficiary. Authorized dealers must report the cancellation of the inward remittance as an outward remittance of “Form-T/M”. Required documents are:

• The date of return in which the inward remittance was reported.
• The name & address of the beneficiary.
• The amount of the purchase as effected.
• Reasons for cancellation.

Reporting to Bangladesh Bank:

• On the last working day of each month the transaction during the month to be reported to Bangladesh Bank through the following schedule:
• Schedule -J-l / 0-3 for TK. 5000 & above.
• Inward remittance voucher-1/04 for below TK. 5000.

 FOREIGN OUTWARD REMITTANCES

The remittance in foreign currency which is being made from our country to abroad, is known as foreign outward remittance.

Mode of outward remittance:

Thus the following are the Mode of outward remittances:

• TT. Telegraphic Transfer.
• MT: Mail Transfer.
• FD:  Foreign Drafts.
• PO: Payment Order
• TC: Travelers Cheque.
• Foreign currency notes.

Approval of Bangladesh Bank:

Bangladesh Bank provides permission or approval for outward remittances to the applicants who are to lodge an application for the purpose on the following prescribed forms with an authorized dealer who forwarded the same to Bangladesh Bank for approval:

• The IMP form (cover remittances for imports).
• Form T/M (Traveling & Miscellaneous).

Issuance procedure of FD, MT. & TT.:

• To prepare the instrument.
• To make entry in DD, MT, TT issued register.
• To prepare draft advice in duplicate one for drawee bank & one for reimbursing bank.
• To make entry in draft advice dispatched register.
• To send reimbursement authority in case of MT & TT.
• To prepare FET schedule.

Issuance procedures of traveler cheque:

• To verify the approved T / M form or Bangladesh Bank permit.
• To issue TC by obtaining signature of the purchaser on the TC.
• To endorse in the passport.
• To prepare FET schedule.
• To make entry in the travelers cheque issue register.
• The TC issuing slip of the issued TC to be sent to that bank (whose TC issued)
• With reimbursement instruction.

Issuance procedure of foreign currency notes:

• To verify the approved T.M form or Bangladesh Bank permit.
• To issue foreign currency notes by endorsing in the passport.
• Voucher preparing with accounting treatment:

                                Party’s account…………………………………..Dr.

                                          Foreign Currency Notes on Hand A/C……………… Cr.

 FACILITIES FOR WAGES EARNERS

• Bangladeshi national/Bangladesh origin dual citizen working abroad may open Foreign Currency account (F.C. A/C ) in US Dollar and Pound Sterling without initial deposit.
• Nominee can operate the account
• Interest is paid on F.C. A/C
• Balance in F.C. A/C can be utilized for import of goods
• Balance available in the F.C. account may wholly or partially be sent abroad.
• Foreign currency brought in by Wage Earners can be deposited in the F.C. A/C
• Wage earners Development Bond in Taka can be purchased from the balance of F.C. A/C
• Non-Resident Foreign Currency A/C (NFCD A/C) can also be opened by Wage Earners.
• F.C. A/C & NFCD A/C may be maintained as long as the account holder desires.

      These accounts can be opened from abroad on submission of required papers duly attested by our Embassy/ Branch/ Representative office abroad.

CHAPTER-10

 FINDINGS AND ANALYSIS

 Major findings

Banking sector being a vital sector of Bangladesh continues to a great deal in the economy of Bangladesh. Lot of new commercial bank has been established in last few years and these banks have made the banking sector very competitive. So now, banks have to organize their operation and do their business according to the need of the market. Banking sectors no more depends on a traditional method of banking. In this competitive world, this sector has trenched its wings wide enough to cover any kind of financial services anywhere in this world. The major task for banks, to survive in this competitive environment is by managing its assets and liabilities in an efficient way. The National Bank Limited is one of the leading banks in the private sector, and it gives a vast service to its customer. It has already shown huge potentials in its initial 26 years of operation. I observed the foreign exchange department, general banking area and also loans and advance department very carefully. With a keen attention and observation, the study has been tried to complete. The following are some extract of the major findings:-

 For the effectiveness of the foreign exchange department, NBL has divided the whole department into three major parts, which are Export, Import, and Remittance.

The monitoring system of the foreign exchange department of NBL is excellent. The chain of command is strictly maintained here. The executives now and then visit the department, which keeps all the officers alert about their duty.

 It may be strictly observed that loan procedure is not influenced by the various factors.

There are some formalities and procedures for loan sanction and supervision, which makes the loan granting procedure so lengthy, costly and time consuming, unfortunately proper supervision, have never been exercised, otherwise loan reviver would have more satisfactory.

Some modifications on the overall loan sanction procedure and improvement of skill of officials related to loan recovery of National Bank Limited is needed.

Sometimes officers show negligence to the client, which has a negative impact on its service.

There must be established a proper relationship between the clients and the officer

 While selecting the customer both in foreign exchange and loan department, 5’C need to be considered. By 5’ C, we mean character, capital, capacity, collateral and condition.

Some of the job in NBL has little growth or advancement path. Therefore, lack of motivation exists in persons filling those positions.

The poor service quality has becomes major problem for the bank. The quality of the service at NBL is better than that of some other commercial bank in Bangladesh. However, the bank has to compete with the Multinational Bank located here.

 The bank failed to provide a strong quality recruitment policy in the lower and some mid level position. As a result, the services of the bank seem to be dues in the present  and future days.

 The main important thing is that the bank has lack of clear mission statement and strategic plan. The banks not have any long term strategies of whether it wants to focus on retail banking or become a corporate bank. The path of the future should be determined now with a strong feasible strategic plan.

 Maximum number of officials & employees of NBL have little knowledge about computer but it is the part and parcel of modern banking.

 Most of the officials and employees of NBL don’t posses overall knowledge about banking. They are just doing routine work but they don’t know detail about it.

 Some rules and regulations of government work as barrier for the free flow of remittance, export and import of profitable goods.

 Chambers of Commerce may not permit the sub-section or any of the   conditions of the L.C issuing bank. So the exporter may not export the goods to the importer.

Untimely shipment by exporter due to lack of backward linkage causes financial loss both for exporter and bank.

Technical problems reduce the performance of the branch and extend the span of time resulting in loss (financial) and providing less service to both the bank and customers.

Lack of co-ordination among the departments and among officials and employees.

 AD branches have to deal the L/C of the non- AD branches of NBL.

Lack of technological assistance.

 Recommendations

As per earnest observation some suggestions for the improvement of the situation are given below:

To attract more clients NBL has to create a new marketing strategy, which will increase the total export import business.

Effective and efficient initiatives are necessary to recover the default loans.

Attractive incentive packages for the exporter will help to increase the export and accordingly it will diminish the balance of payment gap of NBL.

Long term training very much required for the foreign exchange officers.

Computerized banking system and latest communication device are the most important elements for this century. So, for the sound and stable foreign exchange operations, NBL has no alternatives but the modernization.

 Foreign exchange operations of other banks are more dynamic and less time consuming. NBL should take some initiative to compete with those banks.

In our country financial problem is a great constrain in foreign trade. NBL is very conservative for post shipment finance. If it stays in liberal position the exporters can easily overcome their financial constrains.

Bank can provide foreign market reports, which will enable the exporter to evaluate the demand for their products in foreign countries.

Segregation of International Trade transaction from the existing situation i.e. Credit aspects to be looked after by credit analysis department.

The department shall only remain engaged with the documentary aspects of International Trade like opening L/C’s for all types of import and negotiation of export bills.

 NBL can expand their export business in the frozen fish, fish, and jute sector.

 New investment sector is booming rapidly. NBL should identified those untapped areas of business and invest in those sector such as Gas plant, condensed milk project, ship breaking etc.

Efforts may be initiated to bring in the fold of NBL more short term deposits particularly cost free current deposits. For that, customer services may be bettered furthered.

 All out efforts may be in place to reduce overhead costs as minimum as possible.

 The bank should go for mass on-line banking to meet the demand of the next century.

It is noted that “delay in service” is one of the problems faced by the clients. Attempts should be made to straighten the banking procedure.

Effective Management Information System must be evolved by NBL so that correct decisions may be taken at correct time at policy making level.

 Proper communication needs to establish with clients.

 Proper incentive system should be introduced to motivate bank employees for rendering better services.

 New branches should be opened.

Efficient manpower should be recruited with having strong academic background of the related subjects.

ATM Booth should be established.

 Employees should be properly learnt about the mission and vision of NBL, thus will implement their job in that way.

Arrangement of monthly /quarterly training courses /workshops for the selected by the authority in order to promote employee to their desired level.

More technological instruments should be brought for smooth working speed.

I believe these steps will be helpful to improve the performance of National Bank Limited and the financial sector of Bangladesh.

Conclusion

Proper financial system of a country can contribute towards the development of that country’s economy. In our country Bangladesh, banks have a leading power to its financial system. For this reason, the banks should have a potential role to make our financial system. In this arena, private commercial banks are playing a vital role in the development of our economy. But Govt. and Bangladesh Bank play a crucial role to the private commercial banks through imposition of deposit restriction, lending role and other banking operations. In recent years of banking business, National Bank Limited has shown better performance comparing with other first generation banks.

We expect the National Bank Limited may hold its prospect in future and can contribute a vital role in the socio-economic prospective.

It is a great pleasure for me to have practical exposure to National Bank limited, Foreign Exchange Branch. Without practical knowledge, it is not possible for me to compare the academic Knowledge and practical knowledge. Since the time is very limited to learn the all the sectors of a bank. If the duration of internship can be increased, then it is possible to learn the entire banking activities mere properly.

To complete in the environment of advancing technology and faster communication the NBL should depend more heavily on the quality service and information technology. NBL should be connected through wide area network. So that all the informational and service can be accessed from any branch of the world.

Though there are some drawbacks in implementing Foreign Exchange and Foreign Trade in National Bank Limited, it can be overcome through involvement of more financial expert in the decision making process and utilizing the tools to judge integrity of the customers and most of all by taking the prospective steps followed up in this report.

As a leading bank f Bangladesh, NBL contributes in the business with promising future. I can hope so that NBL can spread their business with increasing various scheme and other utility services. The effective and efficient Foreign Exchange Business of the Bank helps in the continuous growth and progress of national economy.

Chapter-11

REFERENCES

Books & Articles

      Ali Syed Ashraf & Howlader R.A, “Banking Law and Practice”.

      Ali  Syed Ashraf, “ Foreign Exchange and Financing of Foreign trade” (1995)

      Bangladesh Bank, Guideline for Foreign Exchange Transaction, (vol-2)

      Dictionary of Business (2003), 3rd edition, Oxford University Press

      Export Policy’2006-2009

       Foreign Exchange Regulation Act -1947

      Import Policy’2006-2009

      NBL, Annual Report- 2007

      NBL, Annual Report-  2008

      NBL, Monthly Statement, October 31, 2009

      NBL, Manual for Foreign Exchange Transaction of Foreign Exchange Department.

      UCPDC-600, ICC Publication No.600LF.

      Various Official Records of National Bank Limited

Websites

      www.bangladesh-bank.org

      www.epzbangladesh.org.bd.

      www.foreignexchange.com

      www.nblbd.com