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Import Services

Meaning of Import
Import means lawfully carrying out of anything from one country to county for Buying. It will be
occurred according to the Government law.
Import Policy Order
Based on the needs of commodity and availability of finance, Government declares policy. For
import of goods for a particular period having approval from the National Assembly is defined as
Import policy order. Import policy is a guideline of a set of rules envisaged by Government
Authority i.e. the Ministry of Trade and commerce for the registered importer for import of goods
inside the country.
Duration
Earlier import policy has been formulated the five years. But present import policy order has been
formulated for 3 (three) years, Effect from the 14 th June 2003 to 30th June 2006 and valid till
announce of new import policy order. If require Government can revise the policy in each every
years.
General rules in Connection with Import
A: Restriction of Import:
a)

Negative list of Merchandises.

b)

Restricted list.

c)

Footnote under Restricted List

d)

Freely importable items.

ITC number is compulsory (H.S code 6 digit) to be mentioned in the L/C and LCAF to
identification the item to be imported.
1. Requirement Right of Refusal (ROR) for public sector agency from Ministry of Industry or
respective Ministry/department of both to Import item under Restricted List.
2. Import cannot be Israel.
3. Pre-shipment inspection (PSI) for private sector normally PSI is not mandatory.
4. Shipment to be made through Bangladeshi ship some exemption
a) Single importer maximum 20 MT grow importer highest 100 MT
b) General waiver from department of shipping otherwise certificate of Waive is to be
obtained to ship through Foreign Cargo
c) Import of Raw materials export oriented Industries to be made on Competitive rate.
Regulations of Import
Import of goods under this policy shall be regulated as under:

Control list: Unless otherwise specified items which have been indicated as banned in this
list shall no be permissible for import. An item included in this list with specific conditions for
import shall be importable only on fulfillment of the conditions specified.
Freely Importable Items: Unless otherwise specified an items the name of which does not
appear in the control list shall be freely importable.
Notwithstanding anything mentioned else where, all imports into Bangladesh shall be subject
to such general or specific conditions as many have been prescribed in this order.
In addition to the conditions mentioned in the control list the conditions. Restrictions and
procedures for import of various items mentioned in the test portion of this order, shall as usual,
apply in case of import of those items.
If, while determining the import status of an items mentioned in the control list the description
of goods does not conform to the H.S Code mentioned against item, or any discrepancy arises
between the H.S Code and the description of goods, in that case the description of goods shall
prevail, In other words, if the import of a particular item is shown as banned in the control list, or
is shown as importable as subject to fulfillment of conditions in the list, the said ban or restriction
as the case may be, shall equally apply to the import of that item , even if such ban or restriction
is mentioned else where and not against the appropriate H.S Code, if any importer, taking ,
advantage of such discrepancy, import any banned items or restricted items or restricted item
without fulfilling the respective conditions, such import shall be treated to have been made as in
contravention of the provisions of this order.
Modes Used in Foreign Exchange Investments
Murabaha/ Bai Muazzal - Import/Export
Bai- Salam Reshipment
Hire purchase For important Machinery under project Investment
The Documentary Letter of Credit
Import L/C (Letter of Credit)
Letter of Credit is a credit contract where the Opening/Issuing Bank is committed to place an
agreed amount of money at the beneficiarys disposal under some agreed conditions. In other
words letters of credit is a letter form the importer Bankers to the exporter that the bills if drawn as
per terms & conditions complied with will be honored on presentation.
Definition of L/C
A letter of Credit is a conditional bank undertaking of payment. In other words letters of credit is a
letter form the importer bankers to the exporter that the bills if drawn as per terms and conditions
are compiled with will be honored on presentation
As per UCPDC 500 a credit may be either:

i)

Revocable.

ii)

Irrevocable.

The Credit, therefore, should clearly indicate whether it is revocable or irrevocable. In the
absence or such indication the credit shall be deemed to be irrevocable.
Types of L/C
1. Revocable Credit:
As per Article no. 8 (a) A revocable credit is a credit which can be amended or canceled by the
issuing bank at any time without prior notification to the seller since to offers little security to the
seller.
2. Irrevocable Credit:
As per Article no 9 an irrevocable credit constitutes a definite undertaking of the issuing Bank. A
credit cannot be amended or cancelled without the agreement of all parties. It gives the seller
grater assurance of payment. An irrevocable credit can be either confirms or unconfirmed
dependant on the desire of the seller.
Classification of Importer
Importers are those who ate authorized by the import Trade authority i.e. & CCI & E for import of
goods essential for consumption or for production purposes.
There are mainly three types of importers.
1.

Commercial Importer

2.

Industrial Importer

3.

Importers under Wage Earner Scheme

1.

Commercial Importer:

It means an importer registered under the importers, exporters and indention registration order
1981 who import goods from sale, when issued to commercial importers, given the category held
by him with ITC classification and public notice against which they are admitted into import trade.
2.

Industrial importers:

When issued to an industrial consumer, gives the items of import as raw materials and packing
materials and spare parts, the value of entitlement and ITC classification.
3.

Importers under WES:

It means registration importers who import only under the WES. In this scheme, the foreign
exchange required for import of goods is met out of the remittance made. By Bangladeshi citizen
earning wage abroad. WES importers can be importing all permissible items a declared by the
importer also can import under WES.
Registration of Importer

As per import & Export control Act. 1950 no person can indent, import or export any goods into
Bangladesh except kin case of exemption issued by the Government of the peoples Republic of
Bangladesh. Violation of this order is punishable with fine under the provisions of Sea Customs
Act 1878 as applied by sub section (3) of Section 3 of this Act.
A: Procedure for Obtaining IRC (Import Registration Certificate)
Through public notice or import policy the chief controller of imports & Exports invites applications
usually for registration of importers. The following papers/ documents are required for submission
to CCI&E or area office of CCI & for import registration certificate:
1. Application form.
2. Nationality Certificate.
3. Income Tax registration Certificate with GIR.
4. Trade License from the municipal or local Authority.
5. Membership Certificate.
6. Partnership deed (for partnership firm)
7. Certificate of Registration with the register of joint Stock Co. & Articles and Memorandum of
Association in case of Limited Co.
8. Bank Certificate.
9. Documentary evidence for business existence.
10. Original copy of Treasury Chalan being payment of registration fees.
11. Original copy Chaplin for passbook.
12. Other documents if any required by the CCI & E.
13. Ownerships documents or Rent receipts of the place of Business.
14. Survey clearance from the relevant Authority.
The nominated bank of the application will examine the papers/documents s& verity the signature
of the applicant and forward the same to the concerned office of the CCI & E with forwarding
schedule in duplicate through banks representative. The duplicate copy of the same bearing the
acknowledgement of CCI & E office of the receipt of the documents is back by the bank and is
preserved.
If the documents are found in order and the CCI & E is satisfied the IRC is issued to the applicant
and sent direct to the nominated bank. The passbook is also issued by the CCI & E
simultaneously to the importer and sent direct to the nominated bank.
Some Important Terms of Letter of Credit

Amendment of Credit: Sometimes the importer may require amendment to be made in the
L/C, but this amendment must be made with the consent of the exporter, otherwise amendment
will have no validity.
Adding Confirmation: Sometimes the exporter may not rely on the L/C issuing bank.
Exporter requires the L/C to be confirmed by another bank situated in his country. Then on
request of issuing bank, any bank in exporters country gives guarantee about the payment. This
is called Confirming Bank. By adding such confirmation, confirming banks undertakes the liability
to honor the bill of exchange of exporter.
Validity and Expiry of Credit: All L/C must mention the expiry date of L/C within which the
documents for payment/acceptance must be presented. This date must exceed the date of
issuance of the bill of lading or other shipping documents, during which presentation of
documents for payment/acceptance must be made.
Free On Board (FOB): Under FOB basis, the exporter quotes the price covering all his
expenses until the goods duty packed are delivered on board, the carrying vessel named and
arranged by the buyer with the freight and the insurance being paid by the buyer. The importer
bears any costs incurred and all risks from the time the goods are placed on board inclusive of
those arising out of the ships failure on berth.
Cost and Freight (C & F): In this case the exporter quotes the FOB price plus insurance
cost. The responsibilities of carrying out all formalities for shipment of the goods develop upon
the seller.
Cost, Insurance and Freight (CIF): Under CIF, the exporter quotes C&F price plus the
insurance cost. The responsibility of carrying out all formalities for shipment of the goods develop
upon the seller.
Free alongside Ship (FAS): Under FAS, the seller quotes the price covering all his charges
until such time as goods are loaded on train at the specified railway station. The buyer is
responsible for all charges from the time he takes delivery of all goods from the exporters yard.
EX-Factory: The seller quotes the price of the goods ex-factory on the date agrees. The
importer is responsible for all further necessary arrangements and charges.
Parties of Letter of Credit
1.

Importer

(Buyer)/Applicant

2.

The

Issuing

Bank

(Opening

Bank)

3.

The

Advising

Bank

(Notifying

Bank)

4.

Exporter/Seller

5.

Confirming

(Beneficiary)
Bank

6.

Negotiating

Bank

7.

The Paying/Reimbursing/Accepting/Remitting Bank

1.

Applicant: The person/body who requests the bank (opening bank) to issue letter of

credit. As per instruction and on behalf of the applicant, the bank opens L/C in line with the terms
and
2.

conditions

of

the

seller

contract

between

the

buyer

and

the

seller.

Opening bank/Issuing Bank: The bank which open/issue letter of credit on behalf of the

applicant/ importer. Issuing banks obligation is to make payment against presentation of


documents
3.

drawn

strictly

as

per

terms

of

the

L/C.

Advising/Notifying Bank: The bank through which the L/C is advised/forward to the

beneficiary (exporter). The responsibility of advising bank is to communicate the L.C to the
beneficiary after checking the authenticity of the credit. It acts as an agent of the issuing bank
without
4.

any

engagement

on

their

part.

Beneficiary: Beneficiary of the L/C is the party in whose favor the letter of credit is issued.

Usually
5.

having
they

are

the

seller

or

exporter.

Confirming Bank: The bank which under instruction in the letter of credit adds

confirmation of making payment in addition to the issuing bank. It is done at the request of the
issuing bank having arrangement with them. This confirmation constitutes a definite undertaking
on the part of confirming bank in addition to that of issuing bank.
Reimbursing/Paying Bank: the bank nominated in the letter of credit by the issuing bank to
make payments stipulated in the document, complying with reimbursing bank.
Documents Submitted by the Importer before opening of the L/C:
1. Trade License (Valid).
2. Import Registration certificate (Must be kept in the bank custody).
3. Passbook import.
4. Income Tax declaration.
5. Membership certificate.
6. Memorandum of Articles (In case of Ltd. Co.)
7. Registrar deed (In case of partnership firm)
8. Resolution.
Bank will supply the following papers/documents before opening of the L/C
a)

L/C application form.

b)

LCAF Form.

c)

IMP Form

d)

Murabaha agreement.

e)

Charge documents paper.

The above paper must be completed duly filled and signed by the party and verified the
signature.
Import Procedure under IBBL
1. Selection of Clients On the basis of
a. Credit Report.
b. Credibility.
c. CIB Report.
(To association of liability if any with other bank.)
2. Induction of client as Importer.
3. L/C a. Conditional Undertakings of bank payments.
b. .Processing to open
C. Permissibility and marketability of the item.
d. Price competitiveness.
e. Credit report of the supplier.
f. Fixation of the cash security.
g. Documentation.
h. Preparation of vouchers.
i. Realizations of the cash security, commission and other charge.
4. Thronging of L/C
a. SWIFT is a worldwide community. It has over 7500 financial institution over 199 Countries as
its member.
b. Air mail/Telex through advising Bank.
5. Lodgment
a. Checking of import documents upon receipt from negotiating or collecting banks.
B.Entry the bills register.
c. Passing the voucher.
d. Purchase of FC. Fund for payment of the bills.
6. Retirement
a. Preparation of cost memo.
b. Intimation to importer regarding arrival of shipping document.
c. Asking the bill paying banks dues showing in the cost memo.
d. Delivery of the documents against receipt of payment
Endorsement.
7. Post Import Finance

a. At the request of importer bank undertakes clearing of the imported goods paying duty. VAT
and other relevant charges stores the same under control
b. Delivers to importer against payment as per prior arrangement.
8. Enlistment of C&F agent
a. For C&F purpose. C&F agents are enlisted under different categories.
9. Reporting
a. To Bangladesh Bank
b. Monthly returns statement to the Head office.
Modes of Sales of Goods
Cash in advance: Risk is low. The Proforma invoice is used
1.

Open Account: Goods are sent first and payment is made afterwards. There are no

intermediaries.
2.

invoice

is

used

here

as

well.

Documentary Collection: Same as an open account but the use of bank as an

intermediary.
3.

Proforma
Here

the

risk

is

zero.

Here

the

bank

acts

like

an

agent.

Documentary Credit: L/C

Here modes 1, 2 and 3 are built on good faith and relationship, but mode 4 comes with a third
party guarantor.
Correspondent Banking
Correspondent Banking means establishing and maintaining a network of relationships with
financial institutions. Correspondent Banking is one of the most important services of a bank
engaged in international business. Basically, Bank cannot run alone in the foreign exchange
arena without having wide network of correspondents.
Correspondent banking plays very important role in building relationship through utilization of
existing scopes, coping with innovative foreign exchange products and consolidating strategic
partnership with the counterparts scattered throughout the world. IBBL since its inception has
concentrated on linking with the major financial institutions for facilitating growing volume of
international trade business.
Major Functions of Correspondent Banking
Major functions related to Correspondent Banking are:
Operating NOSTRO/VOSTRO Account(s)
LC advising, confirming, negotiation and reimbursement
Credit Line operation (Financing, Overdrawn, Guarantee issue )
Cash Letter Services
Proceed realization

Treasury support
LC Re-issuance services
AML & other regulatory compliance
BKE arrangement
Exchanging control documents
Supplying Annual Reports & other corporate information
Service level agreement
MIS on Correspondents
Correspondent Banking of IBBL
No. of Correspondents network : 870
Relationship with 250 internationally reputed banks
NOSTRO Account with 28 Banks
Number of Accounts is 44
Drawing arrangement with 57 banks and Exchange Houses
Account in major currencies such as USD, GBP,EURO & JPY
Sharing revenue with the Correspondents
Credit line facilities from Global banks
Revenue shared with Correspondents
SL.

Name of Correspondents

Amount in Taka

No.
01
02
03
04
05
06
07
08
09
10

American Express Bank, New York


American Express Bank, Kolkata
Citibank NA, New York
Citibank NA, Mumbai
HSBC , Karachi
HSBC, New York
Mashreq Bank PSC, Mumbai
Habib American Bank, New York
Arab Bangladesh Bank, Mumbai
ICICI Bank Ltd. , Mumbai

16,969,486.00
1,958,421.00
1,727,835.00
90,363.00
32,229.00
3,160,409.00
2,287,906.00
253,716.00
1,223,277.00
1,897,233.00

11
12

JP Morgan Chase Bank

48,006.00

Wachovia Bank

27,046.00
Total

29,675,927.00

Share in Correspondent Banking


Among the correspondent banks American Express Bank, Citibank NA, HSBC, Bank of China,
ICICI, Mashreq Bank are leading in terms of amount of business. These banks account for 90%
of the total correspondent business.
Amount in numbers
SL no.

Name of Correspondents

LC Advising

Reimbur-sement

Total

% of

total
01

American Express Bank

5632

9691

15323

41.31

02

Citibank NA

1456

2969

4425

11.93

03

HSBC

2267

1992

4259

11.48

04

Bank of China

2746

692

3438

9.27

05

ICICI

1310

1575

2885

7.77

06

Mashreq Bank

698

1993

2691

7.25

07

Arab Bangladesh Bank

221

842

1063

2.86

08

State Bank of India

471

61

532

1.43

09

Standard Chartered

263

132

395

1.06

10

Bank of Tokyo Mitsubishi

196

172

368

.99

11

Commerz Bank

98

141

239

.64

12

Agriculture Bank of China

131

17

148

.39

13

Wachovia Bank

84

53

137

.37

14

JP Morgan Chase Bank

38

81

119

.32

15

UBS AG

79

11

90

.24

16

Habib American Bank

18

49

67

.18

17

Bank of Communication China

51

14

65

.17

18

Korea Exchange Bank

56

56

.15

19

BNP Paribas

55

55

.15

20

ABN Amro

48

12

60

.16

21

Industrial and Comme. Bank of


China

45

07

52

.14

22

Sonali Bank Ltd

21

17

38

.10

23

Habib Bank AG

29

29

.07

24

Bank of Australia

26

05

31

.08

25

ING Bank

21

21

.05

26

Duetshce Bank AG

20

20

.05

27

UBAF

17

17

.04

28

Industrial Bank of China

15

15

.04

29

Woori Bank

14

14

.03

30

Others

327

107

434

1.18

Grand Total

16453

20633

37086

100

List of Nostro Correspondents of IBBL


Name of correspondent

Account Number

Currency

American Express Bank, NY

000194902

USD

American Express Bank, Frankfort

18127902

EUR

American Express Bank, Kolkata

412800467

ACU

Commerz Bank AG, Frankfort

400871511200

400871511201
Citibank N. A, NY

36076621

USD

EUR
USD

Citibank Aktiengesellschaft, Frankfurt/Main

411/6033/009

EUR

Citibank N.A, Mumbai

11474004

ACU

HSBC, NY

000126713

USD

HSBC, Mumbai

019-771468-650

ACU

HSBC, Karachi

001-077601-190

ACU

Mashreqbank PSC,NY

Mashreqbank PSC , Mumbai

70 002687

61048952

USD

ACU

Habib American Bank, NY

20729963

USD

Arab Bangladesh Bank, Mumbai

300112

ACU

Standard Chartered, NY

3582 066939 001

USD

Standard Chartered, Karachi

15-0002186-01

ACU

ICICI, Kolkata

000406000275

ACU

State Bank of India, Kolkata

09/9514

ACU

JP Morgan Chase bank

400809184

USD

Al Rajhi Bank, KSA

101270/4

SAR

The Bank of Tokyo Mitsubishi,

653 0426644

JPY

LIoyds TSB Bank PLC, UK

01015940

GBP

Wachovia Bank, NY

2000193008247

USD

Unicredito Italiano SPA, Italy

995 1648

EUR

Sonali Bank, Kolkata

10

ACU

Sonali Bank (UK) Ltd.

010 0000 401 400

GBP

020 0000 401 400

USD

060 0000 401 400

EUR

Peoples Bank, Colombo, Sri Lanka

796302100240838

ACU

Nepal Bangladesh Bank

011141D

ACU

Bank Saderate Iran

216/1/1/4190

ACU

Bank of Bhutan

34008

ACU

Korea Exchange Bank, Seoul

963-THR-295-01-4

USD

Import financing is one of the three major functions in foreign trade. Import financing services
helps importers to perform their trading activities safely and in a legal way.
Upon receipt of the import documents from the foreign correspondent bank, two persons should
verify their accuracy. At that time an entry should be made in the Bill Register and the necessary
voucher (Reverse the liability entry) should also be logged, if it is found in order. This process is
known as Lodgment of Documents. It should be done within 72 hours.
Import Financing Products
An importer can retire the lodged import documents by:
Cash payment from his own resources
Bai-Murabaha Post Import (MPI) basis or bank financing
Trust receipt (TR) on Bai-Muajjal.
Musharaka Documentary Bill (MDB) on Partnership basis
Bai-Murabaha
After the goods have been received, the importer can request the bank, by completion of the
appropriate form to clear the goods from the port. Before clearance, the bank can charge a fee to
cover the duty and sales tax. A definite repayment schedule for retirement of the debt is agreed
upon prior to the importer taking delivery of the goods. A Bai-Murabaha agreement should be
executed at the time of the signing of the L/C, to be in place until delivery is made to the exporter.
This agreement shall become operative from the date of purchase of the relative foreign currency
fund at the request of the client or from the date of involvement of the banks fund; as the case
may be. The period of deal should be six months to one year depending on the item and other
related factors. A rebate may be allowed if the deal is closed before the due date. The sale price
should include the cost as per the indent/proforma invoice, all other anticipated costs and
expenses, plus a profit for the bank as mutually agreed upon. The profit on the banks investment
in the purchase of the foreign currency funds or involvement of the banks funds, as the case may
be, should not be charged separately. It may however, be taken into account while negotiating
and determining the rate of profit with the client at the time of the application for the L/C. The

importer client may also be allowed to take delivery of the documents of title of the imported
consignment.
Trust Receipt (TR) on Bai-Muajjal
Just as in the MPI, an application is made for TR facilities, and the importer is required to offer
sufficient tangible securities acceptable to the bank equivalent to investment amount.
To summarize, Bai-Murabaha is applied to L/C in the following manner in Islamic banks:
The customer requests the bank to open a letter of credit to import goods from abroad
through an application enclosing a proforma invoice and providing all the necessary details and
information.
After securing the necessary guarantee and scrutinizing the application, the bank opens a
letter of credit in favor of the client and sends copies to the correspondent bank abroad and to the
exporter.
The customer endorses a Promise to Buy the merchandise. The cost of the goods and the
conditions of delivery are negotiated.
The exporter makes arrangements to export the goods and delivers the documents to the
correspondent bank abroad. The shipment of the goods takes place and the correspondent bank
advises the bank and sends the documents.
Once the bank takes ownership of the goods, an agreement of sale is signed with the client.
Musharaka Documentary Bill
The contract is essentially the same as the one discussed above in terms of the sale and
purchase of domestic goods, but differs in some details. The importer requests the bank to
participate in the import and sale of certain goods. The total cost of importing the goods is
declared and the capital contribution of each party is specified. The cost of the whole transaction
is designated in the appropriate foreign currency. The importer pays a part of his contribution
immediately after the contract has been signed and pays the rest after receiving the invoices. A
special Musharaka account is opened at the bank. The bank then opens a letter of credit at the
request of the importer and pays the full amount to the exporter after receiving the shipment
document. The cost of insurance is charged to the transaction account. The importer is
responsible for the import, clearance and final sale of the goods in question. The net profits are
distributed among the partners in the agreed proportion and any loss is shared in the same
proportion as the actual capital contribution.
Export Services
Meaning of Export
Export means lawful carrying out of anything from one country to another country for sale.

Definition of Exporter
The importers and exports trade of the country is regulated by the Imports Exports Control Act
1950. No person /firm is allowed to export any thing from Bangladesh unless he is registered with
CCI and E under the registration order (Importer and Exporter) 1952. To become an exporter an
ERC (export Registration Certificate) must be obtained from the office of CCI & E.
Procedure for Obtaining Export Registration Certificate (ERC):
For obtaining Export Registration Certificate (ERC), intending Bangladesh Exporters are required
to apply to the CCI & E authority in the prescribed from along with the following documents:
a) Nationality Certificate.
b) Copy of valid Trade License.
c) Income Tax Certificate.
d) Bank Certificate.
e) Copy of rent receipt of the business firm.
f) Registered Partnership Deed in case of partnership concerns.
g) Memorandum of Articles & Association and Incorporation certificate in Case of Limited
Company.
On satisfaction of the CCI & E the potential exporter is advised to deposit export registration fee
of Tk. 1,000/- through Treasury Chelan to Bangladesh Bank/ Sonali Bank for enabling them to
issue ERC. The ERC may be renewed every year on payment of renewal fee of Tk. 1,000/through Treasury Chelan as started.
Different Types if Export
A. Export under L/C
Exporters are allowed to export the commodity under irrevocable letter of credit. Under this type
of export, exporter will ship the goods as pr terms of the credit and will get payment as per
arrangement of the credit.
b. Consignment basis export:
Exports are allowed against firm contract. As per contract, importer will ship the goods and the
buyer will make payment after selling the consignment.
c. Export against advancement payment:
Sometimes exporter receives payment in advance. In that case Authorized Dealer should obtain
a declaration from the exporter on the Advance receipt voucher certifying the purpose of the
remittance. Then the exporter will export the goods against the advance payment.
General Rules for Export

There are some rules, which are mandatory for export of any goods form Bangladesh. The rules
are as under:
(1) No Person can export any goods from Bangladesh, unless he is duly registered as an
exporter with the CCI & E.
(2) All export must be declared on the EXP form, which is consisting of 4 copies.
(3) Export mush is against any of the following:
a) Export L/C.
b) Firm Contract.
c) Advance Payment.
(4) Transport documents related to land route or sea and any other Author8ized Dealer. The
Airway Bill and any other documents of title to car4go may be drawn to the order of a Bank in the
country of import. However in case of advance payment, transport document may be drawn to
the order of Foreign Importer Bank endorsement of transport documents is prohibited. Directions
under Sl. No. shall not apply in the following cases:
a) Export of Trade sample.
b) Personal Effects.
c) Goods shipped under the order of Govt.
d) Export of fresh fish, vegetable and fruits.
e) Gift package for less than Tk. 50/-.
(5) EXP must be submitted to the Bank by the exported and Bank will submit the Duplicate Copy
to the Bangladesh Bank within 14 days from the date of shipment.
(6) Payment for goods exported should be received through an authorized dealer in freely
convertible currency.
(7) Export proceeds must be received by the exporters within 4 months.
(8) Overdue export bills statement to Bangladesh Bank should be submitted by the 15 th of the
month, following quarter to which it relates.
(9) In case of short shipment, exporter should give a notice of short shipment of\n the prescribed
from in duplicate, the prescribed from in duplicate, the customs, who will forward a Certified copy
of the notice, to the Bangladesh Bank.
Issuance of EXP Forms and Number
Bank will certify EXP Form only after confirming the following:
a) Arrangements have been made for realization of Export proceeds.
b) Bona-fides of the importer/ consignees abroad.
c) Arrangements have been made for receipt by Authorized dealer of documents of title to goods.

d) The EXP has been signed by the exporter


Stages & Mechanism of Export
1) Exporter will make the goods ready for shipment.
2) Arrangements have to be taken for inspection of the goods by the

competent authority as

per credit terms.


3) Exporter will declare on EXP form against export L/C/Firm Contract/ Advance payment.
4) Exporter have to arrange approval for export from custom authority on EXP from by submitting
Export L/C, Export permission from CCI & E, Quota clearance from EPB, U.D. in case of
garments, invoice, packing list along with shipping bill prepared by C&F agent.
5) After completion of custom formalities, shipping company will receive the goods and will issue
B.L.
6) Exporter will collect visa/ license and certificate of origin for final documentation.
7) Exporter will submit the full set of documents to the negotiating bank for negotiation.
8) Negotiation bank will dispatch the documents to the issuing bank for clearance of the goods
from destination against payment as per credit terms.
Export Documents Checking
After submissions of export documents by the exporter, Bank must check, whether the entire
required document submitted or not. Bank must examine all documents stipulated in the credit
with reasonable care to ascertain whether or not they appear, on their face to be in compliance
with the terms and conditions of the credit. The Banks will not examine documents not stipulated
in the credit. To examine documents Bank must follow the L.C terms and international standard
banking practice. Automated or computerized carbon copies to be treated as original documents
if it is marked original Copy documents need not be signed. Multiple documents means one
original and remaining copies, Signature, Mark, Stamp or label is sufficient for authentication of
document. Bank will accept a prohibited in the L/C.
Issuance PRC
Sometimes exporters are required to submit to the Govt. Agency evidence of goods and
realization of their proceeds. In such cases proceeds realization certificate (PRC) may be
issued.
Negotiation/ Purchase of Bill without L/C:
In our country exports are also made on the basis of contract between the buyer and the seller
with out the cover of L/C. In such case document are delivered to the buyer through the
intermediary of foreign correspondent of the A.D against payment. Limit (post shipment finance)
is usually sanctioned from Head Office to such exporters to boost up export of the Country.

Document sent on Collection Basis:


When the bank refuses to negotiate the document due to major discrepancies, the bill is sent by
bank on collection basis under written instruction from the beneficiary. To handle such transaction
as per ICC Publication No. 322 named Uniform Rules for Collection
Export Requirement
All export from Bangladesh must be declared by the shipper on EXP form to the Bank enabling
them to submit the duplicate within 14 days from the date of shipment.
The shipper is required to repatriate the export proceeds within 4 months from the date of
shipment otherwise penalty is imposed upon them. A careful watch is to be dept to ensure that
the sale proceeds are received on due date. A due date diary must be maintained to pursue the
individual case.
Shipping & Customs Formalities:
International transfer of goods are made through the Letter of Credit which issued by the foreign
bank at he request of Importers in favor of exporter. Such Export L/Cs is enrooted through the
Bangladeshi Banks by the foreign banks who have correspondent relationship.
The foreign issuing banks may advise a credit in the following manner:
1. By short cable/ Telex followed by Airmail.
2. By full telex (No airmail confirmation).
3. Airmail L/C.
4. Advising of L/C after adding confirmation.
Keep the goods ready for dispatch (shipment):
On receipt of the order from the importer, the exporter is to take immediate steps to manufacture
the goods if they are not already in stock according to the specifications desired and keep them
ready for dispatch.
Inspection of Goods:
The goods should be kept ready for inspection of the competent authorities and issue a certificate
of quality control required under regulation: for example:
1. Export promotion Bureau.
2. Custom Authorities who will inspect the goods under Sea Customs Act.
3. Chamber of Commerce and Industry.
4. Other agencies authorized to inspect the goods before shipment.
Getting shipping space:
In order to export the goods, the shipping companies or their agent must be approached by the
exporter for booking space, to know the freight etc. So that shipment may be made conveniently.

In this regard, the services of clearing and forwarding agents may be taken conveniently for
actual shipment of goods; commission etc. is also to be paid to the agents for this works.
Get in touch with port Authorities:
Who will have to allow the goods to move into the port and make arrangements for loading and
unloading and keeping the goods in godown.
Shipment of Goods and other documents to C & F Agents:
To handle the goods for export in the port of shipment banks nominate clearing agents to handle
the goods to pass on custom formalities. Clearing agents are appointer by the bank from
amongst the C & F agents of custom authority. The clearing agent on behalf of the bank arrange
shipping space in the overseas vessel as per shippers instructions and also pays all the relevant
dudes payable to the custom authority shipping company as freight. Bank or the shipper is to
reimburse these to the C & F agent to the debit of party account.
A: Papers are requirement in regard to export of goods subject to L/C stipulation:
1. Commercial Invoice.
2. Certificate of origin.
3. Negotiable bill of lading.
4. Pre-shipment inspection certificate.
5. Quantity & quality certificate.
6. Fumigation certificate depending o the nature of cargo.
7. Phytosanitary certificate depending on the nature of cargo.
8. Gross revenue proceeds (GFP), export price check (EPC)/ Incase of jute shipment etc.
Export Procedure under IBBL at a Glance
1. Selection of Clients On the basis of
a. Export Registration Certificate. (ERC)
b. Membership of an authorized trade association.
c. Credit report.
d. Export L/C.
e. Checking and Advising.
f. EXP certification.
g. Pre shipment facility.
h. Processing for Export
i. Execution
j. Submission of Export documents.
k. Checking: Preparation of offering sheets for negotiation or Collection.

2. Negotiation and Collection.


a. Purchasing documents.
b. Sending documents to L/C opening banks or correspondent for collection of proceeds .After
collection adjustmentof negotiation value.
3. Reporting
a. Duplicate EXP to Bangladesh Bank.
b. Triplicate EXP after relation of proceeds to Bangladesh Bank.
c. Monthly statement to Head office.
4. Export Under Back to Back System.
a. Export L/C advising.
B .Proposal for BB L/C
c. Checking.
d. Process to open BB L/C
e. Formalities time gap between Import and Export credit.
f. Report Buyer and Supplier.
5. Thronging of BB L/C
a. Advising bank or Foreign correspondent add confirmation.
6. Lodgment of BB Bills
a. Shipping documents.
b. Evidencing dispatch.
c. Goods acceptance of import bills.
d. Conveying of due date to negotiating bank.
e. Clearance of Raw materials.
f. Storing in Bonded Warehouse.
g. Manufacturing of the product.
h. Pre shipment Extension
7. Negotiation of Export Bill.
a. Execution of Export
b. Submission of Export Documents.
c. Checking.
d. Negotiation.
e. Disbursement of funds to different heads of A/C including F/C held
account for payment of BB Bill.
8. Relation of Proceeds and Reporting

a. Crediting NOSTRO A/C.


b. Adjustment of negotiation value.
c. Payments of BB Bills.
d. Export Incentives
e. Reporting of Export.
Back-to Back L/C
Back -to -back L/C means one credit backs another. 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 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

3.

Quota

4.

ERC

5.

Indemnity/Undertaking

6.

NO

7.

Factory

8.

BGMEA Membership

bonded

ware

allocation
in
objection

for
addition
form

house

license

quota

items

to

IRC

previous

banker

inspection

certificate

Problems of Back-to Back L/C


1.

Shipment time gap: Sometime time is shorted for exporting against import L/C, kit may be

caused.
2.

Terms and rules violations: IBBL cannot violate the rules & term of Shariah council.

3.

Selling violation: Out of agreement IBBL cannot receive excess wanted.

4.

Payment of back to back L/C bill: No stock bills are supported against Shariah.

5.

Gaps of International rules & regulations.

Banks bears the responsibility of being a development partner for the economy, not only for the
purpose of boosting exports at a national level for earning foreign exchange, but also to make the
small exporters financially solvent.
Export Financing Products
An exporter requires financing at two stages namely:
Pre-shipment stage
Post-shipment stage.
The procedures of Islamic Bank Finance at these stages are discussed below:

A: Musharaka Mode
Pre-shipment investment covers credit facilities extended to the exporters by IBBL prior to the
actual shipment of goods. The purpose of such investment is to meet working capital
requirements starting from the point of purchasing the raw materials to transportation of goods for
export to foreign countries. Before extending a loan to an exporter, the bank takes into
consideration the credit worthiness; export performance of the exporter together with all the other
necessary information required for sanctioning the Investment in accordance with existing rules
and regulations of the bank. Financing at the pre-shipment stage is generally called Packing
Credit. It is also referred to as Pre-shipment Investment (PSI) or Pre-shipment finance (PSF).
Islamic Banks follow the Musharaka mode of Investment to sanction this kind of finance.
Generally, Islamic banks extend pre-shipment investment against irrevocable and unrestricted
L/Cs in favor of its clients after ascertaining their credit worthiness and reputation. As per existing
laws of the land, the bank may invest as much as 90% (including BB L/C) of FOB value of the
credit (Export L/C).
A-1: Pre Shipment Investment under Musharaka
In this case, the bank finances an export trade normally by opening a L/C on behalf of the
exporter/export houses or Agency who has received an Export L/C from an overseas buyer.
Since the L/C is opened on the strength of, and backed by the export L/C, it is technically called a
Back to Back Letter of Credit.
A-2: Post Shipment Investment under Musharaka
Exporters may require post-shipment financing to cover operation expenses. This is the case
because they have to wait a long time to receive payment from abroad for the exported goods,
depending on the terms of payment stipulated in the respective Export L/C. Islamic banks also
utilize the Musharaka agreement to provide for these types of financing:
Negotiation of documents under L/Cs
Purchase of D.P. and D.A. Bills
B: Bai-Salam
Bai-Salam is defined as an advance purchase of a commodity or product by the bank on
execution of a written contract wherein it is clearly mentioned that the commodity shall be
delivered as per specification, size, quality, and quantity at a fixed future time in a particular
place. The burden of the cost of transportation and storage is also specifically mentioned in the
contract to avoid confusion. Generally, industrial and agricultural products are purchased in
advance under the Bai-Salam mode to provide the capital necessary to produce the purchased
goods.

Financing of the import of raw-materials for the manufacturing, processing, is done under a Back
to Back L/C for ultimate export under a deferred payment through a L/C. Furthermore, the
payment under the L/C is obligatory on the bank for making payment if the documents are drawn
strictly in accordance with the terms of L/C. As such the ownership of raw materials in fact lies
with the bank. Moreover, the Bill of Lading and bill of exchange are made to the order of the
bank. The L/C application and agreement should also contain the clause regarding ownership of
goods by the bank.
Immediately after opening a L/C, the consignment should be sold to the client under a Bai-Muajjal
arrangement for a period of some years by executing the necessary charge forms including the
Bai-Muajjal agreement. The accounting effects of said Bai-Muajjal investment should be recorded
when the banks funds are involved. In addition, an adjustment for rebates due to early payment
should be made to the profit calculation.
Since the client is the owner of the consignment by way of executing a Bai-Muajjal agreement,
and will sell the finished goods to the bank, this transaction is considered a violation of the
Shariah principles. It is not permissible by the Shariah to extend financing under a Bai-Salam
arrangement, without an executed agreement. The sale or export should be done through the
client. This should be clearly mentioned in the Bai-Salam agreement unless otherwise settled and
prescribed. The purchase price should include/ the banks profit as per the rate prescribed from
time to time.
In the Bai-Salam agreement, the description, specification, quality, size, time and place of
delivery of goods should be mentioned in the schedule keeping in mind the requirements
mentioned in L/C contract. Normally the client should be authorized as per the terms of the BaiSalam agreement to deliver and receive the goods to and from the other party as per the L/C
contract on behalf of the bank. In the event payment is delayed for whatever reason,
compensation should be imposed.
SWIFT
Society for Worldwide Inter-bank Financial Telecommunication (SWIFT) was established in 1973
by 239 Banks of 15 European countries with Head Quarter in Belgium is the industry-owned cooperative supplying secure, standardized messaging services and interface software to nearly
8000 Financial Institutions in 206 countries & territories.
SWIFT provides complete solutions covering every aspect of financial service processing which
include payments & cash management, treasury & derivatives, trade services, securities pretrade/trade, pre-settlement, clearing & settlement, custody services and reporting.
SWIFT in Bangladesh

Bangladesh entered into the era of SWIFT Connectivity in 1999 with membership of 7 Banks
including Islami Bank Bangladesh Limited. Other banks are
Arab Bangladesh Bank Ltd.
BASIC Bank Ltd.
International Finance Investment and Commerce (IFIC) Bank Ltd.
National Credit & Commerce Bank Ltd.
Prime Bank Ltd.
United Commercial Bank Ltd. (UCBL)
Presently 35 Banks in Bangladesh have got membership & connectivity of SWIFT. In terms of
network, message volume & share holding, Islami Bank Bangladesh Limited enjoys number 1
position amongst all users of SWIFT in Bangladesh. Islami Bank Bangladesh Limited is an active
participant holding a seat in the Executive Committee of SWIFT User Group in Bangladesh.
SWIFT Share of IBBL
Islami Bank Bangladesh Limited became member of SWIFT with a single share in 1999. The reallocation of SWIFT shares took place at the beginning of 2003 based on share holders financial
contribution from network based services invoiced in 2002.
Different Categories of SWIFT Message
System Messages.
Customer Payments & Cheques.
Financial Institution Transfers
Treasury Markets -Foreign Exchange, Money Markets & Derivatives
Collections & Cash Letters
Securities Market
Treasury Markets -Precious Metal & Syndications
Documentary Credits & Guarantee
Travelers Cheque
Cash Management & Customer Status
Benefits of SWIFT
Confidentiality Information is only disclosed to authorize persons at authorized locations.
Integrity Information can be relied upon to be complete, accurate and unchanged.
Availability Information and associated service is accessible and usable when needed.
Accountability Every individual authorized to use the system is accountable.
Confidentiality and Integrity Are ensured by means of security of transmission, delivery
and message storage; by validation of messages; and by user-to-user authentications.

Importance of SWIFT
Reliable & secure, service (99.999 % reliability).
Electronic authentication of messages.
Structured communication between users.
Cost effective.
Speed & accuracy.