Internship Report On AB Bank Ltd.

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1. Introduction
The word “Bank” refers to the financial institution deals with money. Commercial banks are
the primary contributor to the economy of the country. They are borrowing money from the
locals and lending the same to the business as loans and advances. So the people and the
government are very much dependent on these banks as the financial intermediary.
Moreover, banks are profit -earning concern, as they collect deposits at the lowest possible
cost and provide loans and advances at higher cost. The differences between two are the
profit for the bank.
Involvement of the banking sector in different financial events is increasing day by day. At
the same time the banking process is becoming faster, easier and the banking arena is
becoming wider. As the demand for better service increases, the banking organizations are
coming with innovative ideas. In order to survive in the competitive field of the banking
sector, all banking organizations are looking for better services and opportunities providing
to their clients. As a result, it has become essential for every person to have some ideas on
the bank and banking procedure. Besides these various kind rules and regulations are
formulated to check unexpected threats such as money laundering and to cope with rapid
change and challenge of competitive free market economy.
As core concentration of this study was foreign division, so this study is concerned with
specific area of managing import and export procedures to promote logistic support in
business.
Prepared By: Tania Ahmed Chowdhury | B061246 | Finance & Banking | BBA | IIUC
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1.2 Objective of the study
The main objective of the study is to analyze the foreign exchange business of AB Bank
Limited. There are some specific objectives on the way of achieving the main objective.
These are as follows:
 To discuss about the import & export policy of the sample branch.
 To analyze the export and import functions and financing of the branch
 To focus on growth and development of foreign Exchange business in ABBL, CDA
branch.
 To identify the problems and prospects of foreign exchange.
 To know the risk involved in the foreign exchange business.
 To promote the ways, techniques & policies to improve the performance of Foreign
Exchange business.
1.3 Methodology of the study

In this report both primary and secondary data are collected.
Primary sources of data
 Face to face conversation with the bank officer and staff

 Face to face conversation with the clients
 Observation
 File study
Secondary sources of data
 Annual report of the ABBL

 ABBL website
 Relevant books, newspapers and journals
 Various circulars & guidelines & study selected reports
 Different training materials from BIBM.
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1.4 Scope of the study

Banking system occupies an important place in a nation’s economy. A banking institution is
indispensable in a modern society. It plays a crucial role in the economic development of a
country and forms the core of money market in an advanced country. In recent times the
banking sector over the world has been undergoing a lot of changes due to deregulation,
technological innovation, globalization, implementation of BASEL II & rating based
financing etc. Bangladesh banking sector is lagging far behind in adopting these changes. To
flourish well in these changing environments not only progress of appropriate infrastructure
is necessary but also infusion of professionalism into banking service is essential. It is also
helped me to acquire a firsthand perspective of a leading private bank in Bangladesh. In this
internship report the major area of commercial baking has been covered in Foreign
Exchange business.
1.5 Limitation of the study

From the beginning to end the study has been covered with the intention of making it as a
complete and truthful one. However, many problems appeared in the way of conducting the
study, mainly time. It was not possible to go through the whole area covered by the bank
although financial statements and other information regarding the study have been
considered. This study considers the following limitations:
 Inequality and lack of availability of required current data
 Time constraints
 Confidentiality of data
 Lack of depth knowledge and analytical ability
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Chapter Two
An overview of the company
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2.1 Historical Background of AB Bank Limited

AB Bank Limited is the name of the bank which maintains transparency, fairness,
accountability, responsibility and professionalism in business deliverance at every plausible
level. AB Bank Limited always intends to ensure the trust and confidence of the customers
through focused customer orientation, quality of service and state of the art technology,
transparency in dealings and adopting the best practices of corporate governance. AB Bank
is known as one of leading bank of the country since its commencement 28 years ago. It is
the first private sector bank under Joint Venture with Dubai Bank Ltd, UAE incorporated in
Bangladesh on Dec 31, 1981. The bank commenced its operations in April 12, 1982.
During the last 28 years, AB Bank Limited has opened 78 branches in different business
centers of the country, one foreign branch in Mumbai, India and also established a wholly
owned subsidiary Finance Company in Hong Kong in the name of AB International Finance
Limited. To facilitate cross border trade and payment related services, the bank has
correspondent relationship with over 220 international banks of repute across 58 countries
of the world.In spite of adverse market conditions, AB Bank Limited which turned 28 this
year, concluded the 2008 financial year with good results. The bank’s consolidated profit
after taxes amounted to taka 230 cr which is 21% higher than that of 2007. The asset base of
AB grew by 32% from 2007 to stand at over TK 8400 cr as at the end of 2008.
The bank showed strong growth in loans and deposits. Deposit of the bank rose by TK 1518
cr i.e. 28.45% while the diversified loan portfolio grew over 30% during the year and
recorded a TK 1579 cr increase. On account of Foreign Trade, the Bank made a significant
headway in respect if import, export and inflow of foreign exchange remittances from
abroad. Foreign Trade Business handled was TK 9898 cr indicating a growth of over 40% in
2008.The Credit Rating Agency of Bangladesh Limited (CRAB) awarded the Bank an AA3
rating in the long term and ST-1 rating in the Short term. Modernization is the theme of the
bank. The bank took a conscious decision to rejuvenate its past identity-an identity that the
bank carried as Arab Bangladesh Bank Limited for twenty five long years. As a result of this
decision the bank chose to rename itself as AB Bank Limited and the Bangladesh Bank put
its affirmative stamp on November 14, 2007. The bank changes its traditional color and logo
to bring about a fresh approach in the financial world; an approach which like its new logo
is based on bonding and trust.
The bank has focused to bring services at the doorstep of its customers and to bring millions
into banking channels those who are outside the mainstream banking arena. Innovative
products and services were introduced in the field of Small and Medium Enterprise (SME)
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credit, women’s entrepreneur, Consumer loans, Debit and Credit Cards (local and
international), Internet and SMS Banking, Remittance Services, strengthening and
expanding its Islamic and Banking activities, Investment banking, specialized products and
services for NRBs, Priority banking and Customer Care. AB is recognized as the people’s
choice, catering to the satisfaction of its client. Their satisfaction is AB’s success.
2.1 Change of name and logo of ABBL:

Arab Bangladesh Bank Ltd. Changed its name to AB Bank Limited (ABBL) with effect from 14
November 2007 vides Bangladesh Bank BRPD Circular Letter No-10 dated 22 November 2007.
Prior to that Shareholder of the Bank approved the change of name in the Extra-Ordinary
General Meeting held on 4 September 2007. Effective 1 January 2008, ABBL changed its Logo
as well.
Previous Name & logo : New Name & logo:
Arab Bangladesh Bank Ltd. AB Bank Ltd
2.3 Objectives of ABBL:

The main objectives of the bank are:
• Be one of the best bank of Bangladesh

• Achieve excellence in customer services and superior to all competitors
• Cater to all differentiated segments of retail and wholesale customers
• Be a high quality distributor of products and services
• Use state of art of technology in all spheres of banking (such as ATM-services,
Home Banking, Tele Banking, Mobile Banking, On-line Banking etc.
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2.4 Credo of ABBL
Vision statement
To be trendsetter for innovative banking with excellence and perfection
Mission statement
To be the best performance bank in the country and the region
Goal of the bank
To exceed customer expectations through innovative financial products & services and
establish a strong presence to recognize shareholders' expectations and optimize their
rewards through dedicated workforce
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2.5 Management hierarchy of AB Bank Ltd:

In AB Bank Ltd. (ABBL) an incumbent has to start his carrier as a provisionary officer. For
this, candidate has to seat for a competitive examination. It is under full authority of the
Board of Directors. The following figure shows the hierarchy of carrier ladder in ABBL:
Management hierarchy of AB Bank Ltd
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2.6 Corporate Profile
Incorporated on : 31st December, 1981

Started operation on : 12th April, 1982
Authorized capital : 3000 million
Paid-up Capital : 2564.25 million
Deposits : 83087.12 million
Loans and advances : 70879.93 million
Classified loans : 1358.70 million
Number of branches : 78
EPS : 131.13
P/E ratio : 8.97
Number of SME services center : 11
Number of employees : 1804
Contact Address AB Bank Limited
Registered Office
BCIC Bhaban, 30-31 Dilkusha C/A
Dhaka 1000, Bangladesh.
Tel: +88-02-9560312
Fax: +88-02-9564122,23
SWIFT: ABBLBDDH
Email: Info@abbank.com.bd
Web: www.abbank.com.bd
2.7 Brief description of CDA Avenue Branch

Arab Bangladesh Bank Ltd, CDA Avenue Branch has started its operation as on 1991 which
is located at central position of the Chittagong City. The office floor of AB Bank Ltd is
specious that can accommodate good number of customers comfortably. Branch has
efficient human resources that can meet up customers needs. Order wise work load is
distributed properly. Besides, interpersonal relationship is remarkable. Most noted strength
is customer service. Prompt, cordial & enthusiastic service satisfies almost all customers.
Flexible banking hour attracts more clients doing banking transactions with the branch. As
the bank is centrally situated large number of customers find it easily and comfortably to
transact with the bank.
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Major features of the Branch are:
• Fully computerized accounts maintenance

• Well decorated and air conditioned facilities
• A fully operational computer network which is currently being implemented, the
work of Local Area Network (LAN) and Wide Area Network (WAN) installed
having reliable and secured communication between the branches and head office is
in progress to facilitate any Branch Banking and ATM services
• Money counting machine for making cash transaction easy and prompt
• A group of professional bankers to render personalized services
2.7.1 Financial products/services of ABBL, CDA Avenue branch
AB Bank believes in modernization and complete customer satisfaction which helps to

ensure to provide customers a bunch of innovative products and services that keeps the
Bank always one step ahead of the other competitors in serving the customers need.
• Retail Banking products

 School banking
 Auto loan
 Easy loan for Executives-unsecured
 House/office renovation loan
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 Education loan
 Gold Grace-jewellery loan
 Staff loan
 Secured personal loan
 Unsecured personal loan
 Personal overdraft
• Corporate banking products and services

 Project finance
 Working capital finance
 Trade finance
 Cash management
 Syndicated finance, both onshore & off-shore
 Equity finance, both onshore & off-shore
 Corporate advisory services
• Deposit products
 Current deposit accounts
 Saving deposit accounts
 Fixed/Time deposits
 STD accounts
 Double deposit scheme (DDS)
 Monthly income deposit scheme (MSDS)
 Foreign currency deposit account
• SME loan products

 Gati
 Proshar
 Digun
 Sathi
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 Chhoto Puji
 Uddog
 Awparajita
• Investment baking
 Merchant banking services
 Custodial services
 Brokerage services
 Future products
• Foreign trade
 Import finance
 Export finance
• Inward and outward remittances

• ATM card
• Money transfer
• Locker service
• Online services
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2.7.2 Organizational structure at branch level
Manager
Sub
Manager
A/C Remittan Foreign

Dept. ce
Cash Trade
FCD Credit Dispatch
2.7.3 Performance: ABBL, CDA avenue branch, Chittagong

(Million Tk)
Particulars 2009 2008 2007

Authorized Capital 6000.00 3000.00 2000.00
Paid – up capital 2564.25 2229.79 743.00
Total Deposits 1567.08 1363.42 1019.25
Loans & advances 1888.10 670.51 764.62
Total assets 1939.97 1374.51 1027.22
Import (in USD) 47556059.24 25381706.45 14493091.08
Export (in USD) 44038.51 292725.00 32680.33
Remittances (in USD) 2032263.34 1527503.99 2004108.14
Total Operating Income 124.62 91.99 65.55
Total Operating Expenses 25.11 17.69 12.04
Profit after provision 99.51 74.30 53.50
2.7.3 SWOT Analysis
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SWOT analysis specifying the objective of the business venture or project and identifying
the internal and external factors that are favorable and unfavorable to achieve that objective.
From the SWOT analysis we can figure out the ongoing scenario of ABBL. By doing the
SWOT analysis it is possible to find out the strength, weakness, opportunities and treats of
ABBL. So to a better view of the present business practices what is prevailing at ABBL I
have done the SWOT analysis.
SWOT
Analysis
External
Internal
Factors
Factors
Strengths Weakness Opportunities Threats
Strengths:
• Employees are always ready to provide expected level of services both internal and
external customers so that customers are highly delighted
• Well reputation in the market
• Sound import & export operation
• The relationship between employer and employee is very much appreciable which
increased the productivity of employees.
• Executives are highly qualified and experienced
• Officer and staffs are prompt in their activities
• Branch network cover highly geographic area
• Very good profit margin, interest, and fees income achieved by the last few years
and subsequently bank expanding its business.
Weakness:
• Providing information in due time is being late want of proper technological support
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• Though the bank launched online banking system but 100% online banking is not
possible yet
• There is not any customer complain desk where customers can give their feedback
• Customer service is not up to standard and sufficient for want of trained people
• Unavailability of high-tech electronic facilities
Opportunities:
• Client reliability on ABBL is increasing day by day with the bank
• Increasing rate of branches day by day even remote area attracting large number of
people and people are getting facilities for doing business
• ABBL offers many popular schemes for trade services.
• Foreign remittance are increasing day by day
• Import and export are increasing gradually so bank can properly exploit this
opportunity
• Online and SMS banking services now available in the bank
• Credit facilities & ATM Booth facility also increasing to meet clients need
Threats:
• Highly competitive market
• Entries of new commercial bank, leasing companies, investment and merchant
banking in the market etc they all are competitors
• Competitors are offering innovative new products and services based on highly
technological support
• Government put pressure to reduce interest rate
• Government imposes tax and Vat on profit
• Central Bank’s policies sometimes are not in favor of the private bank’s policies
• Political crisis and lack of trust of the foreign investors
• Frequent fluctuation of domestic currency with US dollar
• Economic recession
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Chapter Three
FOREIGN EXCHANGE OPERATION
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3.1 Foreign Exchange
The term Foreign Exchange has different connotations in different contexts. Foreign
Exchange is a process which is converted one national currency into another and transferred
money from one country to other countries.
According to Mr. H. E. Evitt. Foreign Exchange is that section of economic science which
deals with the means and method by which right to wealth in one country's currency are
converted into rights to wealth in terms of another country's currency. It involved the
investigation of the method by which the currency of one country is exchanged for that of
another, the causes which rented such exchange necessary the forms which exchange may
take and the ratio or equivalent values at which such exchanges are effected.
Foreign exchange is the rate of exchange in the both country's currency.
In terms of section 2(d) of the foreign Exchange Regulation (FER) Act 1947, as adopted in
Bangladesh, foreign exchange means foreign currency and includes any instrument drawn,
accepted, made or issued under clause 13 of article 16 of the Bangladesh Bank Order, 1972,
all deposits, credits and balances payable in any foreign currency and draft, travelers
cheques, letter of credit and bill of exchange expressed or drawn in Bangladesh currency
and payable in any foreign currencies.
The business of foreign exchange is getting increasingly complex and intensely competitive.
However, in the backdrop of phenomenal growth of Bangladesh’s external sector, foreign
exchange business provides a challenge as well as an excellent opportunity to accelerate
growth of bank’s own business. This is the Institution that facilitates international trade
payment as banking channel is the way of settlements. Besides, banks meet the other need of
foreign exchange transactions of the people of the country as they are authorized to deal in
foreign exchange upon receipt of permission from Central Bank under Foreign Exchange
Regulation Act. All exports and imports are executed through the intervention of banks.
Side by side, they provide funded and non funded credit facility in execution of International
Trade.
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3.2.1 Authorized Dealer Branches
Bangladesh bank has issued licenses to certain branches of our bank to deal in foreign
exchange. These branches are known as authorized dealer branches. Licenses to deal in
foreign exchange are normally granted only to scheduled banks which have offices in
Bangladesh after satisfying that they have adequate number of staff/officers properly trained
in handling foreign exchange transactions and will be able to comply fully with
requirements of the administration to exchange control. No other person except the
authorized dealer can deal in foreign exchange.
3.2.2 Authorized Money Exchange

Licenses are also granted by Bangladesh Bank to persons or firms to exchange foreign
currency instruments such as T, C, and currency Notes and Coin. They are known as
authorized moneychangers. They are not, however, authorized to make any other transaction
in foreign exchange. The authorized Moneychangers are, however, required to deposit the
foreign exchange encased by them with an Authorized Dealer at Official rate and submit
Returns of such purchase and deposit of foreign currency notes, T/CS etc. to Bangladesh
Bank.
3.2.3 Legal basis of Foreign Exchange Transaction

Foreign exchange transactions are performed under some legal regulations, as follows:
• Foreign Exchange Regulation Act – 1947
• Import and Export Control Act- 1950
• Customs Act-1969
• The uniform customs and practices for documentary Credit (UCPDC) – 1993 revision &
International Chamber of Commerce Publication no – 500, is also an important law for
settlement of terms and conditions between exporter and importer in international trade.
• Import Policy Issued by Ministry of Commerce
• Export Policy Issued By Ministry of Commerce
• International Rules Issued by International Chamber of Commerce (ICC)/ Uniform Rules
and Practices
• Different Foreign Exchange Circulars issued by Bangladesh Bank
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3.2.4 Functions of Foreign Exchange Department
Foreign Exchange Department performs many functions to facilitate the foreign exchange
transactions. These are:
• Facilitating Import Trade
• Facilitating Export Trade
• Providing Funded and Non-funded Credit Facility.
• Provide Non Commercial Remittance
• Maintaining Foreign Currency Accounts
• Selling of Foreign Currency Bond
• Rate of Exchange
• Preparation and Submission of Statements
3.3 Foreign Trade

Foreign Trade is defined as the exchange of goods and services between nations. Goods can
be defined as finished products as intermediate goods used in producing other goods or a
agricultural products and foodstuffs. International trade enables a nation to specialize in
those goods it can produce most cheaply and efficiently. Trade also enables a country to
consume more than it would be able to produce if it depends only on its own resources.
Finally foreign trade enlarges the potential market for the goods of a particular economy.
Foreign Trade has always been the major force behind the economic relations among
nations.
When two countries adopt a direct import and export relationship then bilateral trade occurs
and when countries deal worldwide there is multilateral trade. In international trade the
values in terms of money are never equal. The balance of trade payments refers the
difference between the monetary value of exports and imports of output in an economy over
a certain period of time. It is the relationship between a nation’s imports and exports. A
favorable balance of trade is known as a trade surplus and consists of exporting more than
is imported; an unfavorable balance of trade is known as a trade deficit or informally, a
trade gap.
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3.3.1 Role of Foreign Trade in Economic Development
• Foreign Trade is an important stimulator of economic growth. It enlarges countries
consumption capacities, increase world output and provide access to scarce resources
and worldwide markets for products without which poor countries would be unable
to grow.
• International trade tends to promote greater international and domestic equality by
equalizing factor prices, raising real income of the trading countries and making
efficient use of each nation’s and the world’s resource endowments.
• In a world of free trade, international prices and costs of production determine how
much a country should trade in order to maximize its national welfare.
• Finally to promote growth and development, an outward-looking international policy
is required. In all cases, self-reliance based on partial or complete isolation is
asserted to be economically inferior to participation in a world of unlimited free
trade.
3.4 Sale and Payment term in Foreign Exchange Business

Every Foreign trade transactions are the result of a sale contract between the seller & buyer.
In a sale contract seller agrees to sell & buyer agrees to buy a specified quantity of goods on
terms of mutually agreed upon.
A sale contract incorporates a number of terms and conditions relating to the various aspects
of the deal, the most important among them being the terms relating to the place & mode of
delivery, the terms of payments of freight & insurance charges, the mode of payment for the
goods, prices, quality, quantity and the period of supply of the goods to be bought & sold.
The payment term shows where & how payment will be effected. It has five principal:
1. Cash in advance
2. Letter of credit
3. Drafts
4. Consignment
5. Open account
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Cash in advance
The buyer places the funds at the disposal of the seller prior to shipment of the goods or
provision of services. It involves maximum risk to exporter used where there are political
unrest goods made to order new unfamiliar customer.
Letter of credit
The documentary credit or letter of credit is an undertaking issued by a bank on account of
buyer (the applicant) or for its own behalf to pay the beneficiary the value of the draft and/or
documents provided that the terms and conditions of the documentary credit are compiled
with.
Advantages of an L/C to exporter are:

a. Eliminates credit risk
b. Reduces default risk
c. Payment certainty
d. Prepayment risk protection
e. Financing source
Advantages of L/C to Importer are:

a. Shipment assured
b. Documents inspected
c. May allow better sales terms
d. Relatively low-cost financing
e. Easy cash recovery if discrepancies
L/Cs is following types

a. Revocable
b. Irrevocable
c. Confirmed
d. Transferable
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Drafts are unconditional order in writing showing exporter’s order for importer to pay at
once (sight draft) or in future (time draft) including three functions are clear evidence of
financial instrument (i.e. may be converted to a banker’s acceptance)
Drafts are four types:

a. Sight
b. Deferred
c. Clean (no documents required)
d. Documentary
Open account
An arrangement between the buyer and the seller whereby the goods are manufactured and
delivered before payments is required. The benefits of open accounts are greater flexibility
in making a trade and lower transactions costs. On the other hand, the major disadvantage is
highly vulnerable to government currency controls.
3.5 Letter of Credit

Letter of Credit is a guarantee or undertaking or commitment to the beneficiary/exporter for
making payment issued by the issuing bank on behalf of the importer upon fulfillment of
some conditions. Central Banks, therefore assure these things to happen simultaneously by
opening Letter of Credit guaranteeing payments to seller and goods to buyer. By opening a
Letter of Credit on behalf of buyer in favor of seller, commercial banks undertake to make
payments to a seller subject to submission of documents drawn on in strictly compliance
with Letter of Credit terms giving title of goods to the buyer. It is a conditional guarantee.
The Letter of Credit thus constitutes one of the most important methods of financing foreign
trade.
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In the Import Policy Order 2003-2006 Letter of Credit denoted as – ‘“Letter of Credit”
means a letter of credit opened for the purpose of import under this Order’
The expression “Documentary Credit(s)” and “Standby Letter(s)” means any arrangements,
however named or described, whereby a bank (“the issuing bank”) acting at the request and
on the instruction of a customer (the “Applicant”) or on its own behalf,
• Is to make a payment to or the order of a third party (“the Beneficiary”), or is to accept

and pay bills of exchange (Draft’s) drawn by the Beneficiary, or
• authorizes another bank to effect such payment, or to accept and pay such bills of
exchange (Draft(s)), or
• authorizes another bank to negotiate,
• Against stipulated document(s), provided that the terms and conditions of the Credit and
complied with.
On the other hand Letter of credit can be defined as a “Credit Contract” whereby the buyer’s
bank is committed (on behalf of the buyers) to place an agreed amount of money at the
seller’s disposal under some agreed conditions. Since the agreed conditions include amongst
other things, the presentation of some specified documents, the letter of credit is called
Documentary letter of credit. The uniform customs and practices for documentary Credit
(UCPDC) published by international Chamber of Commerce (1993) revision, publication no
500 define Documentary Credit:
• Any arrangement however named or described whereby a bank (the issuing bank) acting
at the request and on the instructions of a customs (the Applicant) or on its own behalf,
• Authorize another bank to effect such payment or to accept and pay such bills of
exchange (Drafts)
• Authorize another bank to negotiate against stipulated documents provide that terms and
conditions are complied with.
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3.5.1 Parties involves in L/C
Buyer/Applicant Who applies for L/C
Issuing Bank It is the bank which open/issues a L/C on behalf of the importer
Advising/Notifying It is the bank through which the L/C is advised to the exporters. This
Bank bank is actually situated in exporter’s country. It may also assume
the role of confirming and/or negotiating bank depending upon the
condition of the credit.
Seller/Beneficiary The party, normally supplier of the goods, in whose favor the L/C is
opened
Confirming Bank It is the bank which adds its confirmation to the credit and it is done
at the request of issuing bank. Confirming bank may or may not be
advising bank.
Negotiating Bank It is the bank, which negotiates the bill and pays the amount of the
beneficiary. The advising bank and the negotiating bank may or may
not be the same. Sometimes it can also be confirming bank.
Accepting Bank It is the bank on which the bill will be drawn (as per condition of the
credit). Usually it is the issuing bank.
Paying/Reimbursing It is the bank, which would reimburse the negotiating bank after
Bank getting payment-instructions from issuing bank.
3.5.2 Types of Letter of Credit

There are many types of Letter of Credits that are used in different countries of the world.
But International Chamber of Commerce (ICC) vides their UCPDC- 500, which denotes only
two types of LETTER OF Credits; mentioned
• Revocable Letter of Credit

A revocable credit may be amended or cancelled by the issuing bank at any moment and
without prior notice to the beneficiary. That is to say, this type of letter of credit can be revoked
or cancelled at any time without consent of, or notice to the beneficiary.
In case of seller (beneficiary), revocable credit involves risk, as the credit may be amended or
cancelled while the goods are in transit and before the documents are presented, or although
presented before payments has been made. The seller would then face the problem of obtaining
payment on the other hand revocable credit gives the buyer maximum flexibility, as it can be
amended or cancelled without prior notice to the seller up to the moment of payment buy the
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issuing bank at which the issuing bank has made the credit available. In the modern banking the
use of revocable credit is not widespread.
In this case the issuing banks must perform the following two roles:
• Reimburse another bank with which a revocable Credit has been made available for sight
payment, acceptance or negotiation – for any payment, acceptance or negotiation made by such
bank – prior to receipt by it of notice of amendment or cancellation, against documents which
appear on their face to be in compliance with the terms and conditions of the Credit;
• Reimburse another bank with which a revocable Credit has been made available for deferred
payment, if such a bank has, prior to receipt by it of notice of amendment or cancellation, take
up documents which appear on their face to be in compliance with the terms and conditions of
the Credit.
• Irrevocable Letter of Credit
An irrevocable credit is a documentary credit, which cannot be revoked, varied or

changed/amended or cancelled without the consent of all parties- buyer (Applicant), seller
(Beneficiary), Issuing Bank, and Confirming Bank (in case of confirmed Letter of Credit).
Irrevocable Credit gives the seller greater assurance of payments, but he/she remains dependent
on an undertaking of a foreign bank. In the issuance of Irrevocable Letter of Credit both the
Issuing and Conforming Bank have some liability, mentioned bellow, as per UCPDC -500:
The following types of Letter of Credits are used in the AB Bank, CDA Avenue Branch:
• Sight L/C
Sight L/C means payment is immediately made to the beneficiary on presentation of the
stipulated documents and on condition that all the terms of the credit have been compiled with.
It is advantageous to the exporter as he can get the payment quickly.
• Deferred L/C
Under a deferred L/C the beneficiary does not receive payment when his presents the
documents but at a later date specified in the credit. On presenting the required documents,
he received the authorized banks written undertaking to make payment of maturity. In this
way the importer gains possession of the documents before being debited for the amount
involved.
In terms of its economic effect a deferred payment credit is equivalent to an acceptance
credit, except that there is no bill of exchange and therefore no possibility of obtaining
money immediately through a descant transaction. In certain circumstances, how ever, the
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banks payment undertaking can be used as collateral for an advance, though such as advance
will normally only be available form the issuing or confirming bank. A discountable bill
offers wider scope.
• Back to back L/C
Back-to-Back L/C is a type of import L/C either in inland or in abroad, which open
against lien on valid export L/C. In our country in export of garments, this method of
finance is widely used and is very well known to the manufactures of garments. Suppose
Bangladeshi exporter received an irrevocable L/C for supply of readymade shirts, from an
American Bank. For manufacture of the ordered shirts the exporter does not have the
required raw materials. To execute the order he is to import raw materials from Korea. Then
the Bangladeshi exporter will have to open an import L/C favoring Korean supplier for
import of fabrics and accessories. The L/C is opened by the Bangladeshi bank lien against
the American Banks L/C. under bonded warehouse system.
3.5.3 Documents needed from Importer for opening L/C

• Prescribed L/C Application and Agreement form duly stamped and signed
• A set of LCAF duly filled & signed
• IMP form in duplicate duly signed
• Proforma Invoice (PI) Indent duly accepted
• Marine Insurance Cover Note along with original Money Receipt in case of import
under CFR/FOB
• Valid membership Certificate from a registered local Chamber of Commerce &
Industries or any registered association where the respective Importer belongs
• IRC evidencing payment of fee for current year i.e. duly renewed
• Tax Identification Number (TIN) Certificate
• PSI related papers (where PSI) required
• Papers/documents for import of any special items as required as per Import Policy
• Letter of Authority to recover Bank’s Charges & Margin from Importer’s Account
• Necessary Charges Documents duly stamped & signed
3.5.4 Procedure of opening L/C
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There are some steps involves in L/C process. These are describing here below.
 The importer and exporter have made a contract before opening a L/C.
 The importer applies for a L/C from his banker known as the issuing bank. He may
have to use his credit lines.
 The issuing bank opens the L/C that is channeled through its overseas correspondent
bank, known as advising bank.
 The advising bank informs the exporter of the arrival of the L/C.
 Exporter ships the goods to the importer or other designated place as stipulated in the
L/C.
 Meanwhile the exporter also prepares his own documents and collects transport
documents or other documents from relevant parties. All these documents will be
sent to the banker, which is acting as the negotiating bank.
 Negotiation of export bills happens when the banker agrees to provide him with
finance. In such case he obtains payment immediately upon presentation of
documents. If not the documents will be sent to the issuing bank for payment or on
an approval basis as in the next step.
 Documents are sent to the issuing bank for reimbursement or payment.
 Issuing bank honor it’s undertaking to pay the negotiating bank on condition that the
documents comply with the L/C terms and conditions.
 Issuing bank releases documents to the importer when the letter makes payment to
the former or against the letter of trust receipt.
The importer takes delivery of goods upon presentation of the transport documents.
3.5.5 Important features of an L/C

• Charges
• Country of origin of goods
• Currency and amount
• Date and place of expiry of the Documentary credit
• Description of goods and quantity
• Documents required for negotiation
• Instruction for negotiating bank
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• Last date of shipment
• Letter of credit authorization (LCA) number, IRC (Import Registration Certificate)
number and Harmonized System (H.S.) Code
• Mode of carrying –Air/Ship/Truck
• Name and address of beneficiary
• Name and address of advising bank
• Name and address of the applicant
• Name of issuing bank and branch
• Number of letter of credit and date of opening
• Payment term-sight/Deferred
• Period of negotiation
• Period of presentation
• Port of loading and port of discharge
• Reimbursing bank and payment mode
• Terms and conditions regarding transshipment and partial shipment
• Insurance clause
• B.L clause
• Other clauses as required as per Import Policy Order and as per contract executed in
between buyer and seller
3.5.6 Documents used in Documentary Credit

1. Bills of Lading
2. Airway Bill
3. Truck Receipt
4. Commercial Invoice
5. Bills of Exchange
6. Insurance Cover Note
7. Inspection certificate
8. Certificate of Origin
9. Packing List
10. Proforma Invoice
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Bills of Lading
Bills of Lading are showing ‘shipped on board’ and it has to be properly endorsed to the
bank. A bill of lading specified states that goods are loading for ultimate destination
specifically mentioned in the credit. It also constitutes a document that is, or may be, needed
to support an insurance claim.
The Bills of lading includes:

• A description of the goods in general terms consistent the credit
• Identification of marks and numbers, if any.
• The name of carrying vessel
• Evidence that the goods have been loaded on board
• The names of shipper, consignee and name & address of the notifying party
• Whether freight has been pain or is payable at destination
• The number of original bills of loading issued
• The date of issuance
Commercial Invoices
It has to be verified that the commercial invoice has been properly drawn and signed by the
beneficiary according to the terms and conditions of L/C.
• The beneficiary should properly invoice the merchandise
• Date
• Name and address of the buyer and the seller
• The importer license or IRC number of the importer indents registration number and
number letter of credit Authorization number are incorporated in the invoice
Bills of Exchange
The most important instrument in international trade by which seller can obtain the payment
from the buyers for the invoice value of goods is bill of exchange.
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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 L/C. the buyer who also indicates the type of inspection
he wishes the company to undertake usually nominates the inspection company
Packing List
This is unique documents and not combined with other documents. This is a listing of the
contents of each package, cartoon etc. and other relevant information.
Insurance Document:
Insurance is a contract whereby the insurer is undertaking to indemnify the assured to the
agreed manner and extent against fortuitous losses. Insurance document generally contains
the following information:
• The name of the insurer or his agent
• The name of the ship/carrier
• The name of assured
• The subject matter of insurance
• The time and/or voyage insured
• Te peril (s) insured against
• The valuation
• The stamps etc.
Proforma Invoice
Proforma Invoice (PI)/indent is the sale contract between seller and buyer in export-import
business. There is slight difference between indent and PI. The sales contract, which direct
correspondence between importer and exporter, is called Proforma Invoice (PI). On the
other hand, there may be an agent of exporter in importer’s country. In this regard, if the
Page│31
sale contract is occurred between the agent of at importer and exporter then it is called
indent.
Proforma Invoice/indent is a form of quotation to a potential buyer, inviting him to buy the
goods on stated terms. It should be clearly stated that it is Proforma and if it is accepted the
details are normally transferred to a commercial invoice.
Certificate of Origin
A certificate of origin is a signed statement providing evidence of the origin of the goods.
The chamber of commerce of the importing country usually issues this certificate.
3.6 General condition of import of goods

• Import Trade Control Schedule Number
For import purpose, use of ITC Number (H.S. Code) with at least six digits corresponding to the
classification of goods as given in the Import Trade Control Schedule 1988, based on the
Harmonized Commodity Description and Coding System shall be mandatory. The seven Digit
H.S. Code published by Bangladesh Bureau of Statistics may also be mentioned in the Letter of
Credit. Form, Letter of Credit and other relevant paper within a bracket in addition to normal H.
S. Code as mentioned above. No bank shall issue Letter of Credit Authorization form or open
Letter of Credit without properly mentioning I. T. C. number (H. S. Code) thereon.
• NOC (No Objection Certificate) On the basis of ROR (Right of Refusal)

a. No Objection Certificate on the basis of Right of Refusal (ROR) form any authority shall not
be required for import of any freely importable item by any Public Sector agency.
b. In case of import of banned/restricted items for approval projects financed under foreign aid
the concerned Government Department/Agency will approach the Chief Controller of the Import
and Export directly for necessary permission together with a list of items duly certified under
proper seal and signature giving description, quantity/number, price and H.S. Code Number
against each item required to be imported. The details about the aided project and specific
provision of the relevant contract and other necessary information shall also have to be
furnished along with the list of the items. The Chief Controller shall issue permission /permit on
the basis of above documents.
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• Restriction regarding source of procurement of goods

a. Goods form Israel or goods originating from that country shall not be importable. Goods also
not are importable in the flag vessels of that country.
b. All kinds of import form and export to Serbia and Montenegro, fragments of former Socialist
Republic of Yugoslavia, shall be banned.
• Pre-shipment inspection
Unless otherwise specified, pre-shipment inspection of imported goods shall not be obligatory in
case of import by private sector importers.
• Shipment of Bangladesh Flag Vessels

a. Goods weighing upto 20 MT for import by individual importer and upto 100 MT import
by group importers can be shipped on a non Bangladeshi vessel. While exceeding said
quantity shipment to be made on Bangladeshi vessel, otherwise general waiver from the
Director General, Shipping Directorate to be obtained.
b. In case of import and export of goods by export oriented industries shipment may be
made in non-Bangladeshi flag vessel
• Import by Mentioning “Country of Origin”

1. In all cases of import, “country if origin shall be mentioned clearly on goods,
package/container. A certificate regarding “country of origin” issued by the concerned
Government agency/approved authority/organization of the exporting country must be
submitted, along with import documents to the Customer Authority at the time of release of
goods.. Besides, 100% export oriented industries, which are recognized by Custom Authority,
shall be waived from the restriction of “country of origin” subject to the conditions imposed by
the Foreign Exchange Regulation Act, Bangladesh Bank and Commercial bank.
2. In case of import of Limestone, in different consignments/lot by the rope-way or by
river, as raw-materials for Chattak Cement Factory, “country of origin” certificate from the
exporting country’s Government/approved authority/organization shall be submitted once to the
Customs authority at the time of release of goods, instead of each consignment/lot for the
quantity mentioned in Letter of Credit in case of river way and as per supplied carrying list as
case of rode-way.
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3.7 The Mechanism of Letter Of Credit is as follows:
INDENTOR
Advises and/or confirms

BUYER/ SELLER/
Present document
IMPORTER EXPORTER/
BENEFICIARY
Application for opening L/C
Makes payments against
Submit document
Makes payment
document
Issue L/C
ADVISING BANK/
Pays or Reimburse
NEGOTIATING
ISSUING BANK BANK
Forward
Instruction to pay or
reimburse
Markets
FIG: FOREIGN EXCHANGE MECHANISM
Or
REIMBURSING
BANK
Page│34
Chapter Four
Import Business
Page│35
4.1 Import
Import is the purchase of foreign goods and services from abroad by Consumer, Firms,
Companies Government, and Semi-Government organization in Bangladesh. It is an
international Trade. It is also called Cross-Border Transaction.
4.2 Import Trade Control

Physical imports of goods into Bangladesh are regulated by the ministry of commerce. Govt.
of Bangladesh in accordance with Import Control Act 1950 and public notifications issued
there under from time to time, through the Chief Controller of Imports & Exports (CCIE)
while Bangladesh Bank through its Exchange Control Dept. Controls the financial aspects,
such as payments for imports, rates of exchange, methods of remittances against imports,
under the provision of F.E.R. Act 1947.
On the other hand the customs authorities at the import points physically supervise the
imports of goods and ensure that the items of goods imported are permissible under I.T.C.
regulations before release of the same for consumption in the country on payment of import
duty, sales taxes etc. where applicable.
Imports of goods from South Africa and Israel or goods originated from these two countries
&& on Flag Vessels of Taiwan, South Africa and Israel is prohibited.
4.3 Import Policy

Import Policy of the Govt. is embodied in the Import Policy order issued by the Govt. at the
end of June or at the beginning of each financial year in July. The CCIE announces the
Import Policy covering various aspects of imports during the relative shipping periods. The
import Policy order covers the following main issues:
A. Items eligible for imports during the shipping period including list of banned items.
B. Sources of finance and items permissible for import against:
1. Cash foreign exchange;
2. Foreign aids/credits/grants/barter and under
3. Wage Earner's Scheme/Secondary Exchange Market Scheme.
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C. The Procedure for imports by Industrial consumers, commercial importers and actual
users, including formation of groups by smaller importers.
D. Basis of licensing for the category holders of various permissible items including repeat
licensing procedure.
E. The dates of opening of L/C and shipment and procedure for submission of Letter of
Credit authorization (LCA) forms covering various items of imports.
F. Conditions for entry of new comers into Import Trade.
G. Conditions for Import by established Importers and Industrial consumers.
H. Procedure for imports under O.G.L., if any.
I. Import by TCB and other Govt. Agencies.
J. Validity of licenses with regard to L/C opening and shipment thereof.
K. Rules relating to revalidation of license (LCA FORM) and extension of L/C.
L. Change of items by the commercial Importers.
Before going to discuss the task of import section of the AB Bank Limited, here I have
given the types of importer and import procedure at first.
4.4 Importer
The person who deals in import business obtaining Import Registration Certificate (IRC) in
terms of Importers, Exporters and Indentors (Registration) Order-1981 from the CCI & E is
treated as Importer.
4.4.1 Types of Importer

There are mainly two types of importer on which AB Bank deals with. They are:
1. Commercial importer
It means an importer registered under the importer, exporters and Indentors registration
under 1981 that import goods for sale. When issued to a commercial importer, gives the
category held by him ITC classification and public notice against which they are
admitted into import trade.
2. Industrial Importer
When issued to an industrial customer gives the items of import raw materials and
packing materials and spare parts, the value of entitlement and ITC classification.
Page│37
4.5 Regulations behind Import

Import of goods and services and payment there against are mainly regulated by Bangladesh
Bank under the purview of following rules and regulations:
1. Foreign Exchange Regulation Act-1947
2. Import & Export (Controls) Act-1950
3. Importer, Exporters and Indentors (Registration) Order-1981
4. ICC Publication-UCPDC-600
5. Import Policy Order issued periodically by the Ministry Of Commerce
6. Public Notices issued time to time by the office of the CCI& E.
4.6 Registration of Importer

As per import and export control act, 1950, no person can indent, import or export any
goods into Bangladesh except in case of exemption issued by the government of
Bangladesh.
The first thing one need to carry out a business of import is called Import Registration
Certificate (IRC). But registration is not required for import goods, which do not involved
remittance of foreign exchange like medicine; the users within monetary limit can import
reading materials etc. without registration.
4.6.1 Procedure for obtaining Import Registration Certificate

Through public notice or import policy the Chief Controller of Imports and Exports invites
applicants usually for registration of importers.
The following papers are required for submission to CCI and E

• Valid Trade license
• Income tax clearance Certificate
• Nationality Certificate
• Asset Certificate
• TIN Certificate
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• Bank Solvency Certificate
• VAT Registration Certificate
• Trade Association Certificate
• Memorandum & Articles of Association
• Certificate of Incorporation ( Incase of Limited Company)
Persons exempted from registration

The following persons/items don’t require IRC for Import
• Government Department
• Local Authorities and Autonomous Bodies
• Recognized Education Institutions
• Hospitals
• Import of goods for which no Foreign Exchange Remittance is required
• Import of Capital Machinery and initial Spares to set up a new industry
This registration number is invariable required to mention in IMP form, LCAF, L/C etc.
Importers must be known to AD (Authorized Dealer).
4.7 Import Procedure

To import through AB Bank Limited a customer/credit required a set of document which is
to be produce before the concerned official of the foreign department.
The following are the required documents:
1. Bank Account
2. Import Registration Certificate (IRC)
3. Tax paying Identification Number (TIN)
4. Proforma Invoice/indent
5. Membership certificate
6. L/C application form duly attested
7. One set of IMP form
8. Insurance cover note with money receipt
9. Others
Page│39
The procedures that follow at the time of imports are as follows:

• The buyer and seller conclude a sale of contract provided for payment by
documentary credit.
• The buyer gives an instruction to his bank (the issuing bank) to issue a credit in favor
of the seller----
• The issuing bank then send message to another bank (advising bank) usually situated
in the country of seller, advice or confirm the credit issue.
• The advising bank then informs the seller through his bank that the credit has been
issued.
• As soon as the seller receives the credit, if the credit satisfies him then he can reply
that, he can meet his terms and conditions, he is in 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; this can be the issuing bank or confirming bank. Bank named in
the credit as the paying, accepting and negotiating bank.
• The bank then checks the documents against the credit. If the documents meet the
requirements of the credit, the bank then pay accept or negotiating according to the
terms of credit.
4.7.1 IMP form

This form is prepared for maintaining account of the money, which goes outside the country
for the purpose of payment. This form is required by Bangladesh Bank. It is an application
for permission under Foreign Exchange Regulation Act-1947 to purchase foreign currency
for the payment of import.
IMP has four copies:
1. Original copy for Bangladesh Bank
2. Duplicate copy for authorized dealer. It is issued for processing exchange copy of
bill entry or certified invoice.
3. Triplicate copy for authorized dealers record
Page│40
4. Quadruplicate copy for submission to the bank in case of import documents is
required.
The importer has to fill up an IMP form provided by the AB Bank. This form contains the
followings
 Name and address of the authorized dealers.
 Amount of remittance to be permitted.
 LCA form no. date and value in taka.
 Description of goods.
 Invoice value in foreign currency.
 Country of origin.
 Port of shipment.
 Name of carrier.
 Port of destination.
 Full name and address of the applicant.
4.7.2 L/C Application Form for Import

The L/C application form contains the following information regarding the importer/buyer,
exporter/seller/beneficiary and the goods:
- The full name and address of the beneficiary
- The amount of credit
- The type of credit: revocable/irrevocable/irrevocable with the added conformation of
the advising bank.
- Whether the credit is to be available by payment, acceptance or negotiation
- A brief description of goods, including details of quantity and unit price
- Whether freight is to be prepaid or not
- Details of document required
- The place of shipment or dispatch or taking in charge and the destination
- Whether partial shipments are prohibited
- The latest date of shipment, dispatch or taking in charge
- The expiry date of credit
- How the credit is to be advised
Page│41
On the next step the importer applies to the bank for opening L/C then the next procedure
for import starts. The documents needed for and the procedure of opening L/C is stated
above. Then the next step is:
4.7.3 Importers application for L/C Limitations

After obtaining the IRC and letter of credit authorization the importer then apply to the
bank’s foreign exchange department for L/C limit. The application contains:
- Full particulars of the bank A/C
- Types of business
- Amount of limit required terms of payment
- Security to be offered
- Goods description
- Repayment schedule and source of find flow etc.
If the concerned officer of the office satisfied with the terms and conditions of the
application then precedes it to the head office. After careful inspection, the head office
sanctions the L/C limit.
4.7.4 Transmission of L/C
After inspection of the terms and conditions that mentioned in Import L/C and signed by the
authorized person of the bank, the letter of credit is sent to advising bank. The opening bank
sends an original copy for negotiation and a copy of the advising bank for advising. It also
sends to the reimbursing bank for reimbursement. L/C is normally sent through Fax, MT-
SWIFT-700 or mail.
4.7.5 Adding confirmation of Import L/C

Adding confirming bank is a bank which adds its confirmation to the credit and it is done at
the request of the L/C opening bank. The L/C advising may confirm the issuing bank about
the credit-worthiness of the beneficiary by sending a credit report if there exist a prior
agreement between two banks.
The credit report contents:
- Name and address of the beneficiary
- Constitution
- Nature of account with the advising bank
Page│42
- Business/company established/incorporated
- Nature of business activity
- Other allied activity
- Name and address of associate concern
- Experience as to their dealings
- It limited Co. then authorized and paid-up-capital etc
One thing must be mentioned here that this credit report can be sought from the buyer or
from the seller’s bank or from any other authority also known to the seller.
4.7.6 Amendment of Import L/C

Parties of L/C mainly the buyer & seller can not always satisfy about the terms and
conditions of the L/C due to some genuine reasons. In that situation, the credit terms should
be amended
Incase of revocable credit, it can be amended or cancelled by the issuing bank at any
moment & with prior notice to the beneficiary. However in case of irrevocable credit it can
neither be amended or cancelled without the agreement or the issuing bank, the confirming
bank (if any) & the beneficiary.
4.7.7 Receipt and scrutiny of Documents

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.
The negotiating bank negotiates the draft if the documents are found in order as per terms of the
Letter of Credit, pays the beneficiary. The negotiating bank will reimburse itself either by
debiting AB Bank’s Account, if any, maintained with them (the NOSTRO Account) or will seek
reimbursing bank mentioned in Letter of Credit, if there is no account. Simultaneously, the bank
will send the documents to AB Bank. The nature of documents has to be sent by the negotiating
bank will depend primarily on the terms of the Letter of Credit and secondly the sales contact
between the buyer and seller. 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)
Page│43
• Certificate of Origin;
• Commercial Invoice;
• Draft or bill of exchange;
• Shipment certificate
• Shipping advice
• Inspection of Survey Certificate;
• Packing List;
• Insurance cover note with insurance paid slip
• Quality Control Certificate
4.7.8 Scrutiny of Document

On receipt of the documents the branch shall immediately set itself to the task of
scrutinizing the documents. What they would ensure is that the documents received from the
negotiating bank are drawn strictly in conformity with the terms of the Letter of Credit and
respond to the requirement of the underlying Letter of Credit in every respect. Examination
of the documents generally includes the following points:
• Completeness of the documents;

• Consistency of the documents with each other;
• Compliance with the Uniform Customs and Practices for Documentary Credits (UCPDC)
issued by the International Chamber of Commerce, Paris.
One of the basic principles of documentary credit is that all parties deal with document and
not with goods (Articles 6 of UCPDC-500). That is why the documents should be
scrutinized properly. If any discrepancy in the documents is found, that is to be informed to
the importer that whether he accepts the bills with discrepancies or not. If the importer
doesn’t accept the banker inform it to the negotiating bank within seven banking days from
the date of receipt of the documents, otherwise it is treated to be accepted & the opening
bank must be bound to pay against the bill and no complain against the bill will be accepted
more than seven banking days following the date of receipt of the documents under Article
no K1 (d) & Article no. 14 (c) of the UCPDC-500.
Page│44
4.7.9 Retirement of the documents
On receipt of cost memo/lodgment voucher the importer pays the necessary amount. This
stage of the documentary credit operation is known as ‘Retirement of Import Bills’. The
branch will prepare the retirement voucher to reflect the amount of cost and other charges to
be collected from the importer, adjustments of margin and PAD Account. Thereafter the
documents may be handed over to the importer against proper acknowledgement after
certification and endorsement.
On receipt of intimation, the importer is given necessary instructions with regard to
retirement of the bill, disposal of the shipping documents and clearance of the goods from
the customs authorities. The importer may ask the bank to retire the bill by debiting his
account or may request for the providing LIM or LTR facility, if arranged earlier.
On intimation the importer approaches with a letter for retirement of the document against
full payment with up to date interest and charges payable. Bank prepares cost memo in
printed form on account of the concerned party giving details head of charges payable.
4.8 Common discrepancies of the imported document

The followings are the discrepancies usually found in the documentary operation;
1) Inadequate number of invoice.

2) Submission of shipping documents after expiry of L/C
3) Late shipment.
4) Stale documents.
5) Excess drawing.
6) Shipping made from and to ports other than those permitted in the relevant L/C
7) No indication of “ freight prepaid”
8) Difference in weight in the invoice and with certificate.
9) Specification of goods are not as per terms of L/C
10) Short submission of documents.
11) LCA no. Bangladesh bank permission no are not mention in the invoice.
12) Goods short shipped etc.
The above discrepancies must be carefully noted and referred to the Importer for acceptance
other wise bank would be liable for any problems arising out of them.
Page│45
4.9 Financing related with Import

• Loan Against Imported Merchandise (LIM)
Parties who are not in position to retire the documents, they maybe allowed to retire the
PADs through LIM Account on retaining sufficient margin n the landed cost of the goods or
as prescribed by Bangladesh Bank. Even if they are reluctant to provide aforesaid margin,
goods may be allowed to be cleared through LIM account under forced circumstances to
same the consignment form incurring demurrage, pilferage, and auction and to protect the
interest of the Bank.
• Under such circumstances, goods are cleared only through approved Clearing
Agent of the Bank.
• The consignment after clearance is stored in Bank’s own go-down duly insured
against all risks.
• The delivery of the consignment is made on the parties against payment only,
without resorting to any borrowing from the Bank on that behalf.
• Loan Against Trust Receipts (LTR)

Advances against a Trust Receipt obtained from the Customer are allowed to only first class
tested parties when documents covering an import shipment of other goods pledged to the
Bank as scrutiny are given without payment. However, for such advances prior
permission/sanction form Head Office must be obtained. The customer holds the goods or
their sale –proceeds in trust for the Bank, till such time, the loan allowed against the Trust
Receipts is fully paid off.
• Collateral Security
Collateral security valuing double of the amount of LTR is to be obtained. Any exception to
this rule requires approval by Head Office.
Page│46
Chapter Five
Export Business
Page│47
5.1 Export
Export means goods and services that are produced domestically and sold to buyers in
another country. Export brings foreign currency in the economy. Higher the export higher
the reserve of foreign currency, the export department of AB bank, CDA Avenue branch
engage with various export-related activities for encouraging the exporter. The major
function of this section is comprises with purchase, collection and negotiate the export bill,
provide the exporter export financing and helps the exporter in different issues.
5.2 Export Policy

Export policies formulated by the ministry of commerce, GOB provide the guidelines and
incentives for promotion of export in Bangladesh. Export policies also set out commodity
wise annual target. It has been decided to formulate these policies to cover a five year
regime. The export-oriented private sector, through their representative bodies and chambers
are consulted in the formulation of export policies and are also represented in the various
export promotion bodies set up by the government.
5.3 Export Incentives

a. Financial Incentives
• Restructuring of export credit guarantee scheme
• Convertibility of Taka in current account
• Exporters can deposits 40% of FOB value of their export earning in own
accounts in dollar and pound sterling
• Export development fund
• Expansion of export period from 180 days to 270 days
• Tax rebate on exports earning
• Duty draws back
Page│48
• Bonded warehouse facilities to 100% export oriented firms
• Duty-free import if capital equipment for 100% export oriented firs
b. General Incentives:
• Trading course on external trade
• Arrangement of international trade fairs, commodity-based exhibits in
the country and participation in foreign trade fair
c. Other Incentives:
• Assistance in improvement of quality and packing of exportable items.
• Simplification of exports procedures.
5.4 Export procedures

The import and export trade in our country are regulated by the import and export control
act 1950 under the export policy of Bangladesh the exporter has to get valid Export
Registration Certificate (ERC) from Chief Controller of Import & Export (CCI & E). The
ERC is required to renew every year.
i. Registration of exporters:
For obtaining ERC intending Bangladeshi exporters are required to apply to
the controller/joint controller/deputy controller/assistant controller of import and export, in
the prescribed form along with the following documents:
 Nationality and assets certificate
 Memorandum and Articles of Association and Certificate of Incorporation in
case of Limited company
 Bank certificate
 Income tax certificate
 Tax certificate
ii. Securing the order:
After getting ERC the exporter may proceed to secure the export order. He
can do this by contracting the buyer and directly or through agent. In this purpose the
exporter may get help from:
Page│49
 License officer
 Buyer’s local agent
 Export promoting organization
 Bangladesh Mission Board
 Chamber of Commerce
 Trade Fair etc.
iii. Signing the contract
After communicating buyer, exporter has to get (writing or oral) for
exporting exportable items from Bangladesh detailing commodity, quality, price, shipment,
insurance and marks, inspection and arbitration etc.
iv. Receiving Letter of Credit
After getting the contract for sale, exporter should ask the buyer for Letter
of Credit clearly starting terms and conditions of export and conditions of export and
payment (here the regulatory framework is foreign exchange regulation of B. Bank &
UCPDC 600 published by ICC):
 The terms of the L/C are in conformity with those of the contract
 The L/C is an irrevocable one preferably confirmed bye the advising bank
 The L/C allows sufficient time for shipment and negotiation.
Terms and conditions should be stated the contract in case of other mode of payment:
 Cash in advance
 Open account
 Collection basis
v. Procuring the materials
After making the deal and on having the L/C opened in his favor the next
step for the exporter is to set about the task of procuring or manufacturing the contracted
merchandise.
vi. Shipment of Goods
Then the exporter should take the preparation for exporting arrangement for
delivery of goods as per L/C and in terms prepare and submit shipping documents for
payment/acceptance/negotiation in due time.
Page│50
5.5 Documents needed for export procedure

• Export Registration Certificate (ERC) from CCI & E
• L/C document
• EXP form duly signed by the exporter
• Certificate of origin
• Shipping documents
• Inspection certificate
• Packing list & Bill of Lading
• Invoice
• Transport documents
• Quality control certificate
• Customer Duty Certificate
• Bill of Exchange
5.6 Export documentary checking

1) General Verification
• L/C restricted or not
• Exporter submitted documents before expire date of credit
• Shortage of documents etc.
2) Particular Verification
• Each and every document should be verified with the L/C
3) Cross Verification
• Verification of one documents to another
Page│51
Parties involved in L/C, particularly the seller and the buyer cannot always satisfy the terms
and conditions in full as expected due to the some obvious and genuine reasons. In such a
situation the credit should be amended. The seller being satisfied with the terms and
conditions of the credit proceed to dispatch the required goods to the buyer and after that
have to present the documents evidencing dispatching goods to the negotiating bank on or
before the stipulated expiry date of the credit. After receiving all the documents the
negotiating bank then checks the documents against the credit. If the documents are found 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 requirement, either effects payment
or reimburse in the pre-agreed manner.
Settlement means fulfill 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
agreements as stipulated in the credit. These are:
• Settlement by payment
• Settlement by acceptance
• Settlement by negotiation
5.7 Types of Payment

There are different types of payment method used in international trade and letter of credit
may include one of them.
• Direct cash payment
1. Direct cash remittance
Exporter may receive value of export in advance from importer before the actual
shipment of goods. This may be done by cheque, draft, and M.T. or T.T. favouring
exporters. The exporters collect the remittance and subsequently export goods as per terms
of the contract.
2. C.A.D (Cash Against Document)

Sometimes goods are exported on Cash Against Document basis. In this case the
export documents are presented to importer though a bank in the country of importer and if
Page│52
the importer is satisfied with the documents he pays the bill in cash and takes delivery of the
shipping documents (B/L, Invoice, etc.).
3. Consignment sales
Goods may be exported on consignment sales basis. Exporters ship goods to the
agent who receives and sells the same ad remit sale proceeds to the exporter after deduction
of commission and other charges along with a statement called Account Sale. The exporter
retains title to the goods exported. As per exchange control regulation only non-traditional
item can be sent on consignment basis. Export of goods on consignment sale basis request
prior permission from Exchange Control Authorities. In case of sale on consignment basis
the exporter must have sufficient knowledge regarding financial status of the agent. The
exporter signs an agreement with importer to act as an agent of the exporter. As in this
method generally no bill of exchange is drawn on the importer, the seller (exporter) is
exposed to possible default on the part of the importer.
4. Documentary sight draft (D/P)

This is one of the most widely used methods of case payment in export trade. The
exporters ship goods and draw a sight bill of exchange (draft) on the importers and the same
is presented to the drawee (importer) along with the shipping documents for payment.
Drawee pays the draft (bill of exchange) and takes delivery of documents. Bank in
importing country gives delivery of documents to importers only against payment of the bill.
5. Delivery of documents against trust receipt

Sometimes drawee may take possession of the goods against "Trust Receipt" and in
this case responsibility for repatriation of export proceeds lies with the foreign bank that
allows release of the goods to the importers against Trust Receipt. In this method exporter
retains the title to the goods till the importer finally pays the bill.
6. Documentary Usance Bill

Sometimes the usance bill of exchange, which is payable after a certain fixed period
of time says, 90 d/s, 60 dld etc., is drawn on importers. Bank presents the drafts to the
drawee for acceptance. Drawee accepts the draft, which is retained by the Bank along with
shipping documents with them till payment is made in full. If goods arrive at the port of
destination, the foreign bank, at the request of exporter takes delivery and keeps the same in
Page│53
warehouse. Drawee pays the accepted draft on due date and take delivery of the documents.
But the drawee may also pay the draft before the due date and consequently take possession
of the goods. In this case drawee is entitled to some rebate at an agreed rate for the
unexpired period of the draft i.e. difference between the due date and the date of payment.
• Credit payment
1. Documents against Acceptance (D.A. Bill)
Sometimes drawee may take possession of the goods against "Trust Receipt" and in
this case responsibility for repatriation of export proceeds lies with the foreign bank that
allows release of the goods to the importers against Trust Receipt. In this method exporter
retains the title to the goods till the importer finally pays the bill.
5.8 Export Financing

Financing report constitutes an important part of a bank’s activities. Exporters require
financial services at two different stages of their export operation.
1. Pre-shipment credit
Pre-shipment credit is given to finance the activities of an exporter prior to the actual
shipment of the goods for export. The purpose of such credit is to meet working capital
needs starting from the point of purchasing of raw materials to final shipment of goods for
foreign country. Pre-shipment credit is given for the following purposes:
• Cash for local procurement and meeting related expense
• Procuring and processing of goods for export
• Packing and transporting of goods for export
• Payment of insurance premium
• Inspection fees.
An exporter can obtain credit facilities against lien on the irrevocable, confirmed and
unrestricted export letter of credit in form of the following:
A) Export cash credit (Hypothecation)
Page│54
Under this agreement, a credit is sanctioned against hypothecation of the raw
materials. Such facility is allowed to the first class exporters. As the bank has got no
normally insists on the furnishing collateral security.
B) Export cash credit (Pledge)
Such credit facilities are allowed against pledge of exportable goods or raw
materials. In this case credit facilities are extended against pledge of goods to be
stored in the warehouse under bank’s control by signing letter of pledge & other
pledge document. In the event of failure of the exporter to honor his commitment,
the bank can sell the pledge merchandise for recovery the advance
C) Export cash credit against trust receipt

Under this agreement credit is allowed against trust receipt & the exportable goods
remain in the custody of the exporter but he is required to execute a stamped trust
receipt in favor of the bank, wherein a declaration in made that goods purchased with
financial assistance of the bank are held by him in order to utilize the credit for
processing & rendering the goods in exportable condition.
D) Packing Credit
Packing credit means any loans or advances granted or any other credit provided by
an institution to an exporter for financing the purchase, processing, or packing of
goods on the basis of L/C.
E) Back-to-back letter of credit

After receiving order from the importer very frequently exporters face problems of
scarcity of raw materials because some raw materials are not available in the
country. These have to be collected from abroad. In that case exporter gives lien of
export L/C to bank as security and opens as L/C against it for importing raw
materials. This L/C is called back-to-back L/C.
2. Post-shipment credit
Page│55
The need for post-shipment finance arises because exports that sell goods abroad
have to wait for a long time before payment is received from the overseas buyers. The
actual period of waiting depends on the payment terms. In the meantime, the exporter
needs funds to carry on his normal export activities. Banks are the main source for the
exporters to seek the finance.
Bank generally finances the exporters at post-shipment stage on verifying of the credit-
worthiness and financial soundness of both the buyers and sellers. Post-shipment credit
ordinarily takes the following shape.
• Negotiation of documents under L/C
• Purchase of Foreign Bill under D.P and D.A bills
• Advance against Foreign Bill under collection.
5.9 Export Flow Chart
Receiving the order Asking to open L/C
Booking of freight Booking of exchange rate
Procurement of goods Getting the goods insured
Shipment of goods Advice of shipment
Preparing export papers Securing payment
Close of transaction
Page│56
Page│57
Chapter Six
Foreign Remittance
Page│58
6.1 Foreign Remittance

Foreign remittance means remittance of foreign currencies from one place/person to another
place/person. In broad sense foreign remittance includes all sale and purchase of foreign
currencies on account of import, export, Travel and other purpose. However specifically
foreign remittance means sale and purchase of foreign currencies for the purpose other than
export and import.
On March 24, 1994 Bangladesh Taka was declared convertible for current account
International Transaction. Only a few remittance of special nature require Bangladesh prior
approval.
6.2 Types of Remittance

All foreign remittance transactions are grouped into two broad categories
i) Foreign inward remittance
ii) Foreign outward remittance
6.2.1 Inward Remittance

Inward remittance covers remittance on account of export and private remittance on sundry
items, purchase of traveler’s cheques, foreign currency notes and coins. Actually inward
remittance means remittance received in form abroad through normal banking channel in the
form of foreign TT, MT, DD, Cheques, Bills and Drafts, TCs etc. favoring a beneficiary in
Bangladesh.
Purpose of inward remittances:
 Family maintenance
 Indenting commission
 Donation
 Gift
 Foreign investment
 Export proceeds
 Others
Page│59
Mode of inward remittance

 Telegraphic Transfer (TT)
 Mail Transfer (MT)
 Foreign Demand Draft (FDD)
 Payment Order (PO)
 Traveler’s Cheque (TC)
 Foreign currency Notes.
6.2.2 Outward Remittance

The term “outward remittance” includes not only remittance i.e. sale of foreign currency by
TT, MT, Drafts, Traveler’s Cheque but also includes payment against imports into
Bangladesh and local currency credited to non-resident Taka account of foreign banks or
convertible taka account.
Mode of outward remittance:

 Foreign Telegraphic Transfer (FTT)
 Foreign Mail Transfer (FMT)
 Foreign Demand Draft (FDD)
 Traveler’s Cheque (TC)
 Foreign currency Notes
Local branches can draw TT to those banks with which they have accounting relationship &
message should contain test & brief description of the beneficiary.
Any Authorized Dealer (AD) branches can issue foreign drafts draw on the bank with which
they have an accounting relationship. AD branches can issue foreign currency notes as per
ceiling fixed by Bangladesh Bank.
AD branches can sale Travelers Cheques as per the ceiling fixed by Bangladesh Bank.
Foreign remittance can be cancelled such as unitized foreign currency against passport
endorsement or cancellation of loyalty issued foreign demand etc.
Page│60
Chapter Seven
Performance Evaluation
Page│61
Page│62
7.1 Evaluation of Foreign Exchange performance

Foreign exchange business plays a crucial role in the overall business of a country. Financial
centers around the world function as anchors of trading between a wide range of different
types of buyers and sellers around the clock. In exercise of the powers conferred by the
foreign exchange regulation act 1947 certain schedule banks authorized by the Bangladesh
Bank to deal in Foreign Exchange; the selected branches of the bank can transact such
business. They are known as authorized dealers. For this reason CDA Avenue branch is also
engaged in trade financing. I have analyzed the performance of last three years from 2007 to
2009.
7.1.1 Analysis of Import

Years 2007 2008 2009
Import (in USD) 14493091.08 25381706.45 47556059.24
50000000
40000000
30000000
20000000
10000000
0
2007 2008 2009
Im port ( in USD)
Figure: 01
From the above figure it is clear that the volume of import is increasing gradually and
mentionable that 2008-2009 is noteworthy.
Due to political unrest, adverse economic condition and economic recession was the main
reason of flat growth of import business during 2006-2007 and 2007-2008. In that period the
demand of import decreased significantly. Frequent fluctuation of domestic currency worth
against US dollar, unavailability and shortage of foreign currency was also important
reasons for small growth of import.
Page│63
But growth of import from 2008 to 2009 is remarkable due to inclusion of several corporate
customers and accordingly the profit during 2008-2009 is increased. The branch was in
progressing position because of the economic condition was good position in compare to
previous year.
7.1.2 Analysis of export

Years 2007 2008 2009
Export (in USD) 32680.33 292725.00 44038.51
300000
250000
200000
150000
Export (in USD)
100000
50000
0
2007 2008 2009
Figure-02
ABBL, CDA Avenue Branch was doing the foreign exchange business from the very
beginning of the branch and export renaissance also started that time. From the analysis of
export volume it is seen that in 2007-2008 there is a remarkable growth of export. The
reason behind this notable change is the insertion of several big corporate groups with
renowned buyer and as a result volume of export was outstanding. But in 2008-2009 the
volume of export again reduced to USD 44038.51 due to aversion of exporter to export
outside of country as political instability, disturbed economic growth was prevailed.
Inharmonious international relationship also had a great affect on volume of export
7.1.3 Analysis of Foreign Remittance
Page│64
Years 2007 2008 2009
Remittance(in USD) 2004108.14 1527503.99 2032263.34
2500000
2000000
1500000
Remittance(in USD)
1000000
500000
0
2007 2008 2009
The above table and graph shows that the total foreign remittance earning is not up to the
mark due to lack of non resident account & less relationship with different exchange house
all over the world. Due to change of management policy for collecting huge amount of
foreign remittance back signed a number of MOU with foreign exchange house and
insertion of several shipping companies, remittances is gradually increasing 2008-2009 and
at the end the December the volume of USD 2032263.34 which is better than previous year.
Page│65
7.2 Risk assessed in Foreign Exchange Business

Risk is uncertainty of outcome leading to loss of money, loss of reputation and/or
destabilization of cash flows. It is an inherent part of foreign exchange trade and money
market operation. It never can be avoided but to minimize. Foreign exchange risk
management involves two steps:
• Identifying Risks
• Measures of controlling Risks
1. Identifying Risk
a. Credit risk/counterparty risk- It is the risk of loss due to inability or unwillingness
of the counterparty to meet its obligation.
b. Liquidity risk- Liquidity risk is the risk that a bank will be unable to meet its funding
requirements or execute a transaction quickly and at a reasonable price.
c. Market risk- There is two types of market risk as and when investment is made in
foreign currency i.e. (i) currency exchange rate risk and (ii) interest rate risk.
d. Operational risk- operational risk can arise out of many situations i.e. on account
human error or faulty systems and procedures.
e. Other risks viz., country risk, legal risk etc.
2. Measures of controlling risk
a. Credit risk- Through selection of counter party and fixation of counter party limits.
b. Liquidity and market risk- To minimize these types of risks we can follow a
benchmark. Currency composition, investment portfolio, duration etc. are included in the
benchmark.
c. Operational risk- To ensure the minimum level of operational risk there are three
offices/groups/desks viz. (i) front office, (ii) middle office and (iii) back office.
d. Others- open position limit:- day-light limit/intra-day-limit-overnight limit, stop-loss
limit, currency-wise limit, dealer-wise limit, country limit etc.
Page│66
Chapter Eight
Concluding Aspect
Page│67
8.1 Findings
From the practical implementation of customer dealing procedure during the whole period
of my practical scope in AB Bank, CDA avenue branch, I have reached a firm and concrete
conclusion in a very confident way.
The foreign exchange of AB Bank, CDA Avenue branch is facing the following problems
which are barrier to improve their performance and distinguish from others:
• Want of modern technical equipment such as good software & computer the
mechanism of L/C process sometimes makes complication.
• In case of big L/C payment exchange rate or fluctuation of currency create problem
which is harmful for foreign exchange business
• Foreign exchange house relationship & non-resident account, remittance business is

not enough than other competitor.
• Import and export business are remarkably increasing in 2006 & 2007 respectively
then previous year but later on not continue due to discontinuation of corporate
business and stuck up of previous financing
• For implementation of BASEL II the bank not yet started its work to make a rating
based bank. But now in every case BASEL II is very much needed which will help
to adopt better banking position in the country.
• According to some clients opinion introducer is one of the problems to open an

account. If a person who is new in the city wants to open an account, it is a problem
for him/ her to arrange an introducer of SB or CD accounts holder.
• Lack of variety of service is also a drawback of the general Banking area of the AB
Bank of Bangladesh Ltd. The bank provides only some traditional limited service to
its client. As result Bank is falling behind in competition.
Page│68
8.2 Recommendations
Here are the following recommendations embedded with:
• Bank will have to arrange more training program for the FOREX officers to improve
their analytical ability, communication skill & professional standard regarding the
customer dealing & different foreign exchange operation.
• For better profit than others we have to create good relationship with renewed
corporate client who have huge amount of Import & Export & remittance business.
• Bank should make more relationship with the foreign exchange house & special
strategies will have to take for increasing non resident account, indenting & shipping
line account.
• The bank needs to create new marketing strategy which will attract more clients
including priority customer and thereby increase the total export import business.
• New updated banking software should be installed for foreign exchange department
and bank should take proper step for implementation of BASEL II.
• Payments for L/C’s could also made through pre arranged credit facilities that the
customer may have with the bank. Usually the rates of interest on these credits are
excessively high which actually discourages the customers. Reducing interest on
such credit facilities would induce the clients to do more global trade thus increasing
bank’s profit as well as the well being of the country’s economy
• Bank should consider exchange rate at the time of big payment & L/C margin &
commission should be uniform.
• There is no customer complain desk which causes dissatisfaction about document

negotiation.
Page│69
8.3 Conclusion
Now a day the world is called global village. Because business does not have national
boundaries, it reaches around the world. AB Bank Limited wants to cross the nation
boundaries. Already they develop a global network. AB Bank Limited plays an important
role in our national economy. The employees of the AB Bank are well organized. They
maintain a good employee relation policy.
It was huge gratification for me to do my internship program in a venerated organization

like ABBL, CDA Avenue branch. It presents me ample opportunity to scrutinize the
functions of bank through the superior assistance of its members.
ABBL is a company which has so far shown good performance and holds the strongest
position in the banking market. Overall the bank must make a positive attempt to be more
outward looking in their goals and aware of what is happening.
I hope in spite of my all limitations this experience of sharing works with such working
environment will help me a lot in professional life.
Page│70
References
 Gordon E. & Natarajan K. : Banking Theory, Law and Practice (Himalayan

Publishing House, 2000)
 International Trade Finance-Journal (Bangladesh institute of Bank Management)
 Foreign Exchange – L.R Chowdhury
 Import & Export Policy – Publication of Ministry of Commerce
 Guidelines for Foreign Exchange Transaction & Documentary Credits-
Publication of Bangladesh Bank
 Banking Manual Of ABBL
 Prospects of ABBL
 Annual Report of ABBL
 www.abbank.com.bd

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Page 1 of 70Page 1 of 70

1.2 Objective of the study

1.3 Methodology of the study

Primary sources of data

 Face to face conversation with the bank officer and staff

 Annual report of the ABBL

1.4 Scope of the study

1.5 Limitation of the study

An overview of the company

2.1 Historical Background of AB Bank Limited

2.1 Change of name and logo of ABBL:

Previous Name & logo : New Name & logo:

Arab Bangladesh Bank Ltd. AB Bank Ltd

2.3 Objectives of ABBL:

• Be one of the best bank of Bangladesh

2.4 Credo of ABBL

To be trendsetter for innovative banking with excellence and perfection

To be the best performance bank in the country and the region

Goal of the bank

establish a strong presence to recognize shareholders' expectations and optimize their

rewards through dedicated workforce

2.5 Management hierarchy of AB Bank Ltd:

Management hierarchy of AB Bank Ltd

2.6 Corporate Profile

Incorporated on : 31st December, 1981

2.7 Brief description of CDA Avenue Branch

Major features of the Branch are:

• Fully computerized accounts maintenance

2.7.1 Financial products/services of ABBL, CDA Avenue branch

AB Bank believes in modernization and complete customer satisfaction which helps to

• Retail Banking products

• Corporate banking products and services

• SME loan products

• Inward and outward remittances

2.7.2 Organizational structure at branch level

A/C Remittan Foreign

2.7.3 Performance: ABBL, CDA avenue branch, Chittagong

Particulars 2009 2008 2007

2.7.3 SWOT Analysis

Strengths Weakness Opportunities Threats

FOREIGN EXCHANGE OPERATION

3.1 Foreign Exchange

Foreign exchange is the rate of exchange in the both country's currency.

3.2.2 Authorized Money Exchange

3.2.3 Legal basis of Foreign Exchange Transaction

3.3 Foreign Trade

3.4 Sale and Payment term in Foreign Exchange Business

Advantages of an L/C to exporter are:

Advantages of L/C to Importer are:

L/Cs is following types

Drafts are four types:

3.5 Letter of Credit

• Is to make a payment to or the order of a third party (“the Beneficiary”), or is to accept

3.5.2 Types of Letter of Credit

• Revocable Letter of Credit

An irrevocable credit is a documentary credit, which cannot be revoked, varied or

3.5.3 Documents needed from Importer for opening L/C

3.5.4 Procedure of opening L/C

3.5.5 Important features of an L/C

3.5.6 Documents used in Documentary Credit

The Bills of lading includes:

3.6 General condition of import of goods