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F Exchange
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    Foreign Exchange BASIC Bank Ltd- F oreign Exchange means foreign currency and it includes any instrumentdrawn, accepted, made or issued under clause (13), Article 16 of theBangladesh Bank rder, 1! #$ All deposits, credits and %alances paya%le inany foreign currency and draft, tra&elers che'ue, letter of credit and %ill of exchange expressed or drawn in Bangladeshi currency %ut paya%le in anyforeign currencies$ Bangladesh Bank issues Authoried ealer (A) license %y o%ser&ing the%ank*s performance and also the customers associated with the %ank for conducting foreign dealings$ Back Ground of Bank’s Involvement Banks play a &ital role %y minimiing the risk of two parties, namely %uyer andseller$ +n fact without the help of %anks we cannot think a%out a congenialinternational trade en&ironment$ ow the 'uestion comes how %anks helpinternational trade$ -e know that in a local trade there is a chance to knowa%out each other$ But in international trade the in&ol&ed parties stay two distantplaces$ .or a %uyer the following risks are in&ol&ed/ ã 0isk of non/deli&ery of goods$ ã 0isk of recei&ing su% standard goods$ ã 0isk of fraud in goods$ .or the seller the following risk is in&ol&ed/ ã 0isk of non/payment$o reduce the aforesaid risks an independent system is introduced which willsafeguard the %uyer as well as seller in an international trade$ Actually %anksplay due role %y getting into two parties and %ind them$ 21 +mport 2ection   Export 2ection   0emittance 2ection   .oreign Exchage    Foreign Exchange BASIC Bank Ltd- 3.1 IMPORT SETIO! 3.1.1 FOREIG! TR #E #EP RTME!T .oreign trade deals with import and export %usiness .  hat is why there are two partsin foreign trade department in BA2+4 Bank 5imited$a$+mport epartment%$Export epartment+mport department deals with the import oriented foreign trade while export departmentdeals with export oriented foreign trade 3.1.$IMPORT% +mports are foreign goods and ser&ices purchased %y consumers, firms 7o&ernments in Bangladesh$ o import, a person should %e competentto %e a 8importer*$ According to +mport and Export 4ontrol Act, 1!9:, theffice f 4hief 4ontroller f +mport and Export pro&ides the registration(+04) to the importer$ 3.1.3 IMPORT PROE#&RES%1.Re'(strat(on )(t* I+E a$.or engaging in international trade, e&ery trader must %e first registeredwith the 4hief 4ontroller of +mport and Export . %$By paying specified registration fees and su%mitting necessary papers tothe 44+E .  the trader will get +04 (+mport 0egistration 4ertificate)$After o%taining +04, the person is eligi%le to import .   $.Purc*ase ontract ,et)een (m-orters and e-orter% a$ow the importer has to contact with the seller outside the country to o%tainthe proforma in&oice ; indent which descri%es goods . %$+ndent is got through indenters a local agent of the sellers . c$After the importer accept the preformed in&oice, he makes a purchasecontract with the exporter declaring the terms and conditions of the import .  d$+mport procedure differs with different means of payment .  +n most casesimport payment is made %y the documentary letter of credit (5;4) in our country .3.ollect(on of / form%  hen the importer collects an 5etter of 4redit Authoriation ( 54A) form BA2+4 Bank haka E<= Branch$ 22    Foreign Exchange BASIC Bank Ltd- 0.O-en(n' a /etter of red(t /2 +n international en&ironment, %uyers and sellers are often unknown to each other  . 2o seller always seek guarantee for the payment for his goods exported .  >ere isthe role of %ank .  Bank gi&es export guarantee that it will pay for the goods on%ehalf of the %uyer  .  his guarantee is called 5etter of 4redit .  hus the contract%etween importer and exporter is gi&en a legal shape %y the %anker %y its 85etter of 4redit* .   a.Part(es of /2 i$ Im-orter   ? 2eller -ho applies for opening an 5;4 . ii$ Issu(n' Bank  ? +t is the %ank which opens;issues a 5;4 on %ehalf of theimporter  . iii$ onf(rm(n' Bank  ? +t is the %ank, which adds its confirmation to the creditand it, is done at the re'uest of issuing %ank .  4onfirming %ank may or maynot %e ad&ising %ank . i&$ dv(s(n' 2 !ot(f4(n' Bank  ? is the %ank through which the 5;4 is ad&isedto the exporters .  his %ank is actually situated in exporter*s country .  +t mayalso assume the role of confirming and ; or negotiating %ank dependingupon the condition of the credit . &$ !e'ot(at(n' Bank  ? is the %ank, which negotiates the %ill and pays theamount of the %eneficiary .  he ad&ising %ank and the negotiating %ank mayor may not %e the same .  2ometimes it can also %e confirming %ank . &i$ Pa4(n' 2 cce-t(n' Bank  ? is the %ank on which the %ill will %e drawn (asper condition of the credit) .  @sually it is the issuing %ank . &ii$ Re(m,urs(n' ,ank  ? is the %ank, which would reim%urse the negotiating%ank after getting payment ? instructions from issuing %ank .,. --l(cat(on For /2 l(m(t% Before opening 5;4, importer applies for 5;4 limit .  o ha&e an import 5;4 limit,an importer su%mits an application to the epartment of BA2+4 Bank 5imitedfurnishing the following information, /i$.ull particulars of %ank account maintained with BA2+4 E<= %ranch . ii$ature of %usinessiii$0e'uired amount of limit i&$<ayment terms and conditions&$7oods to %e imported 23    Foreign Exchange BASIC Bank Ltd- &i$ffered security&ii$0epayment schedule A credit fficer scrutinies this application and accordingly prepares a proposal (45<)and forwards it to the >ead ffice 4redit 4ommittee (>44) .  he 4ommittee, if satisfied, sanctions the limit and returns %ack to the %ranch .  hus the importer isentitled for the limit .c.T*e /2 --l(cat(on%  After getting the importer applies to the %ank to open a letter of credit on %ehalf of him with re'uired papers . i$ #ocumentar4 red(t --l(cat(on Form% ii$BA2+4 Bank pro&ides a printed form for opening of 5;4 to the importer  .  hisform is known as 4redit Application form .  A special adhesi&e stamp is affixedon the form .  -hile opening, the stamp is cancelled .  @sually the importer expresses his desire to open the 5;4 'uoting the amount of margin inpercentage .  iii$ Proforma Invo(ce%  +t states description of the goods including 'uantity, unitprice etc . i&$ T*e (nsurance cover note%  he name of issuing company and the insurancenum%er are to %e mentioned on it . &$ T*e /etter of cred(t aut*or(5at(on /  form%  54A form should %e dulyattested$&i$he .orm/+<$&ii$ax +nformation 4ertificate&iii$ For)ard(n' for Pre6S*(-ment Ins-ect(on PSI% +mporter sends forwarding letter to exporter for <re/2hipment +nspection .  Butall types of goods do not re'uire <2+ .   7.Scrut(n(5at(on of /2 --l(cat(on%a. he BA2+4 Bank fficial scrutinies the application in the following manner, / ,. he terms and conditions of the 5;4 must %e complied with @4<4 9:: andExchange 4ontrol  +mport rade 0egulation .c. Eligi%ility of the goods to %e imported .d. he 5;4 must not %e opened in fa&or of the importer  .e. 0adioacti&ity report in case of food item .f. 2ur&ey report or certificate in case of old machinery '. 4arrying &essel is not of +srael or of 2er%ia/ ontenegro 24
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