Import and Export Services of IBBL

Import and Export Services of IBBL

Import and Export Services of IBBL


Import and Export Services of Islami Bank Bangladesh Ltd

 

Import Services

Meaning of Import

Import means lawfully carrying out of anything from one country to
county for Buying. It will be occurred according to the Government law.

Import Policy Order

Based on the needs of commodity and availability of finance,
Government declares policy. For import of goods for a particular period having
approval from the National Assembly is defined as Import policy order. Import
policy is a guideline of a set of rules envisaged by Government Authority i.e.
the Ministry of Trade and commerce for the registered importer for import of
goods inside the country.

Duration

Earlier import policy has been formulated the five years. But
present import policy order has been formulated for 3 (three) years, Effect
from the 14th June 2003 to 30th June 2006 and valid till
announce of new import policy order. If require Government can revise the
policy in each every years.

General rules in Connection with Import

A: Restriction of Import:

a) Negative list of Merchandises.

b) Restricted list.

c) Footnote under Restricted List

d) Freely importable items.

ITC number is compulsory (H.S code 6 digit) to be mentioned in the
L/C and LCAF to identification the item to be imported.

1.
Requirement Right of
Refusal (ROR) for public sector agency from Ministry of Industry or respective
Ministry/department of both to Import item under Restricted List.

2.
Import cannot be Israel.

3.
Pre-shipment inspection
(PSI) for private sector normally PSI is not mandatory.

4.
Shipment to be made
through Bangladeshi ship some exemption

a) Single importer maximum 20 MT grow importer highest 100 MT

b) General waiver from department of shipping otherwise
certificate of Waive is to be obtained to ship through Foreign Cargo

c) Import of Raw materials export oriented Industries to be made
on Competitive rate.

Regulations of Import

Import of goods under this policy shall be regulated as under:

Control list: Unless otherwise specified items which have been indicated as
banned in this list shall no be permissible for import. An item included in
this list with specific conditions for import shall be importable only on
fulfillment of the conditions specified.

Freely Importable Items: Unless otherwise specified an items the name
of which does not appear in the control list shall be freely importable.

Notwithstanding anything mentioned else where, all imports into
Bangladesh shall be subject to such general or specific conditions as many have
been prescribed in this order.

In addition to the conditions mentioned in the control list the
conditions. Restrictions and procedures for import of various items mentioned
in the test portion of this order, shall as usual, apply in case of import of
those items.

If, while determining the import status of an items mentioned in
the control list the description of goods does not conform to the H.S Code
mentioned against item, or any discrepancy arises between the H.S Code and the
description of goods, in that case the description of goods shall prevail, In
other words, if the import of a particular item is shown as banned in the
control list, or is shown as importable as subject to fulfillment of conditions
in the list, the said ban or restriction as the case may be, shall equally
apply to the import of that item , even if such ban or restriction is mentioned
else where and not against the appropriate H.S Code, if any importer, taking ,
advantage of such discrepancy, import any banned items or restricted items or
restricted item without fulfilling the respective conditions, such import shall
be treated to have been made as in contravention of the provisions of this
order.

Modes Used in Foreign Exchange Investments

  • Murabaha/
    Bai Muazzal —- Import/Export
  • Bai-
    Salam ——————– Reshipment
  • Hire
    purchase—————– For important Machinery under project Investment

The Documentary Letter of Credit

Import L/C (Letter of Credit)

Letter of Credit is a credit contract where the Opening/Issuing
Bank is committed to place an agreed amount of money at the beneficiary’s
disposal under some agreed conditions. In other words letters of credit is a
letter form the importer Bankers to the exporter that the bills if drawn as per
terms & conditions complied with will be honored on presentation.

Definition of L/C

A letter of Credit is a conditional bank undertaking of payment.
In other words letters of credit is a letter form the importer bankers to the
exporter that the bills if drawn as per terms and conditions are compiled with
will be honored on presentation

As per UCPDC 600 a credit may be either:

i) Revocable.

ii) Irrevocable.

The Credit, therefore, should clearly indicate whether it is
revocable or irrevocable. In the absence or such indication the credit shall be
deemed to be irrevocable.

Types of L/C

1. Revocable Credit:

As per Article no. 8 (a) A revocable credit is a credit which can
be amended or canceled by the issuing bank at any time without prior
notification to the seller since to offers little security to the seller.

2. Irrevocable Credit:

As per Article no 9 an irrevocable credit constitutes a definite
undertaking of the issuing Bank. A credit cannot be amended or cancelled
without the agreement of all parties. It gives the seller grater assurance of
payment. An irrevocable credit can be either confirms or unconfirmed dependant
on the desire of the seller.

Classification of Importer

Importers are those who ate authorized by the import Trade
authority i.e. & CCI & E for import of goods essential for consumption
or for production purposes.

There are mainly three types of importers.

1. Commercial Importer

2. Industrial Importer

3. Importers under Wage Earner Scheme

1. Commercial Importer:

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

2. Industrial importers:

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

3. Importers under WES:

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

Registration of Importer

As per import & Export control Act. 1950 no person can indent,
import or export any goods into Bangladesh except kin case of exemption issued
by the Government of the peoples Republic of Bangladesh. Violation of this
order is punishable with fine under the provisions of Sea Customs Act 1878 as
applied by sub section (3) of Section 3 of this Act.

A: Procedure for
Obtaining IRC (Import Registration Certificate)

Through public notice or import policy the chief controller of
imports & Exports invites applications usually for registration of
importers. The following papers/ documents are required for submission to
CCI&E or area office of CCI & for import registration certificate:

1. Application form.

2. Nationality Certificate.

3. Income Tax registration Certificate with GIR.

4. Trade License from the municipal or local Authority.

5. Membership Certificate.

6. Partnership deed (for partnership firm)

7. Certificate of Registration with the register of joint Stock
Co. & Articles and Memorandum of Association in case of Limited Co.

8. Bank Certificate.

9. Documentary evidence for business existence.

10. Original copy of Treasury Chalan being payment of registration
fees.

11. Original copy Chaplin for passbook.

12. Other documents if any required by the CCI & E.

13. Ownership’s documents or Rent receipts of the place of
Business.

14. Survey clearance from the relevant Authority.

The nominated bank of the application will examine the
papers/documents s& verity the signature of the applicant and forward the
same to the concerned office of the CCI & E with forwarding schedule in
duplicate through bank’s representative. The duplicate copy of the same bearing
the acknowledgement of CCI & E office of the receipt of the documents is
back by the bank and is preserved.

If the documents are found in order and the CCI & E is
satisfied the IRC is issued to the applicant and sent direct to the nominated
bank. The passbook is also issued by the CCI & E simultaneously to the
importer and sent direct to the nominated bank.

Some Important Terms of Letter of Credit

Amendment of Credit: Sometimes the importer may require amendment to
be made in the L/C, but this amendment must be made with the consent of the
exporter, otherwise amendment will have no validity.

Adding Confirmation: Sometimes the exporter may not rely on the L/C
issuing bank. Exporter requires the L/C to be confirmed by another bank
situated in his country. Then on request of issuing bank, any bank in
exporter’s country gives guarantee about the payment. This is called Confirming
Bank. By adding such confirmation, confirming banks undertakes the liability to
honor the bill of exchange of exporter.

Validity and Expiry of Credit: All L/C must mention the expiry date of L/C
within which the documents for payment/acceptance must be presented. This date
must exceed the date of issuance of the bill of lading or other shipping
documents, during which presentation of documents for payment/acceptance must
be made.

Free On Board (FOB): Under FOB basis, the exporter quotes the price
covering all his expenses until the goods duty packed are delivered “on board”,
the carrying vessel named and arranged by the buyer with the freight and the
insurance being paid by the buyer. The importer bears any costs incurred and
all risks from the time the goods are placed on board inclusive of those
arising out of the ship’s failure on berth.

Cost and Freight (C & F): In this case the exporter quotes the FOB price
plus insurance cost. The responsibilities of carrying out all formalities for
shipment of the goods develop upon the seller.

Cost, Insurance and Freight (CIF): Under CIF, the exporter quotes C&F price
plus the insurance cost. The responsibility of carrying out all formalities for
shipment of the goods develop upon the seller.

Free alongside Ship (FAS): Under FAS, the seller quotes the price covering
all his charges until such time as goods are loaded on train at the specified
railway station. The buyer is responsible for all charges from the time he
takes delivery of all goods from the exporter’s yard.

EX-Factory: The seller quotes the price of the goods ex-factory on the date
agrees. The importer is responsible for all further necessary arrangements and
charges.

Parties of Letter of
Credit

1. Importer (Buyer)/Applicant
2. The Issuing Bank (Opening Bank)
3. The Advising Bank (Notifying Bank)
4. Exporter/Seller (Beneficiary)
5. Confirming Bank
6. Negotiating Bank
7. The Paying/Reimbursing/Accepting/Remitting Bank

1. Applicant: The person/body who requests the bank (opening bank) to issue
letter of credit. As per instruction and on behalf of the applicant, the bank
opens L/C in line with the terms and conditions of the seller contract between
the buyer and the seller.
2. Opening bank/Issuing Bank: The bank which open/issue letter of credit
on behalf of the applicant/ importer. Issuing bank’s obligation is to make
payment against presentation of documents drawn strictly as per terms of the
L/C.
3. Advising/Notifying Bank: The bank through which the L/C is
advised/forward to the beneficiary (exporter). The responsibility of advising
bank is to communicate the L.C to the beneficiary after checking the
authenticity of the credit. It acts as an agent of the issuing bank without
having any engagement on their part.
4. Beneficiary: Beneficiary of the L/C is the party in whose favor the
letter of credit is issued. Usually they are the seller or exporter.
5. Confirming Bank: The bank which under instruction in the letter of
credit adds confirmation of making payment in addition to the issuing bank. It
is done at the request of the issuing bank having arrangement with them. This
confirmation constitutes a definite undertaking on the part of confirming bank
in addition to that of issuing bank.

Reimbursing/Paying Bank: the bank nominated in the letter of credit by
the issuing bank to make payments stipulated in the document, complying with
reimbursing bank.

Documents Submitted by the Importer before opening of the L/C:

1.
Trade License (Valid).

2.
Import Registration
certificate (Must be kept in the bank custody).

3.
Passbook import.

4.
Income Tax declaration.

5.
Membership certificate.

6.
Memorandum of Articles
(In case of Ltd. Co.)

7.
Registrar deed (In case
of partnership firm)

8.
Resolution.

Bank will supply the following papers/documents before opening of the L/C

a) L/C application form.

b) LCAF Form.

c) IMP Form

d) Murabaha agreement.

e) Charge documents paper.

The above paper must be completed duly filled and signed by the
party and verified the signature.

Import Procedure under IBBL

1. Selection of Clients On the basis of

a. Credit Report.

b. Credibility.

c. CIB Report.

(To association of liability if any with other bank.)

2. Induction of client as Importer.

3. L/C a. Conditional Undertakings of bank payments.

b. .Processing to open

C. Permissibility and marketability of the item.

d. Price competitiveness.

e. Credit report of the supplier.

f. Fixation of the cash security.

g. Documentation.

h. Preparation of vouchers.

i. Realizations of the cash security, commission and other charge.

4. Thronging of L/C

a. SWIFT is a worldwide community. It has over 7500 financial
institution over 199 Countries as its member.

b. Air mail/Telex through advising Bank.

5. Lodgement

a. Checking of import documents upon receipt from negotiating or
collecting banks.

B.Entry the bills register.

c. Passing the voucher.

d. Purchase of FC. Fund for payment of the bills.

6. Retirement

a. Preparation of cost memo.

b. Intimation to importer regarding arrival of shipping document.

c. Asking the bill paying bank’s dues showing in the cost memo.

d. Delivery of the documents against receipt of payment

Endorsement.

7. Post Import Finance

a. At the request of importer bank undertakes clearing of the
imported goods paying duty. VAT and other relevant charges stores the same
under control

b. Delivers to importer against payment as per prior arrangement.

8. Enlistment of C&F agent

a. For C&F purpose. C&F agents are enlisted under
different categories.

9. Reporting

a. To Bangladesh Bank

b. Monthly returns statement to the Head office.

Modes of Sales of Goods

Cash in advance: Risk is low. The Proforma invoice is used

1. Open Account: Goods are sent first and payment is made
afterwards. There are no intermediaries. Proforma invoice is used here as well.
2. Documentary Collection: Same as an open account but the use of bank
as an intermediary. Here the risk is zero. Here the bank acts like an agent.
3. Documentary Credit: L/C

Here modes 1, 2 and 3 are built on good faith and relationship,
but mode 4 comes with a third party guarantor.

Correspondent Banking

Correspondent Banking means establishing and maintaining a network
of relationships with financial institutions. Correspondent Banking is one of
the most important services of a bank engaged in international business.
Basically, Bank cannot run alone in the foreign exchange arena without having
wide network of correspondents.

Correspondent banking plays very important role in building
relationship through utilization of existing scopes, coping with innovative
foreign exchange products and consolidating strategic partnership with the
counterparts scattered throughout the world. IBBL since its inception has
concentrated on linking with the major financial institutions for facilitating
growing volume of international trade business.

Major Functions of Correspondent Banking

Major functions related to Correspondent Banking are:

Operating NOSTRO/VOSTRO Account(s)

LC advising, confirming, negotiation and reimbursement

Credit Line operation (Financing, Overdrawn, Guarantee issue )

Cash Letter Services

Proceed realization

Treasury support

LC Re-issuance services

AML & other regulatory compliance

BKE arrangement

Exchanging control documents

Supplying Annual Reports & other corporate information

Service level agreement

MIS on Correspondents

Correspondent Banking of IBBL

No. of Correspondents network : 870

Relationship with 250 internationally reputed banks

NOSTRO Account with 28 Banks

Number of Accounts is 44

Drawing arrangement with 57 banks and Exchange Houses

Account in major currencies such as USD, GBP,EURO & JPY

Sharing revenue with the Correspondents

Credit line facilities from Global banks

Revenue shared with Correspondents

SL.

No.

Name of Correspondents

Amount in Taka

01

American Express Bank,
New York

16,969,486.00

02

American Express Bank,
Kolkata

1,958,421.00

03

Citibank NA, New York

1,727,835.00

04

Citibank NA, Mumbai

90,363.00

05

HSBC , Karachi

32,229.00

06

HSBC, New York

3,160,409.00

07

Mashreq Bank PSC,
Mumbai

2,287,906.00

08

Habib American Bank,
New York

253,716.00

09

Arab Bangladesh Bank,
Mumbai

1,223,277.00

10

ICICI Bank Ltd. ,
Mumbai

1,897,233.00

11

JP Morgan Chase Bank

48,006.00

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