Post Import Finance

Post Import  Finance

Some time branch faces difficulties in retiring import document against L/Cs opened under arranged post import finance facilities, due to lack of proper documentation formalities. In order to avoid any such distress situation, while processing credit proposals for opening of L/C, branches should as a package deal, also finalize to arrangement for retiring the import documents & if post finance is required, they must complete / finalize all formalities of documentation including security arrangement, before opening of L/C.

(a)        Bai-Muajjal (TR) Investment:

i.          There is a sanctioned amount from Head Office for the party to release of documents under Trust Receipt investment and the outstanding is within the sanctioned amount.

ii.         The liability in Mura Bill of Exchange (PAD) is adjusted simultaneously creating BAIM (TR).

i.                    Stamped Trust Receipt in the Bank’s standard form has been obtained for each bill including other charge documents.

ii.                  The due dates of the Trust Receipt are properly diaries and the payments of the bills are followed regularly.

iii.                All bill are properly entered in the Bai-Mujjal TR Register & to be balance accordingly

Accounting procedure:           Dr.       Bai-Muajjal (TR) investment account

                                                Cr.       MBEM PAD account

                                                Cr.       Duty, Tax, Vat etc charges etc.

(b)       Murabaha Post Import (MPI):

i.                    There is a sanction from Head Office for creating Murabaha Post Import (MPI) & the outstanding are within the sanctioned amount.

ii.                  All terms and conditions as embodied in the Head Office sanction advice are compiled with including margin / security to cover custom duty, vat, tax etc.

iii.                The liability in MBE is adjusted simultaneously creating Murabaha Post Import (MPI).

iv.                The goods are cleared through the Bank’s approved C & F agents.

v.                  All formalities for clearance of goods by the Bank’s approved C & F Agents are meticulously followed. After clearance, C & F Agent is to submit – R.R / T.R Bill of clearing agent, Bill of entry exchange control copy to the bank.

vi.                Goods are properly stored in Bank’s controlled Godown with due record in Stock Register.

vii.              In all cases Transit Insurance covering the risks is obtained.

viii.            Goods are delivered proportionately along with the damaged goods, if any in order to protect the Bank’s interest.

ix.                In case of forced MPI Head Office instructions are followed strictly.

x.                  The sticky MPI is timely brought to the notice of Head Office and Head Office instructions are compiled with.

xi.                The Manager makes random physical inspection of goods kept in the godown.

xii.              Insurance cover for Godown and its goods are obtained and kept valid.

xiii.            Adjustment of MPI liability in terms of credit norms is observed in all cases.

xiv.            In case goods cleared through our out side branch & L/C opening branch is debited by the port / custom / vat / other charges through Bank general A/C then profit for the interim period of transit period of advice should be recovered.

Accounting procedure                  Dr.       MPI account

                                                      Cr.       MBE account

                                                      Cr.       Duty, Tax, Vat etc charges

Maintenance of MPI Godown:

 

Fro maintenance / inspection of MPI Godowns, delivery of goods etc branch officials must observe the following points:

(a)        Godown

i.                    Godown should be ‘pucca’ built of brick / cement & be free from dampness, white ants, etc.

ii.                  Godown should not be in inaccessible area & should be connected by motor able roads. There should be no loose electric fittings inside the godown & there should be no windows.

iii.                Godown is to be under full control of the bank & original / duplicate key must be in bank, with entry in Key Register Lock must be under seal / gala with bank / branch seal. The lock should be charged on half yearly basis.

iv.                Bank’s display board must be affixed both inside & outside of the godown.

v.                  If the godown is rented one letter of disclaimer from the owner of the godown & if the godown is his (client) own letter of declaration from the client be obtained stating that they would have no lien over the goods.

vi.                Godown has direct access and where there is no direct access, the branch holds suitable letter of access from the landlord / client.

vii.              In case of rented Godown, the rent for the Godown is regularly paid, verified and the latest rent receipt is obtained.

viii.            Godown Guard’s duty should be charged / rotated by specific office order.

ix.                No Godown Guard should be posted to same godown for more than six month.

x.                  Appointment letter of the godown keeper / guard must be taken from the competent authority.

xi.                At the time of first lodgment of stock, Manager / Investment Officer including the godown keeper & guard of the branch must be present.

xii.              Manager / Investment officer has to make surprise visit to ascertain the presence of the Godown guard during holiday.

xiii.            No perishable / volatile item should be kept in the godown.

xiv.            For drug / Medicine stock, date of expiry should be written in the stock card to facilitate the delivery of goods before expiry.

xv.              For chemicals / dyes / raw materials of medicine / spices / frozen item / hide & skin etc. stock should be for short period, failing which quality of goods stored, may be deteriorated & bank interest may be hampered.

xvi.            As per conventional rule, terms & condition of the sanction advice branch official must conduct periodical inspection, as below:

(a)                For limit below Tk. 20.00 lac, the branch manager visits the godown quarterly & by the other officer’s on monthly basis.

(b)               For limit from Tk. 20.00 lac to 50.00 lac, the branch manger visits the godown on monthly basis.

(c)                For limit above Tk. 50.00 lac, Head Office team visits the same on half yearly basis.

(b)       Stock Card:

i.                    In the stock card Branch official must put his signature, as the witness of store of goods.

ii.                  Goods must be stacked properly (party wise / item wise) to facilitate assessment / counting.

iii.                Godown stock cards are properly maintained for storage and delivery and the balance tallies with the commodities / merchandise as shown in the Stock Register.

iv.                The stock cards must show the checking date of the goods with signature of the checking officials.

(c)        Stock Register & Report:

i.                    Stock register should be prepared item wise. The posting of pledgement / delivery of goods should be recorded along with value of stock.

ii.                  Monthly stock report should be obtained duly signed by the client.

iii.                Deliveries of goods to be made as per terms & conditions of sanction advice / prevailing set rules.

iv.                The delivery orders are properly filed duly signed / acknowledged by the client. The Manager & Investment Officer takes proper precautions for delivery of goods including delivery order jointly signed.

v.                  There is satisfactory delivery of goods and the same is reflected in the account of the party with the bank.

vi.                Investment ledger & stock register should be balanced periodically to ascertain security position against concern liability.

(d)       Market Price register:

i.                    Market value of pledge goods should be ascertained frequently in order to retain proper margin & drawing power during withdrawals.

ii.                  Market rate register is properly maintained and the Manager keeps constant touch with the trend in prices of all commodities in which the bank is interested.

(e)        Insurance

i.                    Insurance policy of godowns to be strictly followed as per sanction advice stipulation.

ii.                  Diary / Register for insurance polices is maintained and the insurance renewed on maturity date without fail.

iii.                Insurance policy must cover the risk of fire, RSD & burglary. It should also contain bank mortgage clause.

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Step: 21 of Export

Step: 21 of Export

Procedure of Export from Exporter side:

1)         To open an account with a Bank.

2)         To be collect ERC (Export Registration Certificate) from CCI & E.

3)         To collect TIN from Bangladesh Revenue Board.

4)                  To collect Export L/C / Transferable Export L/C.

5)                  To submit the Export L/C / Transferable Export L/C to the Bank through his letter pad and type Back to Back L/C.

6)                  To sign LCAF

7)                  To collect Insurance cover Note with money receipt and Vat paid certificate (only for Foreign B/B L/C)

8)                  To Sign IMP & Related charge documents.

Model of Party’s Letter for submission of Export L/C: MASS Fashion Ltd.

Manager

ABC Bank Ltd.

Gulshan Branch

Dhaka

Subject : Submission of Export L/C No. …………….……..  dt.  ……..………… for US$. ………………….

Dear Sir,

Assalamu Alaikum Wa Rahmatullah.

Enclosed please find here with the original Export L/C No. ……………….. dt. …………. for US$. ……….

for your necessary action and oblige.

Ma-assalam

Yours truly,

Managing Director

Mass Fashion Ltd.

7,Gulshan Avenue,

Dhaka

Enclosed: Export L/C. …………………….. dt. ………………..

Procedure of Export from Banker Side:

Step: 1 :          At first Banker open an Account by receiving related paper as per Banking Rule.

Step: 2 :          To receive the Letter / Application of submission Export L/C, Bankers at first verify the signature (Model of Application of the Client).

Step: 3 :          If the Export L/C is transferable Export L/C, it is must to verify through the letter of “Confirmation of transfer ………………. Export L/C …………….. dt …………….. for US$. ………………

(Model of Confirmation Letter / Bank transfer)

Step: 4 :          [ To confirm the Export L/C (for transferable Export L/C)/Direct received Export L/C]. After receiving Export L/C from the client, to check the following:

                       

1)                  Transferable Export L/C’s Bank’s Authorised signature verify or not.

2)                  Form of Documentary Credit Irrevocable transferable or not.

3)                  Date of issue:

4)                  Date and place of Expiry: …………………… in Bangladesh.

5)                  Applicant:

6)                  Beneficiary:

7)                  Currency Amount:

8)                  Draft: At sight

9)                  Transhipment: allowed / Not allowed.

10)              Last date of Shipment:

11)              Terms of Delivery: FOB Dhaka / FOB Ctg.

Step: 5 :          If the terms and condition of Bank Export L/C is ok to mark – LIEN WITH BANK.

	UNDER LIEN WITH JANATA BANK CORPORATE BRANCH DHAKA

 

Step: 6 :          (LIEN MARKED) Export L/C Serial No. write of the file by red ink Ball point . i.e. To open a seperate Export L/C File.

Step: 7 :          Advice the Export L/C to Applicant / Exporter.

Step: 8 :          To Entry the Export Performance Registrar:

Column of Export Performance Registrar.

SL.NO.	Export L/C No & date	Shipment date	Expiry date	Description and Quantity of goods	Category (Quota/not Quota)	Amount In F.C.	Initial
1	2	3	4	5	6	7	8

Particulars of BB L/C

                                                           

                                                                                               

                                                                       

B B L/C And Date	Shipment Date	Expiry Date	Amount in F.C. (BB Bills)	Initial	Import Bill No.  & date	Amount in F.C.	Due date	Paid on	Initial
9	10	11	12	13	14	15	16	17	18

Particulars of Export Bills

                                                                                               

                                                                       

                                                                       

Negotiating date	Export Bill No. (FBP/FBC)	Amount in F.C.	Amount in Local Tk.	Date of realization	Realization amount in F.C.	Initial	Remarks
19	20	21	22	23	24	25	26

Step: 9 :          To open required B/B L/C, Local B/B L/C Under/ agt. the Export L/C (if discretionary power is available to open the above B/B L/C)

                        To open Back to Back Foreign L/C, the following documents signed by Exporter:

1)                  IMP form

2)                  LCA Form (Industrial)

3)                  LC Application form (Industrial)

4)                  Charge documents:

a)                  Promissory Note

b)                  Letter Authority

c)                  DP. Note Deliver Letter

d)                 Balance Confirmation

e)                  LIM/Mura – Agreement Import (150 Tk. Stamped)

f)                   Purchase schedule

g)                  Letter of Guarantee

h)                  Letter of Hypothecation

i)                    Letter of Continuity

5)                  Insurance Cover Note with money receipt & VAT Certificate.

Step: 10 :        If Branch Manager’s discretionery Power is not available to open the B/B L/C (Foreign), B/B L/C Local, Proposal send to Head Office ID.

(Model of proposal to open B/B L/C)

It may open 75% amount of the Export L/C value.

Step: 11 :        To open B/B L/C (Foreign / Local) to pass the following voucher:

                        (a)        Dr.       Customers Liability on B/B L/C.

                                    Cr.       Bankers Liability on B/B L/C.

                        (To entry the liability voucher to B/B L/C Liability Register)

                       

(b)        Dr.       Party Account.

                                    Cr.       L/C Opening Commission Foreign.

                                    Cr.       Telex Charge / Swift Charges.

                                    Cr.       Handling Charge (if required)

                                    Cr.       Direct Exp. Account.

                                    Cr.       Stationery Charges.

                                    Cr.       S/D. on Vat in L/C Commission.

Step: 12 :        To receive the original documents of B/B L/C, to entry the L/C documents (B/B) receiving Registrar and to issue an intimation letter to the client to retire the documents.

Step:13 :         The Exporter receiving the intimation letter, to submit a prayer to endorse the documents to the Bank.

Step: 14 :        To receive the prayer of endorsement the shipping documents with stamped / sealed .

Step: 15:         If the documents is discrepant to inform the Supplier’s Bank the above discrepant through Tlx/Swift/By Post/By Courier. Beside this to inform the following above discrepancy to Exporter.

Step: 16 :        If the discrepant documents accepted by the Exporter (our Importer of B/B L/C), the applicant (our Exporter) submit a prayer for acceptance of the documents.

(Model of Acceptance Letter)

(Model as follows:)

(As like as the all formalities are for B/B L/C Local)

Step: 17 :        To issue a acceptance maturity  date to the supplier of the B/B L/C.

To pass the following voucher:

Dr.       Banker’s Liability B/B L/C.

Cr.       Customer Liability B/B L/C.

Dr.       Customers Liability B/B Bills

Cr.       Banker Liability B/B Bills.

Dr.       Party Account

Cr.       Acceptance Commission of B/B L/C (0.50%)

Cr.       CICC (0.20%)

Cr.       Other Charges (Stationery) -  If any.

Step: 18 :        If the all Fabrics, accessories are received by the Exporter (for RMG). Party request to Bank to issue an Exp. Form to export the goods. Bankers issue a Exp. Form to the Exporter to give the serial No. from the Exp. Issuing Register are as follows:

1.                  Date of issue.

2.                  EXP Serial No.

3.                  Name & Address of the Exporter

4.                  Commodities

5.                   Amount declared in Exp.

6.                  Date of certificate

7.                  Initial of the Banker (certificate issuing official)

8.                  Date of shipment

9.                  Bill No. (FBP/FBC)

10.              Date of Negotiation or sending document abroad for collection of the Export Proceeds.

11.              Date of submission on of duplicate copy of Exp. Form to Bangladesh Bank.

12.              Date realisation

13.              Amount realised in F. Currency.

14.              Taka amount paid to the Exporter & rate of exchange applied.

15.              Date of submission of triplicate copy to Bangladesh Bank.

16.              Remarks (If any).

Step: 19 :        To Export the goods, the Exporter submit a prayer to negotiate the documents.

(Model of Application / Prayer by Exporter)

(FOR FBC)

Date:

Manager

ABC Bank Ltd.

Dhaka

Sub: Export documents of US$.                              agt. Export L/C No.

Dear sir,

Please find enclosed a set of Export documents of              Pcs/Set ………….. Polo/Shirt/         against the above L/C for US$.                     and requested your good -self to send the documents on collection basis for collection of remittance.

Thanks & regds.

Yours truely,

(Sign. & Seal)

Enclosed:        1)         Draft – 02 copy

2)                  Invoice –

3)                  P/L –

4)                  B/L –

5)                  GSP –

6)                  Export License

7)                  BNF Certificate

8)                  Packing Control Certificate

9)                  Inspection Certificate (if required)

10)              AZO – Free certificate (if required)

11)              Exp. Form (dully signed by customs Authority)

12)              Certificate of Original

13)              Phyto sanitary /Health certificate etc.

Step: 20 :        To issue a FBC No. on the top of the Application of FBC and all Pages of FBC documents (Minimum Two set documents) and make a New file of FBC.

                        The column FBC/FBP Register:

1.                  Date

2.                  FBC No.

3.                  Under Export L/C

4.                  On whose Account (Our Clients)

5.                   Particulars

6.                  Place drown on

7.                  Amount:

a)                  Foreign Currency

b)                  Rate

c)                  B. Taka

8.                  Particulars of documents

a.                   Date

b.                  BL/TR

c.                   Invoice No.

d.                  Insurance Policy No.

9.                  Usasnce of Bills: at sight

10.              Particulars of goods:

11.              Name of steamer Carring goods: (Truck/Vessel name)         

12.              Approx. date of arrival to destination

13.              Special Instruction

14.              Date of documents ask by Correspondence.

15.              Remarks/Recovering.

16.              Date of realised.

17.              Initial.

18.              Remarks/Exp No.

To send the FBC documents to Exp. L/C issuing Bank with Bank’s forwarding

[Model of Bank forwarding]

            Voucher to Passed:

            Dr.       Foreign Bill for Lodged (FBL)

            Cr.       Foreign Bill for Collection (FBC)

Step: 21 :        On receipt of Credit advice of the Export Bill form the foreign correspondent Bank, Bank realised the bill on collection at specified rate and rest amount will be paid to Party (Exporter) Account after divestment of all liability (if any).

                        Voucher to be Passed:

                        Dr.       FBC Account [Reversal of contra voucher]

                        Cr.       FBL

                        Dr.       Head Office [Foreign Bank as per Credit advice/Export proceeds]

                        Cr.       Party’s Account after adjustment of liability (if any)

                        Cr.       Income Account Commission/Charges

                                   

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