This report will be on various functional areas in Department of Foreign Exchange, Local Office, Dhaka of Islami Bank Bangladesh Limited
EXECUTIVE SUMMARY _____________________________________________________________________ Islami Bank Bangladesh Limited (IBBL) is Established on the Base of Islamic Shariah. It can not receive or pay Interest in any of its operation and its all activities will be in accordance with the principle of Islamic Shariah. Islami Bank Bangladesh Limited (IBBL) was established on the 30th March, 1983, with the objectives of carrying in all types of banking business and services based strictly on Islamic Shariah and interest free basis. The Islami Bank Bangladesh Ltd. like all other commercial banks, carry on their operations through 170 branches (2006 ) in different parts of the country. To a layman, the term ‘Foreign Exchange’ means foreign money or more precisely, foreign bank notes like those American green banks bearing the portraits of her celebrated presidents and personalities. Or the Bank of England notes adore by a charming queen, blissful of the toll the time has taken on the glory of a once mighty sterling. In the truest sense, these and the assortment of bank notes issued by monetary authorities around the world are not foreign exchange. The term foreign exchange covers a far wider spectrum, beginning from the means of transfers like Telegraphic Transfers and Bank drafts to the process of conversion of the currency into another and the activities centered around that process. Foreign Exchange and Foreign Trade is performed at the grass root level through Authorised Dealer newly Foreign under supervision of currency Dollar International Division, Head Office of a commercial Bank. And all commercial banks and registered moneychangers are guided and regulated by Central Bank. ‘’Islami Banking Business” means banking business whose aims and operations do not involve any element which is not approved by the religion of Islam. Foreign Exchange, like foreign trade, is a part of economic science. It deals with the means and methods by which rights to wealth in one country’s currency are converted into those of another country. Banks have to apply same mechanism to generate Foreign Exchange Business. In this regard Islami Bank Bangladesh Limited’s mechanism is made under the framework of Islamic Shariah.
FOREIGN EXCHANGE TRANSACTION UNDER ISLAMIC FRAMEWORK 1) Foreign Exchange and Foreign Trade. 2) Foreign currency dealing. 3) Spot Transaction, Forward Transaction. 4) Import Financing(a) Opening of L/C (b) Import financing. (c) Ownership of goods. (d) Mode of financing. 5) Back to back L/C(a) Problems of stock-lot. (b) Payment settlement. 6) Export Financing(a) Pre-shipment Finance. (b) Pre-shipment Norms. (c) Mode of Pre-shipment finance. i) Musharaka ii) Bai-Salam iii) Istisna 7) Inward and Outward Foreign Remittance. Foreign Exchange is a mechanism to settle International parents. Foreign Exchange operations are as follows:1) Import 2) Export 3) Remittance ( Inward & Outward )
Import means bringing merchandise to country from any place rest of the world. Two things mainly involve with import of merchandise; bringing of commodities physically into the
country any making payment towards the cost of the merchandise and services connected with its dispatch to the importer. The import trade is mainly done by Trading Corporation of Bangladesh (TCB) and by the independent indent firms. Import trade is financed mainly by documentary bills. The bills are usually drawn on the importer of Bangladesh on the D/P term at 60 days after sight. The D/P bills are not generally discounted. The bank holds them till maturity and they are sent to the importer of our country for collection through the agent of the bank. The bills are presented to the bank of the importer on due date. When the banks receives the bills along with the relevant shipping documents, it pays the bills. If an individual merchant wants to import goods from a foreign country, he is to open a Letter of Credit through his bank in favor of the exporter. The exporter does not agree to send goods without L/C. IBBL, import finance on (1) Murabaha L/C (2) Murabaha post Import (3) Bai-muazzal post Import (4) Hire purchase (5) Musharaka (6) Mudaraba (7) LTR (Latter of Trust Receipt) (8) Bai-Salam (9) Quard-E-Hasna (10) Islisna.
Export
means our carrying of any thing from one country to another for sale with the
stipulated period for to earn foreign exchange; make favorable balance of payment position & stabilize marketability. Export credit means any credit provided by an institution to an exporter in the form of packing credit or of post shipment credit. In this regard packing credit allowed by the way of loan or advance granted or any other credit provided by and institution to an exporter for financing the purchase, processing or packing of goods on the basis of L/C. Post shipment credit means any loan or advance granted or another credit provided by an institution to an exporter of goods from Bangladesh from the date of extending the credit after shipment of the goods to the date of realization of the export proceeds and includes any loan of advances granted to an exporter, in consideration of or on the security of any duty drawback of any payment by way of incentive such as (1) Export Finance - (a) interest rate (b) incremented incentive on interest for interest based bank (c) extend of export credit (d) credit to first time applicant (e) back to back L/C. (2) Substitute Benefit (3) Duty Draw Back.
Remittance
means transfer of fund. If we pronunciate the word "Remittance" we under-
stand transfer of fund through a Bank from one place to another place which may be executed
the country or between two countries. Remittance, which is effected within the country, is called Local Remittance and which is effected between two countries is called Foreign Remittance. Remittance plays a vital role in the development of the country. Without effect of remittance no country can develop her self. Bangladesh are rich enough in respect of human resources. Two types of remittance, one is inward remittance and another is outward remittance. The remittances, which are received from abroad and paid to the beneficiary, are Inward Remittance. In ward remittance are mainly received in US Dollar, pound sterling and Taka Currency. Modes of inward remittance are T.T, M.T, D.D, P.O, I.M.O, T.C, etc. The Remittance in Foreign Currency, which is effected from our country to abroad, is called outward remittance. The Remittance may be made by means of T.T, D.D& T.C, etc. Ideation to these the sale of Foreign Currency under latter of credit against retirement of bill is include as outward remittance.
INTRODUCTION 1.1 BACKGROUND
Islami Bank is a financial institution whose status, rules and procedures expressly state its commitment to the principles of Islami Shariah and to the banning of the receipt and payment of interest on any of its operations. This definition is adapted by O.I.C. later on it has become the standard definition of Islami Bank. To run smoothly an Islami Bank is to handle its operations through its management. By the term management is meant to execute a plan properly and fruitfully through some laid down priceless by a group of responsible peoples, appointed in an institution. It is meant acting according to rules to attain the object in a disciplined way, In the context of if Islamic Banking, it can be expressed to establish socioeconomic justice in every sphere of economic transactions. A well-disciplined prudent group of people shall work and bring a developmental change rapidly withstanding the attacks of all types of “ Jahiliat” i.e. exploitations, usury, oppression & suppression etc. Islami Bank Bangladesh Ltd. from its inauguration in the year 1983 is playing a vital role for the achievement of the above mentioned object efficiently. In a nut shall IBBL is in the field of struggle to establish” Islamic Economics.”
The management of IBBL is constituted of 4 (Four) wings viz. ( a) Board of Directors (b) Shariah council (c) Executive committee (d) Management committee.
a) Board of Directors: The board of directors approves all the basic decisions and it is the highest authority of the bank. It can be compared to a legislative assembly of a country. Shariah council: Shariah council is the organization of the qualified wise and intellectual’s whose function is to analysis all the operations of the bank whether strictly abiding by the Shariah or nor and to advise with effective suggestions to follow the Shariah. In a word it can be expressed by the word “Darul Ifta”. b) Executive committee: Executive committee is the highest powerful authority to execute the decisions of the board of directors. It can be termed as the council of Ministers a country. c) Management committee: Management committee is the committee to run the banks operations following the adopted principles by the board of directors. It may be compared to the secretariat of a country. To attain the objective of bank, operations are urn through recurring deposits from the people and disbursing investment to the qualified entrepreneurs abiding by Islami Shariah through different modes to run the operations. The bank also controls and immense manpower through an administration which is known as the Personnel Department. Simultaneously for qualitative developmental change of its manpower an institution is urn which is known as the Islami Bank Training and Research Academy (IBTRA). There are different divisions and departments relating to the banking purposes viz. Investment Division, International Division, Operation Division, Central Accounts Department, Branches Control Department, Establishment Department, Share Department, and Audit & Inspection Department. All of its operations are done through 170 (one hundred and seventy) branches all over the country.
1.2 OBJECTIVE OF THE STUDY The main objective of the study is to evaluate or examine the Foreign Exchange Transaction followed in the Islami Bank Bangladesh Limited in our country. The specific objectives of the study are as follows: a) To study the financing procedures of the Import by the client of Islami Bank Bangladesh Limited. b) To study Export financing procedure follow by Islami Bank Bangladesh Limited. c) To evaluate the handling of Remittance (Both Inward and Outward) Procedure follow by Islami Bank Bangladesh Limited. d) To identify the loopholes if any, in the Import, Export and Remittance Procedure. e) To suggest some remedial measure to improve the above procedure.
1.3 METHODOLOGY The information to be presented in this report has been collected from both primary and secondary sources. The senior officer IBBL local office foreign exchang deptt. So Collected Primary Data is very easily and secondary data has been collected from Islami Bank Training & Research Academy, Islami Bank Central Library, Islami Bank Annual Report, Bangladesh Bank Annual Report, Journals and Foreign Exchange related papers.
1.4 SCOPE
The focus of this report will be on various functional areas in Department of Foreign Exchange, Local Office, Dhaka of Islami Bank Bangladesh Limited. Attempts will be made particularly on the performance in each area. Specific emphasis will be given on the Import & Export financing and Remittance (Inward and Outward) areas.
THE ORGANIZATION 2.1 BRIEF HISTORY OF ISLAMI BANK BLD. LIMITED :
Bangladesh, from its very birth ( 1971 ) inherited an interest based banking system which was introduced earlier when the country was a part of British Colony. At that time, ownership of and employment in banks were limited, with rare exception to non-Muslims. During 1947 to 1991, Banking of course, came under Muslim control but the system was not changed.
During the seventies, Islamic Development Bank and a number of Islamic Banks at national levels were established in the Islamic world. At home, the Islamic groups were vigorously working for adoption of Islam as the complete code of life. They found Islamic Banking in ready form for immediate introduction. Two professional bodies-Islamic Economics Research Bureau (IERB) & Bangladesh Islamic Bankers Association (BIBA) were taking practical steps for the introduction of Islamic Banking. Moreover, the attitude of Bangladesh Government towards Islamic Banking has been although positive. The attitude has been reflected from the following policy statements:-
(a) Founder member of Islamic Development Bank (1947). (b) Participated in the Islamic Foreign Ministers’ conference held in Dakar, Senegal and subscribed the recommendation of taking effort to establish Islamic Bank.
(c) Proposed to establish an Islamic International Banking System with branches in all the Islamic countries, in Islamic Foreign Ministers’ Conference held in Islamabad, Pakistan (1980).
(d) Participated and supported in establishments of a separate banking system in Islamic countries in order to facilitate their trade and commerce, at the 3rd Islamic Summit Conference held in Makkah and Taif (1981). In line with the above policy and due to continuous and dedicated workings of the above mentioned professional groups and individuals, Bangladesh Government has permitted the establishment of two Islamic Banks i.e. Islamic Bank Bangladesh Limited ( 1983 ).
2.2 ESTABLISHMENT OF IBBL: Islami Bank Bangladesh Limited was incorporated on 13.03.1983 as a Public Company with limited liability under the Companies Act, 1993.
The Bank started functioning with effect from 30.03.1983. This Bank is the first interest-free Bank in South- East Asia. The establishment of this Bank ushered a new era in Bangladesh, the third largest Muslim Country of the world. The Bank is committed to run all its activities as per Islami Shariah. This Bank through its steady progress and continued success has, by now earned the reputation of being one of the leading Banks in the sector of the country.
2.3 Features of IBBL: •
All activities are conducted on interest-free system according to Islamic Shariah.
•
The Bank-Client relationship in this Bank is participatory instead of the debtor-creditor relationship of the conventional system.
•
It invests on the basis of profit-sharing and risk-bearing system.
•
This Bank shares its investment-income with the Profit-Loss Sharing depositors according to a ratio to ensure equity and justice.
•
Its aims are to introduce a welfare oriented banking system and also to establish equity and justice in the field of all economic activities.
•
It extends its co-operation to the poor, helpless and low income group of the people for their economic up liftment particularly in the rural areas.
•
To contribute towards balanced growth & development of the country through its investment operations particularly in the less developed areas.
2.4 CAPITAL: The authorized capital of the Bank is Taka 500 million. The paid-up capital is Taka 2764.80 million. Total Number of Share holder 17,201
2.5 RESERVE: The Reserve Fund of the Bank stood at Taka 1011.84 million as on 31st December 1998.
2.6 EQUITY: Total equity of the Bank as on 31st December 2008 stood at Taka 8331.14 million. Sl No. (a) (b)
PARTICULAR Paid-up Capital Statutory Reserve
Taka in Million 2764.80 5450.95
IMPORT FINANCING BY ISLAMI BANK BLD LIMITED
3.1 INTRODUCTION: Import means bringing merchandise to country from any place rest of the world. Two things mainly involves with import of merchandise; bringing of commodities physically into the country any making payment towards the cost of the merchandise and services connected with its dispatch to the importer.
3.2 RELATED ACTS: As per Import and export Control Act, 1950 person can indent, import or export any goods into Bangladesh except in 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.
3.3
PROCEDURE FOR OBTAINING IRC ( Import Registration Certificate) :
To perform the import business registration with the licensing authority of the area is an urgent. Through public notice the chief controller of Imports and Exports invites applications usually for registration of importers. For getting this registration the following papers/ documents are required for submission to CCI&E or area office of CCI &E for import registration certificate: 1. Application form 2. Nationality certificate 3. Income tax registration certificate 4. Trade License from the municipal or the local authority 5. Membership Certificate 6. partnership Certificate (for partnership concern) 7. Certificate of Registration with the registrar of joint Stock Company. 8. Memorandum of Association in case of limited Company. 9. Bank Certificate. 10. Ownership documents or rent receipts of the place of business. 11. Original Copy of Treasury Challan being payment of registration fees. 12. Other documents prescribed in the import policy. The nominated bank of the applicant will examine the papers/ documents and verify the signature of the applicant and forward the same to the concerned office of the CCI&E with a forwarding schedule through Bank' s representative. The duplication copy of the same bearing the acknowledgment of CCI&E office of the receipt of the documents is received 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 pass book is also issued by the CCI & E simultaneously to the importer and sent direct to the nominated bank. The IRC and pass book are security documents issued under embossing seal of the CCI & E and duly signed by the authorized official of CCI & E. The IRC is to be renewed every year on payment of usual fees through Bangladesh Bank SL
Yearly Total
Initial Registration
No Import Limit Fees A TK. 5.00 Lac TK. 500.00 B TK. 15.00 Lac TK. 1500.00 C TK. 50.00 Lac TK. 3000.00 D TK. 50.00 Lac And above TK. 5000.00 challan or cash payment in their bank’s A/C directly.
Yearly Renewal Fees TK. 500.00 TK. 1500.00 TK. 3000.00 TK. 500.000
The schedule of registration fees/renewal fees in the financial year 2007-05 &2009 are as follows:-
Fees shall be paid in Bangladesh Bank or in the Government Treasury or in Shonali Bank under the Head “42 Trade & Commerce fees realized under Import and Export Control Act,1950”.
3.4 Classification of Importer: Importers are those who are authorized by the import Trade Control Authority that is CCI& E for import of goods essential for consumption or for production purposes.
There are mainly three types of Importer, viz:-
1.
Commercial Importer
2.
Industrial Importer.
3.
Importer under Wage Earner Scheme.(WES)
(1) Commercial Importer: It means an importer registered under the importers, exporters and indenture registration order 1981 who import goods for sale.
(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 registered importers who import only under the WES. WES importers can be importing all permissible items as declared by the import policy and notification. Besides all registered commercial and industrial importer also can import under WES.
Another Importers are as follows: •
Lease Financing Import.
•
Govt. Sector Importer.
•
Import under Bonded Ware-House System.
•
Import by Actual Users.
•
Import by E.P.Z.
3.5 Import Formalities/Procedures: For conducting world trade documentary credit or letter of credit is an essential implement. It is important for the beneficiary of a documentary credit to know that payment will be made
only if the documents are in absolute conformity with the required terms and that the bank has to decide on the basis of the documents alone. An importer desires to have an import L/C limit must have apply to the designated bank in prescribed forms for sanction of margin, L/C limit etc.
3.6 Definition Of Letter of Credit : L/C means Letter of Credit or Documentary credit. As per Uniform Customs and Practice for Documentary Credits (UCPDC) meaning of credit as under: Article No. 2 of UCPDC. For purpose of these articles the expressions “Documentary Credit” and “stand by Letter of Credit” (hereinafter referred to as credit (S) ) mean any arrangement however named or described, whereby a bank (the “Issuing Bank” ) acting at the request and on the instructions of a customer (the “Applicant” ) or on its won behalf. i) Is to make a payment to or to the order of a third party ( the “Beneficiary” ) or is to accept and pay bills of exchange [Draft) (s)] drawn by the Beneficiary. OR ii) Authorizes another bank to effect such payment or to accept and pay such bills of exchange [Draft (s)] OR iii) Authorizes another bank to negotiate, against stipulated document (s) provide that the terms and conditions of the Credit are complied with.
Generally, a Letter of Credit is a conditional Bank undertaking of payment. In other words L/C is a letter from the Importer Bankers to the exporter that the bills if drawn as per terms and conditions are complied with will be honored on presentation.
As per UCPDC 500 a credit may be either:-
i) Revocable ii) Irrevocable
3.6.1 Classification Of L/C: Various types of Letter of Credit are as follows : Revocable L/C. 1. Irrevocable L/C. 2. Confirmed L/C. 3. Transferable L/C.. 4. Divisible L/C.. 5. Back to Back L/C.. 6. Revolving L/C. 7. Restricted L/C 8. Red clause L/C. 9. Green Clause L/C 10. With Recourse 11. Without Recourse
3.6.2 Parties To A Letter of Credit : As per terms and conditions of the L/C, the seller is required to be routed through some intermediary banks in order to get his claim. So, we see that there are a number of parties involved in a L/C. The involved parties to a L/C are as under:Importer / Buyer. Exporter / Seller / Beneficiary. Opening / issuing Bank. Advising / notifying Bank. Confirming Bank (for Add confirming L/C ) Exporter’s Bank i.e. negotiating Bank. Reimbursing Bank or paying Bank.
3.6.3 Procedure For Opening L/C : An importer desirous to have an import L/C limit must have apply to the designated bank in prescribed forms for sanction of margin, L/C limit etc. For Letter of Credit limit following informations are to be furnished by the applicant. •
The full particulars of bank account.
•
Types of business ( Proprietorship, Partnership, Limited Co. ) in case of Ltd. Co. Balance sheet of last 3 (three) years and the names of directors.
•
Historical back ground.
•
Amount of limit required.
•
Goods to be imported.
•
Security to be offered.
•
Re-payment schedule an source of fund.
•
Other liabilities of the customer with the bank.
•
Statements of Assets and liabilities.
•
Account position (Balance).
•
Trade License and import registration number with renewal date.
•
Terms of payment: - Whether the import documents would be retired against payment on receipt or against acceptance or whether post import finance is required in the form of MPI / LTR etc.
On receipt of above particulars the import section of the bank will prepare credit report of the concerned importer The report should be collected from the previous banker of the party also.
3.7 Preparation of Credit Report: Bank prepared credit report in prescribed forms. Character, capacity and capital which are known as the three C’s of credit. Instead of the three C’s some mention the three R’s i.e. reliability, responsibility and resources. To these three C’s may add two more C’s i.e. collateral and condition.
How a banker should obtain the necessary information regarding these fundamentals of credit, No doubt, bankers have to make inquires from those of their customers and other people and inquired the report by the banker. Sometimes informations are gathered by deputing marketing officer or credit officer.
3.8 Position of the A /C: Import section will see whether there is sufficient fund available in the account to cover the margin to be sanctioned, commission, postage, cable or telex charge etc. If it is found O.K., L/C will be sanctioned. In all case the sanction must be informed to the importer for acceptance. On receiving confirmation from the client then the terms and conditions of the sanctioned are acceptable, the subsequent documentation / charge document are taken up. Following papers/documents submitted by the importer before opening of the L/C. a) Trade License (Valid). b) Import Registration Certificate (Must be kept in the bank custody). c) Pass book import d) Income tax declaration. e) Membership certificate. f) Memorandum of Articles (In case of Ltd. Co.) g) Registered deed (In case of partnership firm) h) Resolution. i) Photo one copy.
Bank will supply the following paper/documents before opening of the L/C. (a) L/C. application form (b) ICA form. (c) IMP from. (d) Murabaha Agreement. (e) Chargo documents paper.
The above paper must be completed duly filled and signed by the party and verified the signature.
3.9 Maintenance of Register: The sanction must be recorded in the following register : •
Document execution register. All the charge documents must be recorded in this register.
•
Limit register
•
Liability ledger.
3.10 L/C Applications: For opening L/C the client in to submit to the bank application in the printed format of the designated bank. This is called L/C application form which is also an agreement between the importer and the bank. The form is to be stamped under stamp Act. in force in Bangladesh. The importer must submit the LCA & IMP and Indent or contract / purchase order / proforma invoice (duly accepted by the importer) along with L/C application. The L/C. application must be completed / filled in and signed the authorized person of the importer giving the following particulars:i.
Full name and address of the supplier or beneficiary and importer.
ii.
Brief description of the goods
iii.
L/C. value for US$, £ etc. (CFR value) which must not exceed the LCA value.
iv.
The unit price, quantity, quality of the goods.
v.
Origin of the goods, port of loading and port of destination must be mentioned.
vi.
Mode of shipment ( Sea, Air, Truck or Rail etc.).
vii.
Last date of shipment and negotiation time (must not be beyond 30 days from the shipment date.)
viii.
Insurance cover note number and name of the Company.
ix.
Tenor of draft (i.e. sight /usance /deferred etc.)
x.
Mode of advising L/C. ( i.e. Airmail / Full Telex / Short Cable etc.)
xi.
Opening of L/C. under UCPDE Publication No. 500 ICC affection / Rev. 19993.
xii.
Whether shipment / Transshipments in allowed.
xiii.
Instruction to add confirmation if required.
xiv.
ICA Number.
xv.
Any other relevant information and instruction in any, must be mentioned in the L/C. application.
3.10.1 Examination of L/C. Application: On receipt of L/C. application it must be checked by an officer of L/C section very carefully in the following manner: 1.
That the terms and conditions as stipulated in the L/c. application are consistent with the exchange control and import trade regulation and UCPDE.
2.
That all the information mentioned in above column has been furnished.
3.
That the terms to e imported in eligible according to importer.
4.
Those goods are not being imported or originated from South Africa or Israel.
5.
If the goods are imported form any member countries of ACU.
6.
That all the outing/erasing/alternation if any are authenticated by the authorized person.
7.
LCA/License Permit etc.
8.
That the validity of the L/C. must not exceed the validity of LCA.
9.
L/C. is opened within the validity period permitted in the license.
3.10.2 Confidential Report of Beneficiary of L/C: According to exchange control regulations bankers are required to obtain confidential report of the beneficiary of L/C before opening the same, if the amount of L/C exceeds Tk.5.00 lac. bank can open L/C below Tk.5.00 lac without obtaining C.R.
Bankers can write to their foreign correspondents to supply the C.R. But from practical experiences foreign correspondents of different country are not supply timely. To over come the above situation bankers can consult reference books i.e. MUWN / DUNN / BRADSTREET / Trade directory of various Chambers of Commerce of different countries. On receipt of C.R from any source the banker can accumulate the same in one master file.
3.10.3 LCA Registration LC authorization forms consisting of six copies. 1st copy for exchange control purpose, 2nd copies for the licensing authority, 5th copy for the registration unit and 6th is the office copy of the bank. The procedure for registration LCA form with the Bangladesh Bank is as under: a) All LCA forms should be registered with Bangladesh Bank, Registration Unit, Exchange Control Department, Bangladesh Bank, Dhaka. b) After filling up the relevant portions of the LCAFs and duly signed by the importer there are forwarded to the registration unit of the Bangladesh Bank by the authorised dealers duly authenticated. The LCAFs are registered by the Bangladesh Bank registration unit subject to observation of usual drill. The officer in charge of the Bangladesh Bank Registration until will give the registration number on all the copies of LCA forms under his signature. Thereafter, the same will be opened unless an LCA form which has been registered with the Bangladesh Bank. c) After registration the original and duplicate copies of the LC authorisation forms will be delivered to the authorised representative of the banks from whom the same received by the registration unit.3th & 4th copies of the form will be passed on to the concerned licensing office, 5th copy of the form will be retained in the record of the registration unit of the Bangladesh Bank. d) The authorised dealers will not issue blank L/C authorisation forms to their clients. The importer should sign the L/C authorisation form in presence of Bank’s officer. the A. D. should sign the LCA form and verify the importers signature. Authorised dealer shall keep it careful. e) All authorised dealer will arrange to have with them specimen signatures and photo of the authenticated officers of the Bangladesh Bank registration unit. f) The registration will remain valid for 11 months or 17 months. As the case may be depending on the commercial and industrial machineries.
g) When letter of credits have been opened against the exchange control copy of LCA form, full particulars must be endorsed on the bank of the copy under the stamp and signature of the authorised dealer.
3.10.4 L/C Numbering in the L/C Register : If the L/C application and other all formalities are found in order then put the serial number in the L/C opening register. This L/C number put the L/C application form on the appropriate blank space. Enter in the L/C opening register the following particulars: Date, SL No. (L.C No.) Name of the Importer with address, Beneficiary's name and address , L/C value (Foreign Currency ) and B. Tk. rate of convention, LCA No. CCI & E Registration No. Shipment date, expiry date of the L/C commission postage recovered etc. to be recovered.
3.10.5 L/C Advising : L/C must be typed in the printed format of a bank. After typing, L/C should again be checked up by two authorized signatories and would be dispatched under their full signature, gearing their signature number.
3.10.6 Telex L/C: If any importer desires L/C to be transmitted by Telex. In that case the whole of the L/C is to be transmitted by telex to the advising bank by the opening bank. In the last para of the above telex L/C must be mentioned that the telex message is an operative and no airmail confirmation will follow. In that case reimbursement authority is to be sent to the reimbursing bank separately. If the importer desires that the L/C is to be advised by a short cable, short cable be sent incorporation the principal terms of the L/C as under:a.
Advice our irrevocable L/C No………. date…….. favoring …… ( beneficiary’s name and address )
b.
Amount (foreign currency).
c.
Merchandise to be imported.
d.
Last date of shipment.
e.
Negotiation days.
f.
Name of the importer with address.
g.
Test number.
h.
Air mailing details.
The air mail L/C must state as under " This is in confirmation of our cable dated"...................This is necessary to eliminate the possibility of issuing two advises of deputing the same L/C to the beneficiary by the foreign correspondent.
3.11 Add Confirmation: Sometimes the beneficiary of the L/C may ask for add conformation to a L/C by an internationally, reputed bank in the beneficiary's country. The importer is to request his bank i.e. opening bank to do no in writing. The opening bank advised the L/C through their correspondent with whose they have prior arrangement of credit line. Instructions are issued in the following language. “Please add your confirmation of the credit at Beneficiary's cost". Adding confirmation L/C in the negotiation to the bank who has added their confirmation to the credit. Such undertakings own neither be amended nor cancelled without the agreement of the issuing bank the confirming bank and the beneficiary.
3..12 Disposal of L/C Copies and Filing: L/Cs are normally typed in respective banks printed format in many folds (8 copies). The original L/C in sent to the advising bank for beneficiary's and 2nd copy sent to the above bank at the same time for their own purpose 3rd copy for importer, 4th copy for reimbursing bank 5th & 6th copy office copy of the bank, 7th for I.D. 8th copy for CCI & E and 9th copy for Bangladesh Bank. One copy for importer be sent to them along with the memo of charges incurred by the opening bank for the L/C stating the their amount has been so debited for the amount of Memo including that amount of margin.
3.13 Partial Utilization of LCA : When several L/Cs are opened against a single LCA endorsement must be given according to L/C opened and the aggregate of all the L/Cs must not exceed the value of LCA. Particulars of all the L/Cs should be noted on the back of LCA as under "opened L/C No. ………….. dtd. ………… for F. Currency ……………
@ …….. Equv. Tk. …..balance is Tk.
………
3.14 Accounting procedure for opening L/C. The following accounting system is followed in documentary creditors. The register shall be posted immediately on receipt or approval form the Manager to open a L/C. This register shall control the numbers of the L/C. Entries are to be passed:
3..14.1
Currency vouchers: Dr. Assets as per Contra (L/C WES )
at B.C. Selling
Cr. Liability as per contra ( L/C WES )
,,
Dr. F.C. Deposit ( WES fund held A/c )
at national rate
Cr. F.C. Deposit A/c (WES L/C cover)
,,
( If is purchased Fund at the time of opening L/C )
3.14.2
Taka Voucher : Dr. Party's A/c (Current A/c ). Cr. Sundry Deposit ( Security dep. L/C WES A/c ). Cr. Telex recovery A/c ( at the L/C is transmitted by telex or cable). Cr. Commission ( As per Bangladesh Bank Circular ). Cr. P & T A/c. Dr. Murabaha Import L/C @ B.C selling.
Cr. WES Find purchase A/c. Cr. Profit Receivable A/c WES. Dr. Profit Receivable A/c (monthly credited by daily product basis). Cr. Investment Income A/c.
3.14. 3 L/C Amendment: Amendment of irrevocable latter of credit is not permissible without the joint consent of the entire patron involved in documentary credit operation.
3.15 Time Extension: A written application from the opener of L/C and signature of the opener be verified. A relevant license / LCA / Permanent of the loan / Barter must remain valid unto that period the extension is sought. Increase of L/C amount may be done provided the LCA covers the increase in amount. L/C amount can be decreased provided the relevant indent is amended accordingly and with the consent of the beneficiary .
3.16 Procedure of Preparation and Dispatch: Amendment is to be typed also like L/C in the printed format the copies of the amendment must be dispatched to all concerned as cone in dispatching the L/C. Amendment can be done either by cable / telex of airmail. Each and every amendment of L/C must be noted in the L/C file and copies of each amendment be kept in the L/C file chronologically date wise.
3.17
Bank Charge:
Amendment commission is to be released from the party as pre instruction of Bangladesh Bank F.E. Circulars.
3.18 Account's Procedure: Dr.
Party’s A/c.
Cr.
Commission A/c.
Cr.
P & T A/c.
3.19 Liability: If the amount of L/C increased the liability voucher is to be passed as under: Dr. Liability as per contra (WES L/C ). Cr. Assets as per contra ( WES L/C ).
This is for old entry reversal made at the time of opening the L/C. Dr. . Assets as per contra ( WES L/C ). Cr. Liability as per contra (WES L/C ). A fresh liability is to be passed including the amount of increase on the date of amendment. EXPORT FINANCING BY ISLAMI BANK BLD. LIMITED
4.1 INTRODUCTION: Exporter means any person law fully exporting goods form Bangladesh to any other country. After shipment the exporter has to tender the documents to the bank within the stipulated prior for the negotiation of the documents are drawn compensatory support claims of the exporter. Post shipment credit means any loan or advance granted or another credit provided by an institution to an exporter of goods from Bangladesh from the date of extending the credit after shipment of the goods to the date of realization of the export proceeds and includes any loan of advances granted to an exporter, in consideration of or on the security of any duty drawback of any payment by way if incentive.
Incentives are as under: 4.1.1 Export Finance. a) Incremental incentive on interest for interest based bank. b) Incremental incentive on interest for interest based bank. c) Extent of export credit. d) Credit to first time applicants. e) Bank to Back L/C.
4.1.2 Substitute Benefit: Exporters will get this benefit only for export oriented local waving / knitting manufacturer. The rate of premium is 25% on FOB value.
4.1.3 Duty draws back: An exporter of manufactured products is entitled to draw back the value of the customs duties; sales tax etc. already paid on the importation of raw materials used in the production or manufacture of the export products.
4.1.4
Export credit Guarantee Scheme.
4.1.5
Confessional rate of import Duty.
4.1.6
Income tax rate of import Duty.
4.1.7
Retention Quota.
4.1.8
Travailing facilities.
4.2 EXPORT FORMALITIES 1. Procedure for Registration of Exporter. 2. Books and Register/Ledger required for export. 3. Export L/C. checking and advising. 4. Formalities of back to back L/C. opening.
5. Accounting of B/B LC. 6. B.B. Bill checking / Lodgment. 7. Mechanism of acceptance. 8. Pre-shipment financing. 9. Export document checking and negotiation / negotiation under reserve / collection basis. 10. Calculation of offering sheet for fund disbursement system. 11. Proceeds realization correspondence. 12. Formalities of back to back payment system. 13. Payment form Bai-Muajjal investment Bill A/c (if export fails.) 14. Substitute benefit realization/collection system. 15. EXP form reporting to Bangladesh Bank. 16. Disposal of EXP forms. 17. Export incentives. 18. Disputes and settlement of export claim.
4.3 PREPARATION OF EXPORT DOCUMENTS Procedure for obtaining Export Registration certificate (ERC) form CCL & the following documents are required:
1. Application form. 2. Nationality certificate. 3. Partnership deed (Registered) 4. Memorandum & Articles of Association and incorporation certificate. 5. Bank certificate 6. Income Tax certificate 7. Valid Trade License. 8. Copy of Rent Receipt of the business firm. 9. Fees paid treasury chilliness.
4.4 What IS L/ C The L/C is an undertaking of a Bank to make payment or to accept, and pay bills of exchange of the beneficiary or authorizes another bank to effect such payment or to accept and pay a draft or authorizes another bank to negotiate against stipulated documents, provided that the terms & conditions of the Credit complied with (Article-2 of UCPDC – 500).
4.5 WhatI Is Export L/ C The L/C against which the goods and services are exported is called export L/C. The foreign L/Cs are export L/Cs.
4.6 Checking of Export L/Cs for Advising. Upon receipt of the Export L/C the same must be checked by the receiving Bank carefully before advising the same. The following points to be carefully checked: 1. Authenticity of the L/C – The receiving Bank must ensure about the authenticity of the L/C. If it is tested massage the test No. must be verified and agreed by an Authorized Bank official, Known to the receiving / advising Bank or identified / confirmed by the advising Bank. 2. After authentication the receiving Bank to check the L/C & confirm on the following points : (a) That the Exportable Commodity is not banned item as per rule of land ; (b) That the terms and conditions stipulated in the L/C is not contrary to the Exchange Control regulation of the country.
4.7 Processing and Opening of Back to Back L/C : An export desired to have an import L/C limit under Back to Back arrangement. In that case the following papers & documents are required:-
1. Full particulars of Bank account.
2. Balance sheet. 3. Statement of Assets & liabilities. 4. Trade License. 5. Valid Bonded ware House License. 6. Membership Certificate. 7. Income tax declaration. 8. Memorandum of Articles. 9. 9. Partnership deed. 10. Resolution. 11. Photographs. On receipt of above documents and papers the back L/C opening section will prepare a credit report. Brach must obtain sanction from Head Office for opening of Back to Back L/C. Exporters prepare the documents and submit the same to the Bank for negotiation .
4.8 Preparation of Export Documents:1. Bill of exchange or Draft. 2. Commercial Invoice. 3. Bill of Lading. 4. Inspection certificate. 5. Packing List. 6. Export License. 7. Shipment advice. 8. Certificate of origin. 9. Weight certificate. 10. Photo-sanitary certificate. 11. Certificate of Analysis. 12. Quality certificate. 13. EXP Form.
14. DHL Courier receipt
4.9 Export Documents Checking :4.9.1 General verification: a) L/C restricted or not. b) Exporter us to submit documents before expire expiry date of the credit. c) Shortage of documents etc. 4.9.2 Particulars examination: a) Each and every document should be verified with the L/C. 4.9.3 Cross examination: a) Verified on documents to another. On receipt of documents it must be checked properly and then a proposal sheet would be prepared as per Bank's format indicating the full particulars of shipment and discrepancies under the signature of authorized person and should be placed to the Manager for disposal instruction of sanction.
4.10 Disposal of FBN Documents :Before dispatch:---- Rubber stamp must be affixed of all the documents mentioning the FBN Number. ---- Endorse of draft, B/L Insurance policy unfavorable of foreign correspondent as Per L/C terms. ---- Prepare the forwarding schedule in five copies. The documents are to be dispatched as under:i. 1st mail original documents under the original bank forwarding schedule by courser service.
ii. 2nd mail Duplicate sheet of document under the duplicate bank forwarding schedule by courier service as per L/C terms. iii. 3rd copy of schedule is forehanded to the Head Office, I.D., iv. 4th copy is for record in the FBN file. v.
[[
vi. 5th copy is used if necessary as a tracer or reminder.
4.11 Flow Chart for Export: 1. Goods ready for shipment. 2. Inspection of the goods from the competent authority as per L/C. 3. Prepared invoice and packing list and vessel booking particulars. 4. Papers to be sent to C & F agent for shipment. 5. C & F agent will do the custom formalities i.e. Noting / entry. Checking the goods as per invoice & packing list inspection report etc. 6. C & F agent will take permission for shipment / Hanover the goods to shipping co. 7. After completion of all customs formalities the nominating shipping co received the goods for sail/ load in the ship and issued a receipt which is known as mates receipt. 8. C & F Agent hands over the shipping receipt to the exporter or they can take the original B/L in payment of freight and other expenditure etc. 9. Exporter may dispatch the shipment advice to the importer directly as per L/C terms. 10. C & F Agent recipes the original B/L from the relative shipping co and dispatches he same to the bank for negation of receives the (exporter) from the shipping co directly. 11. Exporter spits the all original and duplicate sets of document to the bank for negotiation. 12. After negotiation bank should dispatch the documents to the opening bank for delivers of from the part. 13. Opining bank lodged the documents and make payment to the negotiation bank A/c terms. 4.12 Export Financing:
4.12.A
Musharaka pre-shipment Finance.
4.12.B
BAI Muazzal Investment ( Forced Loan ).
4.12. C
Mudaraba preshipment finance.
4.12.D
BAI Salam.
4.12. E
Quard Hasana ( Interest free loans ).
4.12. F
Istishan.
4.12.1) Musharaka pre-shipment Finance:Reshipment France is an advance granted by a Bank to an exporter to meet the cost up to the packing of goods for export to overseas buyer. this is done in reshipment stage. So it is also called reshipment advance. The purpose of the investment is for purchase of raw materials a finished goods or manufacturing , processing, packing , transporting up to warehousing / port of shipment etc. For export pre-shipment is an advance for procurement of finished goods.
4.12.1.1 Sanction of Pre-shipment:The party is to apply the bank. On receipt of the application pre-shipment section will start scrutiny of the application. •
Types of pre-shipment: Whether clean / pledge / Hypothecation of good.
•
Whether the investment is within Bangladesh Bank credit restriction.
•
Whether the security offered is acceptable.
•
What is the purpose of the investment.
•
Whether the goods specified for finance is eligible for export jnder export control rule.
•
How the PSI A/C will be adjusted.
•
Whether the item is traditional of non- traditional.
4.12.1.2 Disbursement: Execution of documents: •
Execution of the charge documents.
•
Musharaka Agreement.
•
Lien Mark of the Master L/C.
4.12.1.3 Inspection of goods: On receipt of the goods in the godown or ware House Banker should inspect the goods and process the proposal for making payment @ 9 % on FOB value of Master L/C for 180 days.
4.12.1.4 ACCOUNTING: Dr. Musaraka pre-shipment A/c. Cr. Party's A/c. Cr. Commission A/c. Cr. P & T A/c. Dr. Party's A/c. Cr. Income A/c ( Estimated profit after realization of the proceeds ).
4.12.1.5 QUOTAFINANCING : Quota financed by Musharaka pre- shipment investment for purchase of Garments quota allocation under the following terms & conditions:4.12.1.5.1 Bank finance at the rate of 75% of cost price.
4.12.1.5. 2. Profit sharing ratio.
a) Party 60% But be ensured minimum R/R as prescribed by H.O. b) Bank 40%
4.12.1.5 .3. Mode of disbursement:On completion of negotiation with the seller regarding price, quantity etc. The party will deposit their equity amount at the rate of 25% of the cost price to the Bank with request to make payment of the seller. Disburse Mint of the amount by creating investment under the Head Musaraka pre- shipment (Quota ) after verifying the Market price and observing documentation formalities under Musaraka Agreement.
4.12.1.5 .4. Security:Before disbursement, the Quota allocation duly transferred by quota .Holder and duly authenticated by Export promotion Bureau in favor of the Buyer will be placed under band's lien along with the party's letter of undertaking to the effect the they will make necessary agreement for adjustment of the Bank's Investment by export above special pre-shipment (Quota) from their other sources within due date. Additional charge to be created on the value of collateral security already held if covered by value thereof. If the value of existing collateral security does not covet additional collateral security to be obtained.
4.12.1.5 .5. Additional Charge:Charge to be created on present and future assets of the Company in Bank's favor with the Registrar of joint stock companies against the liabilities of the party with the Bank if not dove carolers.
4.12.1.5 .6. Interim Adjustment:At the time of allowing pre-shipment Investment. If any on arrival of the Raw-materials proportionate amount of Special pre-shipment Investment (Quota) will be transferred to normal pre-shipment investment account. Pre-shipment Finance for Manufacturing the Garments will be allowed to such extent as the total liability of an account of Quota purchase,
import payment and normal pre-shipment together coil not exceed 90 percent of FOB value of the Export L/C. 4.12.1.5 .7. Final Adjustment:At the close of individual i.e. on negotiation of an export bill or receipt of export proceeds in case of collection Bill proportionate amount of Bank's investment together with profit as per agreed ration will be recovered after obtaining a final account form the party.
4.12.1.5 .8. Expiry date:4.12.1.5 .9. Caution:It is a Musharaka Investment which needs round the close supervision. Bank will exercise utmost care to supervene utilisation of the Quota allocation as early as possible invariably within the Quota year. Bank will participate in the and the export of the Readymade Garments. Bank will also inspect the party's books of account in connection with the deals so as to ensure actualization of the estimated profit of maximization thereof.
4.12.1.5 .10. Other conditions: i. An unconditional and irrevocable undertaking to be obtained form the party to the effect that they shall arrange obtention of necessary export order through acceptable export L/C failing they shall arrange disposal of the Quota under Bank's supervision and adjust the proceeds toward the financing to be allowed and in the even of shortfall, if any, the same shall be adjusted on or before due date(s) from party's own sources. ii. Branch must verity market of the Quota & Quota is purchased at competitive price and market price verification certificate duly signed by Branch Incumbent / 2nd officer, Foreign Exchange In-charge & the Dealing Desk officer should be retained for record. iii. An affidavit in appropriate manner be obtained firm the party to the effect that entire Quota presently held by the party & will be performed & be purchased in future irrespective of Bank / own finance will be kept lien with the Branch and will be utilized by exporting Readymade Garments through the Branch.
4.12.1.5 .11. Salient features of the existing provision of export credit:
i. Bank may allow export credit to the extent of 90% of the value of confirmed irrevocable export L/C or firm sale contract. ii. Export Credit quarantine scheme:The guarantee covers 85% of loss caused by commercial risks and 95% of the loss caused by political risks.
4.12.1.5.12. Accounting:Dr. Musaraka pre-shipment (Quota). Cr. Party's A/c. Estimated profit for 90 days must be calculated and marked in the ledger. When deal will close in that time Bank will realize the profit in full form their A/c. Dr. Party's A/c. Cr. Income A/c (Pre-shipment).
4.12.2) BAIMUAZZAL: It is a contract in which a client wishing to purchase raw-materials, finished goods, commodities, spares, Machinery, equipment or any other goods request the Bank to procure the items and sell them to him at a price payable at a future date in lumps of in installments. . It is a credit sale. Ownership and possession of the goods is transferred by the Bank to the client before receipt of sale price. •
Sale price of the goods is payable the client at a specified future date.
•
Documentation :1. D. P. Note. 2. D. P. Note delivery latter.
v
3. Bai-muzzal Agreement.
vi
4. Letter of Hypothecation.
•
Accounting :Dr. BAIM Investment A/c. Cr. Payment order A/c favoring seller of the goods. Cr. Profit Receivable A/c.
Dr. Party's A/c. [
Cr. BAIM Investment A/c. Cr. Profit Receivable A/C.
(Monthly Product Basis).
• Insurance :Ask the client to obtain insurance policy equal to the sale price of the goods. On behalf of the Readymade Garments Industries clients, open deferred payment L/C for import of fabrics and other accessories under Back arrangement of the understanding that the importers will arrange payment on or before the due date by repatriation of proceeds of exports of their products. In some cases they cannot execute exports in time exulting in their failure to repatriate exports in time resolution in their failure to repatriate export proceeds to make import payment on its maturity. But the bank in order to keep its commitments has to pay on due date irrespective of relative export proceeds released of not. Such overdue import payment is to be made by purchase of foreign currency form WES/SEM and the importers will have to arrange for the same. On failure of the party to arrange import payment on of before the maturity date, the branch will effect the remittance by purchasing the required foreign currency at SEM rate by debit to Bai-Muazzal WES Bills A/c giving effect to the equivalent taka and due date for their repayment. Then the branch will approach the Bangladesh Bank for then post fecto approval along with the following documents/papers.
1.
Party's letter addressed to NBR.
2.
Bill of entry (exchange control copy).
3.
Export L/C copy.
4.
Back to Back L/C copy.
5.
Proforma Invoice.
6.
Position of the goods.
The branches will need vigorous follow-up for recovery of the Bank's dues within due date of the agreement positively. In case of the party's failure to repay the Bank dues as per agreement the branch will arrange for disposal of the stock after obtaining necessary clearance from the competent Govt. Agencies and Head Office also The branch will submit a monthly statement of outstanding Bai-Muazzal WES Bill as per Head Office proforma. Accounting procedure of the Bai-Muazzal WES Bill Investment. Dr. FC. Deposit (WES Fund held) A/C.
F.C. Voueher.
Cr. GB General A/C Head Office. I.D. Dr. Bai-Muazzal WES (Bills) A/C.
Tk. Voucher.
Cr. WES Fund Purchased A/C.
,,
Cr. F.C.A/C.
,,
Cr. Telex Recovery A/C.
,,
Cr. Commission A/C.
,,
Cr. Investment Income A/C.
,,
4.12.2.1 Documents required:
1. Charge document 2. Undertaking to arrange foreign currency for payment. 3. Agreement for sale of goods under Bai-Muazzal.
4.12.2 .2 Post -Shipment Export Financing under L/C. Export credit means any credit provided by an institution to an export in the form of packing credit or post shipment credit. Packing credit means any loan or advance 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. Post shipment credit means any loan or advance granted or any other credit provided by an institution to an exporter of goods from Bangladesh from the date of extending the credit after shipment of the goods to the date of realization of the export proceeds and includes any loan or advance granted to an exporter, in consideration of, or on the security of, any duty draw-back or any cash payment by way of incentive. The following incentives are provided to the exporters:
4.12.2 .2.1 Export Finance: a) Interest rate: The concessional interest rate of export credit for traditional & non traditional items.
b) Extent of export credit: Commercial banks provide export credit to the extent of 90% of the value of confirmed and irrevocable L/C or of the firm’s
sales contract. c) Credit to first time applicants: Commercial bank will not refuse any application for export credit received for the first time. d) Back to Back L/C: All authorised dealers (commercial Banks) can establish L/C on a back to back basis against lien valid export L/C for the importation of raw materials and other accessories from abroad or from inland for readymade garments, specialized textiles and hosiery products etc
4.12.2 .2.2 Substitute Benefit: From 31st March 1990.the arrangement for cash premium to the exporters under substitute benefit scheme has been replaced by export performance benefit (XPB), a system under which Bangladesh Bank shall reimbursed a premium in cash to the exporters Bank disfavor of the party. This scheme has been introduced against customs duty or Duty drawback; exporters will get this benefit only for export oriented local weaving/knitting manufacturer. The rate of cash premium is 25% on for value. The following manufacturers will get the benefit against export as prescribed by Bangladesh Bank: a) Weaving cloth, knit cloth, Hosiery fabrics, Gray cloth, Printed cloth, Drying cloth, Gramin cheeck, Handloom fabrics and Reshmi silk cloth and exported readymade garments which have been made by local fabrics (Fabrics producer and garment exporter are to be same). b) Local manufacturing Toel, Bed Sheet, Bed Cover, other related items, Terry bag and Shocks etc. c) Fabrics producer and garments exporter must be same industry, and exported the garments by the use of own produced fabrics.
4.12.2 .2.3. Duty Draw Back : An exporter of manufactured products is entitled to draw back the value of the customs duties; sales tax etc, already paid on the importation of raw materials used in the production or manufacture of the export products. There are three methods:(a) Draw back at actual, (b) National payment of duty, (c) Draw back at flat rate for realising drawbacks.
4.12.2 .2.4 Export Credit Guarantee Scheme (E.C.G.) : The export credit guarantee wing of the Sadharan Bima Corporation (SBC) provides guarantee to Importers and Exporters the overseas commercial and political risks respectively, currently three types of guarantee e. g. (a) The Export Finance Guarantee (Pre-shipment), (b) The Export Finance Guarantee (Post-shipment), (c) The comprehensive Guarantee.
4.12.2 .2.5 Concessional Rate of Import Duty:(a) Capital Machinery: Capital Machinery for export oriented Industries is allowed to the imported at a concessional rate of 2 ½ % import duty. (b) Spare Parts: Drawback of import duties and sales tax paid in excess of 2 ½ % on the importation export oriented industries, provided that such part are not produced within the country.
4.12.2 .2.6 Income Tax Rebate:-
Exporters of various categories are entitled to an income tax rebate, varying in percentage, depending on their export performance, as fixed by the NBR from time to time.
4.12.2 .2.7 Rebate on Insurance Premium:Special rates are allowed to export oriented industries (Non traditional items) in respect of their premium payments for fire and marine Insurance.
4.12.2 .2.8 Freight Rebate:Special inducement and promotional freight rates are provided to exporters by the Bangladesh Biman Airlines and the Bangladesh Shipping Corporation.
4.12.2 .2.9 Retention Quota :Retention quota for merchandise exporters readymade garments is 7.5% of repatriate FOB value of their exports in F.C. A/C.
4.12.3) MUDARABA : Mudaraba is a deed on the basis of which an agreement is signed between a Bank and a person (Real person or a legal entity) in order to enter into a Commercial (Purchase and / or sale of goods ) investment and jobbing transaction. In this kind of agreement, the bank, as the owner, acts as the supplier of the necessary cash and the other party as the modareb or amel. Capital owner is the Saheb E-Mmal and capital user is called Mudareb. All profits, earned through the relevant transactions, shall be divided between the bank and the amel. On the winding up of the Job, the ratios for this dividend shall be those initially agreed upon.
4.12. 4) BAI SALAM OR BAI SALAF: This is deferred delivery transaction under which banks may finance purchases on a client’s behalf. These are a distinction drawn between such purchases and future trading which is regarded as speculative and therefore, prohibited. Under a forward purchase the bank pays for the commodity being trade on behalf of the import agent or whole seller who will repay the bank when he resells the merchandise to the retailer or final customer. The banks can prepurchase the future output of the firms at agreed price with specifications of the goods and stipulated time / date of delivery. They, however, cannot sell the product until they have taken physical possession of goods. This mode is prescribed many other banks.
4.12.5) QUARD-E-HASANA (Interest Free Loan): Most Islamic Banks also provide interest-free loans (Qard-E-Hassan) to their customers. However, practice differs in this respect. Some Banks provide the privilege of interest-free loans to the holder of investment accounts at the bank. Other banks provide interest-free loans to needy students and their economically weaker sections of society. Yet others provide interest-free loans to small producers, farmers and entrepreneurs who are not qualified to receive financing from other sources. The purpose of these interest-free loans is to help them to become independent or to raise their incomes and standard of xx living. Second helping to increase production with due emphasis on Agricultural, livestock, and industrial production.
4.12.6) ISTISHNA: The word” Istishna” has derived from Sana-AA. Which means manufacturing and construction. •
Value/Price is to be paid before delivery of goods.
•
Both delivery and price may be differed as per Hanafi School of thought.
•
Risk and conversion both are permitted. Goods may be fungible or non-fungible.
REMITTANCE Remittance means transfer of fund. If we pronunciate of the word "Remittance" we under stand transfer of fund through a Bank from one place to another place which may be executed the country or between two countries. Remittance which is effected within the country is called Local Remittance and which is effected between two countries is called Foreign Remittance. Remittance plays a vital role in the development of the country. Without effect of remittance no country can develop her. Bangladesh is rich enough in respect of human resources. So Inward Remittance has great importance in our country.
5.1 OPENING OF FOREIGN CURRENCY A/C. Accounts are phenomena through which transaction is routed. All banking transactions are settled through Accounts. So A/C. is essential for setting our day transactions Foreign
Currency A/C. has a great important on overall Foreign Exchange. Only the Authorised Dealer Branches can open F.C. A/C .without prior permission of Bangladesh Bank F.C. A/C. is opened by Bangladeshi nationals serving and earning abroad i.e. having Income from sources other than Bangladesh. To open an FCAD/FCAP A/C the formalities mentioned below are to be observed:1. Opening forms i.e. Application, Signature Card, nomination form if any, to be duly filled in and signed by the applicant and the nominee. 2. Original passport to be submitted for verification and Photocopy of 1st seven pages to be submitted for preservation. 3. Passport photographs of both A/C holder and the nominee are to be submitted Photo graphs of Nominee to be attested by the A/C holder & A/C holder's photo be attested by the authored by the authorised office of the Band. 4. Service contract in English or Bengali person to be submitted with the A/C Opening form. 5. If the intending person desire to open A/C from abroad the necessary papers are to be sent duly att6ested by the authorized official of Bangladesh Embassy working there. All signatures are by same as that of Passport. It may be mentioned that no initial fund is required at the time of opening of the Foreign Currency account.
5.2 FCAD ( FXP ) A/C: FACD A/C Export is opened by the exports only 7.5% FOB value? Realised amount is deposited in this account and the fund is used for the promotion of business. Establish of business, Payment of credit card bill, Export fair, to attend the seminar and of purchase of Machinery and Spare parts.
5.3 Private Foreign Currency ( PFC) A/C :
Private Foreign Currency A/C is opened by the Alien who serve in Bangladesh Foreign mission, Foreign NGO and Foreign consultation firm. Photograph, photocopy of passport, work permit, NGO permission etc, are to be submitted to open the A/C.
5.4 CONVERTIBLE TAKA (CT) A/C : The private Foreign Currency Account holders are to open Convertible taka Account. The entire funds of the PFC A/C are to be routed through the related convertible taka Account.
5.5 INWARD REMITTANCE: The remittances, which are received from abroad and paid to the beneficiary, are Inward Remittance. In ward remittance are mainly received in US Dollar, pound sterling and Taka Currency. Very few remittances in miscellaneous currencies are also received.
5.6 MODE OF INWARD REMITTANCE: 1.
T.T ----------
Telegraphic Transfer.
2.
M.T ---------
Mail Transfer.
3.
D.D ---------
Demand Draft.
4.
P.O ---------- Payment Order.
5.
I.M.O -------- International Money Order.
5.
T.C ---------- Traveler’s Cheque.
5.7 OUTWARD REMITTANCE: The Remittance in Foreign Currency which is affected from our country to abroad is called outward remittance. Form remitter's point of view is called outward Remittance and from payee's point of view is called Inward Remittance.
5.8 MODE OF OUTWARD REMITTANCE:
The Remittance may be made by means of T.T, D.D& T.C, etc. Ideation to these the sale of Foreign Currency under latter of credit against retirement of bill is include as outward remittance.
5.9 PROCEDURE OF PAYMENT: To make payment the points mentioned below are to be observed. 5.9.1 DEMAND DRAFT: 1. The D.D must be in original 2. The name of bank, name of Branch, Date, name and A/C number of the payee, amount in word and figures must be mentioned. 3. The D.D must be as per prescribed format or specimen copy supplied earlier. 4. The amount is protecting graphed. 5. Payment is not stopped. 6. Draft is not reported lost. 7. Verification of drawer's signature. 8. Telex confirmation from the issuing Bank, if the amount exceeds the limit as per agreement made earlier. 5.9.2 TELEGRAPHIC TANSFER: The message must be in original 2. It must be authenticated under test, Test must be decoded and found correct. 3. T.T. must contain the name of Bank, name of Branch, name and A/C number of the beneficiary. It the above points are Okay, payment made to the beneficiary as soon as possible. Incase of Express Remittance Scheme with Al-Rajhi Banking and Investment Corporation. K.S.A Local Office ensures the payment to our Branches within the following time frame as per H.O., ID circular No. d.dt.22.5.95. 1. Capital Area 24 hours. 2. Major Cities 48 hours. 3. Other Towns 72 hours 4. Remote Areas 120 hours.
At present twelve Exchange House / Bank are maintaining their NRD & NRD Accounts with us. As per agreement made with them they provide us sufficient fund to honor their drawing. On receipts of their fund Local Office prepare vouchers as under:1.
Dr. IBG A/C HO-IK (FET-59) (Respective Ex. House / Bank) Dr. NRD A/C Cr. NRD A/C (Respective Ex. House / Bank) Cr. W.F.H. A/C.
2.
Dr. W.F.P/ A/C Cr. NRD a/c (respective ex. House/bank) Cr. W.F.H. A/C.
Exchange House can issue DD and TT against their fund in the form of US Dollar or Taka Currency. In case of taka Currency the following vouchers are to be prepared:Dr. NRT A/C. Cr. Party A/C. In case of US Dollar the vouchers ore to as under:Dr. NRD A/C ( National Rate). Cr. Party A/ C. Dr. W.F.P. A/C ( TT Clean rate). Cr. W.F.H A/C. Beneficiaries maintain their A/C with different Banishes of IBBL of any other Banks . In these case Local Office issues IBCA to other Branches of IBBL .If Beneficiary's A/C is maintained with other Banks, Local Office issues P.O. within the area of clearing house and DD beyond the area of clearing House.
1.
If Beneficiary maintains A/C with Local Office and DD is drowning of LO, the same
will be received in the counter and payment will make directly. 2.
If Beneficiary maintains A/C with any other Branches of IBBL and DD is drawn on
that Br. In that case Beneficiary. Bank /Br. will make payment debiting Local Office and the IBDA will be responded by the LO. 3.
If Beneficiary, maintain A/C with any other Br. of IBBL and FDD is drawn on LO in
that case payment will be made through Transfer Delivery A/C within city Area. If the Branches are beyond the city Area payment will be made by OBC i.e. on collection Basis. In the city Area, If there is any discrepancy in the draft if should be sent to LO on collection basis and LO will make payment after confirmation from the issuing Bank. If Beneficiary maintains A/C with other bank within the clearing Area and draft drawn on IBBL draft will be paid through clearing. But beyond the Chittagong Area it will be paid on collection basis. Draft of Chittagong TDA A/C can't be held. Either kit will be paid or returned mentioning the cause of dishonor. On receipt of Dollar Draft through collection basis the same will be sent for collection to the respective bank and payment will be making on receipt of proceeds. In this case the following vouchers are to be prepared:Dr. Outward Bills for lodged A/C. Cr. Outward Bill for collection A/C .
After payment: Dr. Outward Bills for collection A/c Cr. Outward Bills for lodged A/C
5.10 SETTLEMENT OF CLAIMS:
As the remittance is received from abroad or remote places, some claim, may occur for non receipts of fund. These claims may arise by the Beneficiary. Or remittance through issuing/Remitting Bank. As such the claims are to the settled. 5.10.1 DEMAND DRAFT: If the TT is lost or stolen, remitter will report to the remitting bank. R/B will ask / advise the Beneficiary. Bank to mark stop payment or not to make payment. Beneficiary bank will confirm the stop payment to the Rem. Bank if the DD is not paid earlier . If the DD is paid earlier the mode of payment is to be confirmed to the Rem, Bank. If necessary a duplicate DD is to be issued to make payment to the beneficiary for settlement of the claim. 5.10.2 THLEGRAPHIC TRANSFER: If the TT contains any wrong information Beneficiary. Bank is to contact with the issuing / Remitting Bank for correct information. On getting the correct information payment is to be made accordingly.
5.11 INCASE OF PURCHASE OF CHEQUE & DRAFT: Dr. FCDP A/C. Cr. W.F.P A/C. Dr. W.F.P A/C. Cr. Party A/C. Cr. Commission A/C. (TK. 25 per Dollar. TK.. 35 per Pound Sterling.)
On realiasation Dr. IBG A/C HO-ID (FET - 59) Cr. FCDP A/C 5.12 Foreign Remittance of IBBL Performance and Recent Developments. Remittance of expatriate customers has always been contributing towards continued success of the Bank in deposit mobilization which, in turn, helped accelerate its investment operations. Besides, Foreign Exchange portfolio of the Bank has been quite phenomenal due to substantial inflow of Foreign Currency against remittance of Bangladeshi expatriates. In fine, Foreign Remittance helped consolidate the Bank’s deposit base, expand investment operation, finance import business and earn huge income from ancillary business and exchange gain. Since its inception, IBBL has been maintaining a predominant position among contemporary Banks in this field. Over the last few years, IBBL is holding the 1 st position among Private Commercial Banks in respect of remittance handling while it maintained 2 nd position among all the banks (both NCBs & PCBs) in the year 2008. To facilitate remittance of Bangladeshi expatriates around the globe, Islami Bank Bangladesh Limited has so far established Taka Drawing/Remittance Arrangement with 43 Exchange Houses/Banks in different countries. Besides, we have signed Agreement with 5 institutions and obtained Bangladesh Bank approval for establishing such arrangement with 6 Exchange Houses while 3 other proposal have been sent to Bangladesh Bank and 22 more are under process and correspondence. Apart from the Taka Drawing system, Bangladeshis living abroad may send money in Foreign Currency through our NOSTRO correspondents. Due to widening the network and coverage, strengthening marketing drives and restructuring IBW with formation of new Divisions for Remittance as per Remittance Policy of the Bank, the overall growth of foreign Remittances has been increased quite satisfactorily. Performance A.. Volume and growth in foreign remittance from 2004 to June 2009 are furnished bellow Amount in million Taka
2009 Up to
Particulars
2004
2005
2006
2007
2008
Achievement Increase
9879
14670
16668
23669
36948
June 23189
2235
4791
1998
7001
13279
6642
29.24
48.50
13.62
42.00
56.10
40.14
(cor. prd) Growth(%)
IBBL Remittance position from 2004 to 2009
Million Taka
40,000.00 35,000.00 30,000.00 25,000.00 20,000.00 15,000.00
B. Foreign remittance business target & performance in 2008 & 2009 10,000.00
Fig in Million Taka
5,000.00 0.00
2001
Target Achievement Remittance
9,879.00
Growth (%)
29.24
for
2002
Target
2004
2005
Proportionate
Achievement
for
target as on
January to
Achievement
2009
30.06.06
June 2009
over
2008
2008
2003
14,670.00
16,668.00
48.50
13.62
Percentage of
23,669.00
36,948.00
42.00
56.10
proportionate target 35500
36948
59000
29500
23189
79%
C. Month wise Remittance flow from January to June 2009 Fig in Million Taka January
February
March
April
May
June
Total
2969
3627
3939
3925
4617
4114
23189
D. The volume & growth during January- June period in last few years are furnished below: Fig in Million Taka Particulars Achievement Increase (Amt) Growth (%)
June 2005 7016
June 2006 8300
June-2007
June-2008
June-2009
10710
16547
23189
3045
1284
2410
5837
6642
76.68
18.30
29.04
54.50
40.14
It is seen that half yearly total remittance up to June 06 stood at Tk. 23189 million which is almost equivalent to the yearly remittance of 2007 (Tk. 23669 million). The growth as on 30 th June, 2009 is 40% over a higher amount of base figure in corresponding period of 2008. It may be mentioned that usually we receive highest amount of remittance during the Eid ul Fitr and Eid ul Azha each year. Since both the occasions will be observed during the 2 nd half of the year, we hope that volume and growth of remittance will be higher in remaining months. Moreover, we have established Taka Drawing arrangement with some new Exchange Houses which are expected to go in operation in next few months and would contribute in the remittance flow of the year. E. Country wise position of IBBL compared with national remittance in 2008 is shown below
Country wise Country
K.S.A. U.A.E. Kuwait USA U.K Qatar Oman Bahrain Others Total
share of
Country wise share of
Share of IBBL on
IBBL
National
Remittance
Remittance
National Remittance 37.98% 11.71% 10.50% 15.91% 13.96% 3.62% 3.48% 1.65% 1.91% 100%
62.36% 7.76% 9.50% 1.32%* 3.98% 3.30% 1.14% 1.02% 9.62%* 100%
22.30% 9.00% 12.29% 1.13% 4.08% 12.38% 4.44% 8.37% 26.01%
F. The total remittances of the country & IBBL from major remittance source countries showing our position/share in last few years are furnished in Annexure: G. Comparative position of Remittance received through Banks / Exchange Houses as on June 30, 2009 is attached in separate sheet. POSITION OF DRAWING ARRANGEMENT
IBBL so far obtained Bangladesh Bank approval for establishing Remittance arrangement with 54 Exchange Houses/ Banks out of which Taka Drawing has been started with 43 Exchange Houses in 12 countries as shown in Annexure A. Year wise position is summarized below: Year 1983-2000 2004 2005 2006 2007 2008 2009 (up to June)
Approval Obtained 20 2 4 7 3 11 7
Cumulative Position 20 22 26 33 36 47 54
Status of Drawing Arrangement yet to be completed are furnished below: i . Agreement signed & operation will be started soon 01. Alfalah Exchange Company (Dhabi Group) UAE 02. T N S Money transfer, UK 03. Global Financial Exchange, USA 04. Hadi Express Exchange, UAE 05. Bank Islam Malaysia Berhad, Malaysia ii. Bangladesh Bank permission Obtained & Agreement will be signed soon 01. Federal Exchange, Dubai, UAE 02. Emirates India International Exchange, UAE 03. ARY Forex Ltd, UAE 04. Milfa Sterling Exchange, UK 05. Bank Muamalat Malaysia Berhad, Malaysia (Agreed for Establishment of Drawing arrangement) 06. United Exchange (2023224 ONTARIO INCORPORATED), Canada iii. Proposal sent to Bangladesh Bank for approval
01. World link Money Transfers S.A., Greece 02. Omnex Group, USA 03. Saajan Travel Services Ltd, UK iv. Agreed to establish arrangement, proposal being processed to send for Bangladesh Bank Approval 1. DolEx Dollar Express Inc, USA 2. Al Ansari& Behbehani Exchange Co. WLL, Kuwait 3. Jalalabad Financial Services Ltd, UK 4. Alukkas Exchange, UAE 5.
Romana Money Services, UK
6. Tele Money Transfer Limited, UK 7. Trust Exchange Company, Doha, Qatar v. Negotiations are going on for establishing arrangement 01. Western Union Financial Services 02. Malayan Banking Berhad (Maybank), Malaysia 03. Am Bank, Malaysia 04. Bumiputra Commerce Bank Berhad, Malaysia. 05. RHB Bank Berhad, Malaysia 06. Arab National Bank, KSA 07. Riyadh Bank, KSA 08. National Commercial Bank, KSA 09. Al Dar for Exchange Works, Qatar 10. Mostafa Sultan Exchange, Sultanat of Oman 11. Sonali Money Exchange (UK) Ltd., UK 12. Al Muzaini Exchange Company, Kuwait 13. Gulf Exchange Company, Qatar 14. Ameer Tech Remittance & Exchange Services, Singapore. 15. Mostafa Air Travel Tec Limited
Recent Developments in Remittance handling activities Adopted Remittance Policy With a view to utilizing the available strengths and deriving the benefits out of opportunities, IBBL has formulated a Remittance Policy containing strategies, action plan & a perspective plan for mobilizing/handling remittance which has been approved by the Board. Strengthened Customer Service Deptt Customer Service Cell at IBW has been upgraded to a Deptt. For meeting queries/complaints of expatriates & Exchange Houses. Besides, all Branches have been instructed through a circular to form a Customer Service Cell/Desk/Deptt & designate specific officials for handling expatriate customers. Offering Competitive Exchange Rate Exchange Houses have always been requesting for market competitive rate for cover fund against their Drawings. Upon establishment of Dealing Room at IBW, we update the rate daily while those Exchange Houses are funding through direct dealing and receive best rate prevailing in the inter bank market. Observance of Customer Service Month During “The Service Month� 06 observed by the Bank , IBW issued a separate circular giving detailed guidelines as to ensure better services to Expatriate customers and taking steps for mobilization of foreign remittance specially during the month. Utilizing RDS officials for remittance mobilization In order to increase the expatriate customer base and mobilize deposit through foreign remittance, RDS officials have been engaged recently. We hope to widen our remittance base in remote areas with the participators of grass root level employees of RDS. Introduction of Instant Cash Payment Arrangement We have recently made arrangement for Instant Cash Payment with some renowned Exchange Houses which will be in full operation from our Branches very soon. Officials from different Branches have already been trained by IBW in co-operation with UAE Exchange Centre Dhaka Office.
Automation of Remittance operation IBW has taken steps to automate remittance of IBBL within shortest possible time. In this process, payment orders are electronically printed from eibs program and similar developments are under process of completion. Strengthening Remittance Distribution Hub IBW with the help of ICTD has taken various steps for capacity building of remittance handling officials working at Remittance Distribution Hub in Local Office through updating eibs and providing necessary logistics and support. Shifting of Remittance Service Operation from Local Office to Head Office IBW is actively working on the different aspects of shifting remittance handling service from Local Office to Head Office. We have chalked out a layout for manpower, logistics, space and the other requirement for shifting the operation. New Coverage Countries under Remittance Arrangement Besides, KSA and other Gulf countries, there are some other countries where Bangladeshis live and work, in good numbers. To fetch remittance from those countries we have recently made arrangement in new areas namely Canada, Italy, Korea, Greece, Malaysia. Moreover, we are trying to establish such arrangement in countries like South Africa, France, Singapore, etc. Arrangement in Malaysia A good number of Bangladeshis have been working in Malaysia. As there is no Exchange House in that country, we could not make any drawing arrangement for easy remittance of Bangladeshi expatriates in Malaysia. However, while attending a training program, the EVP, IBW visited 5 (five) reputed Banks in Malaysia and had fruitful discussion on establishment of remittance arrangement. Consequently, we signed an Agreement with Bank Islam Malaysia Berhad on 19th April 2009. Besides, Bank Muamalat has agreed to have similar arrangement with our Bank. We are also corresponding with May Bank, Bumiputra-
Commerce Bank Berhad, RHB Bank Berhad and Am Bank in Malaysia and hope to receive positive results soon. Visit for Mobilization of Remittance A detailed memo on “Visit Plan 2009 for mobilizing foreign remittance” containing the importance of countries in terms of remittance receipt and number of Bangladeshi expatriates was placed before the EC and the Board. As part of remittance mobilization, our honorable Directors and Executives have been visiting remittance source countries. IBW arranged appointments with Exchange Houses, gathering of Tellers and Expatriates and sent different gift items, Account Opening Form, Publicity Materials on the occasion of delegates visits abroad. Single Country Trade Fair IBBL has participated in Bangladesh Single Country Trade Fair organized jointly by Embassy of Bangladesh in KSA and Bangladesh Business Committee held in Riyadh on May 25 to 28, 2009. IBBL stall in the Fair attracted a good number of visitors and there was a huge response and impact on the expatriates in KSA. We sent different brochures, leaflets, festoons and promotional materials for distribution among Bangladeshis. Placement of New Representatives in UAE IBBL made special arrangement with UAE Exchange under which they have offered to take 3 (three) Representatives from our bank at their cost to be stationed at Dubai, Abu Dhabi and Sharjah. The nominated officials are expected to proceed to UAE very shortly and we hope that there will be a break through in remittance from UAE upon their deputation.
Promotional Activities IBBL arranged wide coverage in print media on the establishment of remittance arrangement with different Banks and Exchange houses which definitely helped increase bank’s image among people in general.
Conference and Workshops IBBL arranged 4 Training / conferences for Foreign Exchange and Remittance handling officials of our bank. Such programs have been very much beneficial for desk officials in getting a wide picture of Foreign Remittance of the Bank. Besides, we have received some valuable suggestion from the participants for improving our Services in remittance handling. Annexure: Remittances of the country & IBBL from major source countries showing our position/share KSA Million Taka Year
Country
Country
Share of
IBBL
Total
Remittance
KSA on
Total
Remittance from KSA
Total
184851 212860 272050
76378 87494 103324
Share of
% of KSA
Remittance IBBL on
on IBBL
Remittanc from KSA Country
Country
2006 2007 2008
IBBL
e
total
Remittance Remittance
Remittance
from KSA
(%) 41.32 41.10 37.98
(%) 11.01 16.39 22.30
16668 23669 36948
8407 14337 23039
50.44 60.57 62.36
UAE Million Taka Year
Country Country
Share of
IBBL
Total Remittanc UAE on
Total
Remittan e from ce
2006 2007 2008 Kuwait
184851 212860 272050
UAE
20320 23334 31848
Total Country
IBBL
Remittan IBBL on
Remittanc ce from e
Share of
UAE
Country from UAE
(%) 10.99 10.96 11.71
(%) 5.44 5.97 9.00
1105 1393 2866
IBBL total Remittance
Remittance
Remittance 16668 23669 36948
% of UAE on
6.63 5.89 7.76 Million Taka
Year
Country
Country
Total
2006 2007 2008 Bahrain
Share of
Remittanc Kuwait on
Remittanc
e from
Total
e
Kuwait
Country
184851 212860 272050
19689 22732 28577
IBBL Total
IBBL
Remittan IBBL on
Remittanc ce from e
Share of % of Kuwait Country from
e (%)
Kuwait 16668 23669 36948
total
Kuwait Remittance Remittance
Remittanc
10.65 10.68 10.50
on IBBL
1915 2376 3512
(%) 9.72 10.45 12.29
11.49 10.04 9.50 Million Taka
Year
Country
Country
Total
2006 2007 2008 Oman
Share of
Remittance Bahrain on
Remittanc
from
Total
e
Bahrain
Country
184851 212860 272050
3724 3743 4498
IBBL Total
IBBL
Remittan IBBL on
Remittanc ce from e
Share of Country
Bahrain on IBBL total
Bahrain Remittance Remittance
Remittanc
from
e (%)
Bahrain
2.01 1.76 1.65
(%) 8.11 7.54 8.37
16668 23669 36948
% of
302 282 377
1.81 1.19 1.02 Million Taka
Year
Country Total
2006 2007 2008
Country
Share of
IBBL
Remittance Oman on
Total
Remittanc
from
Total
e
Oman
Country
184851 212860 272050
6649 7368 9465
IBBL
Remittan IBBL on
Remittanc ce from e
Share of % of Oman Country
total
Oman Remittance Remittance
Remittance
from Oman
(%) 3.60 3.46 3.48
(%) 5.74 6.28 4.44
16668 23669 36948
on IBBL
381 463 420
2.29 1.96 1.14
Qatar Year
Country Total
2006 2007 2008 Malaysia
Country
Share of
IBBL
IBBLRe Share of
% of Qatar
Remittanc Qatar on
Total
mittance IBBL on
on IBBL
Remittanc
e from
Total
e
Qatar
Country
184851 212860 272050
6412 7488 9837
Remittanc from e
Contry
Qatar Remittance Remittance
Remittance
from Qatar
(%) 3.47 3.52 3.62
(%) 2.95 6.25 12.38
16668 23669 36948
total
189 468 1217
1.13 1.98 3.30
Fig in Million Taka Year
2006 2007 2008 Japan
Country
Country
Share of
IBBL
IBBL
Share of
% of
Total
Remitta
Malaysi
Total
Remitt
IBBL on
Malaysia
Remitta
nce from
a on
Remitta
ance
Contry
on IBBL
nce
Malaysi
Total
nce
from
Remittanc
total
a
Country
Malay
e from
Remittanc
Remitta
sia
Malaysia(
e
2.71 3.01 9.96
%) 0.14 0.14 0.70
0.02 0.01 0.03
184851 212860 272050
1949 2109 1432
nce (%) 1.05 0.99 0.53
16668 23669 36948
Fig in Million Taka Year
Country
Country
Share of
IBBL
IBBL
Share of
% of Japan
Total
Remitta
Japan on
Total
Remitt
IBBL on
on IBBL
Remitta
nce from
Total
Remitta
ance
Contry
total
nce
Japan
Country
nce
from
Remitta
Remittance
Japan
nce from
Remitta
2006 2007 2008 Korea
184851 212860 272050
1093 1145 685
nce (%)
Japan
0.59 0.54 0.25
(%) 14.10 16.42 15.18
16668 23669 36948
154.00 188.00 104.00
0.92 0.79 0.28 Fig
Taka
in
Million
Year
Country
Country
Share of
IBBL
IBBL
Share of
% of Korea
Total
Remitta
Korea
Total
Remitt
IBBL on
on IBBL
Remitta
nce from
on Total
Remitta
ance
Contry
total
nce
Korea
Country
nce
from
Remitta
Remittance
Korea
nce from
Remitta nce (%)
Korea (%)
2006 2007 2008
184851 212860 272050
16668 23669 36948
251.70 521.85 748.14
1.51 2.20 2.02
Singapore Fig in Million Taka Year
2006 2007 2008
Country
Country
Share of
IBBL
IBBL
Total
Remitta
SINGAP
Total
Remit IBBL on SINGAPO
Remitta
nce from
ORE on
Remitta
tance
Contry
RE on
nce
SINGA
Total
nce
from
Remitta
IBBL total
PORE
Country
SING nce from
Remittanc
Remittan
APO
SINGA
ce (%)
RE
PORE
6 34 23
(%) 0.35 1.61 0.64
184851 212860 272050
1682 2112 3586
0.91 0.99 1.32
16668 23669 36948
Share of
% of
e
0.03 0.14 0.06
Foreign Exchange performance of IBBL Foreign Exchange Business of the Bank has been maintaining a steady growth (about 37.66%) despite numerous difficulties the bank had to face in different fields. Import: Import business achieved 87% of target with Tk. 70702 million at the end of September 2009 as against Tk. 54,900 million in 2008. Growth in amount was Tk. 15802 million (highest in last five years) with a percentage growth of 28.78%
Although import business made a very promising start in the 1st quarter of the year with about 57% growth, the business declined in the 2 nd quarter which continued upto July 2009 due to some obvious reasons like restrictions imposed on investments due to asset liability management and also restrictions imposed by Indian Government on export of food items to Bangladesh. Import Business has a gained picked up and by now has reached 29% growth level as against 13% national growth in the last quarter. The performance of the Bank in import business in the last five years from January
to
September has been shown in different charts enclosed. Export: Export Business stood at Tk. 36.682 million achieving 100% of proportionate target as against TAKA 25,680 million in September 2008 registering a growth in amount Tk.11, 002 million and growth percentage of 43.1%, both highest in the last five years. The growth in export business is attributable to inclusion of new export oriented projects, increase in export of textile and RMG outputs & other nontraditional items. The National growth in export of last quarter was 31%. The performance of the Bank in export business in the last five years from January
to
September has been shown in different charts enclosed. Remittance: Remittance Business stood at TAKA 37852 million achieving 86% of target as against 26786 million in 2008 registering a growth in amount of Tk 11096 million, highest in last five years with a growth percentage of 41.47%. Remittance Business of the Bank made a great leap in 2008 with 61% growth over 2007 and on that base figure, in 2009, Remittance Performance has registered 41.47% growth, which is quite encouraging while the national growth is 24%. The performance of the Bank in remittance business in the last five years from January to September has been shown in different charts enclosed. F. Ex Business trends: September 2004 to September 2009 IMPORT
Import: Chart shows growth in
Fig-1 : Cumulative growth 2008-2009
amount at end September in
80000
each year.
Million Taka
70000 60000
Up-to September 2004, total
50000 40000
import business of the bank was
30000
19899 million as against 70702
20000
million in September 2009.
10000 0
Import
Sep-01
Sep-02
Sep-03
Sep-04
Sep-05
Sep-06
19899
23297
33074
41713
54900
70702
Growth (Amt)
3398
9777
8639
13187
15802
Growth (%)
17.08
41.97
26.12
31.61
28.78
Business grew 3.55 times in 5 (five) years against the corresponding period. Average growth was 29.11 % The graph shows cumulative increase of amount showing a linier growth. Growth in amount was highest in 2009 (15802 million) while highest growth in percentage was in 2006 (41.97%).
Fig-2 : Growth in percentage at end September in each year
Import: Chart shows growth in percentage at end September in each year.
Million Taka
50.00 40.00
Growth in import business was
30.00
highest in 2006 i.e. 41.97% and
20.00
the lowest was in 2005 i.e.
10.00
17.08%.
0.00 2005 Growth (%)
2006
2007
2008
2009
Sep-02
Sep-03
Sep-04
Sep-05
Sep-06
17.08
41.97
26.12
31.61
28.78
Average growth in the 5 (five) years was 29.11 %. 2009 maintained the average growth of 29% with highest growth in amount i.e. Tk. 15802 million.
Import: Chart shows growth in
Fig-3 : Growth in percentage at the end of each month of 2008
percentage at the end of each month of 2009.
70
Million Taka
60
Growth in 2009 with 43.06 %
50 40
in January that increased up to
30
57% in February-March 2009.
20
From April there was a decline
10 0 Growth in %
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
43.06
57.48
56.63
43.24
26.37
24.78
19.74
20.18
28.78
to 43.24% which reached as low as 20% in July-August. In September the growth Picked up and registered 29% growth. Import: The chart & table
Fig-4 : Comparison of I MPORT : 2008 & 2009after each month
shows month wise comparison
Million Taka
80000
of import growth both in
70000
amount & percentage at the end
60000 50000
of each month in 2008 & 2009.
40000 30000
There was good growth in
20000 10000 0
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
2008
4498
8232
13995
21153
29291
35669
42325
49197
54900
2009
6435
12964
21920
30300
37015
44509
50678
59123
70702
Growth in Amt
1937
4732
7925
9147
7724
8840
8353
9926
15802
Growth in %
43.06
57.48
56.63
43.24
26.37
24.78
19.74
20.18
28.78
amount(s) as well as in percentage from Jan to Mar 2009 i.e. growth of 56.63% while in amount it was 7925 million. There was a decline in growth rate from April to August (decline from 56.63% to 20.18%). In September 2009 business has picked up with growth percentage of 28.78%.
The decline caused due to restriction on investment by the Bank and export ban on food items from India etc.
Import: The chart shows growth
Million Taka
Fig-5 : Comparison of IMPORT : 2008 vs. 2009 against individual month 12000
of Import business in amount &
10000
percentage in each Individual month.
8000 6000 4000
The picture also shows good
2000
growth in the 1st three months.
0
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
2008
4498
3734
5763
7158
8138
6378
6656
6872
5703
2009
6435
6530
8956
8380
6715
7494
6169
8445
11579
Growth in Amt
1937
2796
3193
1222
-1423
1116
-487
1573
5876
Growth in %
43.06
74.88
55.41
17.07 -17.49 17.50
-7.32
22.89 103.03
The
highest
growth
was
in
September while the lowest was in May 2009. April to July was the lean period this year due to reasons mentioned earlier.
EXPORT
Export: Chart shows growth in
Million Taka
Fig-1 : Cumulative growth 2004-2008 40000
amount at end September in each
35000 30000
year.
25000 20000
Up-to
15000 10000
2004,
total
export business of the bank was
5000 0 Export
September
12294 million as against 36682 Sep-01
Sep-02
Sep-03
Sep-04
Sep-05
Sep-06
12294
12323
16097
21590
25680
36682
29
3774
5493
4090
11002
0.24
30.63
34.12
18.94
42.84
Growth (Amt) Growth (%)
million in Sep 2009. Business grew 2.98 times in 5 (five)
years
against
the
corresponding period. Average growth in 5 years was 25.35 % Export registered highest growth both in amount & percentage in 2009 (11002 million & 42.84%)
Million Taka
Fig-2 : Growth in percentage at end September in each year
Export: Chart shows growth in percentage at end September in each year.
50.00 40.00
Growth in export business was
30.00 20.00
highest in 2009 i.e. 42.89% and
10.00
the lowest was in 2005 i.e.
0.00
Growth (%)
2005
2006
2007
2008
2009
Sep-02
Sep-03
Sep-04
Sep-05
Sep-06
0.24
30.63
34.12
18.94
42.84
0.24% Average growth in the 5 (five) years was 25.35 %. 2009 maintained above average i.e. highest growth with highest growth in amount i.e. Tk. 11002 million.
Export: Chart shows growth of
Fig-3 : Growth in percentage at the end of each month of 2009
export business at the end of each month of 2009.
50 45 Million Taka
40
Export maintained near constant
35 30
growth in the average of 40%. The
25 20
growth is due to increase in export
15 10
of textile out-puts specially knit
5 0 Growth in %
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
44.11
33.89
41.51
44.45
44.52
41.62
41.34
38.96
42.84
and inclusion of new export oriented
clients/projects
and
competitive exchange rate. Fig-4 : Comparison of EXPORT : 2008 & 2009 after each month 40000
Million Taka
35000
Export: The chart & table shows month
wise
comparison
of
export growth both in amount &
30000
percentage at the end of each
25000 20000
month in 2008 & 2009.
15000 10000
There was good growth in
5000 0
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
2008
2537
5105
7868
10231
13138
16287
19574
23184
25680
2009
3656
Growth in Amt Growth in %
6835
11134
14779
18987
23066
27665
32217
36681
1119
1730
3266
4548
5849
6779
8091
9033
11001
44.11
33.89
41.51
44.45
44.52
41.62
41.34
38.96
42.84
amount(s)
as
well
as
in
percentage. Only in February 2009 & August 2009, the growth percentage went below 40%. Up to September 2009, export business was total 36,681 as against 25680 million in 2008 with growth of 42.84%.
Export: The chart shows growth
Fig-5 : Comparison of EXPORT : 2008 vs. 2009 against individual month
of export business in amount &
5000 4500
percentage in each Individual
Million Taka
4000 3500
month.
3000 2500
March
2000 1500 500 Feb
Mar
Apr
May
2008
2537
2568
2763
2363
2009
3656
3179
4299
3645
611
1536
44.11 23.79
55.59
Growth in %
2009
50%. Jan
Growth in Amt
September
showed growth of more than
1000 0
&
1119
Jun
Jul
Aug
Sep
2907
3149
4208
4079
3287
3610
2496
4599
4552
1282
1301
4464
930
1312
942
1968
54.25
44.75
29.53
39.91
26.09
78.85
September showing growth of more than 75%. February,
June
and
August
showed growth in between 20%30%
REMITTANCE Remittance:
Fig-1 : Cumulative growth 2004-2009
growth
Million Taka
40000
in
Chart amount
shows at
end
September in each year.
35000 30000 25000
Up-to September 2004, total
20000
remittance was 6696 million as
15000 10000
against 37852 million in Sep
5000
200.
0 Sep-01
Sep-02
Sep-03
Sep-04
Sep-05
Sep-06
6696
10975
12380
16655
26756
37852
Growth (Amt)
4279
1405
4275
10101
11096
Growth (%)
63.90
12.80
34.53
60.65
41.47
Remittance
Business grew 5.65 times in 5 (five)
years
against
the
corresponding period. Average growth was 42.67 % Growth in amount was highest in 2009 (11096 million) while highest growth in percentage
was in 2005 (63.90%).
Remittance:
Fig-2 : Growth in percentage at end September in each year
Chart
shows
growth in percentage at end September in each year.
Million Taka
70 60
Growth in remittance business
50 40
was highest in 2005 i.e. 63.90%
30 20
with amount of 4279 million
10 0
Growth (%)
2005
2006
2007
2008
2009
Sep-02
Sep-03
Sep-04
Sep-05
Sep-06
63.90
12.80
34.53
60.65
41.47
and the lowest was in 2006 i.e. 12.80% Average growth in the 5 (five) years was 42.67 %. 2009 maintained near average growth i.e. 41.47% with growth in
amount
i.e.
Tk.
11096
million. Fig-3 : Growth in percentage at the end of each month of 2008 50
Chart
cumulative
growth
shows of
Remittance business at the end
45
of each month of 2009.
40 Million Taka
Remittance:
35 30
Remittance business showed
25
constant growth of around
20 15
40% over the figure of 2008.
10 5 0 Growth in %
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
39.92
44.84
40.52
40.85
45.20
40.14
34.98
39.92
41.31
Only in July it went below 40% mark while in February & May the growth was 45%.
Fig-5 : Comparison of REMITTANCE : 2009 vs. 2008 against individual month
Remittance: The chart shows
5500 5000
growth of Import business in
Million Taka
4500 4000
amount & percentage in each
3500 3000
Individual month.
2500 2000 1500 1000 500 0
February, May, August & September registered growth Jan
Feb
Mar
Apr
May
Jun
Jul
2009
2122
2432
2943
2769
2872
3409
3871
3198
3170
2008
2969
3627
3939
3925
4617
4112
4371
5484
4808
Growth in Amt Growth in %
Aug
Sep
847
1195
996
1156
1745
703
500
2286
1638
39.92
49.14
33.84
41.75
60.76
20.62
12.92
71.48
51.67
of around 50% while it was low in July 2009 (12.92%)
Growth of Foreign Exchange Business Since inception, IBBL is leading with a pioneering role in handling Foreign Exchange business. Classified under 3 (three) distinct categories viz., Import, Export & Remittance, the achievement of IBBL in the area of foreign exchange business is quite phenomenal and epoch making. In 2008, Import, Export and Remittance business position of IBBL among all the private commercial Banks was first while among all Banks including NCBs its position in Import & Remittance was 2nd. The total foreign exchange business stood at Taka 147,642 million as on 31.12.2008 as against Taka 112,624.00 million in preceding year registering an increase of 31.09%. Table: Foreign Exchange Business Taka in Million Year 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
Import 10.80 861.60 979.42 1800.61 1578.45 2015.30 3394.90 3917.70 6204.27 8778.51 8612.70 14623.43 21218.38 17874.80 17370.00 20238.30 20396.00 25327.00
Export 63.70 265.00 622.42 971.15 1349.70 1543.80 2588.30 3966.58 4948.81 5841.64 7790.42 11015.75 11766.40 14469.40 14894.30 14798.00 16889.00
Remittance 443.80 492.38 1172.71 1424.64 1125.40 901.60 1339.90 1814.13 2028.59 2402.51 2943.00 2447.21 3328.30 4806.00 6360.60 8415.00 7644.00
Total F. Ex Business 10.80 1369.10 1736.80 3595.74 3974.24 4490.40 5840.30 7845.90 11984.98 15755.91 16856.85 25356.85 34681.34 32969.50 36645.40 41493.20 43609.00 49860.00
Growth Rate 27% 107% 11% 13% 30% 34% 53% 31% 7% 50% 37% -5% 11% 13% 5% 14%
2004 2005 2006 2007 2008 2009 up to September
25,907.00 33,788.00 46,237.00 59,804.00 74,525.00
16,082.00 16,673.00 21,738.00 29,151.00 36,169.00
9,879.00 14,670.00 16,668.00 23,669.00 36,948.00
51,868.00 65,131.00 84.643.00 112,624.00 147,642.00
4%. 26% 30% 33% 31%
70,702.00
36,682.00
37,852.00
145,236.00
35%
To handle foreign exchange business effectively and efficiently, the Bank has, over the years, developed a wide network of correspondent relationship with 245 foreign Banks and Exchange houses. In respect of remittance business, IBBL has been playing vital role since inception 1983 and has made tremendous success in facilitating expatriate Bangladeshis through establishment of drawing agreement or special remittance arrangement with as many as 55 Renowned Banks / Exchange houses in major remittance source countries including KSA, GCC countries, USA, Canada, UK, Italy, Greece, Malaysia, Singapore etc. IBBL puts utmost emphasis on excellent / highest customer services to the wage earners by competitive exchange rate & ensuring fastest delivery of remittances. IBBL is using state of the art of technology, viz., SWIFT, online banking in expediting hard earned money to the door steps of the beneficiaries of remittances. IBBL has opened separate expatriate services desk/cell/department in all of its branches. Besides for expeditious delivery of remittances it has introduce instant money transfer system through which beneficiaries are getting instant cash. It is seen that every two years, our remittance gets doubled in volume which shows IBBL has gained solid ground of confidence of the expatriates. From July 2008, the treasury activities are managed by International Banking Wing of Head Office. IBBL is now actively participating in the inter Bank Foreign Exchange Market through the Dealing room in order to meet internal requirements as well as to contribute in the Inter-bank Market through sale and buy of Foreign currencies. The Contribution of IBBL to the Inter-Bank Market is 7.51%.
Foreign Correspondents The Bank has made special arrangement with Al-Rajhi Banking and Investment Corporation for “Express Remittance� of money from Saudi Arabia within the shortest period of time. Islami Bank Bangladesh Limited has money drawing arrangement with the following 55 exchange houses:
KSA 1. Al Rajhi Bank (ARBIC). 2. Bank Al Bilad 3. A. Aziz A. Al Zamil & Sons Ex. Co. 4. Alamoudi Exchange Company 5. Citi Bank N.A (SAMBA) KUWAIT 1. Kuwait Bahrain Int’l Exchange 2. Bahrain Exchange Company 3. The Citi Int’l Exchange Co. 4. Oman Exange Company W.L.L. 5. Dolarco Exchange Co. 6. Kuwait Finance House 7. Kuwait Asian Int’l Exchange Co. 8. National Money Exchange 9. Al Moosa Exchange Co. WLL BAHRAIN 1. Zenj Exchange Co 2. Dalil Exchange 3. Bahrain Islamic Bank QATAR 1. Union Exchange 2. Habib Qatar Int. Exchange Ltd. 3. Estern Exchange Co. 4. Qatar Islamic Bank BRUNEI 1. AFIMA Express MALAYSIA 1. Bank Islam Malaysia Berhad 2. Bank Muamalat Malaysia Berhad CANADA 1. United Exchange GREECE 1. World link Money Transfers
UAE 1. Habib Exchange Company L.L.C. 2. U.A.E. Exchange 3. Wall Street Exchange Centre L.L.C. 4. Abu Dhabi Islamic Bank, Dubai 5. Al Ansari Exchange Est., Dubai 6. Lari Exchange Establishment 7. Al Ahalia Money Exchange Bur. 8. Dubai Islami Bank, Dubai 9. Al Fardan Exchange 10. Al Mona Exchange Co., Dubai 11. Gulf Express Exchange OMAN 1. Oman International Exange Co. 2. Modern Exchange Co. U.S.A. 1. Placid NK Corporation 2. Wall Street Finance LLC U.S.A. KOREA 1. Korea Exchange Bank ITALY 1. Uni Cradito Italiano 2. Banco Populare Di Verona E Novara UK 1.A N Express Ltd. 2. Kushiara Financial Services Ltd. 3. Bangladesh Money Transfers (UK) Ltd. 4. Zamzam Exchange International 5. Milfa Starling Exchange Limited 6. ARY Forex 7. Sonali money Exchange SINGAPORE 1. Ameer Tec Remittance 2. Exchange Services PLC Ltd.
Besides that the Bank has remittance arrangement with Barclays Bank PLC, London, U.K.; Standard Chartered Bank, U.K.; American Express Bank Ltd.; New York, U.S.A.; Citibank N.A., New York, U.S.A, Placid N.K. Corporation, U.S.A, Bank of Tokyo Mitsubishi Ltd.; Japan; Commerz Bank A.G., Frankfurt, Germany. It is one of the top three thousand international banks of the world and its world –rank is 1620 in 2009.
Import Performance of IBBL, a 23 Years picture 80000 75000 70000 65000 60000 55000 50000 45000 40000 35000 30000 25000 20000 15000 10000 5000 0 -5000
Imp ort
19 8 3
19 8 4
10 .8
8 6 1.6
19 8 5
78 77.78 13 .6 7
Growth (%)
19 8 6
9 79 .4 2 18 0 0 .6 8 3 .8 4
19 9 5
19 9 6
19 9 7
19 9 8
1578 .5 2 0 15.3 3 3 9 4 .9 3 9 17.7 6 2 0 4 .3 8 778 .5 8 6 12 .7 14 6 2 3
19 8 7
19 8 8
2 12 18
178 75
173 70
20238 20396
-12 .3 4
4 5.10
- 15.76
- 2 .8 2
2 7.6 8
19 8 9
19 9 0
6 8 .4 6
15.4 0
19 9 1
19 9 2
58 .3 7
19 9 3
4 1.4 9
19 9 4
- 1.8 9
6 9 .79
19 9 9
16 .51
0 .78
2000
2001
2002
2003
2004
2005
2 53 2 7 2 5,9 0 7. 3 3 ,78 8 . 4 6 ,2 3 7. 59 ,8 0 4 . 74 ,52 5. 2 4 .18
2 .2 9
3 0 .4 2
3 6 .8 4
2 9 .3 4
2 4 .6 2
Export Performance of IBBL, a 23 Years picture 38000 36000 34000 32000 30000 28000 26000 24000 22000 20000 18000 16000 14000 12000 10000 8000 6000 4000 2000 0 -2000
Expo rt
1983
1984
1985
0
63.7
265
1995
1996
1997
622.42 971.15 1349.7 1543.8 2588.3 3966.6 4948 .8 5841.6 7790 .4 11016
1986
1987
1988
11766
14 469 14 894 14 798 16889 16,082. 16 ,6 73. 21,7 38. 29,192. 36,169.
316.01 134.88 56.03
G ro wth (%)
38.98
1989
1990
14.3 8
67.66
1991
1992
53.25
24.76
1993
19 94
18.04
33.36
41.40
6.81
22.97
1998
1999
2.94
2 000
-0.65
14.13
2 001 -4.78
2002
2003
2004
3.67
30 .38
34.29
2002
2003
2004
2005 23.90
Remittance Performance of IBBL, a 23 Years picture 40000 35000 30000 Million Taka
25000 20000 15000 10000 5000 0 -5000 Rem ittance
1983 0
1985
1986
1987
1988
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
443.8 492.4
1984
1173
1425
1125 901.6 1340
1989
1814
2029
2403
2943
2447
3328
4806
6361
8415
7644 9,879. 14,670 16,668 23,669 36,948
2001
2005
10.95 138.17 21.48 -21.00 -19.89 48.61 35.39 11.82 18.43 22.50 -16.85 36.00 44.40 32.35 32.30 -9.16 29.24 48.50 13.62 42.00 56.10
Grow th (%)
Foreign Exchange Business Performance of IBBL Fig in Million Taka
NATURE OF
ACHIEVEMENT
TARGET
PROPOR-
ACHIEVEMENT
PERCENTAGE
ACHIEVEMENT
PERCENTAGE
BUSINESS
2008
FOR
TIONATE
JANUARY
OF
JANUARY
OF GROWTH
2009
TARGET
TO
ACHIEVEMENT
TO
OVER THE
AS ON
SEPTEMBER
OVER
SEPTEMBER
CORRESPON-
30.09.2009
2009
PROPRTIONATE
2008
TARGET IMPORT
74,525
108,000
81,000
70,702
87%
DING PERIOD OF LAST YEAR
54,900
29%
EXPORT
36,169
49,000
36,750
36,682
99.81%
25,680
43%
REMITTANCE
36,948
59,000
44,250
37,852
86%
26,786
41%
TOTAL
147,642
216,000
162,000
145,236
90%
107,366
35%
2005
2006
2007
2008
2009 (Sep)
26%
30%
33%
31%
35%
IMPORT
30%
37%
29%
25%
29%
EXPORT
4%
30%
34%
24%
43%
REMITTANCE
48%
14%
42%
56%
41%
Growth of F. Ex Business
Foreign Exchange Business Performance of the Bank from September 2004 to September 2009 Fig in Million Taka
Import Import Achievement
Sep-01
Sep-02
Sep-03
Sep-04
Sep-05
Sep-06
19899
23297
33074
41713
54900
70702
Growth in amount
-
3398
9777
8639
13187
15802
Growth in %
-
17.08
41.97
26.12
31.61
28.78
Export
Export
Sep-01
Sep-02
Sep-03
Sep-04
Sep-05
Sep-06
12294
12323
16097
21590
25680
36682
Achievement Growth in amount
-
29
3774
5493
4090
11002
Growth in %
-
0.24
30.63
34.12
18.94
42.84
Remittance
Remittance
Sep-01
Sep-02
Sep-03
Sep-04
Sep-05
Sep-06
6696
10975
12380
16655
26756
37852
Achievement Growth in amount
-
4279
1405
4275
10101
11096
Growth in %
-
63.90
12.80
34.53
60.65
41.47
Month to Month Growth & volume of F.EX business compared (January to September 2008 & 2009)
Month wise
Export : 2006 vs. 2005
5000
Million Taka
4000 3000 2000 1000 0
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
2005
2537
2568
2763
2363
2907
3149
3287
3610
2496
2006
3656
3179
4299
3645
4208
4079
4599
4552
4464
Grow th in Amt
1119
611
1536
1282
1301
930
1312
942
1968
Grow th in %
44.11
23.79
55.59
54.25
44.75
29.53
39.91
26.09
78.85
Month wise
Remittance : 2006 vs. 2005
5500 5000 4500 4000 Million Taka
3500 3000 2500 2000 1500 1000 500 0
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
2005
2122
2432
2943
2769
2872
3409
3871
3198
3170
2006
2969
3627
3939
3925
4617
4112
4371
5484
4808
Grow th in Amt
847
1195
996
1156
1745
703
500
2286
1638
39.92
49.14
33.84
41.75
60.76
20.62
12.92
71.48
51.67
Grow th in %
Foreign Exchange Business trend of IBBL : Sep 2001 to Sep 2006 80000 70000
Million Taka
60000 50000 40000 30000 20000 10000 0
Sep-01
Sep-02
Sep-03
Sep-04
Sep-05
Sep-06
Import
19899
23297
33074
41713
54900
70702
Export
12294
12323
16097
21590
25680
36682
6696
10975
12380
16655
26756
37852
Remittance
F.Ex Inflow & Outflow of IBBL Sep 2001 to Sep 2006 80000 70000
Million Taka
60000 50000 40000 30000 20000 10000 0 Sep-01
Sep-02
Sep-03
Sep-04
Sep-05
Sep-06
Outflow
19899
23297
33074
41713
54900
70702
Inflow
18990
23298
28477
38245
52436
74534
Share of IBBL vs National F.Ex Business : 2005 1000000
Million Taka
800000 600000 400000
7.737%
200000 0
11.39%
6.02%
Im port
Export
Rem ittance
National
963670
600813
324319
IBBL
74525
36169
36948
Performance of different Zones and Corporate Branches Million Taka
Import : Performance of Corp. Br & Zones
IMPORT Name
Achieve.
% of
% of
of
Up to
Target
IBBL
BRANCH
Sept '06
achiev.
Total
(prop.) 84% 82% 96% 78% 85% 138% 68% 54% 71% 69% 106% 28% 87%
Import 23.04 8.68 8.14 6.65 8.80 1.93 10.85 5.73 8.23 0.51 17.34 0.09 100.00
Local Office F. Ex. Br. Nawabpur Br. HO. COMPLEX Dhaka South Dhaka North Chittagong Bogra Zone Khulna Zone Comilla Zone Central Zone Sylhet Zone Grand Total=
16291 6137 5758 4700 6224 1364 7669 4051 5820 363 12261 62 70,702
Central Zone 17.34%
Sylhet Zone 0.09% Local Office 23.04%
Com illa Zone 0.51% Khulna Zone 8.23% F. Ex. Br. 8.68%
Bogra Zone 5.73%
Chittagong 10.85% Dhaka North Dhaka South 1.93% 8.80%
Naw abpur Br. 8.14% HO. COMPLEX 6.65%
Export : Performance of Corp. Br & Zones
F . E x. B r. 12 .8 2 %
N a wa bpur B r. H O . C O M P LE X 2 .0 1% 6 .7 0 % D ha k a S o uth 12 .2 8 %
D ha k a N o rt h 2.0 6 %
Export Name
Achieve.
% of
% of
of
Up to
Target
IBBL
BRANCH
Sept '06
achiev.
Total
(prop.) 88% 105% 66% 82% 64% 111% 49% 50% 28% 0% 118% 0% 100%
Import 48.60 12.82 2.01 6.70 12.28 2.06 2.00 0.61 1.43 0.00 11.49 0.00 100.00
Local Office F. Ex. Br. Nawabpur Br. HO. COMPLEX Dhaka South Dhaka North Chittagong Bogra Zone Khulna Zone Comilla Zone Central Zone Sylhet Zone Grand Total=
17828 4704 737 2456 4503 755 735 223 526 0 4214 1 36,682
C hit t a go ng 2 .0 0 % B o gra Z o ne 0 .6 1% Khulna Z o ne 1.4 3% C o m illa Z o ne 0 .0 0 % Lo c a l O f fic e 4 8 .6 0 %
C e nt ra l Z o ne 11.4 9 % S ylhe t Z o ne 0 .00 %
Remittance Name
Achieve.
% of
% of
of
Up to
Target
IBBL
BRANCH
Sept '06
achiev.
Total
(prop.) 59% 57% 59% 97% 74% 69% 83% 73% 89% 74% 87% 95% 86%
Import 9.31 1.13 0.17 1.16 8.01 12.48 8.90 5.09 5.31 24.92 8.35 15.16 100.00
Local Office F. Ex. Br. Nawabpur Br. HO. COMPLEX Dhaka South Dhaka North Chittagong Bogra Zone Khulna Zone Comilla Zone Central Zone Sylhet Zone Grand Total=
3525 426 66 438 3033 4725 3368 1926 2011 9433 3162 5739 37,852
Remittance : Performance of Corp. Br & Zones Central Zone 8.35%
Sylhet Zone 15.16%
Local Office 9.31% Com illa Zone 24.92%
F. Ex. Br. 1.13% Naw abpur Br. 0.17% HOCC 1.16% Dhaka South 8.01%
Khulna Zone 5.31% Bogra Zone Chittagong 5.09% 8.90%
Dhaka North 12.48%
Performance of Top 15 Branches in Import, Export and Remittance Import : Top 15 Branches of IBBL
Million Taka Branch
Achiev.
Local Office F. Ex. Br.
16,291 6,137
% of total Import 23.04 8.68
Nawabpur Br.
5,758
8.14
HO. COMPLEX
4,700
6.65
Khatungonj
4,290
6.07
Ramna
2,714
3.84
Kawran Bazar
2,585
3.66
Paltan
2,544
3.60
Kushtia
2,243
3.17
Agrabad
2,222
3.14
VIP Road
1,403
1.98
Rajshahi
1,341
1.90
Mouchak
1,266
1.79
C. M. B.
1,256
1.78
Elephant Road
1,241
1.76
14,712
20.81
Other
Naw abpur Br. 8.14%
HO. COMPLEX 6.65%
Khatungonj 6.07% Ramna 3.84%
F. Ex. Br. 8.68%
Kaw ran Bazar 3.66% Paltan 3.60%
Kushtia 3.17%
Agrabad 3.14% VIP Road 1.98%
Local Office 23.04%
Rajshahi 1.90% Mouchak 1.79% C. M. B. 1.78% Elephant Road 1.76% Other 20.81%
Export : Top 15 Branches of IBBL F. Ex. Br. 13%
HO. COMPLEX 7% Farm gate 4% Paltan 4% Mouchak 3% Narayangonj 3% Mirpur 2%
Branch
17,828 4,704 2,456 1,392 1,381 1,153 1,135 844
% of total Export 48.60 12.82 6.70 3.79 3.76 3.14 3.09 2.30
Nawabpur Br.
737
2.01
Gulshan Kawran Bazar VIP Road Islampur Agrabad Khulna Other
718 713 706 485 480 269 1,680
1.96 1.95 1.92 1.32 1.31 0.73 4.58
Local Office F. Ex. Br. HO. COMPLEX Farmgate Paltan Mouchak Narayangonj Mirpur
Branch
Achiev.
Achiev.
% of total Remittance
Naw abpur 2% Gulshan 2% Kaw ran Bazar 2% VIP Road 2% Local Office 48%
Is lam pur 1% Agrabad 1% Khulna 1% Other 5%
Re mittance : Top 15 Branch of IBBL Local Office 9.31%
Com illa 4.86% Sylhet 4.14% Feni 3.48% B. Baria 3.08% Chandpur 2.67% Chaum uhani 2.49% Narshingdi 2.36% Tangail 2.15% Laxm ipur 1.97% Bashurhat 1.80%
Other 54.84%
Laksham 1.78% N.gonj 1.73% Hazigonj 1.71% Moulvibazar 1.61%
Item wise Export of IBBL Up to June 2009 Thousand Taka Name of Commodity
Taka
%
Readymade Garments
8313256
36.04
(Woven) Readymade Garments
4390682
19.03
804467
3.49
1172070
5.08
(Knitwear) Fabrics RMG Accessories
954615
4.14
4401742
19.08
etc) Local Raw Jute
36438
0.16
Jute Goods
404378
1.75
984
0.00
1633
0.01
Vegetables
32248
0.14
Handloom
13357
0.06
98277
0.43
RMG Sweaters Textile (Yarn, Fabrics
Tea Leather
Chemicals Others Total :
2163419
9.38
23067000
100.00
Export of IBBl : 2006 (up to June)
R e a dym a de G a rm e nt s ( Knit we a r) 19 .0 3 %
F a bric s 3 .4 9 %
R e a dym a de Ga rm e nts ( Wo v e n) 3 6 .0 4 %
R M G A c c e s s o rie s 5 .0 8 % R M G S we a t e rs 4 .14 %
O t he rs 11.3 9 %
J ut e G o o ds 1.7 5 %
Item wise Import of IBBL Up to June 2009 Thousand Taka
T e xt ile ( Ya rn, F a bric s e t c ) Lo c a l 19 .0 8 %
Name of Commodity
IBBL
%
Rice
1583033
3.56
Wheat
2397922
5.39
Edible Oil
2048685
4.60
Chemicals
1964898
4.41
Pharmaceutical Products
683862
1.54
Fertilizers
943258
2.12
Dyeing & Tanning
Itemwise Import of IBBL: Up to June 2006
Others 28.97%
Rice 3.56% Wheat 5.39% Motor Vehicle 3.06%
557181
1.25
Cotton
4071471
9.15
Yarn
1446004
3.25
Iron & Steel
3968179
8.92
Capital Machinery
5564962
12.50
697271
1.57
RMG Acc.
1970487
4.43
Scrap vessel
460017
1.03
Agri Equipment
1593424
3.58
Motor Vehicle
1360842
3.06
Others
12894468
28.97
Total Imports
44509000
100.00
Materials
Gray Fabrics
Edible Oil 4.60%
Agri Equipment 3.58%
Chem icals 4.41%
Scrap vessel 1.03%
Pharm aceutical Products 1.54%
RMG Acc. 4.43%
Fertilizers 2.12%
Grey Fabrics 1.57% Capital Machinery 12.50%
Cotton 9.15% Iron & Steel 8.92%
Yarn 3.25%
Dyeing & Tanning Materials 1.25%
F.EX INCOME OF IBBL Million taka
Particulars
Achieve
Achieve
Growth
Achieve
Growth
Achieve
Achieve
Growth
2006
2007
over 2006
2008
over 2007
Up to
Up to
over
(%)
August
August
August
2009
2008
2008 (%)
(%) Inv. Income
1472.6
1848.19
26%
2649.26
43%
2051.86
1516.23
35%
Comm. Income
366.69
434.22
18%
613.96
41%
458.23
339.46
35%
Exch. Income
431.99
632.37
46%
1027.23
62%
768.53
651.34
18%
Other Income
114.24
70.97
-37%
136.52
92%
55.42
76.08
-27%
2385.52
2985.75
25%
4426.97
48%
3334.04
2583.13
29%
Total
3000 F.EX Income of IBBL: 2001 to 2005
Million Taka
2500 2000 1500 1000 500 0
2001
2002
2003
2004
2005
Inv. Incom e
828.27
1071.42
1472.6
1848.19
2649.26
Com m. Income
286.93
297.73
366.69
434.22
613.96
Exch. Incom e
268.23
340.84
431.99
632.37
1027.23
Othe r Incom e
117.76
145.93
114.24
70.97
136.52
Total F.Ex Incom e of IBBL : 2001 to 2005
Incom e of IBBL: Head w ise
5000 4000
Com m . Incom e 14%
3000 2000
Inv. Incom e 60%
1000 Exch. Incom e 23%
0 Total
2001
2002
2003
2004
2005
1501.19
1855.92
2385.52
2985.75
4426.97
Other Incom e 3%
Growth trend of IBBL vis-à-vis Country Growth: 2004 - 2008
Import : Growth trend of IBBL vis-à-vis Country Growth 2001 - 2005
Million Taka
40.00 30.00 20.00 10.00 -
2001
2002
2003
2004
2005
IBBL Growth %
2.29
30.42
36.84
29.34
24.62
National Growth %
6.07
0.62
22.52
19.07
11.00
Export : Growth trend of IBBL vis-à-vis Country Growth 2001 - 2005 40.00 35.00 30.00 Million Taka
25.00 20.00 15.00 10.00 5.00 (5.00) (10.00)
2001
2002
2003
2004
2005
IBBL Growth %
(4.78)
3.67
30.38
34.10
24.07
National Growth %
11.30
(1.43)
15.04
27.55
18.64
Remittance : Growth trend of IBBL vis-à-vis Country Growth 2001 - 2005 60.00 50.00 40.00 30.00 20.00 10.00 -
2001
2002
2003
2004
2005
IBBL Grow th %
29.24
48.50
13.62
42.00
56.10
National Grow th %
17.57
42.37
12.17
15.11
27.81
F. Ex Business performance of different Banks : 2008 Sl. No.
Bank
Import
Export
Remittance
(Million Taka) Total
1
Sonali
114528
64092
94324
2
Janata
72912
58395
26573
272944 157880
3
IBBL
74525
36169
36948
147642
4
Agrani
51194
41710
34568
127472
5
EXIM
41432
31285
223
72940
6
Prime
40303
28882
3688
72873
7
Uttara
23092
18192
27276
68560
8
NBL
31648
21344
13618
66610
9
IFIC
26629
33698
5745
66072
10
Marcentile
33272
24109
679
58060
11
Pubali
26034
15721
14820
56575
12
DBBL
26029
22144
838
49011
13
Dhaka Bank
30231
13505
3962
47698
14
South East
29079
13511
3510
46100
15
Bank Asia
26352
13964
5445
45761
16
UCBL
29408
14785
1515
45708
17
EBL
29692
13239
1917
44848
18
The City Bank
21363
18219
3793
43375
19
AB Bank
23151
12595
7614
43360
20
Rupali
21654
6118
13641
41413
21
Premier
20734
13116
1427
35277
22
One Bank
17435
11916
2667
32018
23
Mutual Trust
17657
8815
564
27036
24
NCC
16296
7776
2492
26564
25
SBL
16145
7569
204
23918
26
BASIC
13930
8544
859
23333
27
BKB
12183
5631
2454
20268
28
Shahjalal
13114
6295
690
20099
29
Jamuna
12152
6522
645
19319
30
Al Arafah
12632
4933
455
18020
31
SIBL
11577
5528
333
17438
32
Oriental
6474
5536
3235
15245
33
The Trust Bank
7593
2072
535
10200
34
First Security
6605
2856
62
9523
35
BRAC
3015
277
5157
8449
36
BCB
3600
1750
1843
7193
963670
600813
324319
1888802
Total
Foreign Bank Sl. No.
Bank
Import
Export
Remittance
Total
1
SCB
56612
40280
86544
183436
2
HSBC
46598
41385
33571
121554
3
Citi
15652
17434
12462
45548
4
Comm.Bank of CY
12231
8978
6061
27270
5
Woori
4203
7105
5342
16650
6
State Bank of India
4126
2918
3578
10622
7
Bank Al-Falah
1138
818
3376
5332
8
NBP
2833
1708
9
Habib
2255
449
145648
Total
Sonali
Import 2005151118 121075 114528
11.88%
IBBL
74525
7.73%
Janata
72912
7.57%
Agrani
51194
5.31%
EXIM
41432
4.30%
Prime
40303
4.18%
Marcentile
33272
3.45%
NBL
31648
3.28%
Dhaka Bank
30231
3.14%
EBL
29692
3.08%
Other
443933
46.07%
Top 10 Bank of Bangladesh Import 2005 : Top 10 Bank Sonali 11.88%
IBBL 7.73%
24 Fig in Million Taka 160
Janata 7.57% Agrani 5.31% EXIM 4.30% Prim e 4.18% Marcentile 3.45%
Other 46.07%
EBL 3.08%
Export 2005 Sonali
64092
10.67%
Janata
58395
9.72%
Agrani
41710
6.94%
NBL 3.28%
IBBL
36169
6.02%
Dhaka 3.14%
IFIC
33698
5.61%
EXIM
31285
5.21%
Prime
28882
4.81%
Marcentile
24109
4.01%
DBBL
22144
3.69%
NBL
21344
3.55%
4565 2864 417841
Remittance 2005 : Top 10 Bank IFIC 1.77%
Others 15.17%
Sonali 29.08%
AB Bank 2.35% NBL 4.20% Rupali 4.21% Pubali 4.57% Janata 8.19%
IBBL 11.39% Uttara 8.41%
Agrani 10.66%
Business Plan / Vision up to 2010 IMPORT 300000 Million Taka
250000 200000 150000 100000 50000 0 Am ount Grow th %
2006
2007
2008
2009
2010
108000
145000
187000
233000
290000
45%
35%
30%
25%
25%
Business Plan / Vision up to 2010 EXPORT 140000 Million Taka
120000 100000 80000 60000 40000 20000 0 Am ount Grow th %
2006
2007
2008
2009
2010
49000
63000
79000
99000
124000
35%
30%
25%
25%
25%
Business Plan / Vision up to 2010 REMITTANCE
Million Taka
200000 150000 100000 50000 0 IBBL IBBL Grow th
2006
2007
2008
2009
2010
59000
71000
95000
124000
162500
60%
34%
34%
31%
31%
CONCLUDING REMARKS At present some of banks operate their banking system by computer as well as automation. Easy banking system leads to flexibility of transaction between the bank and the clients. But still these days towards the millenium the banking system is not so appropriate in solving fast money, especially with knocking every desk for a cheque to be drawn from the counter which is a very annoying and stained at the present moments. In IBBL, when a client want to withdrawn his or her deposit firstly he or she deposits cheque and receives a scroll number usually called “Token’. Then his or her specimen signature verified by a responsible officer and go to the computer section. After completing all formalities he or she get his/her currency. This system is very slow and annoying. If the above banking system have done by automated banking, the process would be easier than before. In this automated system every client would firstly submitted his/her chaque to the computer section for verifying his or her Account’s code number, Name and Signature because every client’s detailed information is stored previously in the computer when he/she open a Account at an automated banking system. For this way, the computers verify all necessities and give the issuing cheque clearance then the cheque received officer give money to the Account holder. Hence automated banking system is much easier than traditional system for clients and bankers because its save time each of other.
If a server and Wide Area Network ( WIN ) connect the banking system, a client could easily transact his or her Account from any IBBL’s branch of a city. Beside this Automatic Trailer Machine (ATM) is also a possibility of automated banking. If all these above recommendations are implements by the IBBL, then IBBL will be the most undated bank in the next Millenium.
BIBLIOGRAPHY ♦ A HAND BOOK OF FOREIGN EXCHANGE & FOREIGN TRADE --- Haider Ali Miah ♦ FOREIGN EXCHANGE AND FINANCING OF FOREIGN TRADE --- Syed Ashraf Ali ♦ ACCOUNTING PRACTICES OF ITEREST-FREE BANKING-A CASE STUDY OF ISLAMI BANK BANGLADESH LIMITED. --- K. M. Golam Muhiuddin* Harunur Rasid** ♦ ISLAMI BANK ANNUAL REPORT ♦ BANLADESH BANK ANNUAL REPORT
APPENDIX “A” IMPORT POLICY ORDER:
Based on the needs of commodity and availability of finance, Government declines policy for import of goods for a particular period having approval from the National Assembly can be defined as import policy order. Import policy is a guide line or a set of rules envisaged by Govt. Authority i.e. the Ministry of Trade and commerce for the registered importers for import of goods inside the country. DURATION: Earlier import policy have been formulated for 2 (two) years. But present import policy order has been formulated for 5 (five) years, effect from the valid till announce of new import policy order. If require Govt. can revise the policy in each &every years. General Rules in Connection With Import: (1) Restriction of import. a) Negative list of Merchandise. b) Restricted list. c) Foot Note under Restricted list. d) Freely importable items (2) ITC Number is compulsory (H.S. Code 6 digit) to be mentioned in the L/C and LCFA to identification the item to be imported. H.S. Code seven digits as mentioned by Bangladesh statistical Bureau to be used. (3) Requirement of Right of Refusal (ROR) for public sector Agency from Ministry of Industry or respective Ministry/dept of both to import under restricted list. (4) Import can’t be made from Israel, Serbia, & Montenegro. (5) Pre-shipment inspection (PSI) for private sector normally; PSI is not mandatory. (6) Shipment to be made through Bangladeshi Ship. Some exceptions.
(7) Import to be made on competitive rate. (8) CFR and FOB basis import; Normally import under CFR basis. (9) Country of Origin: Mandatory should be clearly indicated at the body of packing/container/ box/ packet etc. It is not applicable in case of export oriented Garments Industry. SOURCE OF FINANCE: Import may be allowed under the following sources of finance: a) Cash: i) Foreign Currency Reserve in Bangladesh Bank. ii)Wage Earner’s F.C. balance. b) External economic aid (Commodity Aid, Loan, Credit, or Grant). c) Commodity Exchange: i)Barter ii)Special Trading Arrangement (STA). FOREIGN EXCHANGE REGULATION: (1)
Exchange Control Manual.
(2)
F.E. Circular.
(3)
Public Notice.
(4) Import & Export Policy. (5) Ministry of Commerce Circular. IMPORT RELATED FEES: Four categories of importer registration renewal fees are as under: Category A B C D
Value Ceiling of
Registration
Annual Renewal Fees
Annual Import TK. 5.00 Lac TK. 15.00 Lac TK. 50.00 Lac Above TK. 50.00 Lac
Fees TK. 500.00 TK. 1500.00 TK. 3000.00 TK. 5000.00
TK. 500.00 TK. 1500.00 TK. 3000.00 TK. 500.000
MISCELLANEOUS RULES: •
Group Import Allowed.
•
Non-resident Bangladeshi Importer for there own profession that is Doctor/ Scientist.
•
Sample Import.
•
Temporary Import for re-export within 1 (one) year re-export to made.
•
Import at EPZ and Export there from out of this policy order.
•
Human Consumable item Import: Milk, Product item, Edible Oil etc. * Radiation Test, Amount of cesium-137 per Kg cited in the Document. * Fit for Human consumption, certificate, * For Milk cesium -137 i.e. maximum 95 BQ per Kg. Others 50 BQ/Kg.
IMPORT IN THE INDUSTRIAL SECTOR: •
Three times of import entitlement is allowable, which is restricted for commercial
•
`
•
Capital Machinery- LCA/ IP free exempted permission required.
•
MS sheet, GP sheet, BR sheet, Tim plate, Secondary quality as per entitlement for
importer
recognize.. •
Black list to be approved by Director, Drag Administration for importation of raw materials for pharmaceutical Industry.
•
Readymade Garments: through BB L/ C 75% of irrevocable FOB export L/C value is entitled to import presently 100% allowed for Local BB L/C.
•
Incase of FOB value USD=60 or above per Doz, for quota item. 80% &Non quota 85% import is allowable
APPENDIX “B” EXPORT POLICY ORDER : To streamline & boost up the Export of the country, the Ministry of Trade having approval from the National Assembly announced the Policy of Export. Pentad annually (earlier Biannually & annually) which is called Export Policy Order. DURATION : Present export policy order has been formulated for 5 ( Five ) years, effect from 1st July,1998 to 30th June,2005 & valid till announce of new Export Policy Order. Object of Export Policy Order : a)
To achieve the National Growth by way of increasing Export Regional & International market.
b)
To minimize the gap between the income of Import & Export of the country by achieving Export Target.
c)
To consolidate the existing makers & expansion of new market & timely steps in this regard.
d)
Diversification of exports commodities & improvement of its quality to develop the same for the market.
e)
Establishment of new backward linkage Industries for more value addition i.e. utilization of local raw materials in the finished Export Commodities.
f)
To liberalize the export process, rationalization & consolidation of Export
incentives. g)
Development of infrastructure of Export Trade.
h)
To take all sorts of opportunities to enter Liberalized & Globalize International market after Urogoye Round.
i)
Development of trained manpower in the Export Sector.
j)
Development of Quality & Grading of export items at the International Standard.
THRUST SECTOR : a) Hides & Skin. b) High CM & value added Readymade Garments. c) Computer Software. d) Agro - processing. ITEAMWISE FACILITIES : Readymade Garments: a) BB-L/C, Payment of Import Bill from realized Export proceeds directly/ without conversion to Taka. b) Some Import (category- wise 20 pcs & yearly 100 pcs ) duty free. c) Value addition : ---
25% for woven & knit.
---
Nil against Knit Export using local Yarn procuring through BB-L/C.
d) Import of Grey Fabrics. e) Fashion Institute set up. MISCELLANEOUS : a) Quality control of Export items. b) Harmonized Code Introduction for Import & Export ( HS Code )
APPENDIX “C� BANGLADESH BANK RETURNS IN FOREIGN EXCHANGE. As per foreign Exchange Regulation Act `1947 : Submission of foreign exchange returns to Bangladesh Bank is statutory obligation of the banks. Exchange control Dept. of Bangladesh Bank is responsible for ensuring the submission of returns by the AD Banks. All foreign exchange retune are to be submitted by the authorized dealers to their respect area office. The preparation of returns prescribed proforma as given in the exchange control manual (1997) edition) and Foreign Exchange circular as issued by Bangladesh Bank from time to time are to be followed strictly with in the stipulated time. The statements must be submitted to the Bangladesh Bank for their necessary action. Were there is no transaction to record to report during a particular period, a Nil statement should be submitted. While submitted due care must take by the authorised dealers to fill up the relative forms properly and attached the required documents with the statement. The Authorised Dealers are required to submit to the Bangladesh Bank. Six summary statements in respect of their transaction in different currencies in which position is maintained by them. The summary statements are basically abstract of the authorised deal ledger accounts and consist of total under specified heads. These statements are balanced by adding opening and closing balances, as the case may be, so as to make each statement complete.
The following sox summary statements have been prescribed by Exchange Control Manual (1997) for different currencies and types of transactions: -
Statement
S-1
for transaction in all currencies except ACU
-
"
S-2
for transaction under ACU.
-
"
S-3
for transaction in all other currencies.
-
"
S-4
for transaction in Taka account of non resident bank branches and correspondents as well as taka account held by AD. For ACU member consolidated manner.
-
"
S-5
for transaction on Barter and Special Trade Arrangements prepared country wise in a consolidated manner.
-
"
S-6
for transaction on sales and purchase of approved foreign currency notes.
Summary statement must be supported by appropriate schedules (prescribed for the purpose of ECM) and relative exchange control forms (such as EXP, IMP. TM etc.). 1. Schedule A- 1 and A- 2 : Schedule A- 1 is used for reporting purchase of foreign currency f for debit to non resident Taka accounts of correspondents against 'EXP' form certified by the authorised dealers. In case of advance receipts for the goods to be exported the transaction should be reported schedule a-2 and an advance payment voucher should be attached therewith. 2. Schedule B-1 and B-2 B-2 schedules are to be prepared separately for foreign currency sold which B-1 will contain a summary of the relative amounts entered the summary statement S-1. 3. Schedule-C Currencies purchased form A.D maintaining separate currency position are reported on this schedule and be attached to the relative S-1 , S-2, S-3 or S-6 statement . 4. Schedule-D:
Foreign currency purchased from and sold to Bangladesh bank must be entered on schedule 'D' and totals entered on the relative summary statement. 5. Schedule-G: Currencies sold to AD. Maintaining separate currency position is to be reported on this schedule. 6. Schedule-H: Currency bought against credits to non resident take accounts are entered on schedule -H 7. Schedule-O&P: Branches that do not maintain independent currency positions but operate on the foreign Currency accounts of their Head Office are another branch are required to submit the summary statements to the area office of Bangladesh Bank. The truncations on account of Branches booked in the currency account are reported on schedules O & P. 8. Schedule-E-2/E-3/E-4: All sales of foreign currencies to the public for imports, travels and miscellaneous purposes are reported on these schedules on these schedules. IMP form on E-2 and TM form on E-3/E4. 9. Schedule-J Inward remittances for amounts TK.5000/- and above are listed on this schedule supported by form - C. Amounts below TK.5000/- are reported on Inward remittance (IRV). 10. Schedule-K: The schedule 'K' is not related to the summary statements S-1, S-2, S-3 or S-4. 11. Schedule-L: Debits to non resident bank taka accounts covering transfers to other non resident bank taka accounts must be listed schedule 'L' and the total amount of taka must agree with the total on S-4 statement. The schedule should be submitted to the Bangladesh Bank in duplicate with the relative summary statements.
12. Schedule-M: Debits to not resident bank taka A/C 's against sales of foreign currencies must be listed on schedule 'M' and the total must be agree with the amount entered on S-4 statement . 13. Schedule-N: The closing balance on the non-resident bank taka accounts must be listed on schedule 'N'. This should be grouped according to countries or currency groups. 14. Schedule-D: The branches who do not maintain independent currency positrons but operate on foreign currency accounts on their Head Office are required to submit to the area Office of the Bangladesh bank unbalanced summary statements S-1, S-2 etc. 15. Schedule-D: Credits to non-resident bank Taka accounts covering transfers from other non-resident bank taka accounts must be listed on schedule-R and the total on S-4 statement. The schedule should be submitted to the Bangladesh Bank in duplicate with the relative summary statement.