The Advising confirming Bank then informs the seller through his Bank that the

The advising confirming bank then informs the seller

This preview shows page 17 - 20 out of 41 pages.

The Advising / confirming Bank then informs the seller through his Bank that the Credit has been issued. As soon as the seller receives the credit, if the credits satisfy him the he can reply that, he can meet its terms and conditions, he is in position to load the goods and dispatch them. The seller then sends the documents evidencing the shipment to the „! Bank where the Credit is available (nominated Bank). This can be the A issuing Bank or Confirming Bank; Bank named in the Credit as the paying, accepting and Negotiating Bank. The Bank then checks the documents against the credit. If the documents meet the
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requirements of the credit, the Bank then pay, accept or negotiate according to the terms of credit. In the case of credit available by negotiation, Issuing Bank will negotiate with ecourse. The Bank, if other then the issuing bank, sends the documents to the issuing Bank. The issuing Bank checks the document and if they found that the document has meet the credit requirements, they realize to the buyer upon payment of the amount due or other terms agreed between him and the issuing Bank. The buyer sends transport documents to the carrier who will then proceed to deliver the goods. An importer is required to have the followings to import through the bank: A bank account in the bank. Import Registration certificate. Tax paying identification number. S Performa invoice indent Membership certificate LCA (Letter of credit application) form duly attested. One set of IMP form. 4.2.2.3. Import Mechanisms: To import, a person should be competent to be an importer. According to import and export control act, 1950, the officer of the chief controller of import and export provides the registration (IRC) to the importer. After obtaining this, this person has to secure a letter of credit authorization (LCA) from Bangladesh Bank and then a person becomes a qualified importer. He is the person who requests or instructs the opening bank to open an L/C. he is also called opener or applicant of the credit. Step-1: Proposal for Opening of L/C: In case of an L/C of a small amount only the prescribed application form i.e. the LCA (Letter of credit application) form is enough to open an L/C. but when the L/C amount is reasonably high, and then the importer is asked to submit a proposal to the bank authority to have a limit of L/C amount. This proposal should be approved in the meeting of the executive committee of the bank. The sufficient features of a proposal are — Full particulars of bank account. Nature of business. Required amount of limit. Payment terms and conditions. Goods to be imported. Offered security. Repayment schedule.
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A credit officer scrutinizes this application and accordingly prepares a proposal (CLP) and forwards it to the Head office Credit Committee (HOCC). The committee, if satisfied, sanctions the limits and returns back to the branch. Thus the importer is entitled for the limit.
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