CATEGORIES:

As initiated by Bangladesh Bank vide BCD Circular No. 33 dated 16-11-89 different kinds of lending were subdivided into 11 categories w.e.f. 01-01-90 which was subsequently reduced to 9 vide BCD Circular No. 23 dated 09-10-93 and again to 7 sectors vide BCD Circular No.8 dated 25.04.94 for fixation of rates of interest by the individual banks on competitive basis depending on the cost of Funds, prevailing market condition and monetary trend of the country.   Now, as per Interest Rate policy of Bangladesh Bank, banks are free to charge/fix their deposit and lending rates other than export credit. At present, except pre-shipment export credit and loans to Agriculture sector and Women entrepreneur there is no interest rate lending cap for banks and banks can differentiate interest rate up to 3% considering comparative risk elements involved among borrowers in same lending category (Ref. BRPD Circular no.21 dated 01.11.2001 and BRPD Circular no.04 dated 06.06.2004 and BRPD Circular letter no.09 dated 20.06.2011). Loan and advances have primarily been divided into three major groups:

1. Fixed term loan: These are the advances made by the Bank with fixed repayment schedules. The term of loan are defined as follows:

Short term   : Up to 12 months Medium term    :  More than 12 and up to 60 months Long Term  :  More than 60 months

1. Continuing credit : These are the advances having no fixed repayment schedule, but have an expiry date at which it is renewable on satisfactory performance.

1. c) Demand Loan: These are the loans that become repayable on demand by the bank and no fixed instalment of repayment schedule are laid down. If any contingent of other liabilities are turned to forced loans (i.e. without any prior approval as regular loan) those too will be treated as Demand Loans.

Further all categories of loans are accommodated under the 7 sectors as under:

1. Agriculture:

Credit facilities to the agricultural sector falls under this category. It is subdivided into two major heads:

1. a) Loans to primary producers: This sector of agricultural financing refers to the credit facilities allowed to production units engaged in farming, fishing, forestry or livestock.

Loans to processors or traders of agricultural products are not to be categoried as agricultural loans. Loans to tea gardens for production are treated as agricultural loan, but loans to tea gardens for export should be treated under the category “Export Credit”. Similarly medium and long-term loans to tea gardens are categorized as industrial term lending.

1. b) Loans to input dealers/distributors: It refers to the financing allowed to input dealers and (or) distributors in the agricultural sectors.

Agricultural loans may include short, medium and long fixed term loans as well as continuing credits. As such, it may fall under Loan (Gen)/Hire-Purchase/Lease Financing/Cash Credit/Overdraft etc.

1. Term Loan for Large & Medium Scale Industry:

As per SMESPD Circular-01 dated 07.01.2016, Medium and Small Enterprise are defined. Rest enterprises over the both categories in terms of fixed asset and number of employee are termed as Large Enterprise.  Medium Enterprise is defined as under:

This category of advances accommodate the medium and long term financing for acquiring capital machinery of new Industries or for BMRE of the existing units who are engaged in manufacturing goods and services. Term financing to tea gardens may also be included in this category depending on the nature and size. As the financing under this category have fixed repayment schedule it falls under Loan (Gen)/Hire-Purchase/Lease Financing/Term Loan.

III. Term Loans to Small & Cottage Industries:

As per SMESPD Circular-01 dated  07.01.2016, Small, Micro and Cottage Enterprise are defined as under:  

Small Enterprise:

Micro Enterprise:

Cottage: Cottage is that enterprise which has fixed asset valued less than 5.00 lac excluding land & building having family member maximum10. No short term or continuing credits are to be included in this category. Medium & Long term credits are also included under this category. Like the Large & Medium Scale Industry it is also allowed in the form of “Loan (Gen)/Hire ­Purchase/Lease Financing”.

Working Capital:

Loans allowed to the manufacturing units to meet their working capital requirements, irrespective of their size – big, medium or small, fall under the category. These are usually continuing credits and fall under the head “Cash Credit/SOD(General).”

Export Credit:

Credit facilities allowed to facilitate export of all items against Letter of Credit and/or confirmed export orders fall under this category. It is accommodated under the heads “Export Cash Credit (ECC)”, Packing Credit (PC), Foreign Documentary Bills Purchased (FDBP), Local Documentary Bills Purchased (LDBP) etc. However, bills discounted/purchased against supply of goods and services to companies/ industries which are located in the country and not involved in export/deemed export shall not fall under export credit.

Commercial Lending:

Short term loans and continuing credits allowed for commercial purposes other than exports fall under this category. It includes import financing, financing for internal trade, service establishment, etc. No medium and long term loans are accommodated here. This category of advances are allowed in the form of (I) Loan against imported merchandise (LlM), (ii) Loan against trust receipt (LTR), (iii) Payment against import documents (PAD), (iv) Secured Overdrafts (SOD), (v) Cash Credit (CC), (vi) Loan (Gen), (vii) Time Loan etc. for commercial purposes.                  

VII. Others: Any loan that does not fall in any of the above categories is considered under the category “Others”. It includes loan for (I) Purchasing of transport equipments, (ii) Construction works including housing (commercial/residential), (iii) Work order finance, (iv) Retail loans, (v) Credit Card, etc. Also Bangladesh Bank vide BRPD Circular No. 07 dated 03.11.2004 has also given prudential regulatory guidelines for Small Enterprise Financing. The SMEs are recognized as engines of economic growth worldwide. To achieve high and sustained economic growth, a triggering force is mandatory to exit from endemic poverty and socioeconomic deprivation.The role of Small and Medium Enterprise is very crucial in the economic development of the county. Jamuna Bank Limited has separate SME Financing Scheme duly approved by the Board. There are several products, modalities and loan ceiling for SME financing.

TYPES OF CREDIT FACILITIES

Depending on the various nature of financing, all the credit facilities have been brought under two major groups; Funded Credit and Non-funded Credit.

• Funded Credit Facilities:

  Any type of credit facility which involves direct outflow of bank’s fund on account of borrower refers to funded credit facility. The followings are the funded credit facilities/limits practiced in JBL:

PAD:

PAD stands for ‘Payment against Documents’. It is an interim advance connected with import through L/C. As the L/C issuing bank is bound to honor its commitment to pay for import bills when these are presented for payment, the issuing bank will lodge the in-order shipping documents to their book by creating PAD as soon as they receive it. Payment is made by the Bank against lodgement of shipping documents of goods imported through L/C. It is generally liquidated against payments usually made by the party for retirement of the documents for release of imported goods from the customs authority. It falls under the category “Commercial Lending”.   Features:

• It is a demand loan.
• This is a consequential facility and does not require pre-facto or post-facto approval.
• PAD could only be created against import L/C.
• Creation of PAD depends on L/C. More than one PAD account may be created against a single L/C. However, aggregate amount of PAD created must not exceed the value of L/C ± tolerance, less margin, if any.
• If the negotiating Bank already makes payment, PAD amount would be determined after loading interest for the lapsed period.
• Maximum maturity of PAD account may be 21 (Twenty One) days.
• PAD liability is liquidated against payments made by the customer either by cash from own sources or by availing post-import facilities such as LTR/LIM/Other facility(s).
• The importer receives the documents only after adjustment of PAD.
• Primary security: L/C related shipping documents
•  

• LTR:

LTR stands for ‘Loan against Trust Receipt’. Facility allowed for retirement of shipping documents (so that the importer can release the goods imported through L/C) by adjustment of PAD liability, is known as LTR. The facility is allowed on trust with the arrangement that sale proceeds of the goods will be deposited to liquidate the loan account within the stipulated time. This is also a temporary advance connected with import and known as post-import finance and falls under the category “Commercial Lending”   Features:

• This is a post-import finance.
• All specific LTRs and each LTR created under a revolving limit are demand loan by nature.
• Usually allowed to retire shipping documents of L/C.
• Usually LTR amount equals the PAD liability. However, if Duty, VAT, other costs are financed by the Bank or importer provides further margin, the amount may vary.
• Importer controls/possesses the imported goods.
• The tenure of the facility will be in the range of 30 to180 days subject to customer’s need and Bangladesh Bank guidelines/directives.
• Drawing is allowed once only, no further drawing is possible. Repayment in multiple phases is preferred but in full with upto date interest within its validity.
• Primary security: Letter of Trust Receipt.

• LIM:

  LIM stands for ‘Loan against Imported Merchandise’. Facility allowed for retirement of shipping documents by adjustment of PAD liability and taking effective control/possession over the goods under pledge in godowns under Bank’s lock & key. This is also a temporary advance connected with import which is known as post-import finance and falls under the category “Commercial Lending”. Features:

• This is a post-import finance.
• All specific LTRs and each LTR created under a revolving limit are demand loan by nature.
• Usually allowed to retire shipping documents of L/C.
• Usually LTR amount equals the PAD liability. However, if Duty, VAT, other costs are financed by the Bank or importer provides further margin, the amount may vary.
• Importer controls/possesses the imported goods.
• The tenure of the facility will be in the range of 30 to180 days subject to customer’s need and Bangladesh Bank guidelines/directives.
• Drawing is allowed once only, no further drawing is possible. Repayment in multiple phases is preferred but in full with upto date interest within its validity.
• Primary security: Letter of Trust Receipt.

• PC:

PC stands for (Export) Packing Credit. It is a short term facility allowed to customers against export L/C and/or firm contract for processing/packing/shipping of goods to be exported. It must be adjusted from proceeds of the relevant exports. It falls under the category “Export Credit”.

Features:

• This is a mode of export finance.
• All specific PCs and each PC created under a revolving limit are demand loan by nature.
• PC amount should not exceed 10% of outstanding ABP (against BTB L/C) at any point of time and total finance (including ABP) against an export L/C should not exceed 90% of the FOB value.
• Usually has the tenure of 90 days but can be extended to 270 days
• Pricing mode: Interest at a special rate prescribed by Bangladesh Bank (Presently 7.00% p.a.).
• Primary security: Export L/C/firm Contract.
  •  

  • ECC:

  ECC stands for Export Cash Credit. This facility is allowed to a customer for processing of export of goods. It must be adjusted from proceeds of the relevant exports. Financial accommodation allowed to a customer for exports of goods falls under this head and is categorized as “Export Credit”. The advances must be liquidated out of export proceeds within 180 days. Features:

• This is a mode of export finance.
• All specific ECC and each ECC created under a revolving limit are demand loan by nature.
• ECC amount should be determined on the basis of export L/C value.
• The advances must be liquidated out of export proceeds within 180 days.
• Primary security: Export L/C/firm Contract.

• IDBP:

  IDBP stands for ‘Inland Documentary Bill Purchase’. This facility is provided to purchase documents/ bills (duly accepted by issuing Bank) submitted by the exporter/supplier on (deemed) export/supply made to local export oriented industries or other entities against inland L/C usually denominated in Foreign Currency. This temporary liability is adjustable from proceeds of the Bill. Features:

• This is usually a mode of (deemed) export finance.
• Bills against acceptance of Scheduled Banks in Bangladesh other than restricted Bank could only be purchased.
• The accepted bills have to be confirmed by the accepting Bank upon written request of the purchasing Bank.
• Usual amount of IDBP is 90% of the bill value.
• Usually has the tenure of less or more 90-120
• Liability is adjusted from the proceeds of the Bill. However, usually a General Letter of indemnity on Tk.300/- non-judicial stamp is obtained from the beneficiary (exporter/supplier) to the effect that if the proceeds against any bill is not received in due time, the bill/bills will be adjusted from the beneficiary’s own source.
• Primary security: Duly accepted and confirmed inland documentary bills.

• FDBP:

  FDBP stands for ‘Foreign Documentary Bills Purchase’. It falls under the category “Export Credit”.This facility is provided to negotiate (purchase) Foreign Documentary bills/documents submitted by the exporter on export made against export L/C denominated in Foreign Currency. Payment made to a customer through purchase/negotiation of a Foreign documentary bills falls under this head. This temporary advance is adjustable from the proceeds of the shipping/export documents. Features:

• This is a mode of export finance.
• The documents/bills have to be in order as per export L/C terms.
• Usual amount of FDBP is 20% of the documents/bill value. The remaining amount is used to meet BTB L/C, PC, and other liabilities associated to the particular export.
• Usually has no fixed tenure but maximum tenure may be allowed is 21 days for sight L/C and as per stipulated usance period for usance (DP) L/C.
• Liability is adjusted from the proceeds of the documents/Bills.
• Primary security: In order L/C documents/bills.

• FBP:

  FBP stands for ‘Foreign Bills Purchase’. Payment made to a customer through purchase of Foreign Currency Cheques/Drafts falls under this head. This temporary advance is adjustable from the proceeds of the cheque/draft. Features:

• It is demand loan by nature.
• The Cheques/Drafts have to be in order.
• FBP is allowed to meet short term obligations of Bank’s existing tested and trusted
• Usual amount of FBP is 50-90% of the Cheques/Drafts value.
• Tenure depends on the Cheques/Drafts’ validity.
• Liability is adjusted from the proceeds of the Cheques/Drafts. However, usually a General Letter of indemnity on Tk. 300/- non-judicial stamp is obtained from the drawee to the effect that if the proceeds against any Cheques/Drafts is not received in due time, the liability will be adjusted from the drawee’s own source.
• Primary security: Foreign Currency Cheques/Drafts.

• IBP:

  IBP stands for ‘Inland Bills Purchase’. Payment made to a customer through purchase of Local Currency Cheques/Drafts. Payment made through purchase of inland bills/cheques to meet urgent requirement of the customer falls under this type of credit facility. This temporary advance is adjustable from the proceeds of bills/cheques purchased for collection. It falls under the category “Commercial Lending”. Features:

• It is a demand loan by nature.
• The Cheques/Drafts have to be in order.
• IBP is allowed to meet short term obligations of Bank’s existing tested and trusted non-export customers.
• Usual amount of IBP is 50-90% of the Cheques/Drafts value.
• Tenure depends on the Cheques/Drafts’ validity.
• Liability is adjusted from the proceeds of the Cheques/Drafts. However, usually a General Letter of indemnity on Tk. 300/- non-judicial stamp is obtained from the drawee to the effect that if the proceeds against any Cheques/Drafts is not received in due time, the liability will be adjusted from the drawee’s own source.
• Primary security: Local Currency Cheques/Drafts.

• SOD(Export):

  SOD (Export) stands for ‘Secured Over Draft (Export)’. This facility is allowed for making import payments including BTB L/C liability in foreign currency against export L/C, where the exports do not materialize before the due date of import payments. Features:

• It is a demand loan by nature.
• This is a forced liability.
• OD (Export) is allowed to meet import payments including BTB L/C obligations. Thus the amount equals the import obligations.
• Tenure depends on possible date of export proceeds realization.
• Liability is adjusted from the export proceeds. However, in case of failure, the exporter pays from their own sources.
• Primary security: Export L/C documents/bills.

• Loan against EDF:

  Government of Bangladesh under the supervision of Bangladesh Bank has formed a fund which is known as Export Development Fund (EDF). In case of meeting Sight L/C or Sight BTB L/C (for importing export input) payment at the premature stage of export, EDF provides the fund in foreign currency. This facility is called Loan against EDF. Features:

• EDF liability has to be repaid within 06
• This facility is allowed to meet Sight L/C or Sight BTB L/C payment for importing export inputs when export payment will be due later.
• Liability is adjusted from the export proceeds within 06 However, in case of failure, the loan has to be adjusted by creating OD (Export) facility.
• Pricing mode: Interest @(LIBOR+X)% p.a. [X is a variable]
• Primary security: Export L/C documents/bills.
• All specific loans against EDF and each loan against EDF created under a revolving limit are demand loan by nature.

• Lease Finance :

  This is a mode of term financing for acquisition of capital machinery and equipments (or other assets such as consumer durables, vehicles, etc. and in some cases house building) whereby the Bank retains ownership and the customer is given the exclusive right to use the asset for an agreed period of time in return of rental payment. Features:

• Lease is a contract between the Lessor (Bank) and the Lessee (Customer). The contract is called ‘Lease Agreement’, which guides the facility throughout the term.
• Down payment or margin from the customer is optional.
• Ownership of the asset remains with the Lessor throughout the Lease term. However, the Lessee is responsible for maintenance, insurance and other obligations related to the asset.
• There are different modes of Lease, usually Bank (Lessor) finances in the ‘Capital/Financial Lease’ form, where ownership is transferred to the customer (Lessee) at the end of Lease term (and after repayment of all dues) at the payment of a lump sum amount. Occasionally, ‘Sale & Lease Back’ form of Lease is also used for financing, where the customer sells some asset to the Bank and obtains the right to use it by taking Lease.
• Lease Finance generates some special kind of fees for the Bank, those are: Project Examination Fee, Supervision Cost, Transfer Fee etc. These fees vary from 10% to 2.00% of the Lease Finance amount. Besides, deposit of advance Lease Rental (1-3 nos.) is another feature of Lease Finance.
• Liability is adjusted through deposit of Lease ‘Rentals’ periodically.
• Tenor will be one year to 8 years.
• Primary security: Ownership of the asset.

• Hire Purchase (HP):

  Hire-Purchase is a type of installment credit under which the Hire-Purchaser agrees to take the goods on hire at a stated rental, which is inclusive of the repayment of Principal as well as interest for adjustment of the loan within a specified period. This is another mode of term financing for acquisition of capital machinery and equipments (or other assets such as consumer durables and vehicles) whereby the Bank initially retains ownership but the ownership gradually shifts to the customer with regular repayment of pre-agreed installments within a specified period. The customer is entitled to use the asset at his own risk & responsibility throughout the loan tenure. Features:

• It is a term loan.
• A contract called ‘Hire Purchase Agreement’ guides the facility throughout the term.
• A down payment or margin from the customer is required.
• Initially ownership of the asset remains with the Bank but the ownership gradually shifts to the customer with repayment of installments. At the end of the term (and after repayment of all dues) the customer gets full ownership. However, the customer is responsible for maintenance, insurance and other obligations related to the asset.
• Liability is adjusted through deposit of Hire Purchase ‘Installments’ periodically.
• Primary security: Ownership of the asset.

• Loan(General) or Loan (G):

  This is mainly allowed to accommodate term financing, when the other term financing modes (as stated above) are not applicable. Short term, Medium term & Long term loans allowed to individual/firm/industries for a specific purpose but for a definite period and generally repayable by installments fall under this head. This type of lending is mainly allowed to accommodate financing under the categories (i) Large & Medium Scale Industry and (ii) Small & Cottage Industry. Very often term financing for (iii) Agriculture & (iv) Others are also included here. Features:

• It is a term loan.
• A contract called ‘Loan Agreement’ guides the facility throughout the term.
• Loan (G) facility is available for miscellaneous purpose of the customer and the purpose of taking the loan and the source of repayment should be clearly identified before allowing this facility.
• It is adjusted through deposit of installments (single or multiple and equal or unequal) within the validity period.
• Primary security: Charge on the underlying asset.

• Real Estate Financing (CRB):

  Real Estate Financing (CRB) stands for Real Estate Financing (Construction of Residential Building). Term Loans allowed for purchase of apartment or construction of house for residential purpose fall under this type. Features:

• It is a term loan.
• Bank’s separate ‘HBL policy’, if available, guides the facility throughout the term.
• Real Estate Financing (CRB) facility may be allowed for the following purposes:

1. Purchase of flat (apartment) for residential purpose.
2. Construction of residential building.
3. Purchase or renovation of residential building.

• Usually disbursement is made at multiple phases.
• It is usually a longer term financing.
• It is adjusted through deposit of periodical installments.
• Primary security: Registered Mortgage of the underlying land & building.

• Real Estate Financing (CCB):

  Real Estate Financing (CCB) stands for Real Estate Financing (Construction of Commercial Building) Term Loans allowed for purchase of commercial space or construction of house for commercial purpose fall under this type. Features:

• It is a term loan.
• Bank’s separate ‘Real Estate Financing policy’, if available, guides the facility throughout the term.
• Real Estate Financing facility may be allowed for the following purposes:
  1. Purchase of space for commercial purpose.
  2. Construction of commercial building.
  3. Construction of residential building for selling out to the public.
  4. Purchase or renovation of commercial building.
• Usually disbursement is made at multiple phases.
• It is usually short to medium term financing.
• It is adjusted through deposit of periodical installments.
• Primary security: Registered Mortgage of the underlying land & building.

• CC (Hypo):

  CC(Hypo) stands for Cash Credit (Hypothecation). Advances allowed to individual/firm for trading as well as wholesale purpose or to industries to meet up the working capital requirements against hypothecation of goods as primary security fall under this type of lending. It is allowed under the categories (i) “Commercial Lending” when the customer is other than an industry and (ii) “Working Capital” when the customer is an industry. This is a continuous credit limit allowed for trading as well as manufacturing/ assembling/ other value adding units to procure and maintain the stock in trade for trading units and stock of raw material (RM), work in process (WIP), and finished goods (FG) for manufacturing/ assembling/ other value adding units. Features:

• This is a continuous loan.
• Continuous drawing and adjustment is possible.
• Validity of the limit may be one year or less.
• It is adjusted through crediting sale proceeds in the account on regular basis. Desired yearly credit turnover in the account is 04 times of the credit limit.
• Customer possesses the stock.
• Primary security: Hypothecation of stock in trade or stock of RM, WIP, & FG.

• CC (Pledge):

  CC(Pledge) stands for Cash Credit (Pledge). Financial accommodations to individual/firms for trading as well as for whole-sale or to industries as working capital against pledge of goods as primary security fall under this head of advance. It is also a continuous credit and like the above allowed under the categories (i) “Commercial Lending” and (ii) Working Capital”. This credit limit is allowed for trading as well as manufacturing/ assembling/ other value adding units to procure and maintain the stock in trade for trading units and stock of raw material, work in process and finished goods for manufacturing/ assembling/ other value adding units but the stock is kept as pledge in godowns under Bank’s lock & key.   Features:

• This is a continuous loan.
• Continuous drawing and adjustment is possible keeping adequate stock as pledged.
• Validity of the limit may be one year or less.
• It is adjusted through crediting sale proceeds in the account on regular basis. Desired yearly credit turnover in the account is 04 times of the credit limit.
• Bank possesses the stock.
• Primary security: Hypothecation of stock in trade or stock of RM, WIP, & FG.

• SOD (G):

    SOD (G) stands for Secured Over Draft (General). This continuous credit limit is allowed for different business purposes including meeting working capital requirement. Features:

• This is a continuous loan.
• Continuous drawing and adjustment is possible.
• Validity of the limit may be one year or less.
• Primary security: Hypothecation of underlying assets.

• SOD(WO):

SOD (WO) stands for Secured Over Draft (Work Order). This facility is allowed for execution of work/supply order. Features:

• Bank’s separate ‘Work Order policy’, if available, guides the facility throughout the term.
• Usually disbursement is made with the progress of execution.
• Validity of the facility is matched with the validity of work/supply order.
• It is adjusted (gradually) through making deduction from the assigned bills received from the work/supply order awarding authority.
• Primary security: Assignment of the bills against the work/supply order.
• All specific SOD (WO) and each SOD (WO) created under a revolving limit are demand loan by nature.

• SOD(PO/SDR):

  SOD (PO/SDR) stands for ‘Secured Over Draft (Pay Order/Special Deposit Receipt)’. This facility is allowed by issuing Payment Order (PO)/Special Deposit Receipt (SDR) in favor of ‘bid inviting authority’ as bid security. The issued PO/SDR value reflects the facility amount. Features:

• This is an alternative to Bid Bond/Guarantee.
• The PO/SDR amount depends on the requirement stated by ‘bid inviting authority’ in the tender notice.
• Usually has the tenure of 30-90
• Adjustment is made by depositing the returned PO/SDR for unsuccessful bids. In case of successful bids, the PO/SDR value less the margin is deposited by the customer.
• Primary security: Cash equivalent to the value of the highest PO/SDR, Postdated cheque.
• All specific SOD (PO) and each SOD (PO) created under a revolving limit are demand loan by nature.

• SOD (FDR) :

  SOD (FDR) stands for Secured Over Draft (Fixed Deposit Receipt). Advances allowed to individual/firms against Fixed Deposit Receipt (i.e. lien on FDR etc). Features:

• This is a continuous loan.
• Continuous drawing and adjustment is possible.
• Validity of the limit may be one year or less.
• Primary security: Lien on underlying FDR.

• SOD(FO):

  SOD (FO) stands for Secured Over Draft (Financial Obligation). This continuous credit limit is allowed against financial obligations (FDR, MBDR, Scheme Deposits or similar products of other banks, treasury bond etc.). Features:

• This is a continuous loan.
• Continuous drawing and adjustment is possible.
• Validity of the limit may be one year or less.
• Primary security: Lien on underlying FO.

• SOD (Special Scheme) :

  SOD (Special Scheme) stands for Secured Over Draft (Special Scheme). This continuous credit limit is allowed against different scheme deposits of our bank. Features:

• This is a continuous loan.
• Continuous drawing and adjustment is possible.
• Validity of the limit may be one year or less.
• Primary security: Lien on underlying Special Deposit Scheme.

• SOD (Share):

  SOD (Share) stands for Secured Over Draft (Share). This continuous credit limit is allowed against shares of public Limited Company. Bank must advance only against approved shares quoted on stock exchange. The Central Bank issues directives regularly valuation of the shares kept as security. Features:

• This is a continuous loan.
• Continuous drawing and adjustment is possible.
• Validity of the limit may be one year or less.
• Primary security: Lien on underlying share.

• Time Loan :

This is one time financial accommodation for short period maximum 12 months to meet some specific purpose. The loan is adjustable within the validity and not renewable and no transaction is allowed. It can be repaid with instalments or lumpsome basis.

• Retail Credit:

These loans are processed through Retail Department. PPG for Retail Credit has approved by the Board of Directors in its 121^th meeting held on 15-06-2009. Products of retail credit are as follows:

Auto Loan:

Customer Segment: For permanent/confirmed service holders of Govt., Semi-Govt., Autonomous Organizations, Banks, Insurance Companies, Public Limited Companies, Multinational Companies, NGOs, Employees of Private Limited Companies acceptable to the bank, covered by guarantee of another employee of equal or higher grade. Teachers of Universities, Colleges & Schools (Affiliated), Professional persons like Doctors, Engineers, Chartered Accountants and Architects, Businessmen at steady trade for at least two years evidence by tax payment and trade license.

Purpose:

• To procure brand new/reconditioned Personal Transport of age not more than 5 Model year is in the limit of 5 years.
• The Vehicle should have maximum 10 (ten) seats.

  Nationality & Age Limit:

• Bangladeshi by birth.
• Minimum age 25 years / Maximum age 54
• Loan tenor shall not exceed 59 years of age.

Minimum Income:

• Net Income should be at least Tk. 40,000/- per month (To be substantiated by evidence). The customer must have sufficient net cash flow to repay the loan installments regularly.

  Loan Size:

• Minimum Tk. 00 Lac and Maximum Tk. 40.00 Lac.

  Maximum Term of Loan:

• 5

Loan to price:

• Regulated by Bangladesh Bank from time to time. Presently Loan to Car Value is 50:50 ratio and should not exceed Tk. 40 lacs (maximum amount).

  Rate of Interest:

• As determined by the bank from to time.

  Security/ Collateral:

• Registration of vehicle in favor of JBL.
• Personal guarantee of the applicant & applicant’s spouse.
• Third party Guarantor shall be equal to or creditworthy than the principal applicant.
• Post dated cheques for installments and one undated cheque covering entire loan amount with interest.
• Comprehensive 1st party insurance coverage of asset favouring the bank.
•  
• Any Purpose Loan:

  Customer Segment: For permanent/confirmed service holders of Govt., Semi-Govt., Autonomous Organizations, Banks, Insurance Companies, Public Limited Companies, Multinational Companies, NGOs, Employees of Private Limited Companies, acceptable to the bank, covered by guarantee of another employee of equal or higher grade. Teachers of Universities, Colleges & Schools (Affiliated). Professional persons like Doctors, Engineers, Chartered Accountants and Architects, Businessmen at steady trade for at least two years evidence by tax payment and trade license. Purpose:

• For construction & renovation of residential house/building and purchase of Flat/Apartment and any other lawful purpose acceptable to the Bank.

  Nationality and Age Limit:

• Bangladeshi by birth.
• Minimum age 25 years / Maximum age 55
• Loan tenor shall not exceed 60 years of age.

Minimum Income:

• Net Income should be at least Tk. 40,000/- per month (To be substantiated by evidence).

  Loan Size:

• Minimum Tk. 00 Lac and Maximum Tk. 50.00 Lac.

  Maximum Term of Loan:

• 10

  Rate of Interest:

• As determined by the bank from to time.

  Security/ Collateral:

• The loan will be covered appropriately by tangible asset/financial asset.
• In suitable cases security condition may be relaxed.
• Hypothecation/ Lien / Registration / Mortgage of any other asset, acceptable to the bank, as feasible depending on the type of asset.
• Personal guarantee of the applicant & applicant’s spouse.
• Third party guarantor shall be equal to or creditworthy than the principal applicant.

• Personal Loan:

  Customer Segment: For permanent/confirmed service holders of Govt., Semi-Govt., Autonomous Organizations, Banks, Insurance Companies, Public Limited Companies, Multinational Companies, NGOs, Employees of Private Limited Companies, acceptable to the bank, covered by guarantee of another employee of equal or higher grade. Teachers of Universities, Colleges & Schools (Affiliated). Professional persons like Doctors, Engineers, Chartered Accountants, and Architects, Businessmen at steady trade for at least two years evidence by tax payment and trade license. Purpose:

• Any lawful purpose acceptable to the Bank.

    Nationality & Age Limit:

• Bangladeshi by birth.
• Minimum age 25 years / Maximum age 57
• But loan tenor shall not exceed 62 years of age.

    Minimum Income:

• Net Income should be at least Tk.40,000/- per month. (To be substantiated by evidence)

    Loan Size:

• Minimum Tk. 00 lac and Maximum Tk. 20.00 Lac.

      Maximum Term of Loan:

• 5

  Rate of Interest:

• As determined by the Bank from to time.

  Security/ Collateral:

• Loan above Tk. 00 Lac shall be secured by 200% tangible asset or 100% financial asset.
• Hypothecation/ Lien / Registration / Mortgage of Offered / Procured / Purchased/ Any other asset, acceptable to the Bank, as feasible depending on the type of asset.
• In suitable cases security condition may be relaxed.

1. Salary Loan :

Customer Segment: For permanent/confirmed service holders of Govt., Semi-Govt., Autonomous organizations, Banks, Insurance Companies, Public Limited Companies, Multinational Companies, NGOs, Employees of Private Limited Companies, acceptable to the bank, covered by guarantee of another employee of equal or higher grade. Teachers of Universities, Colleges & Schools (Affiliated). Professional persons like Doctors, Engineers, Chartered Accountants, and Architects. Purpose:

• Any lawful purpose.

  Nationality & Age Limit:

• Bangladeshi by birth.
• Minimum age 21 years / Maximum age 55
• But loan tenor shall not exceed 60 years of age.

    Minimum Income:

• Net Income should be at least Tk. 15,000/- per month.

    Rate of Interest:

• As determined by the bank from to time.

    Maximum Term of Loan:

• 5

    Loan Size:

• Minimum 00 lac Maximum Tk. 8.00 lac or 12 times of gross salary, which ever is lower.

  Security/ Collateral:

• Lien on Salary and service benefit of the customers and consent to pay to JBL on demand to adjust the loan from his employer on XYZ standard format.
• Personal guarantee of the applicant & applicant’s spouse.
• Third party guarantor shall be equal to or more creditworthy than the Principal applicant.

1. Doctors Loan:

  Customer Segment: For Salaried Doctors of reputed Medical Colleges & Hospitals, Clinics, Diagnostic Centers, NGOs, Multinational/Local Corporate, Govt. Offices, Semi Govt. Offices, Autonomous Organizations, National / International Aid agencies, UN Bodies. Self Employed Tax Paying Doctors having good reputation and reliable income source(s). Purpose: Educational Expenses, Office Equipment, Medical Equipments Purchase, Professional  Equipment Purchase, Commercial/Office/Chamber Space Purchase/, Renovation/ Decoration, Office Decoration, Equipments, Electronics items purchase.   Nationality & Age Limit:

• Bangladeshi by birth.
• Minimum age 25 years / Maximum age 60 years.
• Loan tenor shall not exceed 65 years of age.

  Minimum Income:

• Net Income should be at least Tk. 30,000/- per month (To be substantiated by evidence).

  Loan Size:

• Minimum 2.00 lac Maximum Tk. 50.00 lac.

  Maximum Term of Loan:

• 5 years.

  Rate of Interest:

• As determined by the Bank from to time.

­ Security/ Collateral:

• Loan above Tk.10.00 lac must be secured by 200% fixed asset or 100% financial asset.
• Hypothecation/ Lien / Registration / Mortgage of Offered/Procured /Purchased/ Any other asset, acceptable to the bank, as feasible depending on the type of asset.
• Comprehensive 1st party insurance coverage of asset favoring the bank, if applicable.
• Personal guarantee of the Applicant & Applicant’s spouse.
• Third party Guarantor shall be equal to or more creditworthy than the Principal applicant.

1. Education Loan :

  Customer Segment: Students of reputed Public / Private Universities, Medical / Engineering / Nursing Colleges & Institutes, Student studying Undergraduate, Post Graduate, Doctoral or Professional Courses (CA, CMA, CIMA, Marine, MBM, MBA, FCPS, FRCS, Bar-at-Law). Minimum Educational Qualification: HSC / A-Level Pass. Overseas Education in any reputed educational institution. Person having overseas job offer at hand, bound by training /course requirement. Pre-qualification:

• The applicant must have (a) Chatro-Bondhu Account (EL-19) or, (b) Overseas Student File or, (c) Overseas Scholarship/University Acceptance.

  Parents/Guardians/Guarantors Qualification:

• Guarantor having sufficient net cash flow to deposit installments regularly. Parent/Guardian/Guarantor who are eligible shall be referred to as Guarantor.

    Purpose:

• Student support to bear (1) Tuition Fees (2) Living Cost (3) Other Educational Expenses (4) Consultants Fee (5) Visa Processing fees (6) Traveling Cost (7) Document / Other verification Fees (8) Purchase of Educational Equipments/Gadget (9) any other cost not stated above but acceptable to the Bank.

    Nationality & Age Limit:

• Bangladeshi by birth.

  Minimum Income:

• Gross Monthly Income of the Customer/Guarantor should be at least Tk. 30,000/- per month. The Customer/Guarantor must have sufficient net cash flow to repay the loan installments.

Loan Size:

• Minimum 00 Lac Maximum Tk. 10.00 Lac

Maximum Term of Loan:

• 4

  Rate of Interest:

• As determined by the bank from to time.

Security/ Collateral:

• Mortgage of any tangible asset having forced sale value of at least double the loan amount or Lien on financial asset having value at least equivalent to the loan amount.
• Any other security acceptable to the Bank.
• Personal guarantee of the applicant & applicant’s spouse.
• Third party Guarantor shall be equal to or more creditworthy than the principal applicant.

• Overseas Job Loan:

  Customer Segment:   Person having valid Job Offer / Akama / Green Card / Business Visa / Resident Visa / Work Permit Visa. Person moving overseas for on the job training with subsequent Job prospect. Person having business overseas evidenced by business documents. Purpose:

• Travel expenses, marital expenses, Educational expenses, Festival expenses, Home construction, House renovation, Land purchase, Transport purchase, Office equipment, Professional equipment purchase, office space purchase, shop space purchase, Office decoration, Household durables / Equipments / Electronics purchase, Any other lawful purpose acceptable to the Bank.

    Nationality & Age Limit:

• Bangladeshi by birth.
• Minimum age 25 years / Maximum age 57
• Loan tenor shall not exceed 62 years of age.

    Minimum Income:

• Net Income should be at least Tk. 50,000/- per month (To be substantiated by evidence).

    Loan Size:

• Minimum 00 Lac Maximum Tk. 50.00 Lac

Maximum Term of Loan:

• 5

    Rate of Interest:

• As determined by the bank from to time.

    Security/ Collateral:

• Registered mortgage/ registration of fixed asset in the name of the bank having value of at least two times the loan applied for.
• Lien of financial asset having value of at least equivalent to the loan amount.
• Personal Guarantee of the applicant & applicant’s spouse.
• Third party Guarantor shall be equal to or more creditworthy than the principal applicant.
  • SME Financing:

SME Loan is special financing facility for small and medium sized trading, manufacturing and service industries spread across the country. The product offers term loan/ lease finance/ hire purchase facilities for the purpose of working capital finance, fixed assets purchase or lease or expansion of business premises under equal monthly installment loan facility or structured repayment method. PPG for SME Finance has published by letter no. JBL/HO/SME/2009/16431  dated July 12, 2009. These loans are processed through SME Division. SME products are as follows:

i)                               Jamuna Bonik (Import Finance)

To facilitate the foreign trade transactions of the SME clients, Jamuna Bank is offering a product named ‘Jamuna Bonik’.

Purpose

To settle foreign trade payment & import document retirement line (mainly import financing, e.g., L/C and LTR facility).

Key Features

# Loan Amount: Min. BDT 5.00 lac to Max. BDT 50.00 lac.

# Tenure: For each L/C highest 04 months and for each LTR highest 06 months.

# L/C Margin and Commission: As per negotiation.

# Fast and quality service.

# No hidden charge.

Eligibility

# Having business experince for at least 2 years in the same line.

# Age Limit: 20 years to 60 years.

Required Documents

# Last twelve months’ sales statement.

# Last twelve months’ bank statement.

# Valid Trade License of last two years.

# National Voter ID/ Passport of the borrower.

# Photographs of the borrower and the guarantors.

ii)                            Jamuna Chalantika

It is a working capital solution [50% term loan & 50% revolving credit (cash credit) facility] to run the business smoothly.

Purpose

To meet up working capital requirement of the business.

Key Features

# Loan Amount: BDT 5.00 lac to BDT 50.00 lac.

# Tenure: For revolving loan- Maximum 01 year (Renewable).

                   For Term Loan- Maximum 36 months.

# Interest Rate: Competitive interest rate.

# Fast and quality service.

# No hidden charge.

# Registered Mortgage of Property is required.

Eligibility

# Having business at least 2 years in the same line.

# Age Limit of the Borrower : 20 years to 60 years.

Required Documents

# Last twelve months’ sales statement.

# Last twelve months’ bank statement.

# Valid Trade License of last two years.

# National Voter ID/ Passport of the borrower.

# Photographs of the borrower and the guarantors.

# Utility bills of business.

iii)                          Jamuna Green

Jamuna Green is an ECO friendly product. Under this product, you can get finance for ETP plants in different sectors, Eco friendly vehicles, Eco friendly fields (reduce CO₂ emission), Bio Fertilizer, Bio gas plants, Solar plants and Eco friendly any other business. Mode of finance shall be Term Loan mainly.

Purpose

# To facilitate establishment of eco friendly projects.

Key Features

# Loan Amount: Max. 300 lac.

# Tenure: Max. 60 months.

 # Interest Rate: Competitive interest rate.

# Fast and quality service.

# No hidden charge.

Eligibility

# Having business for at least 2 years in the same line.

# Age Limit: 20 years to 60 years.

Required Documents

# Last twelve months’ sales statement.

# Last twelve months’ bank statement.

# Valid Trade License of last two years.

# National Voter ID/ Passport of the borrower.

# Photographs of the borrower and the guarantors.

# Utility bills of the concerned business.

iv)                           Jamuna Jantrik

Jamuna Jantrik is a lease finance faciliy for SME clients to puchase any machine or vehicle for business.

Purpose

# To procure machinery or vehicle for SME business purpose.

Key Features

# Loan Amount: BDT 5.00 lac to BDT 50.00 lac.

# Tenure: Max. 60 months.

# Interest Rate: Competitive interest rate.

# Fast and quality service.

# No hidden charge.

Eligibility

# Having business for at least 2 years in the same line.

# Age Limit: 20 years to 60 years.

Required Documents

# Last twelve months’ sales statement.

# Last twelve months’ bank statement.

# Valid Trade License of last two years.

# National Voter ID/ Passport of the borrower.

# Photographs of the borrower and the guarantors.

# Utility bills of the concerned business.

v)                             Jamuna Nari Uddogh (Women Entrepreneur Loan)

About 50(fifty) percent of our total population is women and many of them have succeeded as a business entrepreneur. To give our incomparable ladies some extra ease and to help them to get financial freedom, Jamuna Bank Ltd. is offering a product ‘Jamuna Nari Uddogh’. To make your dream come true, we are always with you as a true friend.

Purpose

Any justifiable business purpose.

Key Features

# Loan Amount: BDT 3.00 lac to BDT 50.00 lac.

# Tenure: For Trading & Service Industry 36 months.

                   For Manufacturing industry 42 months.

# Interest Rate: 10% – the lowest interest rate.

# Fast and Quality Service.

# No hidden Charge.

# Up to BDT 25.00 lac is collateral Free.

Eligibility

# having business at least 2 years in the same line of business.

# Age Limit: 25 years to 60 years.

Required Documents

# Last Twelve months sales statement.

# Last Twelve months bank statement of transactional account.

# Valid Trade License of last two years.

# National Voter ID/ Passport/ Ward Commissioner/ UP Chairman certificate of the borrower.

# photograph of the proprietor and the guarantors.

# Utility bill of business.

vi)                Jamuna NGO Shohojogi

Jamuna NGO Shohojogi is a product for under previledged people of remote areas through NGOs. It ensures wholesale financing through the reputed NGOs in the country whose past records are remarkable, repayment behaviours are satisfactory, growth rates are significant and above all loan monitoring & recoveries are above 95%.

Purpose

To provide loan facility to the small enterprise through wholesale lending to the NGOs.

Key Features

# Loan Amount: Max. limit BDT 500.00 lac

# Tenure: Max. 48 months.

# Interest Rate: Competitive interest rate.

# Fast and quality service.

# No hidden charge.

# Monthly instalment basis.

Eligibility

# Any type of NGO having certificate from Micro Credit Regulatory Authority to operate business in Bangladesh.

# Having business at least for 5 years in the same line.

# Age Limit: 20 years to 60 years.

Required Documents

# Last twelve months’ sales statement.

# Last twelve months’ bank statement.

# Valid Trade License of last two years.

# Personal guarantee of all the directors.

vii)            Jamuna Shachchondo

Jamuna Shachchondo is a combined product of both overdraft and term loan facilities.

Purpose

To meet up working capital requirement of the business.

Key Features

# Loan Amount: BDT 15.00 lac to BDT 50.00 lac.

# Tenure: For 1st time loan- 12 months to 30 months.

                   For Repeat Loan- 36 months to 48 months.

# Interest Rate: Competitive interest rate.

# No additional charge.

# An FDR shall be taken covering minimum 25% of the total loan amount. The SOD facility shall be allowed upto 90% of the FDR amount.

# Guarantor must be renowned business person and have permanent residence in the commanding area/ possession of the shop.

# Business premise must be owned/ possession held by the borrower.

Eligibility

# Having business for at least 5 years in the same line.

# Age Limit: 30 years to 55 years.

Required Documents

# Last twelve months’ sales statement.

# Last twelve months’ bank statement.

# Valid Trade License of last two years.

# National Voter ID/ Passport of the borrower.

# Photographs of the borrower and the guarantors.

# Utility bills of the concerned business.

viii)          Jamuna Sommriddhi

By this product, Jamuna Bank is offering four times loan facility against the  encashable securities like FDR for avoiding encashment of long held savings.

Purpose

Any justifiable business purpose.

Key Features

# Loan Amount: Max. limit 50.00 lac.

# Tenure: Max. 48 months.

# Interest Rate: Competitive interest rate.

# Fast and quality service.

# No hidden charge.

# Lien of FDR of 25% of the total loan amount.

Eligibility

# Having business for at least 2 years in the same line.

# Age Limit: 20 years to 60 years.

Required Documents

# Last twelve months’ sales statement.

# Last twelve months’ bank statement.

# Valid Trade License of last two years.

# National Voter ID/ Passport of the borrower.

# Photographs of the borrower and the guarantors.

# Utility bills of the concerned business.

ix)               Jamuna Swabolombi

Jamuna Swabolombi is a working capital finance in the form of term loan without any  collateral.

Purpose

Any justifiable business purpose.

Key Features

# Loan Amount: BDT 5.00 lac to BDT 25.00 lac.

# Tenure: For Trading & Service Industry 30 months.

                   For Manufacturing industry 36 months.

# Interest Rate: Competitive interest rate.

# Fast and quality service.

# No hidden charge.

# Up to BDT 25.00 lac is collateral Free.

Eligibility

# Having business for at least 2 years in the same line.

# Age Limit: 20 years to 60 years.

Required Documents

# Last twelve months’ sales statement.

# Last twelve months’ bank statement.

# Valid Trade License of last two years.

# National Voter ID/ Passport of the borrower.

# Photographs of the borrower and the guarantors.

# Utility bills of the concerned business

• Credit Card:

Credit cards for local currency and foreign currency are processed through our ADC & Card Division.

• Agriculture Loan:

These loans are processed through our Agriculture department. PPG for Agricultural loan has published by Credit Division Circular no. 34/10 dated 22-09-2010. Agricultural & Rural Credit Product & Services of Jamuna Bank Ltd are as follows:

• Loan Syndication & Structured Finance:

  Syndication is a joint financing by more than one banks/financial institutions to the same clients against a common security. This is done basically to spread the risk. It also provides a scope for an independent evaluation of risk and focused monitoring by the agent/lead bank. In Syndication financing banks also enter into an agreement that one of the lenders may act as Lead Bank. In such case, lead bank has to co-ordinate the activities at various stages of handling the proposal i.e. appraisal, sanction, documentation, sharing of securities, disbursement, inspection, follow-up, recovery, distribution of instalments/interest etc. It may also call meeting on syndication members, whenever necessary to finalise any decision. Depending on merit Jamuna Bank Limited shall participate in syndicated financing either as a lead arranger or a syndicate partner. Types of Syndicated facilities:

1. Working Capital Syndication
2. Project Finance loan
3. Credit enhanced syndicated loan
4. Loan for BMRE/New Project
5. Local Currency Loan under Structured Finance etc.

Parties to the Syndication:

1. Arranger (Single Arranger/Co-Arranger/Arranger Group). Arranger must obtain mandate from the customer/borrower.
2. Participants (Banks/Financial Institutions etc.)
3. The Facility Manager/Agent (Banks/Financial Institutions).

Features:

1. More than one bank/F.I. provide this loan under syndication agreement to a same business entity against common security.
2. ii) Syndication loan may be non-funded, revolving funded limit and long term

loan in nature. iii) Primary security: Pari passu security sharing agreement on the fixed and floating assets (present and future) among the lenders.

• Employee’s House building Loan:

Bank provides the loan facility to its employees for construction of building/ purchase of flat. The loan is operated by Employee’s House building Loan Scheme of the bank.

• Employee’s Car Loan Scheme:

Bank provides car loan facility to the executives of the bank for purchase of reconditioned/ brand new cars under the scheme.

• SIFCO:

  SIFCO is one kind of short term credit facility which is allowed to reputed and prudent customers only on a reduced interest rate. SIFCO is an abbreviated form of Special Investment Fund for Corporate. This is one time financial accommodation for short period maximum 6 (six) months to meet some specific purpose. The loan is adjustable within the validity and not renewable and no transaction is allowed. It can be repaid with instalments or lumpsome basis. 3.2  Non- funded credit facility: Any type of credit facility which involves direct commitment of bank on behalf of customer for payment to third party under some agreed conditions refers to non-funded credit facility. The followings are the non-funded credit facilities/limits practiced in the Jamuna Bank Limited. 3.2.1 Letter of Credit (L/C): This is an obligation undertaken by the Bank against which the customer imports/procures any permissible items from both local and foreign sources. Features:

600. It is governed by UCPDC-600.
601. L/C has to be opened in accordance with Foreign Exchange Regulation Act, guidelines for foreign exchange transactions, current import policy order and the FE/ID circulars from Bangladesh Bank as well as our bank.

• Bank enters into two separate contracts in case of opening any L/C, one is with the customer and other is the L/C itself with the exporter/supplier (beneficiary).

1. All specific L/C and each L/C created under a revolving limit are demand loan by nature.
2. Bank is obliged to pay the beneficiary on complied presentation of documents or upon production of stipulated documents thus Bank does not deal with the goods.
3. There are different types of L/C but the following are practiced in Jamuna Bank Limited
4. Sight L/C: When payment against the L/C is made on sight of the shipping documents/bill.
5. Usance or Deferred Payment (DP) L/C: When Bank gives acceptance for payment at a pre agreed later time upon sight of the shipping documents/bill. In usual cases deferral period varies from 30 days to 360
6. Back to Back (BTB) L/C: The BTB L/C is opened on the basis of an existing non-transferable L/C (Master L/C) sales contract in favor of another beneficiary. Usually, BTB L/Cs are opened against sales contract/master export L/C to mobilize export inputs.

• Pricing mode: Commission usually on quarterly basis.
• Primary security; L/C margin, L/C related shipping documents in case of Sight/DP L/C, acceptance in case of DP L/C and Lien on master L/C in case of BTB L/C.

3.2.2   Back-to-Back L/Cs: The BTB L/C is opened on the basis of an existing non-transferable L/C (Master L/C)/Sales contract in favor of another beneficiary. Usually, BTB L/Cs are opened agaisnt sales contract/master export L/C to mobilize export inputs. Features:

1. i) Back-to-Back L/C is opened against Export L/C or sales contract.
2. ii) Back-to-Back L/C value is determined on FOB value of Export L/C or sales contract complying the prescribed percentage of import Policy Order.

• iii) Pre-shipment finance (such as PC) may be allowed only on receipt of entire raw materials in time at the factory premises of the customer. Pre shipment finance and Back-to-Back L/C liability altogether will not exceed 90% of FOB value of the export L/C. corresponding PC liability shall be adjusted upon negotiation/repatriation of the export bill.

1. iv) All specific BTB L/C and each BTB L/C created under a revolving limit are demand loan by nature.
2. v) No accepted bill drawn under Back-to-Back L/C shall be kept overdue beyond its due date of payment as per acceptance communicated by the Bank.
3. vi) Pricing mode: Commission usually on quarterly basis.

• vii) Primary security: Lien on master L/C in case of BTB L/C.

While allowing Back to Back L/Cs and pre-shipment finance on account of export oriented industries operating under Bonded Warehouse system, the following norms shall be followed:

• Branches will ensure the compliance issue of the 100% export oriented RMG customers.
• Export L/C must be examined carefully to ascertain its genuineness and important points i.e shipment validity, credit validity, payment/availability clause, reimbursement clause etc. to be noted-down to ensure that nothing is adverse to execute the export order and to receive the payment.
• Present outstanding of Back-to-Back L/Cs and Bills will be taken together to determine the exposure of the customer against the sanctioned limit approved for import/procurement of raw materials.
• To open Back-to-Back L/C on behalf of a new customer, prior approval from Head Office must be obtained.
• Back-to-Back L/C may be opened against sales contract of regular buyers of the customer. However, branch may have to take prior approval with regular limit for one year or separately up to the validity of revolving limit.
• Credit report of the buyer to be obtained before opening of BTB L/C at least once in a year.
• Forced loan i.e SOD(Export) to be allowed by the Branch to pay out overdue accepted bill drawn under Back-to-Back L/Cs and will obtain post-facto approval of Head Office.
• If forced loan is created for existing customer, approved BTB L/C and PC limit will be suspended and case to case approval from Head Office to be obtained for opening of further BTB L/C or allowing PC or any other new facility till full adjustment of the forced loan liability.
• Board/EC shall be apprised quarterly on the position of Forced Loan.
• All imports and exports are subject to Import & Export Trade Control Regulations and as per Guidelines for Foreign Exchange Transactions. The Ads will meticulously follow these regulations while opening L/Cs and negotiating export documents.

  3.2.3  UPAS L/C (Usance Payable at Sight):   UPAS is an usance L/C that is payable at sight basis to the seller (beneficiary) by the issuing Bank or its correspondent Bank through discounting the import usance bill, while the payment settlement from the applicant (buyer) to the issuing Bank will be made at the end of usance period.   Eligibility to avail UPAS L/C: Customers who are allowed by Bangladesh Bank to enjoy deferred payment import credit facilities as per 33(a), Chapter-07 of Guidelines for Foreign Exchange Transaction (vol 1). Mode of Settlement: Upon receipt of original shipping documents, if accepted, the L/C liability will be converted into ABP liability; however, payment will be made to beneficiary at sight by our Offshore Banking Unit (OBU)/ any Foreign Bank as nominated by our International Division through bill discounting as per agreed interest rate. ABP liability along with interest of bill discounting will be adjusted within the maturity by building up fund from the sales proceeds or from own sources of the customer. Rate of interest of bill discounting to be determined by our OBU/International Division, Head Office before opening of L/C on case to case basis. Branch shall communicate our International Division, Head Office before opening of the UPAS L/C to obtain necessary permission and guidance in this regard. 3.2.4  ABP:   ABP stands for ‘Accepted Bills for Payment’. This is acceptance made by the Bank for payment after a certain period against shipping documents (bill) for import through Usance (DP) L/C. It is an interim arrangement that allows time for the importer to make payment. Features:

1. This is a consequential facility and does not require pre-facto or post-facto approval.
2. All specific ABP and each ABP created under a revolving limit are demand loan by nature.

• ABP is created against import Usance (DP) L/C.

1. It will have the tenure as per the L/C term such as 30, 90, 120, 180 or 360 days but subject to Bangladesh Bank guidelines/directives.
2. The amount of ABP is dependent on L/C. More than one ABP may be created against a single L/C, where part shipment is allowed. However, aggregate amount of ABP created must not exceed the value of L/C ±
3. Importer receives shipping documents after creation of ABP.

• At the end of the ABP tenure, payment to the beneficiary would be made by the Bank. Simultaneously, importer would pay equal amount to the Bank.
• Usually no post-import finance is allowed.

1. Pricing mode: Commission usually on quarterly basis.
2. Primary security: Bill of Exchange signed on the back by the importer and L/C Application and Agreement Form.

  3.2.5  Bank Guarantee (BG): A Bank Guarantee represents an unconditional undertaking of the Bank to pay a specified amount of money if the party for which the bank is giving the guarantee does not fulfill its contractual obligations. Features:

1. All specific BG and each BG created under a revolving limit are demand loan by nature.
2. Bank is obliged to pay the beneficiary upon lodgement claim by the beneficiary.

• There are different types of BG but the following are practiced in Jamuna Bank Limited:
  • Bid Bond (BB): This guarantee is provided in favor of the tender inviting authority to participate in a tender on behalf of the bidder (Customer). Bid Bond bears very short term validity period. Unsuccessful bidder’s Bond is returned immediately after decision on work/supply-awarding and successful bidder’s Bond is replaced by PG within the time allowed by the authority.

• Performance Guarantee (PG): This guarantee is provided in favor of the work/supply order awarding authority for assurance of performance of the work/supply order on behalf of the contractor/supplier (Customer). Usual amount of PG is 10-15% of work/supply order value; however, it depends on the work/supply order awarding authority. Usually its validity covers the work order validity plus warranty/defect liability period.

• Advance Payment Guarantee (APG): This guarantee is provided in favor of the work/supply order awarding authority on behalf of the contractor/supplier (Customer) in return of the advance made by them for mobilization of material, equipments, etc. Usual amount of APG is 10-20% of work /supply order value; however, it depends on the work/supply order awarding authority. APG gradually liquidates with the recovery of the mobilization advance by the work/supply order awarding authority from each running bill.

• Retention Money Guarantee/Retention Bond: This guarantee is provided in favor of the work/supply order awarding authority on behalf of the contractor/supplier (Customer) after completion of work/supply order for withdrawing the money retained by them from the bills. Usual amount of this Guarantee is 5% of work/supply order value; however, it depends on amount retained by and the terms of work/supply order awarding authority. Usually its validity ends with the warranty/defect liability period.

• Payment Guarantee/ Suppliers Credit Guarantee: This guarantee is provided in favor of the suppliers/service providers and on behalf of the Customers to avail certain amount of supplies/services on credit. It is usually a longer term (1-5 years) guarantee.

• Guarantee against Counter Guarantee of other Bank/NBFI (Foreign or Local): This guarantee is provided as per instruction of Counter Guarantee of other Bank/NBFI (Foreign or Local). Details of the guarantee text and terms are stipulated in the Counter Guarantee. In case of any claim the Counter Guarantee providing Bank/NBFI will reimburse the amount to the issuing Bank thus the Bank/NBFI has to be acceptable to the issuing Bank.

• Customs Guarantee: This guarantee is provided in favor of the Customs Authority of Bangladesh on behalf of the Customer to clear imported goods postponing payment of customs duty. Usually exporters avail this kind of the guarantee. Sometimes this guarantee covers the Customs’ claimed amount (as duty) when the customer chooses to go for litigation.

• Other Bank Guarantees: Besides these, time to time Bank provides different other guarantees in the name of ‘Bank Guarantee’ to meet customer requirements.

1. Pricing mode: Commission usually on quarterly basis.
2. Primary security: Counter Guarantee of the customer.

3.2.6   Commercial Paper:

Commercial Paper (CP) is a money market instrument to meet short-term demand of the fund. CP refers to a promissory note with a maturity of not less than 30 days and not more than 1 (one) year that is sold at a fixed rate of interest or discount from face value.  To ensure the interest of the bank CP may be backed by guarantee.

CP shall be issued in denominations of BDT.10,00,000.00 and multiplies thereof. Bank shall not invest in any CP issued by the organization in which its sponsor shareholders of their affiliates have interest.