1. What is Foreign Exchange

• Foreign exchange is the trading of currencies.

2. What is exchange position

• Exchange Position is the status of total holding of foreign currency by the Authorized Dealer bank on a particular point of time.

3. What is open position

• Balancing amount between the purchase and the sale of foreign currency

4. What is Balance of payment

• A statistical statement that systematically summarizes, for a specific time period, the economic transactions of an economy with the rest of world.

5. What is Balance of Trade

• Difference between export and import

6. Components of Balance of payment

• Trade balance (Import ~Export), service, income, current transfers, capital account, financial account, errors & omissions and reserve

7. What is Convertibility of Currency

• Convertibility is the ability of the owner of the currency to exchange it for other currencies.

8. From when our currency is partially convertible

• October 20, 1993

9. What is Foreign Remittance & Type

• Foreign remittance means remittance of foreign currencies from one place/person of a country to another of that country

Types:

1. Inward Remittance
2. Outward Remittance

10. What is Exchange Rate

• The exchange rate is the price of one country’s money in terms of another country’s money.

11. How can we determine the Exchange Rate

• From the demand and supply of the foreign currency.

12. What is Contingent Liability

• Contingent liabilities are liabilities that may or may not be incurred by an entity depending on the outcome of a future event.

13. What is SWIFT

• Society for World-wide Interbank Financial Telecommunication

14. Meaning of IPO, At last IPO implementation date

• Import Policy Order, 21 January, 2010.

15. What is LC

• LC is a undertaking issued by a bank on behalf of buyers or for its own account, to pay the seller (beneficiary) the value of the drafts and /or documents provided that the terms and conditions of the documentary credit are complied with.

16. What is BTB LC

• The LC which is back by Master or Export LC

17. Consumption of BTB LC against Master LC as per IPO

• Knit, Woven-80%, Sweater-80% and Kids-85%

18. Type of Export Finance

• Pre-shipment:

Export cash credit (Hypothecation)

Export cash credit (Pledge)

Export cash credit against Trust receipt

Packing credit

BTB LC

Credit against red-clause letter of credit

• Post-shipment:

Negotiation of documents LC

Purchase of DP & DA bills

Advance against export bills surrendered for Collection

19. What is negotiation

• Negotiation means the purchase by the nominated bank of drafts (drawn on a bank other than the nominated bank) and/or documents under complying presentation, by advancing or agreeing to advance funds to the beneficiary on or before the banking day on which reimbursement is due to the nominated bank.

20. Meaning of UCPDC From when UCPDC-600 implemented

• Uniform Customs and practice for Documentary Credits, 01 July 2007.

21. How many articles are there in UCPDC-600, URC 522-26, URR 725-17 and ISBP 681

• UCPDC 600-39, URC 522-26, URR 725-17, ISBP 681-185

22. LC opening formalities and required documents/papers

• LC could be opened if the following conditions are fulfilled by the customer
  1. He must maintain account with the bank
  2. He must place a request on their letter head pad for issuance of LC

• Prescribed application from duly filled and signed, verified buy authorized officials of bank and stamped

1. H/O Approval
2. LCAF & IMP form duly filled &signed
3. Valid IRC and import permit

• Collateral Security (As per HO sanction)
• Margin of LC (As per HO sanction)

1. Trade license
2. Vat & Tin certificate
3. Approval of competent authority (If necessary)

• Proforma invoice / Indent
• Credit report
• NOC from other bank

1. Clearance of bill of entry

• Insurance cover note with money receipt and vat
• Permission from Ministry of Commerce (If CIF, CIP)
• Charge documents
• Environment certificate

23. When & why we obtain credit report & limit of credit report

• Credit report is needed before opening of the LC. To know the financial condition of the exporter and make decision based on that report to minimize the country and financial risk.

Limit of credit report

Indent-USD 20,000(TWENTY THOUSAND DOLLAR), Proforma-USD10,000(TEN THOUSAND DOLLAR).

24. What is B/L & Types of B/L

• B/L gives proof of shipment/carriage of goods from port of loading/port of shipment/place of receipt to port of discharge/place of destination. Usually, B/L is the documents of title of goods and act as the evidence of contract for the carriage or transportation of the goods between the shipper and the carrier.
  1. Through B/L
  2. Short form/blank back B/L

• Straight B/L

1. Stale B/L
2. Port or custody B/L
3. Mate’s Receipt

• On board B/L
• Received for shipment B/L

1. Clean & Not clean B/L
2. Negotiable & Non-Negotiable B/L
3. Liner party B/L

• Charter party B/L
• Groupage B/L
• Forwarder’s cargo receipt

1. Shipper’s load & count B/L

• Freight paid & freight collect B/L

25. What is Documents

• In the context of documentary credit operations “documents” reflect only those papers which fulfill the terms and conditions of the LC.

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26. Why B/L is Quasi Instrument

• B/L is Quasi Instrument as it is transferrable but not negotiable

27. Yearly Quota for Traveler for issuance of Cash currency:

28. SAARC-$5000 & Outside of SAARC -$7000 at a time $ 5000.

29. Quota for medical purpose

• $10,000.00, subject to the approval of specialized doctors or hospital

30. Meaning of ACU & how much country is evolved here

• Asian Clearing Union. Bangladesh, India, Iran, Myanmar. Nepal, Pakistan, Sri-lanka, Bhutan, Maldives. HEAD QUARER IRAN.

31. Can we use the fund from ERQ a/c for HAJJ purpose?

• No

32. Meaning of LCAF & how much copy here for what purpose

• Letter of Credit Authorization Form (06 Pages)

First Copy-for exchange control purpose

Second copy-for custom purpose

Third copy-for statistical purpose

Fourth copy-for CCI & E’s office

Fifth Copy-for Bangladesh bank regulation unit

Sixth copy-for office copy

33. Meaning of EXP & Reporting formalities

• Meaning of EXP –Export Permission (04 Pages)

Original-submit to the customs authority during shipment

Duplicate-submit to Bangladesh bank after document sending

Triplicate-submit Bangladesh bank after proceed realization

Quadruplicate-keep for office copy

34. Who will issue short shipment certificate

• Issued by C & F agent, and verified by the customs

35. What is INCOTERMS & at last from when INCOTERMS -2010 has been implemented

• International Commercial terms, 01 January, 2011.

36. Type of INCOTERMS:

• 11

Any Mode of Transport

CIP – Carriage and Insurance Paid
CPT – Carriage Paid To
DAP – Delivered At Place
DAT – Delivered At Terminal
DDP – Delivered Duty Paid
EXW – Ex Works
FCA – Free Carrier

Sea and Inland Waterway Transport Only
CFR – Cost and Freight
CIF – Cost, Insurance and Freight
FAS – Free Alongside Ship
FOB – Free On Board

37. Types of Commercial Invoice
    1. Consular invoice
    2. Proforma invoice

• Customs invoice

1. Certified invoice

38. Time Limit of LCAF for opening of LC

• 180 Days

39. Time Limit of SHIPMENT for commercial & industrial LCAF

• Commercial-09 Months, industrial-17 Months

40. What is Re-export

• Value addition of 10% of export of imported goods by changing the quality

41. What Is PSI & how much PSI company are involved in our country

• Pre-shipment Inspection

Four Company:

1. SGS Societe Generale de Surveillance S.A., Geneva, Switzerland. (A and B)
2. BIVAC International S.A., France. (C)

• OMIC Overseas Merchandise Inspection co, Ltd., Japan. (D)

1. INTERTEK International Ltd., United Kingdom. (E)

42. What is THE DIFFERENCE BETWEEN CRF & CFR

• CRF-Clean report of findings (PSI), CFR-Cost and freight (Incoterms)

43. Type of IRC based on limit

• First-                  100,000.00

Second              500,000.00

Third                 15, 00,000.00

Fourth               50, 00,000.00

Fifth                   10,000,000.00

Sixth                  Above 10,000,000.00

44. What is other documents

• All documents mentioned in LC excluding Transport documents, commercial Invoice and insurance Documents.

45. Who will renew ERC

• CCI &E

46. Shipment from which country is destined for Bangladesh

• Israel

47. What is late presentation

• Presentation documents after the date presentation in the LC

48. Yearly limit for advance payment except Myanmar:

• USD 50,000.00

49. Can we open any BTB LC against SALES CONTRACT?

•  Yes

50. For which commodities, country of origin mention in package is not obligated

• Bulk Items

51. What is advising bank

• Advising bank means the bank that advises the credit at the request of the issuing bank

52. What banking day

• Banking day means a day on which a bank is regularly open at the place at which an act subject to these rules is to be performed

53. How many banks are involved (at least) for procedure of LC opening to retirement

• At least two banks

Issuing bank

Advising bank

Confirming bank

Negotiating bank

Reimbursing bank

54. What is Lodgment

• Receiving the documents
• Inform the customer about the documents
• Open a PAD account by patting an entry into PAD register
• Conversion of currency of documented value
• Make payment.