Non-AD Branches & Functions of TFPC !

Functions of TFPC:

XYZ Bank Limited started its trade operations in 2001 and all the trade activities were carried out by XYZ’s  21 (Twenty One) Authorized Dealer (AD) Branches. In the year 2013, XYZ established the Trade Finance Processing Center (TFPC) at Dilkusha C/A, Dhaka and Chittagong. Since then the TFPC does the processing of all the trade activities of Non-AD branches by using state of the art technology and well groomed team. The trade activities of 58 Non-AD branches are routed through the TFPC Dhaka and 12 Non-AD branches are routed through the TFPC Chittagong Zone.

Trade Finance Processing Center of XYZ is performing in a cost effective and environmental friendly way by reducing use of time, resources and labors to achieve its corporate motto “Your Partner for Growth”. All sorts of LCs, bills, payments, negotiation and other transaction related to foreign trade are routing from our TFPC in well organized and effective way. TFPC is running complying all Standard Operating Procedures (SOP) & rules and regulations of national and international bodies. TFPC also helps the efficient & easier management of information. Thus, the centralization of the trade services is one step forward to the bank’s commitment of providing seamless processes and services to its customers.

Presently, Trade Finance Processing Center (TFPC) processes and manages the foreign trade business of non-AD branches of JBL from one center efficiently & in such way that non-AD branches and their customers do not feel remoteness their foreign trade business. The unit is focused to ensure very specialized service to non-AD branches. TFPC is a separate unit of Head Office & having its Unit Code 0998 (Dhaka) & 0997(Chittagong Zone). TFPC uses Head Office AD license containing Swift Code. (Dhaka) & (Chittagong). Foreign Exchange Transactions of all existing AD Branches will become in the purview of the TFPC with the passage of time in 3rd phase upon capacity building of our own.

Export:

• Foreign Bill collection, Proceeds Realization
• L/C Transfer
• EXP Issue
• BB L/C:
• BB L/C opening.
• Document scrutiny
• Providing Acceptance
• BB L/C payment
• Reporting and related other works.

Import:

• L/C opening & other related Works
• Scrutiny, Lodgment, Endorsement &
• Retirement of Import documents.
• Collection of Bill of Entry & Matching with IMP form.
• Reporting and related other works.

Remittance:

• Inward & outward Remittance.
• Proposal Processing of buying house & indent commission agent
• Reporting and related other works

Bank Guarantee:

• Issuance of Foreign Bank Guarantee
• Reporting and related other works.

Procedures of Operation of Foreign Exchange Business by Non-AD Branches:

Necessary Guidance & Vouching Process & Procedures of Operation of Foreign Exchange Business by Non-AD Branches through TFPC are appended in ID Circular No. 1411/2013 Dated November 10, 2013.

With a view to streamline & facilitate the overall Trade Finance (Local & Foreign) activities of the Bank in a centralized platform, we have already established & started operation of our separate Trade Finance Processing Center of the Bank at Head Office level w.e.f. 08.01.2013 and Zonal- Trade Finance Processing Center (TFPC) at Chittagong w.e.f. 12.05.2013 as approved by the Management. In 1st phase, these Trade Finance Processing Centers have started with Routing/ Processing all Local Documentary Bills/ Accepted Bills business of Non-AD Branches of the Bank.

Now, in 2nd phase, we are going to process Cash L/Cs (Sight & DP) and Export Operation of Non-AD Branches through TFPC, Dhaka & Zonal- TFPC, Chittagong with immediate effect to widen the activities of TFPCs. Henceforth, all our Non-AD Branches will be able to operate Foreign Exchange Business (Import, Export, Foreign Bank Guarantee etc.) as an AD Branch.

Foreign Exchange Transactions of all existing AD Branches will become in the purview of the TFPC with the passage of time in 3rd phase upon capacity building of our own.

For day-to-day operational convenience of our Non-AD Branches and TFPCs, necessary Guidance & Vouching process are given below:

Cash L/C (Sight & DP) Operation:

All Non- AD Branches & TFPCs are instructed to follow the undernoted Guidelines/Procedures to handle/settle the Cash L/Cs (Sight & DP): 

1.Clients of Non-AD Branches will submit their L/C opening request to the respective Non-AD Branches.

2.Non-AD Branches will get required approval from Head Office (Corporate/CRM) and send the related papers/documents to the respective “Trade Finance Processing Center (TFPC)” for opening the L/C with a request letter.

3.Certified copy of valid IRC, TIN, BIN, VAT Registration Certificate and NOC from other Bank/Branch (where applicable) of each Importer must be kept in respective TFPCs.

4.Non-AD Branches will collect Documentary Credit Application (DCA) Form from G&CSD and deliver to the respective Importers.

5.Non-AD Branches will collect blank LCA Form from TFPC and supply the same to the respective Importer.

6.On getting the required documents (i.e. client’s request letter, LCAF, DCA, valid Pro-forma Invoice, Insurance Cover Note etc.) related to L/C opening from the clients, Non-AD Branch will verify the client’s signature and send the documents with their forwarding schedule to respective TFPC for processing the L/C.

7.Upon receipt of L/C opening request from Non-AD Branches, TFPC will process the documents (if, found in order) for issuance of L/C.

8.Once L/C is opened & transmitted, TFPC will send an acknowledgement copy of the L/C to the respective Non-AD Branch

9.After receiving the Import Documents, TFPC will scrutinize the documents. If the documents are found discrepant, TFPC will serve discrepancy notice to the Negotiating/Presenting Bank and notify the discrepancies to the respective Non-AD Branch for onward notification of the same to the client.

10.In case of discrepant documents, Non-AD Branch will obtain ‘Discrepancy Waiver Letter’ from the client, if the client desires and forward the same to TFPC at the time of lodgement.

In case of DP L/C, Acceptance Letter from the customer must be obtained by Non-AD Branch and must be sent to respective TFPC after verification of the signature of the Applicant.

12.Upon receipt of the Client’s Acceptance Letter, respective TFPC will confirm the maturity date to Negotiating/Presenting Bank through SWIFT.

13.Trade Finance Processing Center will perform L/C related Reporting & Regulatory compliance.

14.Trade Finance Processing Center will pass the following vouchers in the Ledger of the respective Non-AD Branch:

• Voucher for Cash L/C (Sight)
• L/C opening voucher
• Dr.- Customers Liability for L/C
• Cr.- Bankers Liability for L/C
• (Specific head related to L/C mentioned in Statement of Affairs)
• Dr.- Party’s A/C
• Cr.- Sundry Deposit –Margin on L/C
• Cr.- Income A/C –Commission on L/C
• Cr.- Income A/C –Postage/SWIFT
• Cr.- Income A/C –Courier Service
• Cr.- VAT A/C
• Cr.- Others, if any

• Voucher for Cash L/C (Deferred)
• L/C opening voucher
• Dr.-Customers Liability for L/C
• Cr.- Bankers Liability for L/C
• (Specific head related to L/C mentioned in Statement of Affairs)
• Dr.-Party’s A/C
• Cr.-Sundry Deposit –Margin on L/C
• Cr.-Income A/C –Commission on L/C
• Cr.-Income A/C –Postage/SWIFT
• Cr.-Income A/C –Courier Service
• Cr. VAT A/C
• Cr.-Others, if any

• Lodgement
• Dr.- Bankers Liability for L/C
• Cr.- Customers Liability for L/C
• (L/C liability reversed)
• Dr.-PAD A/C
• Cr.-Adjusting A/C- Cr. for Fx. Transaction of Head Office through Trade Module.
• Cr.-Income A/C –Exchange Earnings
• Dr.-Sundry Deposit –Margin on L/C
• Cr.-PAD A/C (for proportionate amount)

• Creation of Accepted Liability
• Dr.- Bankers Liability for L/C
• Cr.- Customers Liability for L/C
• (L/C liability reversed)
• Dr.- Customers liability for ABP
• Cr.- Bankers liability for ABP
• Dr.- Party’s A/C
• Cr.- Income A/C – Acceptance Commission
• Cr.- VAT A/C
• Cr.- Others, if any

• Retirement of Documents
• Dr.- PAD A/C (for charging interest)
• Cr.- Income A/C –Interest on PAD
• Cr.- Income A/C -charges, if any
• Dr.- Party’s A/C
• Cr.- PAD A/C

• Retirement of Documents
• Dr. Bankers liability for ABP
• Cr. Customers liability for ABP
• Dr.-Sundry Deposit –Margin on L/C.
• Dr.- Party’s A/C.
• Cr.- Adjusting A/C- Cr. for Fx. Transaction of Head Office through Trade Module.
• Cr.-Income A/C –Exchange Earnings.

Export Operation to Export Processing Zone (EPZ) and Abroad: 

1.Non-AD Branches will request their Clients / Beneficiary / Supplier to receive their Master Export L/Cs through TFPCs  The name of the Non-AD Branch must be mentioned in the L/C as ‘Advise Through Bank’.

2.TFPC will confirm the authenticity of the Export L/C and advise the same to the Client/ Beneficiary/ Supplier through Non-AD Branch.

3.Certified copy of valid ERC, IRC, TIN, BIN, VAT Registration Certificate and NOC from other Bank/ Branch of the client must be kept in respective TFPC.

4.The client may get the BTB L/C facility subject to proposal from Non-AD Branch and approval from Head Office.

5.For BTB L/C facility, Master Export L/C must be lien marked with respective TFPC.

6.TFPCs will open and settle BTB LCs/ ABPs complying all terms and conditions of Head Office (Corporate/ CRM) sanction advice and Regulatory compliance.

7. TFPCs will open and settle Packing Credit, SOD (Export) and other related Export/ Import Finance complying all terms and conditions of Head Office (Corporate/ CRM) sanction advice and Regulatory compliance.

8.TFPCs will pass all vouchers related to Trade Finance (Import/ Export) in the G/L of respective Non-AD Branch.

9.Upon request by the client, Non-AD Branch will issue EXP Form after collection of EXP number from TFPC.

10.Client will submit their Export Bills (All Original Shipping Documents as per LC / Contract) to the respective Non-AD Branch with copy of Duplicate, Triplicate & Quarduplicate EXP Form.

11.Non-AD Branch will send the ‘Export Bills’ to the TFPC for collection/ Negotiation  after scrutiny of the Documents at their end, mentioning their reference number. If the Documents are discrepant, Branch will inform the discrepancies to the Beneficiary.

12.Upon receipt of the Documents, Trade Finance Processing Center will scrutinize the Documents. If the Documents are discrepant, TFPC will inform the discrepancies to the concerned Non-AD Branch for onward intimation to the Beneficiary. After rectification, TFPC will send the same to the respective L/C Issuing Bank through their Forwarding Schedule (mentioning their Bill number).

13.Upon receipt of the ‘Discrepancy Notice’ (if any) from the L/C Issuing Bank, Trade Finance Processing Center will inform the respective Non-AD Branch for onward intimation to the Beneficiary.

Export Operation to Export Processing Zone (EPZ) and Abroad: 

• TFPCs will follow the below procedure for FDBC and FDBP:
• Creation of FDBC:
• Dr.- Contra- Foreign Documentary Bills Lodged (FDBL)
• Cr.- Contra- Foreign Documentary Bills for Collection (FDBC)
• Realization of FDBC:
• For ID
• Dr.- Respective Nostro A/C (at TT clean buying rate)
• Cr.- Adjusting A/c- Cr. for Fx. Transaction of TFPC G/L# 902152
• For TFPC
• Dr.- Adjusting A/c- Cr. for Fx. Transaction of TFPC G/L# 902152
• Cr.- Income- Miscellaneous Income- Miscellaneous Earnings (For collection charge)
• Cr.- Postage
• Cr.- Vat on Banking Services
• Cr.- Source Tax
• Cr.- Adjustment/ Reserve for Adjustment if any
• Cr.- Customer’s A/C (Balance amount)
• Cr.- Others, if any

Creation of FDBP against Sight Master L/C:

14. If the customer is already enjoying a sanction of FDBP limit and Documents are In Order (Compliant Documents), Trade Finance Processing Center will purchase the bill after complying all circulars and will obtain Disbursement Power (DP) from Credit Administration Division (CAD), Head Office for creation of FDBP and will pass the following entries:

• Dr.- FDBP Account- (In the name of respective Customer as approved, in GL of Non-AD Branch.
• Cr.- Postage , Cr.- Vat on Banking Services, Cr.- Adjustment/ Reserve for Adjustment if any,   Cr.-  Customer’s A/C (Balance amount), Cr.- Others, if any

15.  In case of case to case approval/ Discrepant Documents against Master Sight LC, Non-AD Branch will send their proposal through TFPCs to get required approval from Head Office (Corporate/ CRM) for purchasing the Bill with a request letter.

16. Trade Finance Processing Center will maintain a Register/Record for their Bills sent for Collection & follow up the cases with the L/C Issuing Bank well before the Maturity Date as well as after maturity (if required), till settlement of the Bill and submit required all day to day reporting to the respective Authority.

17.  Upon receipt of proceeds of FDBC/FDBP from ID, HO TFPC will transfer the amount to the customer’s A/C after adjustment of all liabilities (proportionate) and charges (if any) as per sanction terms. Amount of Proportionate BTB L/C will be kept in FCBPAR A/C maintained with TFPC in the name of the respective client.

Creation of FDBP against DP (Usance) Master L/C:

18. Upon receipt of the Letter of Acceptance/ Maturity, Trade Finance Processing Center will inform the respective Branch accordingly.

19. Non-AD Branch may request the Trade Finance Processing Center to purchase the Bill upon receipt of request of the customer subject to receiving of ‘Letter of Acceptance/ Due Date/ Maturity’ by Trade Finance Processing Center from the L/C Issuing Bank/Nominated Bank.

20.If the customer is already enjoying a sanction of FDBP limit and Documents are In Order (Compliant Documents) Trade Finance Processing Center will purchase the bill after complying all circulars and will obtain Disbursement Power (DP) from Credit Administration Division (CAD) Head Office for creation of FDBP and pass the following entries:

• Creation of FDBP against DP (Usance) Master L/C:
• Dr.- Contra- – Foreign Documentary Bills for Collection (FDBC)
• Cr.- Contra Foreign Documentary Bills Lodged (FDBL)
• (Liability reversed)
• Dr.- FDBP Account- (In the name of respective Customer as approved, in GL of Non-AD Branch.
• Cr.- Income- Miscellaneous Income- Miscellaneous Earnings (For collection charge)
• Cr.- Postage
• Cr.- Vat on Banking Services
• Cr.- Adjustment/ Reserve for Adjustment if any
• Cr.- Customer’s A/C (Balance amount)
• Cr.- Others, if any

Export Bills against receipt of Advance Payment:

1. International Division, Trade Finance Processing Center & Non-AD Branch will pass the following voucher in the Ledger of the respective Branch upon receipt of Advance Proceed:

• For ID
• Dr.- Respective Nostro A/C (at TT clean buying rate)
• Cr.- Adjusting A/c- Cr. for Fx. Transaction of TFPC G/L# 902152
• For TFPC

2. TFPC will transfer the amount of proceeds to the customer’s A/C after adjustment of all Liabilities (proportionate) and charges (if any) as per sanction terms. Amount of Proportionate BTB L/C (if any) will be kept in FCBPAR A/C maintained with TFPC.

3. On realization of proceeds in advance, respective Non-AD Branch will submit the Export Bills to respective TFPC along with verified EXP and TFPC will act accordingly.

 Local Export Operation (LDBC/ IDBP):

1.Non-AD Branches will request their Clients / Beneficiary / Supplier to receive their Export L/Cs through TFPCs for Chittagong zone Non-AD Branches). The name of the Non-AD Branch must be mentioned in the L/C as ‘Advise Through Bank’.

2.TFPC will confirm the authenticity of the Export L/C and send the same to the Non-AD Branch for onward advising to the Client/ Beneficiary/ Supplier.

3.Certified copy of valid ERC, IRC, TIN, BIN, VAT Registration Certificate (if applicable) and NOC from other Bank/ Branch of the client must be kept in respective TFPC.

4.Client will submit their Export Bills to the respective Non-AD Branch with EXP form.

5.Non-AD Branch will send the ‘Export Bills’ to the TFPC for collection after scrutiny of the Documents at their end, mentioning their collection number. If the Documents are discrepant, Branch will inform the discrepancies to the Beneficiary. Master Export L/C must be lien marked with respective TFPC.

Upon receipt of the Documents, Trade Finance Processing Center will scrutinize the Documents finally and send the same to the respective L/C Issuing Bank through their Forwarding Schedule (mentioning their collection reference number), if the Documents are in order.

• TFPCs will pass the Following vouchers in the G/L of respective Non-AD Branch
• Dr.-Contra- LDBC Assets
• Cr.-Contra- LDBC Liability
• If the Documents are discrepant, TFPC will inform the discrepancies to the concerned Non-AD Branch for onward intimation to the Beneficiary.

7.Upon receipt of the ‘Discrepancy Notice’ (if any) from the L/C Issuing Bank, Trade Finance Processing Center will inform the respective Non-Branch for onward intimation to the Beneficiary.

8.Upon receipt of ‘Acceptance through SWIFT’ from L/C issuing Bank/Nominated Bank, Trade Finance Processing Center will inform the respective Branch accordingly.

9.Non-AD Branch may request the Trade Finance Processing Center to purchase the Bill upon request of the customer subject to receiving of Acceptance/Maturity/Due Date in case of DP L/C  by Trade Finance Processing Center from the L/C Issuing Bank.

10. Non-AD Branches will send their proposal through TFPCs to get required approval from Head Office (Corporate/ CRM) and send the related papers/documents to the respective “Trade Finance Processing Center (TFPC)” for purchase the Bill with a request letter.
11. Trade Finance Processing Center will purchase the bill after getting necessary approval from Head Office (Corporate/CRM) for creation of IDBP and pass the following entries:

• For IDBP:
•    Dr.- Contra- – Local Documentary Bills for Collection (LDBC)
• Cr.- Contra Local Documentary Bills Lodged (LDBL)
• (Liability reversed)
• Dr.- IDBP- TFPC (In the name of respective Customer as approved, in GL of Non- AD Branch.
• Cr.- Cr. Postage
• Cr.- Vat on Banking Services
• Cr.- Adjustment/ Reserve for Adjustment if any
• Cr.- Customer’s A/C (Balance amount)
• Cr.- Others, if any

12. TFPC will report in Bangladesh Bank Online Foreign Exchange Transaction Monitoring System under E-services of Bangladesh Bank website on the same day of creating LDBC/ IDBP.
13. Upon receipt of proceeds of LDBC/IDBP, TFPC will transfer the amount to the customer’s A/C after adjustment of all liabilities (proportionate) and charges (if any) as per sanction terms.

• Trade Finance Processing Center will maintain a Register/ Record for their Bills sent for Collection & follow up the cases with the L/C Issuing Bank well before the Maturity Date as well as after maturity (if required), till settlement of the Bill and submit required all day to day reporting to the respective Authority.
• TFPC will realize Advising & Collection Charges from the Customer and credit the same to the respective Branch.

• Foreign Bank Guarantee/Bid Bond/Performance Bond/Payment Guarantee/Advance Payment Guarantee/Standby L/C Operation:
• Trade Finance Processing Center will issue Foreign Bank Guarantee/Bid Bond/Performance Bond/Payment Guarantee/Advance Payment Guarantee/Standby Letter of Credit on behalf of the customer of Non-AD Branch as per existing rules.
• Documentation:
• Non-AD Branch will maintain a shadow file of all correspondence & documents for compliance and record.
• All documents related to L/C, LDBC, IDBP, FDBC, FDBP & Guarantee will be kept in TFPC for Record, Follow up, Regulatory Compliance & Reporting.
• All documentation related with Customer’s Security, Mortgage, Charge Creation, Undertaking etc. to be completed & preserved by Non-AD Branch with a Confirmation/Certification to the TFPC.
• TFPC will operate their business as per instruction of Guidelines for Foreign Exchange Transactions (Vol-1 & 2), Import & Export Policy Order, UCP, URR, URC, ISBP, ISP, URDG, URBPO, Foreign Exchange Manual of JBL in force and Circulars from Bangladesh Bank & different Divisions from time to time.