Produc Treasury /

t
Forex /Swap
Family: Contracts

Product
Requirements
General
Characteristics
Brief Description

Volume of
transactions per
day/month
Rate system used
for quoting

Basic Product
Requirements
Major Currencies
dealt with
Tenor
Normal Tenor, Max.
and Min. Periods
Rate amendments

Rates input - How

rates are accessed
and determined

Requirements

Clarificat
ions

Interbank swaps are used for

synchronising cash flows arising out of
various merchant and IB deals
25 - 30 per day(in total)
(Spot/Forward/Swap Put together)
Indirect method

USD, GBP, EUR, CAD, AUD,JPY

Maximum of 180 days

Rate, amount can be changed even
after the deal is authorised, but before
SWIFT message is sent. Swift
messages are now being prepared and
sent manually, within certain time of
the business hour
Through Reuter screen and inerbank

Rate is
quoted as
1USD =
70BDT
(Banglade
sh Taka)

Settlement
Process

Settlements are done through central

bank FC A/C or through nostro A/C
depending on the settlement
instruction mentioned on the deal
agreement.
i) Settlements are done through issue
of local cheques drawn on Bangladesh
Bank when Taka currency is involved.
In case of FCY, this is done through
either FDD (Foreign Demand Draft) or
nostro A/c through SWIFT depending on
the payment instruction on the deal
agreement.

Are Standard
Settlement
Instructions
(Routing, Nostro etc)
available for
Counterparties?
Settlement
Gross/Nett
settlement
Settlement date
falls on a nonworking day

Limits
Limit Type Revolving/Nonrevolving
Limit Product to
be used

Yes.

Gross Settlement
Next available business day.

Revolving
FX

Suppose
a USD
deal is
maturing
on
Sunday,
then
settlemen
t will take
place on
Monday

Are sub products

and limits for sub
products allowed?
(X amount for Spot
and Y amount for
Forward etc)

Charges/Commissi
ons and Taxes
Provide details of
charges and
commissions

No. Total limit is set for Forward, Spot

and SWAP deals put together.

No Charges are levied, as the deals are

done for Bank's own purpose of
meeting the demand of export/import
funding transactions of the customers.

Taxes applicable
to Charges and
Commissions
Any other Taxes
applicable
Confirmations and
Advices
Confirmations
required and
medium (Print/Swift
- MTnnn)

No

Advices
(Debit/Credit)
required and
medium (Print/Swift)
for Foreign Currency
Deals

payment Advises will be sent in swift

format for nostro banks.
If payment advice for Bangladesh Bank
fc acount thenLocal payment/receipt is
through cheque drawn on Bangladesh
Bank/FDD (Foreign Currency Demand
Draft).

Brokers

Sub limits
may be
set in
future for
Spot/Forw
ard/Swap.
System
should
support
this
requireme
nt.

may
require in
future.

No

Both Print/Swift are required. Banks in

Dhaka requires Printed messages. If
transaction is made outside
Bangladesh, swift messages are sent.

both first
leg and
second
leg deal
conforma
aton will
be
genereted
through
the
system
on deal
date

Whether deals are

done via brokers?

Brokerage
Calculation
Requirements
Brokerage
Payment
Requirements
Are Broker limits
applicable and
requirements
Revaluation
Requirements
Type/Method of
revaluation

As of now, no brokerage deals are

carried and it might be carried out in
the future.

FX deals
are done
with
Banks as
counterpa
rty.

At present FX transactions are not

shown as contingent entries in the
book of accounts. Only on the value
date, entries are passed

Contingen
t entry is
raised for
the far
leg of the
transactio
ns.

Frequency
Revaluation Rate
to be used

daily and Monthly

daily- when rate changes

Accounting
treatment for
Unrealised
Profit/Loss
Financial
Accounting
GL/Chart of
Account for Buy
Side

adjusted

COA

monthlywith
banglade
sh bank
provieded
mid rate

Nostro
Account /
Taka
Account
for
transactio
ns with
FCY/LCY
Nostro
Account/N
ostro
Account
for

transactio
ns in
FCY/FCY.
GL should
show the
balance
amount in
equivalen
t Taka
Amount
only. For
the Far
leg of the
Swap
contract,
contingen
t entries
are
generated
and
reversed
on
maturity
of the
SWAP
contract.
GL/Chart of
Account for Sell Side
GL/Chart of
Account for
revaluation

COA
COA

Dr Profit
and Loss
Account
Cr.
Revaluati
on Gain
Account
(in case
of gain on
Revaluati
on).
Dr.
Revaluati
on Loss
Account
Cr. Profit
and Loss
Account
(in case
of loss on
Revaluati
on)

Any other (Taxes,

Charges etc)
Other
Requirements
Modification of
Deals after
authorisation
Stop Loss on rate
amendments
Archival
Requirements

Dealer Limits
Relation to other
LOBs/Business
Processes
Deal Slip
Requirements

NO

Yes.
NA
Applicable

Yes.

Required
for future.
5 Year
data is to
be
preserved
as per
central
Bank
guidelines
.
Intra
day/overn
ight limits

NA
Two copies of dealslip required for both
the leg, one set for the bank and
another to be sent to the counterparty.

Front
office
rings up
to the
bank for
buy/sell of
intebank
FCY. This
teleponic
deal
conversat
ion is
recorded
through
voice
recorder.
Once a
deal is
confirmed
the dealer
prepare a
dealslip
manually
giving the
details of
counter

party,
nostro
account,
details,
currency
buy/sell,
rate,
amount
and other
informatio
n (if any)
and send
it to the
back
office.
Back
office
prepares
the deal
confirmati
on base
on the
informatio
n provied
on the
dealslip
for
counterpa
rty and
also for
banks
own
record .
Back
office also
prepares
the Swift
message
or the
FDD and
passes
the
voucher
for
accountin
g
settlemen
t.
Activities
Deal Processing

Busine
ss
Proces
s

Deal
confir
mation

Activities

Roles

Accounti
ng
Entries

Strike deal over the

trading
platform/phone/brok
er

Dealer/FO

Input deals in
system and check
for any limit
breaches

BO/Limits are not set for counterparty

(as they are banks - Inland and
Foreign)

Contingen
t entry is
raised for
the far
leg of the
transactio
ns. As for
the near
leg, no
accountin
g entry is
passed on
the deal
date.
Only
voucher is
prepared
with value
date.
Nil

Authorise deal and

print deal slip
Send MT300 or
printed deal
confirmation as
appropriate
File the papers
value date wise(2
copies are available,
office copy will be
maintained by front
office. Filing papers
are not based on
value date and it is
done serialwise
(deal reference
number)

BO Authorised person

Nil

Back Office

Nil

Back Office.
Office copy will be maintained by front
office.

Verify with
counterparty's deal
confirmation .
Record
confirmation.
Follow-up Nonreceipt of Deal
Confirmation
Match all inward
confirmations with
deals. If no deal
available then
inform dealer for
action
Identify and resolve
discrepancies in DC

Back office

Nil

Back office

Nil

Back office/Front office

Nil

Back Office

Nil

Back Office

Nil

Back Office

Nil

Back Office

Nil

Back office

Nil

Deal
Settle
ment
Send payment
messages for cash
deals
Send payment
messages for next
day value deals
Ensure that the
messages are
ACKED by SWIFT
For each currency
countercheck if total
payments sent
tallies with funds
outflow as per the
Interbank funds flow
report for the value
date

Accounting Entries

Apart from the following entries for the

near leg, entries are passed in
contingent for the future leg.

Buy FCY against

BDT

Dr Mirror account of respective

NOSTRO account / Bangladesh bank FC
CLG. Account (FDD) Cr. Bangladesh
Bank Taka account

At present Treasury is dealing in FCY

and pass entries as : Dr. ETDA Account
and Cr. Bangladesh Bank account

Sell FCY against BDT

FC Bought and FC
sold

At ID
(Internati
onal
Division),
this entry
is
responde
d to as :
Dr. Nostro
Mirror
account
and
Credit .
ETDA
Account

Dr Bangladesh Bank Taka account Cr.

Mirror account of respective NOSTRO
account / Bangladesh bank FC CLG.
Account (FDD)

Treasury is passing entries for FCY

Treasury is just passing the voucher to
the ID

ID is
passing
entries for
NOSTRO
mirror
account
Dr. Mirror
account
of
respectiv
e Nostro
Account
Cr. Mirror
account
of
respectiv
e Nostro
Account.
This will
be passed
at ID. For
eg; Buy
USD sell
GBP. Dr.
Mirror
account
of USD
Nostro
and Cr.
Mirror

account
of GBP
Nostro.