Professional Documents
Culture Documents
CHAPTER TWO
COMPANY PROFILE
Trust Bank Limited is a scheduled commercial bank established under the Bank
Companies Act, 1991 and incorporated as a Public Limited Company under Companies
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Act, 1994 in Bangladesh on June 1999 with the primary objective to carry on all kinds of
banking businesses in and outside Bangladesh. The Bank has now Forty Three (43)
branches operating in Bangladesh as of 1st March, 2010. There are also five SME Center
and one Merchant Banking division of the bank to serve the customers.
Initially the bank has started its operation in the name of The Trust Bank Limited but on
12 November 2006 it was renamed as “Trust Bank Limited” by the Register of Joint
Stock Companies. The new name of the bank was approved by Bangladesh Bank on 03
December 2006.
Trust Bank Limited offers full range of banking services that include deposit banking,
loans and advance, export, import and financing national and international remittances
etc. Presently the bank is owned by the Army Welfare Trust of the country. It holds
99.99% shares and the rest (i.e. .01%) is held by the Board members of the bank who are
senior army personal by virtue of Army Welfare trust’s mandate. Therefore the
shareholding at present is highly concentrated. However with the flotation of the shares to
the public, the shareholding pattern has been diluted with public participation. Against the
present authorized capital of Tk. 2000 million the paid-up will be raised through ensuing
IPO Flotation. The bank has offered 70, 00, 00,000 taka primary shares with premium.
Recently the bank has launched its Islamic banking Operation in few of their big
branches.
Vision
Mission
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attractive products and services through our technology and qualified
human resources. We always look out to benefit the local community
through supporting entrepreneurship, social responsibility and
economic development of the country.
Branch Network:
The Branch network of Trust Bank Limited is quite strong. With an age
of only eight years, the bank is now having a network of 43 branches,
five SME branches and one merchant banking branch across
Bangladesh as on March 24, 2010. These branches are situated at
various strategically important commercial and industrial locations in
the country. Among these braches
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Trust Bank Limited has been established with the objective of providing
efficient and innovative banking services to the people of all sections of
the society. Towards this end TBL offers full range of normal banking
service that include deposit banking, loans and advances, export
import, inward worker remittances etc.
1. Car Loan
2. Doctors Loan
3. Education Loan
4. Travel Loan
5. Hospitalization Loan
6. Any Purpose Loan
7. Apon Nibash Loan
8. CNG Conversion Loan
9. Marriage Loan
10. Advance Against Salary Loan
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2. OD (Against Salary)
3. RRDH (Micro Credit)
4. Above General Loans
Trust Bank holds the principle member License from VISA International
to issue & acquire the world’s most widely used Credit Card. It also
offering Debit Cards and ATM Cards. For account holders, TBL offering
ATM Cards without any costs.
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• Services:
CHAPTER THREE
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FOREIGN EXCHANGE BUSINESS OF TBL
Foreign Exchange:
All deposits, credits and balances payable in any foreign currency and
any drafts,
travelers cheques, letters of credit and bills of exchange, expressed or
drawn in Indian currency but payable in any foreign currency;
• Import Section
• Export Section
Import Section:
The bank defines import as to bring in, from abroad, something in kind
of goods or services (to behave lawfully). It includes the following
services:
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The import mechanism first involves the issuing of a L/C as an
instrument by a bank on behalf of one of its customers, authorizing an
individual or a firm to draw draft on the bank or on one of its
correspondents for its account under certain conditions which is
predetermined in the credit. Secondly the bank import mechanism
involves the retirement of import mechanism on receiving the payment
or under certain conditions against the security of payments made by
the importer in documents required an advance payment date.
Export Section:
CHAPTER FOUR
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IMPORT BUSINESS OF TBL
i. Trade License
ii. Income tax clearance certificate
iii. Nationality certificate
iv. Bank’s solvency certificate
v. Asset certificate
vi. Registration partnership deed (if any)
vii. Memorandum and article of association / certificate of
incorporation (if any)
viii. Rent receipt of the business premises
ix. Certificate of incorporation (if any)
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Import Procedure:
1. Bank account
2. Import Registration Certificate
3. Tax Paying Identification Number
4. Pro-forma Invoice Indent
5. Membership Certificate
6. LC Application form duly attested
7. One set of IMP Form
8. Insurance Cover note with money receipt
9. Others.
Import Mechanism:
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4. payment terms and conditions
5. goods to be imported
6. offered security
7. repayment schedule
A credit Officer scrutinizes this application and accordingly prepares a
proposal (CLP) and forwards it to the Head Office Credit Committee
(HOCC). The Committee, if satisfied, sanctions the limit and returns
back to the branch. Thus the importer is entitled for the limit to open
Letter of Credit.
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4.3 Advising a Letter of Credit:
The advising or notifying bank is the bank through which the L/C is
advised to the exporter. It is a bank situated in the exporting country
and it may be a branch of the opening bank. It becomes customary to
advise a credit to the beneficiary through an advising bank. Advising
depicts the proof of authenticity of the credit to the seller. The opening
bank has corresponding relationship or arrangement throughout the
world by which the L/C is advised. Actually the advising bank does not
take any liability if otherwise not requested.
Adding Confirmation:
c) Provide reimbursement
Credit Report:
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If the amount of L/C exceeds a certain limit, TBL takes the credit report
of the beneficiary to ensure the worthiness of the seller of supplying
the stipulated goods.
Parties involved in a L/C, particularly the seller and the buyer cannot
always satisfy the terms and conditions fully as expected due to some
obvious and genuine reason .In such a situation, the credit should be
amended. TBL transmits the amendment by tested telex to the
advising bank .In case of revocable credit; it can be amended or
cancelled by the issuing bank at any moment and without prior notice
to the beneficiary. But in case of irrevocable letter of credit, it can
neither be amended nor cancelled without the agreement of the
issuing bank, the confirming bank (if any) and the beneficiary. If the L/C
is amended, service charge and telex charge is debited from the party
account accordingly.
The seller being satisfied with the terms and the conditions of the
credit proceeds to dispatch the required goods to the buyer and after
that, has to present the documents evidencing dispatching of goods to
the negotiating bank on or before the stipulated expiry date of the
credit. After receiving all the documents, the negotiating bank then
checks the documents against the credit. If the documents are found in
order, the bank will pay, accept or negotiate to TBL. TBL check the
documents. The usual documents are,-
1. Invoice
2. Bill of lading
3. Certificate of origin
4. Packing list
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5. weight list
6. Shipping advice
7. Non negotiable copy of bill of lading
8. Bill of exchange
9. Pre-shipment inspection report
10. Shipment certificate
Examination of Documents:
The documents generally include the following and the basic points of
checking by TBL are, -
Letter Of Credit
i) Whether the documents have been negotiated
or presented before expiry of the credit
ii) whether the amount drawn exceeded the
amount available under the credit
The Invoice:
i. Is the invoice made out in the name currency as the
credit indicates?
ii. Is the invoice made out in the name of the buyer with
the same address specified in the credit
iii. Does the invoice agree exactly with the credit as
regards description of goods, value of goods, unit prices
& delivery terms?
iv. Any special notation, confirmation & attestation were
specified in the credit and those have been complied
with on the invoice and if required duly signed.
v. Does the invoice evidence the following; shipping
marks/terms of delivery/weight data &import license
number etc.
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Bill of Exchange:
F. Certificate Of Origin:
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vi. Is the Certificate of Origin of merchandise is given as
stipulated?
Additional documents:
vii. Additional documents called for in the credit if any
such as packing list, weight certificate, consular
invoice, inspection certificate etc. to be checked
whether drawn and issued in accordance with the
terms of the credit.
After realizing the telex charge, service charge, interest (if any), the
shipping documents is then stamped with PAD Number & entered in
the PAD Register. Intimation is given to the customer calling on the
bank’s counter requesting retirement of the shipping documents. After
passing the necessary vouchers, endorsements is made on the back of
the Bill Of Exchange as “Received Payment” and the Bill Of Lading is
endorsed to the effect “Please deliver to the order of M/S---------”, under
two authorized signatures of the bank’s officers (P.A. Holder). Then the
documents are delivered to the Importer.
This is the most sensitive task of the Import Department. The Officials
have to be very much careful while making payment. This task
constitutes the following,-
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3. Documentary Collection: This is an arrangement whereby
the goods are shipped and the relevant bill of exchange / draft
is drawn by the seller on the buyer and documents are sent to
the seller’s bank with clear instructions for collection through
one of its correspondent bank located in the buyers domicile.
The prime thing is the ‘risk’ affiliated with the parties. At the time of
all international trade both the exporter and importer try to go for a
safer position during the payment takes place. Except the
‘Documentary Credit’, not all other modes can provide equal benefits
to both the parties. In ‘Cash in Advance’, process risk goes to the
importer while the importer makes the payment before arrival of the
goods and on the other hand in ‘Open Account’, system the exporter
occupying the riskier placer by manufacturing the goods before the
payment has made. When we talk about the ‘Documentary Collection’,
system where there is no undertakings about the settlement by any
third party (Except exporter and importer).
All of the lacking that we have discovered from discussion can be only
be fulfilled by the fourth modes of payment, that is ‘Documentary
Credit’. Here all the parties are equally risk averse and the undertaking
of a third party has properly backed international settlement.
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Import Analysis:
Year to Year Import
2004 8542 -
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Comparison of Industry and TBL Growth rate
In million Taka
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CHAPTER FIVE
Export:
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Export means supply or delivery/ provides the goods or services from
our country to the other persons / companies who are residing outside
the country. Any person or company or organization can export who
have an ERC (Exporter’s Registration Certificate) or any special
permission for export competent authority.
Export Incentives:
A. Financial Incentives:
B. General Incentives:
C. Other Incentives:
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• Assistance in improvement of quality and packing of exportable
items;
Export Procedures:
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• Then he / she will collect export order through a Letter of credit
(LC) or contact. In case of LC, it should be authenticated and
advised by a bank.
• After that he / she can export the goods against LC / contract for
a payment term as “Sight / Usage” basis. Even they export the
goods on consignment basis.
• He / she apply to his/her bank along with the original LC/ contract
% a copy of commercial invoice for issuance of EXP Form. (EXP
form known as export form).
• Exporter signs & fills up their portion of EXP form and then they
collect bank’s seal and signature on the same EXP form.
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Bangladesh bank and rest of three EXP form ( Duplicate,
Triplicate and Quadruplicate Copy) returns to the exporter.
• After receipt a request from the exporter for issuance of EXP form:
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certification EXP form will be filled up and
signed by the exporter.
• Before sending the documents, bank endorses the Bill of lading (BL)
or Track Receipt (TR) or Air way Bill (AWB), transport documents in
favor of the LC issuing or Paying Bank. Bank may endorse the BL in
favor of buyer if full proceeds against the said bill are received in
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advance. Bill of Exchange also may require for endorsement in favor
of the bank.
• Bank will take decision whether they will negotiate the documents
or send for collection basis.
• Finally, Bank reports all the export proceeds which are received during
the month to the central bank under :
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Important Key Terms of Foreign Trade:
Commercial Invoice
Packing List
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Bill of Leading:
Others:
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Financial Incentives given by TBL Ltd.:
Lien of Export L/C: An exporter can obtain credit facilities against lien
on the irrevocable, confirmed and unrestricted export letter of credit in
form of the followings:
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exporter. He is required to execute a stamped export trust receipt in
favor of the bank, he holds wherein a declaration is made that goods
purchased with financial assistance of in trust for the bank. This type of
credit is granted when the exporter wants to utilize the credit for
processing, packing and rendering the goods in exportable conditions
and when it seems that exportable goods cannot be taken into bank’s
custody. This facility is allowed only to the first class party and
collateral security is generally obtained in this case.
Export credit insurance was seen primarily as a tool in the hands of the
Government for promoting export. This is to assist the exporters to get
bank finance without any difficulty and to realize the proceeds of the
exports immediately after shipment. Shadharan Bima Corporation has
been entrusted with the responsibility of administering the scheme by
the government of Bangladesh.
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Existing Schemes:
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• Pre-shipment credit:
• Packing Credit:
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to be adjusted fully once within a period of 3 to 6 months. Suiting to
the breed and nature of export, sometimes an exporter may also be
allowed to avail a combined Cash Credit and Packing Credit limit
with fixed ceiling on revolving basis. But in no case the borrower
would be allowed to exceed individual credit limit fixed for the
purpose. The drawings under Export Cash Credit limits are generally
adjusted by the drawing in packing credit limit, which is, in turn
liquidated by the negotiation of export documents.
Under Red clause letter of credit, the opening bank authorizes the
Advising Bank/Negotiating Bank to make advance to the beneficiary
prior to shipment to enable him to procure and store the exportable
goods in anticipation of his effecting the shipment and submitting a bill
under the L/C. As the clause containing such authority is printed in red
ink, the L/C is called Red clause and Green clause respectively.
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Post Shipment Finance:
If the bank is not satisfied with the documents submitted to TBL gives
the exporter reasonable time to remove the discrepancies or sends the
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documents to Letter of Credit opening bank for collection. This is
known as Foreign Documentary Bill for Collection (FDBC)
1. L/C expired;
2. Late shipment;
3. Late presentation;
4. L/C overdrawn;
5. Unit price differ between L/C and Commercial Invoice;
6. Consignee Name and address differ between L/C and other
documents.
7. Discrepancies in B/L;
8. Any other Major discrepancies.
FDBC signifies that the exporter will receive payment only when the
issuing bank gives payment. TBL make regular follow-up with the L/C
issuing Bank in case of any delay in getting payment.
This is one of the facilities that an exporter gets for production of the
exported goods. After the advising of the L/C if the exporter is a
finished goods producer like RMG then he give the advised L/C at the
BTB section for advising second L/C favoring his raw materials
suppliers.
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Eligible for opening BTB L/C:
The AD (Authorized Dealer e.g. bank) may open back to back import
L/Cs against export L/C received by export oriented industrial units
operating under the bonded warehouse system, subject to
observance of domestic value addition requirement (stated in terms
of permissible limit of c & f value of imported inputs as percentage
of fob export value of output) prescribed by the Ministry of
Commerce from time to time.
The back to back L/C value shall not exceed the admissible
percentage of net FOB value of the relative master export L/C
value and the price of goods to be imported must be
competitive.
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All amendments of the master export L/C should be noted
down carefully to rule out chances of excess obligation under
the BTB import L/C.
BTB import L/C should not be opened against L/Cs received for
export under Barter/STA, without prior approval of Bangladesh
Bank.
The BTB import L/C shall contain condition of PSI (Pre Shipment
Insurance) by an internationally reputed inspection firm
regarding quality and quantity of the merchandise.
1. Value addition for knit garments shall not be less than 20%.
2. Value addition for woven garments shall not be less than 20%.
4. Value addition for all types of sweater shall not be less than 20%
and
5. Value addition for all types of baby garments shall not be less
than 15%.
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Required documents before opening BTB L/C:
3. Master L/C
4. Invoice or Indent
6. EXP Form
• Letter of Credits:
a) Each and every clause in the L/C must be complied with the
documents submitted meticulously.
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c) The documents are negotiated within letter of credit validity
• Drafts:
a) Draft is not dated earlier than the date of B/L & L/C issuing
date.
g) In case of usage bill, the requisite foreign bills stamp has been
affixed as per Stamp Act enforce in the country.
• Invoices:
a) The invoices are addressed to the importer.
b) Invoices are dated not later than the date of B/L and not
earlier than issuing date.
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c) Description of goods given in the invoices is exactly in
accordance with the letter of credit or firm contract.
j) The invoice value must not be less than the value declared in
EXP form.
• Insurance Policy:
a) Description of the goods given in the insurance Policy is in
accordance with the terms of the L/C
h) All the risks have been covered as required in the relative L/C.
• Other Documents:
a) Check that other documents like certificate of Origin, Weight
List, Packing List, Inspection Certificate and Certificate of
Analysis, if required by the Letter of Credit, accompany the
main documents.
b) See also, that the description of the goods and other
particulars given in these documents are identical with the
particulars given in the relative L/C.
c) Check the Inspection Certificate, particularly to ensure that it
does not bear clauses tating that the goods are not in good
order and/or in accordance with the specifications of the
relative L/C.
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• Certificate of Origin:
Issued by recognized authority (such as Chamber Of Commerce and
Industry) according the L/C terms and condition. It certifies the country
of origin of goods. Generally it is called for by importers in certain
countries to comply with their customs requirements and to enable
rate of duty to be determined, special type of origin in G.S.P. form is
also issued.
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Year by Year Export of TBL
2004 2636
10.43%
2005 2991
45.42%
2008 6078
461530 27.55%
547550 18.64%
733720 34.00%
811520 10.60%
929270 14.51%
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