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Foreign Exchange
Foreign Exchange is a process or system of conversion of one national currency into another national currency and of transferring money from one country to another.
FOREIGN EXCHANGE
1) EXPORT
3) FOREIGN REMITTANCE
2) IMPORT
4) DEALING ROOM OPERATION
International TradeThe activities of buying and
selling of commodities or services between two different countries is termed as international trade.
Exchange Rate:The rate at which one currency is
converted into another currency is the rate of exchange between the currencies concerned . If Bangladeshi bank exchanged US dollars for TK. 68.40 a dollar , the exchange rate between taka and dollar can be expressed as USD 1=Tk.68.40 .
Authorized Dealers:
The Banks or the Traders who have been authorized to deal in foreign exchange by Bangladesh Bank are known as authorized dealers.
1) The Import Export control Act-1950
2) Import Policy Order–2009-2012
6) The Customs Act-1969
5) Bangladesh Bank Guidelines for Foreign Exchange Transactions.
4) The Foreign Exchange Regulation Act-1947
Act > Policies > Rules > Regulations
3) Export Policy –2009-2012
7) ICC Publications
Parties involved in International trade:
a) Importer b) Importer’s bank(LC opening) c) Advising Bank d) Confirming Bank e) Nominated Bank f) Reimbursing bank g) Exporter
Authority & Agency involved
Bangladesh Bank Commerce MinistryADsCCI & EChamber of Commerce Indentor
Shipping AgentCustoms AuthorityC & F AgentExport Promotion Bureau.
Authority & Agency involved
REQUIREMENT for IMPORT1) Valid IRC (Issued by CCI&E)2) Indent / Proforma Invoice
5) Follow Foreign Exchange Regulation Act-19474) Follow Import Policy Order 2009-12
8) Follow Bangladesh Bank Guidelines for Foreign Exchange Transactions
3) TIN Certificate
6) UCPDC-600
7)International Standard Banking Practice
DOCUMENT NEEDED for IMPORT
1) LCA(LC Authorization) Form
2) Prescribed LC Application & Agreement Form
4) IMP Form
3) Insurance Cover Note
Letter of Credit: Letter of credit is an undertaking by
the importer’s bank that if the exporter exports the goods and produces documents as stipulated in the credit, the bank would make payment to the exporter.
REQUIREMENT for EXPORT1) Valid ERC (Issued by CCI&E)2) Bill of Exchange
5) Follow Foreign Exchange Regulation Act-19474) Follow Export Policy
7) Follow Bangladesh Bank Guidelines for Foreign Exchange Transactions
3) Bill of Lading/TR/AWB
6) UCPDC-600
8) Certificate of Origin9) PSI
Foreign correspondent Accounts Involved
Nostro A/CVostro A/CLoro A/C
Foreign Remittance
Inward Remittance Outward Remittance
Foreign remittance is madea) Between two different countriesb) Two or more currenciesc) Bank’s Involvement is a must
Source of Inward Remittance Expatriate Bangladeshis Exporters Bangladeshi Nationals Working
Abroad Commission, Fees etc Earned by
Local Business People Foreign Loans and Grants Foreign Donation and Gifts
Modes of Foreign Inward Remittance
Telegraphic Transfer (T.T) Mail Transfer (M.T) Foreign Demand Draft (F.D.D) Travelers Cheque (T.C) Foreign Currency Notes. Electronic Fund Transfer (EFT) On line Remittance Purchase of Bills
Purpose of Remittance
Family maintenance Indenting Commission Recruiting Agents Commission Realization of Export Proceeds Donation Gift. Export Broker’s Commission Etc.
Purpose of Outward Remittance
To settle Import Payment. To meet Travel Expenses To meet Medical Expenses To meet Educational Expenses etc.
FOREIGN EXCHANGE
DEALING ROOM OPERATION
Sonali Bank Dealing Room Start Functioning from 15-11-1994.
.