...Understanding Letter of Credit EXM104 FA Export Documentation & Methods of Payment Instructor: Emiliano Introcaso Seneca College ASSIGNMENT 02 Xueyuan Tan 041-806-084 Xtan9@learn.senecac.on.ca Due Date August 2nd 2011 – Week 9 Letters of credit accomplish their purpose by substituting the credit of the bank for that of the customer, for the purpose of facilitating trade. There are basically two types: commercial and standby. The commercial letter of credit is the primary payment mechanism for a transaction, whereas the standby letter of credit is a secondary payment mechanism. Commercial letters of credit have been used for centuries to facilitate payment in international trade. Their use will continue to increase as the global economy evolves. Letters of credit used in international transactions are governed by the International Chamber of Commerce Uniform Customs and Practice for Documentary Credits. The general provisions and definitions of the International Chamber of Commerce are binding on all parties. Domestic collections in the United States are governed by the Uniform Commercial Code. A commercial letter of credit is a contractual agreement between a bank, known as the issuing bank, on behalf of one of its customers, authorizing another bank, known as the advising or confirming bank, to make payment to the beneficiary. The issuing bank, on the request of its customer, opens the letter of credit. The issuing bank makes a commitment to honor drawings...
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...11.4 STEPS IN THE OPERATION OF LETTER OF CREDIT Letters of credit accomplish their purpose by substituting the credit of the bank for that of the customer, for the purpose of facilitating trade. There are basically two types: * Commercial * The commercial letter of credit is the primary payment mechanism for a transaction. * Standby * The standby letter of credit is a secondary payment mechanism. Letters of Credit have certain advantages in foreign trade transactions not only for exporters but also for importers. Letters of Credit give comfort to exporters regarding the payment. Exporters know that as long as they comply in the terms and conditions of the credit they will be paid. Exporters can demand from a bank to add its guarantee to the Credit in order to overcome various risks such as political risk. Conditions of the Credit will not be changed without the permission and consent of the exporter as long as it is irrevocable. In Letter of credit, normally four parties are involved: (1) The Buyer (the applicant) (2) The Buyer's bank (the issuing) (3) The Beneficiary (the seller/payee) (4) The beneficiary's bank (the ADVISING BANK). (5) The CONFIRMING BANK (often the same as the advising bank) The LC outlines the conditions under which payment (credit) will be made to a third party (the Beneficiary). The conditions are specified by the buyer and may include insurance forms, Way Bills, Bills of Lading, Customs forms, various certificates...
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... Case Study: Functional Overview on Letter of Credit Author: Deepak Seeruwani, Consultant Contributors: Naveen Rangineni, Consultant Skill Level Rating for this Case Study: Intermediate About Oracle Customer Submitted Case Studies Oracle Customer Submitted Case Studies are intended as learning tools and for sharing information or knowledge related to a complex event, process, procedure, or to a series of related events. Each case study is written based upon the experience that the writer/s encountered. Customers should not interpret or use information in these case studies as solutions or recommendations without first contacting Oracle Support. Each Case Study contains a skill level rating. The rating provides an indication of what skill level the reader should have as it relates to the information in the case study. Ratings are: • Expert: significant experience with the subject matter • Intermediate: some experience with the subject matter • Beginner: little experience with the subject matter Case Study Abstract This case study will provide a practical guide to letters of credit and as there is no functionality as of now to use Letter of Credit as a means of payment which is increasingly being used, a workaround in Oracle Payables to handle payments through Letters of Credit. Within its limitations it is hoped that: • This paper will serve as a basic tool in understanding letters of credit and • The solution giv...
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...លិខិតឥណទាន គឺជាការស្នើរសុំដោយអ្នកនាំចូល ឬអ្នកទិញទៅកាន់ធនាគារក្នុងប្រទេសរបស់ខ្លួនអោយចេញនូវលិខិតមួយសំរាប់បញ្ជាក់ចំពោះការទូទាត់ទៅអោយអ្នកទទូលផល ឬអ្នកលក់។ នៅពេលមួយកំណត់ជាក់លាក់ ព្រមជាមួយនិងឯកសារតម្រូវនៅក្នុងលក្ខខណ្ឌនៃលិខិតឥណទានមានភាពត្រឹមត្រូវក្រោមការត្រួតពិនិត្យរបស់ធនាគារអ្នកនាំចូល។ ការដែលធ្វើអោយមានការប្រើប្រាស់នេះ ធ្វើអោយមានទំនុកចិត្តគ្នារវាងអ្នកនាំចូល និងអ្នកនាំចេញកាន់តែខ្លាំងសំរាប់ដំណើរការនៃពាណិជ្ជកម្មអន្តរជាតិ។ ១.២.៣. មុខងាររបស់លិខិតឥណទាន លិខិតឥណទានមានមុខងារមួយចំនួនគឺ៖ - ការទូទាត់ភ្លាមៗ (Prompt Payment) : អ្នកលក់នឹងទទួលបានការទូទាត់ភ្លាមបន្ទាប់ពីបានដឹកជញ្ជូនទំនិញ។ ប្រសិនបើគ្មានលិខិតឥណទានទេ អ្នកទទួលផលត្រូវការការទូទាត់មុនការដឹកជញ្ជូនទំនិញ ឬត្រូវរង់ចាំរហូតដល់អ្នកទិញទទួលបានទំនិញទើបទទួលបានការទូទាត់។ - ជំនួយជាហិរញ្ញប្បទាន (Substituting Credit) : អ្នកលក់អាចនឹងមានភាពស្ទាក់ស្ទើរក្នុងការលក់ទំនិញជំពាក់ (Open Account) ប្រសិនបើអ្នកលក់មិនបានដឹងច្បាស់ពីស្ថានហិរញ្ញវត្ថុ។ លិខិតឥណទានអាចជួយអោយអ្នកលក់មានទំនុកចិត្តក្នុងការលក់ទំនិញអោយទៅអ្នកទិញ។ - ការផ្ទេរចំណាយខាងផ្លូវតុលាការ (Shifting Litigation Costs) : រាល់កិច្ចសន្យាទិញលក់មានការប្រឈមមុខនិងហានិភ័យលើមុខទំនិញដែលមិនអាចអនុលោមតាមកិច្ចសន្យា។ ប្រសិនបើគេប្រើប្រាស់វិធីសាស្រ្តទូទាត់បែបជំពាក់(Open Account) អ្នកលក់ភាគច្រើននឹងចំណាយលើការប្តឹងផ្តល់ដោយសារមិនទទួលបានការទូទាត់ថ្លៃទំនិញ។ ចំពោះលិខិតឥណទានវិញ ចំណាយលើការប្តឹងផ្តល់ជាបន្ទុករបស់អ្នកទិញដោយសារអ្នកលក់ទទួលបានការទូទាត់ភ្លាម នៅពេលគាត់បង្ហាញរាល់ឯកសារបានត្រឹមត្រូវតាមលក្ខខណ្ឌរបស់លិខិតឥណទានទៅកាន់ ធនាគារអ្នកទិញ (Issuing Bank)។ - ការចរចាជាមួយអ្នកលក់ (Shifting the Forum) : អ្នកទទួលបានថ្លៃទំនិញអាចនឹងមានប្រៀបខាងផ្លូវច្បាប់។...
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...EXPORT & DEEMED EXPORT CONCEPTS (WITH BENEFITS AT A GLANCE) [Extracts from D.V.Shidhaye’s Compilation on C.D. “EXPORT AND DEEMED EXPORT BENEFITS (Practical approach to encash).] Key Notes (1) There are changes in the in the new FTP 2009-2014. Customs has also issued new Notifications and amended old Notifications to give effect to the changes in new FTP. Summery of all changes is given by Customs in its Master Circular No. 26 /2009-Cus. [F.NO.605/58/2009-DBK] dated 30/9/2009.This is available in Chapter 26 of this book. (2) Accordingly Department of Revenue issued following Notifications (a) No. 91/09-Cus to 103/09-Cus. All dated 11/9/2009 (b) 104/09- Cus and 105/09- Cus both dated 14/9/2009. (c) 109/09-Cus dated 24/9/2009 (d) 23/09- CE (NT) dated 25/9/2009 (e) 112/09-Cus dated 29/9/2009. These are issued to implement the policy and the handbook. Then the salient features of all these are explained briefly in this important circular No. 26/2009 –Cus dated 30/9/2009. Summery of these Notifications is given in Para 3.6 Chapter 3 of this book only as ready recknor. 1. Export (Physical) Removal of goods from factory of manufacture or warehouses or godowns for onward exportation out of India either by Sea or Air or Road or Courier or Post is direct or actual export. Shipping Bill and Export Invoice are key documents. Here payment is received in freely convertible foreign exchange by Government and exporter gets it in Indian Rupees (at the exchange rates...
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...Chapter-01 Introduction Introduction The internship program is an integral part of Bachelor of Business Administration (BBA). For Bachelor of Business Administration (BBA) student only theoretical knowledge is not enough for handling the real life business situation. It is a great opportunity for the student to know about the real business operations through the internship program. Internship program is the perfect blend of the theoretical and the practical life experience. It is mandatory for any BBA student of University of Dhaka. For that reason this report is prepared on the Analysis of Foreign Exchange Operations of Sonali Bank Limited (SBL). Different terms that are related to the foreign exchange business and the detail scenario of the Sonali Bank Limited described in the report. Background of the Report The development of the modern economy would not have possible without the use of money. A first fundamental characteristic of money is that it is very much like collective and goods. It is a parallel relationship between money and banking. Bank is an important and essential institution for the necessity of the use of money and the protection of the money. As a BBA student, financial institutions are the most appropriate field to gather the experience and among the financial institution, bank is the most prominent place. With a view to supply skilled personals in banking arena, University of Dhaka has undertaking the internship training program for all BBA students. As...
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...owners. Common services that freight forward provide are: full-service documentation, export packaging and container stuffing, marine insurance, letter of credit negotiation and analysis, consolidation and deconsolidation services. International freight forwarder can be either ocean freight forwarder or air freight forwarder. The international transportation is unimodal when goods are carried with only one mode of transportation. While the goods are carried by more than one mode of transportation is multimodal. If the goods are transported by see, an ocean bill of lading and ocean waybill are important documents for the contract. Container is used for ocean shipment and can be door to door or consolidated. A door to door is when exporter provides full container load, otherwise goods are taken to a container freight station to consolidate with the goods of other exporters. When goods are transported by air the Air waybill will be provided by the carrier, who will be liable for damage of goods. To ensure goods against losses during transportation exporter can buy insurance. Marine insurance is the most common to the international exporter. FINANCING THE INTERNATIONAL TRANSACTION To ensure that the goods are delivered on time, meet the terms and conditions of the contract and the payment are made. Most companies use letter of credit, issued by issuing bank, with whom corresponding bank makes payment to the exporter. The corresponding bank can be confirming bank or advising...
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...Finman Letter B. Example of stock saving and loan association In Philippines, there are several savings and loans associations. The Metropolitan Bank and Trust Company, and the Bank of the Philippine Islands (BPI) are two. Minnesota Federal Savings and Loan merged with First Federal Savings and Loan in the mid-80's to form First Minnesota Savings Bank... The New Bank! Norwest Banks absorbed First Minnesota in 1989 or 1990 and has since gone on to become Wells Fargo. I worked in Minnesota Federal's data center and rode out all of the afore mentioned mergers/acquisitions. Letter J Open domestic letter of credit * A written commitment to pay, by a buyer's or importer's bank (called the issuing bank) to the seller's or exporter's bank (called the accepting bank, negotiating bank, or paying bank). A letter of credit guarantees payment of a specified sum in a specified currency, provided the seller meets precisely-defined conditions and submits the prescribed documents within a fixed timeframe. These documents almost always include a clean bill of lading or air waybill, commercial invoice, and certificate of origin. To establish a letter of credit in favor of the seller or exporter (called the beneficiary) the buyer (called the applicant or account party) either pays the specified sum (plus service charges) up front to the issuing bank, or negotiates credit. Letters of credit are formal trade instruments and are used usually where the seller is unwilling to extend credit to the...
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...[pic] 01.01Introduction: The word ‘Bank” refers to the financial institution that deals with money transaction. Banks collect deposit at lowest possible cost and provide loans and advances at highest Cost. The spread between the two is the profit for the bank. There are two different types of banking. One is commercial banking and investment banking. The commercial bank is types of bank which is engaged in banking activities, like; deposit and making loans and other fee based services. It also byes corporate markets activities. In today’s world, technological and financial advancement is influencing every human activity. Commercial banks have been playing a vital role in the world economy. Bank is not only a financial institution, but also a helping hand for the common people, different organization and also for the government country’s prospect and future economic conditions largely depends on the commercial banks. In today’s business world, few financial organizations have made a strong place in the market and “Bank Asia” is one of those names. The year 2014 has been a significant year for the economy of Bangladesh in terms of steady growth followed by price stability. Despite the political turbulence in the last half of 2013 and its impact in the early 2014, GDP increased from 6.01% in 2013 to 6.12% in 2014. This is mainly due to the rise in public investment from 6.6% of GDP in FY2013 to 7.3% in FY2014 and decline in private consumption by 1.5% due to...
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... After a successful completion of internship program on Dhaka Bank, Khatungonj Branch over the topic of “Foreign Exchange Dealings”, I have attempted to produce a report over the mentioned topic. FOCUS OF THE REPORT This report highlights the theoretical as well as practical background of foreign exchange. As the DBL Ktg Branch deals with Import Business as well Export Business, this report will focus on import & export business mechanisms of foreign exchange. Initially this report will make a brief highlight on the overall Dhaka Bank Limited (DBL) & its Khatungonj (Ktg) Branch. Then it will discuss the basics of foreign exchange, means and methods for settlement of International trade, Import procedures, Details of documenting credit, exchange rate determination and financial statistics on foreign exchange business. In the end, the report will enclose an appendix, which will show the various financial results’ summary of the DBL Ktg Branch. I hope the report will achieve its ultimate objective. SAIDUL ALAM ACKNOWLEDGEMENT I have the pleasure to express my gratitude to the Almighty Allah (SWT) for giving me opportunity to complete my BBA course, internship Program and finally to Prepare this report. First and foremost, I hold the pleasure to express my deepest gratitude to Mr. Mohd. Mujibul Quader, the honorable Vice President & Manager of DBL, Ktg. Branch for allowing me to conduct my internship in his prestigious bank. I sincerely acknowledge the...
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...incorporation into letters of credit from 1st July 2007 and replaces UCP 500. It is expected that letters of credit issued after that date will be subject to the UCP 600. The UCP 500 has not been repealed and as such and in principle, parties could still opt for the UCP 500. Rationale for the UCP 600 Revisions of the UCP 500 were initiated by International Chamber of Commerce (“ICC”) which mandated the Banking Commission of the ICC to bring the UCP procedure in line with the present times. Though the UCP 500 had obvious benefits, the international business community found the procedure embedded in the UCP 500 cumbersome and open to ambiguity, error and document rejections. New and Simplified Structure One striking feature of the UCP 600 is its lean and simplified look. It is set out in a new and simplified structure. The number of articles have been reduced from 49 to 39. The practice of position papers which were issued previously to clarify rules have been discontinued. The old UCP 500 was subjected to major drafting changes. Every single article has been re-drafted and tightened with a view to not only to bringing simplicity and clarity to the language but to remove ambiguity and reduce document rejections. UCP 600 Summary of New Provisions Set out below is a summary of the new provisions: • a leaner set of rules, with 38 articles rather than 49 articles; • a new section of “Definitions”, containing terms such as “honour”, “credit” and “negotiation”; ...
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...DOCUMENTARY CREDIT TRACKING SYSTEM OF IBBL An internship report submitted for the satisfaction of the requirements for the degree of BACHELOR OF BUSINESS ADMINISTRATION By S.M. Tanvir Ferdous Id: B033112 Department of Business Administration International Islamic University Chittagong, Dhaka Campus Spring 2008 -1- DOCUMENTARY CREDIT TRACKING SYSTEM OF IBBL An internship report submitted for the satisfaction of the requirements for the degree of BACHELOR OF BUSINESS ADMINISTRATION Submitted To Md. Shariful Haque Assistant Professor Prepared By S.M. Tanvir Ferdous Id: B033112 Date of Submission: January 5, 2008 Department of Business Administration International Islamic University Chittagong, Dhaka Campus -2- Letter of Transmittal January 5, 2008 Md. Shariful Haque Assistant Professor DBA, IIUC Dhaka Campus Subject: Submission of the Internship Report Dear Sir, I am glad to inform you that I have completed my internship report on “Documentary Credit Tracking System of IBBL”. I have gathered extensive knowledge while I was doing this report. Though there was some limitation and difficulties but I tried my level best to eliminate those limitations with your help and your guideline. Since this is my first full form of co-relational study, I tried my level best to finish this study as professional manure. I highly appreciate the opportunity to prepare this report. Yours sincerely, S.M. Tanvir Ferdous Matric NO- B033112 Batch- 17A Department...
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...Tactics of Commercial Activities PREPARED BY Saiful Islam Biplob | CAN-150221 | Date of Submission: Dec 07, 2015 Executive summery Exporting is a challenging job in the garments sector. Now it’s an adopting concept in garments industry. In this regard commercials play an important role in the RMG manufacturing company. The Commercial Officer is an executive-level position whose occupant is responsible for the commercial strategy and development of an organization. It typically involves activities relating to marketing, sales, product development and customer service to drive business growth and market share. As a corporate officer position, the commercials generally reports directly to the chief executive officer (CEO) and is primarily concerned with ensuring the integrated commercial success of an organization. The role typically must combine technical knowledge of the relevant field with strong marketing and business development skills. This means that they are closely linked to the organization's strategic management function, in drafting, implementing and evaluating cross-functional decisions that will enable an organization to achieve its long-term objectives. Merchandiser has to understand the buyer’s requirements after receiving specification in the sample order. In many cases, there are modifications pertaining to the specifications in the order to dispatch on time and the right quality. He has to talk with the in-house veterans...
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...DOCUMENTARY CREDIT TRACKING SYSTEM OF IBBL An internship report submitted for the satisfaction of the requirements for the degree of BACHELOR OF BUSINESS ADMINISTRATION By S.M. Tanvir Ferdous Id: B033112 Department of Business Administration International Islamic University Chittagong, Dhaka Campus Spring 2008 -1- DOCUMENTARY CREDIT TRACKING SYSTEM OF IBBL An internship report submitted for the satisfaction of the requirements for the degree of BACHELOR OF BUSINESS ADMINISTRATION Submitted To Md. Shariful Haque Assistant Professor Prepared By S.M. Tanvir Ferdous Id: B033112 Date of Submission: January 5, 2008 Department of Business Administration International Islamic University Chittagong, Dhaka Campus -2- Letter of Transmittal January 5, 2008 Md. Shariful Haque Assistant Professor DBA, IIUC Dhaka Campus Subject: Submission of the Internship Report Dear Sir, I am glad to inform you that I have completed my internship report on “Documentary Credit Tracking System of IBBL”. I have gathered extensive knowledge while I was doing this report. Though there was some limitation and difficulties but I tried my level best to eliminate those limitations with your help and your guideline. Since this is my first full form of co-relational study, I tried my level best to finish this study as professional manure. I highly appreciate the opportunity to prepare this report. Yours sincerely, S.M. Tanvir Ferdous Matric NO- B033112 Batch- 17A Department of Business Administration...
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...CHAPTER 1 Introduction 1.0 Introduction: Banking system is expending its hand in different financial events every day. At the same time the banking service is becoming faster, easier and the banking arena is becoming wider as the demand for better service increases day by day, they are coming with different innovative ideas & products. In order to survive in the competitive field of the banking sector, all banking organizations are looking for better service opportunities to provide their fellow clients. As a result, it has become essential for every person to have some idea on the bank and banking procedure. Internship program is essential for every student, especially for the students of Business Administration, which helps them to known the real life situation. 1.1 Background of the Report: This report was being assigned as a part of the BBA Program. To prepare the report under the BBA program requirement, I accommodate my internship program in the EXIM Bank Limited. For the completion of the program, I have already prepared a report. This report is being formed on the most important issue “Foreign Exchange performance of EXIM Bank Limited”. The entire report is based on practical experience of EXIM Bank Limited. I have tried to furnish all the issue that I gathered from through working with EXIM Bank limited. 1.2 Objective of the Report: The objective of the report are mentioned according to the priority- 1. The most significant objective...
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