BTB FLOWCHART
DHAKA BANK
PRIME TEXTILE LTD
RUPALI BANK
VAI MUNNA
GARMENTS
UBL DHAKA
SUPPLIERS BANK
FABRICS SUPPLIER
LC ISSUING BANK/
NEGOTIATING BANK
2 ND BENEFICIARY/
EXPORTER
TRANSFERRING BANK
ZXY Buying SCB DHAKA
AMEX NEWYORK
JC PENNY
FIRST BENEFICIARY
ADVISING BANK
LC ISSUING BANK
BUYER/ APPLICANT
Legal Framework: Import – Export (Control) Act – 1950 (sub section 1 of section 3)
Import Policy Order Export Policy Order
Foreign Exchange Regulation Act (FERA)-1947 Guidelines for Foreign Exchange Transactions
(GFET): Vol – I & Vol - II Directives of NBR
Customs Act – 1969 Pre-shipment Inspection (PSI) Act - 1999
International Rules of ICC UCPDC–600 eUCP–Version 1.1 URC-522 URR-725 ISBP-681 Incoterms 2000
Main Features of Import Policy: Who can import- • Any Person having Import Registration Certificate
(IRC) • Any Person exempted from having IRC How IRC is obtained- How IRC is renewed- List of banned, restricted & permissible items- How import can be done: • With LC & LCA • Without LC but against LCA • Without LC & LCA (Import permit or Clearance
permit)
Main contents of Import Policy Order (IPO):
Banned items Restricted items Permissible items Restriction of shipment
-Prior to opening of LC-Expiry of the LC
Country of Origin ( ‘CO’ should be mentioned in package/goods)
Harmonized commodity description & coding system (H.S. code)
Carrying of goods by Bangladesh Flag Vessels Pre-shipment inspection Special conditions for food items CFR/FOB/CIF Insurance cover note.
FEATURES of BTB
Back to Back LCs to be opened against export LCs received by export orient industries under the bonded warehouse system.
Required value addition should be observed (value addition is prescribed in IPO)
For Quota & Non-quota woven garments : 20% Knitted/others (Qouta - price $60/Dozen) : 15% Knitted/others (Non- qouta - price $60/Dozen) : 10% Sweater : 20% Kids’ garments : 15%
FEATURES (BTB LC)
BTB LCs may be opened upto 180 days usance. Sight LCs may be opened under EDF. Inland BTB LCs denominated in FC may be opened
in favour of local manufacturer-cum-suppliers. BTB LCs may be opened for import of necessary
inputs against inland BTB LCs. Accepted (Usance) bills against BTB LCs should be
settled at maturity. Cases of failure of export against related LCs should
be reported to NBR & Commissioner of Customs.
REQUIRED PAPERS1. Valid IRC, ERC.2. Valid Trade License from recognized Trade
Body.3. TIN & Income Tax payment certificate.4. VAT registration certificate.5. Valid Bonded Ware House license (foreign
import). 6. Other formalities with concern regulatory
bodies.
PROCEDURES1.Receiving Export/Master LC duly advised/
transferred.2.Scrutiny of Master LC to find out if there is
any adverse clause in the LC, shipment & expiry date, reimbursement clause etc.
3.Receiving application from the client in LC Application Form along with PI duly accepted by the importer.
4.Obtaining credit report of exporter ( upto Tk. 700,000 in case of PI and upto Tk. 1000,000 in case of indent)
5.Approval of proposal / office note for opening BTB LC. Contd…….
Procedures Contd…….
6. Issuance of IMP, LCAF7. Giving entries in LC Opening Register.8. Vouching:Commissions, charges & Liability.9. Transmission of LC.10. Passing liability voucher. 11. Receiving of Shipping documents.12. Lodgment of import bill, intimating discrepancy.13. Intimation of maturity date in case of deferred
LC.13. Making payment at sight for sight LC (EDF),
payment on due date for deferred LC.14. IMP reporting to Bangladesh Bank.15. Matching Bill of Entries.
ACCOUNTINGLiabil i ty Voucher:
Dr. Customer’s liability on BTB L/C Cr. Banker’s liability on BTB L/C
(Applicable rate: B.C Selling rate)
Commission & others charges:
Dr. Customers A/c: Commission + FCC + Postal/ Telex + Misc.
Cr. Income A/c: Commission on L/C foreign Cr. Income A/c. Postal/ Telex Recoveries Cr. Income A/c: Miscellaneous earnings
(Handling charges, stationery, etc.) Cr. Sundry Deposit A/c: FCC.
Export documents purchase: (Only CM portion is purchased) Dr. FDBP/FBP Account (@ OD sight
export) Cr. CD A/C Cr. Packing Credit/ Others Loan A/C Cr. Income A/C Com Cr. S/D Tax
After realization of Export Proceeds: Dr. General A/C ID, HO (CM portion- TT
Clean & rest portion-OD Sight ) Cr. FC Held ( @ OD Sight Export)
Cr. FBP A/C Cr. I/A Exchange Earning
Payment of BTB: (i) Reversal of acceptance liability: Dr. Banker’s liability on BTB bills Cr. Customer’s liability on BTB bills (ii) Out of export proceeds settlement in FC: Dr. Exporters F.C held A/c: Bill value with
usance interest (O.D sight export) Cr. General A/c: On Nostro A/c( OD sight
export)