3.8 L/C OPERATION OF PBL

Today PBL is one of the leading and most successful Banking enterprises in the country. If pay a great role in the economy of the country. By export-import business the bank play a great role to the economy of Bangladesh. PBL is one of the greatest bank in export-import business.

Foreign trade plays a vital role in the economic advancement process of a nation. So the trend of country's foreign trade, i.e import & export is of a great concern to the government of a country. Fluctuation in the parameters of foreign trade immediately brings about some impact on the total economy. As such the nature, trend and the volume of foreign trade are required to keep peace with the national economic needs and objective. There may be some areas where emphasis is to be given while there may be others which deserve restrictions or discouragement. Moreover the items of import & export value and volume of the same, the corresponding time period, sources of fund far payment and receipt, all these factors are to be considered very carefully for making necessary adjustment to match with the national economic policies as well as achieve balanced economic growth through the interpolicy and interpolicy co-ordination.

International trade policy relates to commercial policy which has two main components of Import policy relates to commercial policy which has two main components of Import policy and Export policy. With a view to achieving favorable balance of payment position as well as to encouraging or well to encouraging or well regulated and need based foreign trade of the country, the government formulates the national commercial policy i.e. import and export policy for a certain period considering all the favorable & unfavorable aspects of the nation's previous trade performance as well as the future requirement and prospects.

As the policy matter and the operational of import & export trade are quite different, two separate policies for import & export trade are formulated by the government. Import policy refers to government policies account for a particular fiscal period envisaging the allocation of fund available from various sources for import of certain quantity of certain goods. The main purpose of the policy is to conserve scare foreign exchange & to ensure its utilization for the import of goods and services which have national priority. The selected persons on institutions those who have got valid Import Registration Certificate (IRC) form the Chief Controller of Import and Export (CCI & E) can import and they are known as importers.

These importers can import goods as entitled in each year as per import policy by opening letter of credit (L/C) through bank i.e. Authorized Dealer (A.D). Authorized Dealer means the branches of commercial banks, those who are authorized / licensed by the Bangladesh Bank to deal in foreign Exchange. Letter of Credit may be defined as the letter as the letter of undertaking or letter of guarantee issued by the L/C opening bank on behalf of the importer submits all the documents as mentioned in the L/C submits all the documents as mentioned in the L/C within the time schedule to his bank i.e. exporters bank.

Before opening L/C in favour of the exporter the entitlement of the importer (total amount in taka he can import as per import policy) to be registered with Bangladesh Bank. For this purpose the importer is to apply through L/C. Authorization form (LC A form). This is a set in quintuplicate and the authorized dealer will issue LCA form to the individual importer at their request. After filled up and signed up the appropriate column of the LCA from, the importer will submit it to Authorized Dealer who inturn forward the same to Bangladesh Bank for registration where fund is purchased from Bangladesh Bank. After registration Bangladesh Bank forward the 1st and 2nd copy of LCA form to the Authorized Dealer, 3rd and 4th copy to CCI & E and keep the 5th copy as their office copy. 1st copy of LCA is known as Exchange Control copy against which Authorized Dealer can open L/C at the request of the importer. 2nd Copy is known as custom purpose copy which will be handed over to the importer who will clear the goods from the port on its arrival through this custom purpose copy of LCA along with other shipping documents.