The documentary letter of credit (L/C) constitutes of the important methods of financing trade. Because of the phenomenal growth in world trade and commodity wise diversification of trade its importance has significantly increased.

On receipt of the documents from the negotiating Bank, the L/C opening bank will make entry the particulars of the documents into Inward Foreign Bill Register and prepare the voucher by converting the foreign currency into Bangladesh Taka. This stage is known as lodgment of import bills.

The full sets of documents which are submitted by the exporter to his bank as per terms and conditions of the L/C is known as shipping documents.

The L/C opening bank may receive these shipping documents from his foreign correspondent (Bank) in two ways.

i) Documents on collections basis.
ii) Negotiated Documents.

i) Documents on collection Basis :-

The shipping documents which are not negotiable by the exporter's bank due to some discrepancies will be sent to L/C opening bank on collection basis. The collection bank (exporter's bank) will mention the discrepancies on their forwarding schedule.

On receiving the documents the L/C opening bank will further scrutinize the documents with the L/C and inform the importer regarding discrepancies found in the documents. If these are acceptable to the importer and or permissible with the existing exchange control Regulation, the documents will be lodged and L/C opening bank will send the payment instruction to the collecting bank.

ii) Negotiated Documents

The documents which has already been negotiated i.e. the exporters bank (this bank is known as negotiating bank) has made payment to the exporter against the documents submitted by him may be termed as negotiated documents. Generally these documents are free from discrepancies. Though these documents are supposed to be free from any discrepancy, the L/C opening bank must scrutinize and confirm that there is no discrepancy in the documents.

Incase of documents which has no discrepancy and documents with minor discrepancy (if accepted by the importer) are to be lodged, where the major discrepancy is found, it is the duty of the L/C opening banks to send a cable / Telex to the negotiating bank with instruction to credit the amount to the L/C opening banks A/C which was paid to the exporter, because the documents are not accepted and also to seek instruction regarding disposal of the documents. The particulars of these documents to be entered is separate column or separate Inward Foreign Bill Register under the head Foreign Bill under Reserve.


After scrutinization, if it is fund in order the officer concerned will brand a rubber stamp "Checked and Found Correct" which will be followed by his initial.

Amount in foreign currency to be converted into Bangladesh Taka with the exchange rate (B.C selling) prevailing on the date of lodgment.
Particulars of documents to be entered in the "Inward Foreign Bills Register"

Preparation of Vouchers : The following vouchers are to be prepared :-
a) Lodgment voucher :
Dr. PAD / Draft amount + Negotiation commission (if any)
Cr. H.O, I.D / (Reimbursing Bank) A/C

B) Liability voucher to be reversed which was originated at the time of opening L/C
Dr. Barkers liability on L/C (Cash)
Cr. Customers liability on L/C (Cash)