Standard Chartered Bank of Pakistan

INTERNATIONAL BANKING 2014

GC UNIVERSITY FAISALABAD Page 1

A WELL-KNOWN QUOTE

A dream doesnt become reality through magic; it

takes sweat, determination and hard work.

A FINAL PROJECT SSTTAANNDDAARRDD CCHHAARRTTEERREEDD BBAANNKK OOFF PPAAKKIISSTTAANN

HERE FOR GOOD



PRESENTED TO:

Sir .Saleem

Lecturer

Dept. Banking and finance

GC University Faisalabad

PRESENTED BY:

ALI RAZA RAFIQ 7108

Cell # 03447996241

ABDUL HANNAN 7103

Class: BBA 7th (E-B)

Dept. Banking and finance

GC University Faisalabad



Table of contents

Dedication ... 4

Acknowledgement.5

Preface...6

History . .07 to 14

Introduction of Standard Chartered Bank of Pakistan

The Global Operating Regions of Standard Chartered Bank:

Mission and vision

Logo

Approach

Core values

Awards and achievement

Board Of directors

Associated companies

Commitment to stakeholders

PACRA credit rating

Organizational structure

Branch hierarchy

Major clients

Financial Key figures ......15

Priorities of 2014..15

Introduction to international banking.16

Foreign currency account ..17

Branch Information ..18

Corporate banking ...18

Methods of payments in international banking.18

Types of remittances.....20

Remittances techniques....20

Nostro accounts of SCP...21



Vostro account of SCP.....21

Loro account of SCP21

'Telegraphic Transfer - TT'..22

SWIFT.....21

LC and its Types ..22

Schedule of Standard chartered Bank of Pakistan..23

Basic component of LC.24

Guidelines Adhered to Trade Services of Standard Chartered Bank25

Documents required submitting along with LC Application..25

Documents required ..26

Advantage and disadvantage of LC.....27

Summary .....28

Bibliography..29



DEDICATION

WE would like to dedicate this project to our beloved

parents and very respectable teachers who are best

in our life.

They also gave me courage, enthusiasm, support &

guidance for my studies & carrier at various

occasions of my life

Thanks a lot!!!!!!!!!!



ACKNOWLEDGEMENT

All praises for Almighty Allah, whose uniqueness, oneness &

wholeness is unchallengeable guided us in different and congeal

circumstances.

We are grateful to our teachers, especially Sir Saleem & Dr. Bilal

Aziz they really support us during this project.

We must acknowledge our gratitude to Mr. Syed Mohsan Abbas

Branch Manager of STANDARED CHARTED BANK OF PAKISTAN

(kotwali road branch) and Me.Hamid Riaz Finance Manager of

STANDARD CHARTERED BANK OF PAKISTAN they really helps us to

complete this report



PREFACE

Being students of BBA (B&F) GC University Faisalabad we are

pleased to disclose this report through which we have gain a

lot.

We have realized theory and practices both are obligatory to

become a good manager. Someone has rightly said that

practical knowledge is far better than classroom teaching.

After doing successful work on this international banking

project we are able to analyze international banking practices

like method of Remittances, Import procedure, export

procedure and whole procedure of letter of credit which are

common practices in international banking



Standard chartered bank of Pakistan

Introduction

Standard Chartered is a leading international banking group. It has operated for over 150 years

in some of the world's most dynamic markets and earns around 90 per cent of its income and

profits in Asia, Africa and the Middle East. This geographic focus and commitment to developing

deep relationships with clients and customers has driven the Bank's growth in recent years.

Standard Chartered PLC is listed on the London and Hong Kong stock exchanges as well as

the Bombay and National Stock Exchanges in India.

With 1,700 offices in 70 markets, the Group offers exciting and challenging international career

opportunities to over 88,000 staff. It is committed to building a sustainable business over the

long term and upholding high standards of corporate governance, social responsibility,

environmental protection and employee diversity. Standard Chartered's heritage and values are

expressed in its brand promise, 'Here for good'.

Background of Standard Chartered Bank:

Standard Chartered Bank (SCB) is incorporated in England with limited liability by Royal

Charter 1853, now it is one of the worlds best international banks, with operations throughout

the globe. Standard Chartered Bank has a history of about 150 years. The name of the bank

came from the two original banks the Standard Bank of British South Africa and the

Chartered Bank of India, Australia and China. Of the two banks, the Chartered Bank was

established in 1853 by a Royal Charter granted by Queen Victoria of England. The key person

behind the Chartered Bank was a Scot, James Wilson who has started The Economist, which

is still one of the worlds pre-eminent publications. He visualized the advantages of financing the

growing trade links with the areas in the East, where none of the other financial institutions were

present at that time and therefore the Chartered Bank opened two branches in 1858 in Chennai

and Mumbai. On the other hand, the Standard Bank was founded by another Scot, John

Paterson in 1862. He immigrated to the Cape Province in South Africa and became a

successful merchant there. Coming from the similar background, he also visualized the great

opportunities through linking between Europe and South Africa.

From the very beginning both the banks were keen to capitalize on the huge expansion of trade

between Europe, Asia and Africa and to reap the handsome profits to be made from financing

on that trade. Therefore, although they were separate entities, survived the First World Ware

and the Depression. But were directly affected by the wider conflict of the Second World War in

terms of loss of business and closure of branches and for that they decided to merge in 1969.

After the merger the new shares of the Standard and Chartered Banking Group Limited were

listed in the London Stock Exchange on January 30, 1970. Although the two banks merged in

1969, but their operations were being executed from two different headquarters, until on June



1980, the original building of the Chartered Bank was demolished and a new headquarter of the

Standard Chartered Bank was opened on March 20th, 1986. Right after the merger the bank

embarked on a vigorous mission to expand its business in Europe and the USA

In the last thirty years, Standard Chartered Bank has experienced continuous growth, which led

to its becoming one of the top 100 listed banks in the world. In the year 1993 and 1994 it was

judged as the best bank in the Asia Pacific region for its excellent service and growth rate as

well. The bank excels in providing the most efficient, consistent and timely services through 600

offices in more than 57 countries of Asia, Africa, Middle East and European region incorporated

in the UK with its Headquarter as 1 Aldermanbury Square, London. At present, it is maintaining

corresponding relationship with over 600 banks in 157 countries. SCB specializes in personal,

corporate, institutional and personal finance and custodial service with having a staff of about

33,000 people. SCB is well established in growth markets and aims to be the right partner for its

customers. This Bank is trusted across its network for its standard of governance and its

commitment to making a difference in the communities in which it operates. Standards

Chartered Bank aims to be a banker of choice by understanding, meeting and consistently

exceeding their customer requirements. They aim to provide security and value to their

customers by offering a wide range of innovative and safe products that are benchmarked

against their competitors best offerings.

The Global Operating Regions of Standard Chartered Bank:

Standard Chartered is headquartered in London where it is regulated by the UKs Financial

Services Authority. The Groups head office provides guidance on governance and regulatory

standards. Our Wholesale Banking team in London plays a key role in serving corporate clients

and financial institutions doing business in our markets. The Standard Chartered Group is

operating in 57 countries in various extents. These countries are grouped into 5 regions based

on their locations and business core focus.

Asia Pacific

Africa

Latin America

Middle East and South Asia (MESA)

UK and USA

150 Years in Asia

First branches opened in Calcutta, Shanghai and Mumbai in 1858, followed by branches in

Hong Kong and Singapore in 1859.

Over 80% of total Group staff work in Asia



Largest international bank in India & Pakistan

Locally incorporated in China in 2007

Over 80% of Groups profits generated from Asia

Standard Chartered Bank Pakistan

Standard Chartered Bank (Pakistan) Ltd. is the oldest and largest international bank in Pakistan.

It is also the first international bank to be awarded Islamic banking licence and the first to open

an Islamic banking branch.

Standard Chartered celebrated 150 Years in Pakistan in 2013. The Bank, which started as the

Chartered Bank opened its first office in Karachi in March 1863.

The Banks serves both Consumer and Wholesale Banking customers. Consumer Banking

provides credit cards, personal loans, deposit taking and wealth management services to

individuals and small to medium sized enterprises. Wholesale Banking provides corporate and

institutional clients with services in trade finance, cash management, lending, securities

services, foreign exchange, debt capital markets and corporate finance. It also offers a complete

suite of Islamic banking solutions under its Standard Chartered Saadiq brand.

Standard Chartered was assigned a rating of AAA/ A1+ by PACRA. In 2012 and 2013 it won the

award for Best Bank in Pakistan by The Asset Triple A for two consecutive years.

The Bank employs over 4,500 people in Pakistan and has a network of 116 branches of which

10 are dedicated Standard Chartered Saadiq branches as well as 191 ATMs.

Logo: Here for good

Here for good is the essence who we are. It's about sticking by our clients and customers

through good times and bad, and always trying to do the right thing.

Mission:

Standard Chartered bank aims to be a banker of choice by understanding, meeting and

consistently exceeding their customer requirements. They aim to provide security and value to

their customer by offering a wide range of innovative and safe product that are benchmarked

against our competitors best offerings. Their motto is to be the worlds best international bank.

Vision:

Leading the way by providing best customer services.



BOARD OF DIRECTORS (AS AT OCTOBER 28, 2013) MR. MOHSIN ALI NATHANI CEO / EXECUTIVE DIRECTOR MR. CHRISTOS PAPADOPOULOS NON EXECUTIVE DIRECTOR & CHAIRMAN OF THE BOD MR. RAHEEL AHMED NON EXECUTIVE DIRECTOR MR. ANDREW BAINBRIDGE NON EXECUTIVE DIRECTOR MR. NAJAM I. CHAUDHRI NON EXECUTIVE DIRECTOR & CHAIRMAN AUDIT COMMITTEE

MR. PARVEZ GHIAS INDEPENDENT NON EXECUTIVE DIRECTOR

Awards & Achievements

Finance Asia Country Awards 2011

Best Foreign Commercial Bank in Pakistan

Best Foreign Investment Bank in Pakistan

The Asset Triple A Awards for 2011

Best Bank in Pakistan

Best Debt House in Pakistan (for the fourth consecutive year)

Euro money Awards for Excellence 2011

Best International Trade Bank in Pakistan

Global Finance Magazine Award 2011

Best Consumer Internet Bank in Pakistan for the second consecutive year

The Asset Triple A Awards for 2011

Best Country Deal in Pakistan

First ever local currency shipping finance transaction for Pakistan National Shipping

Corporation of US D10.3bn Pakistani rupees - financing equivalent to USD 120mn

Associated Companies:

Standard Chartered Modaraba

Website: www.scmodaraba.com

Standard Chartered Leasing Ltd.

Website: www.standardcharteredleasing.com

Bank Auditors:

M/s KPMG Taseer Hadi & Co. Chartered Accountants



Website links of Stock Exchanges:

www.kse.com.pk

www.lse.com.pk

www.ise.com.pk

We are leading the way through our:

o Growth Markets

o Innovative Products and Services

o Talented and Diverse Teams

o Sustainable Business Strategy

Brand Promise:

Leading by Example to be The Right Partner

Core Values:

Responsive

Trustworthy

Creative

International

Courageous

Approach:

Participation: Focusing on attractive, growing markets where we can leverage our customer relationships and expertise.

Competitive Positioning: Combining global capability, deep local knowledge and creativity to outperform our competitors.

Management Discipline: Continuously improving the way we work; balancing the pursuit of growth with firm control of costs and risks

Commitment to Stakeholders:

Customers:passionate about our customers success, delighting them with the quality of our service.

Our People: Helping our people to grow, enabling individuals to make a difference and teams to win.

Communities: Trusted and caring, dedicated to making a difference.

Investors: A distinctive investment delivering outstanding performance and superior returns.



Regulators: Exemplary governance and ethics wherever we are

PACRA Maintains the Ratings of standard chartered bank of Pakistan Standard Chartered was assigned a rating of AAA/ A1+ by PACRA. In 2012 and 2013 it won the award for Best Bank in Pakistan by The Asset Triple A for two consecutive years.

Organizational Structure:

CEO-SC PAKISTAN

Head of

Corporate

Banking

Head of

Consumer

banking

Head of

International

Banking

Head of

treasury

Head of

legal &

compliance

Head of

Human

resource

Unit head

d

Unit head

Unit head Unit head Unit head Unit head Unit head

Manager Manager Manager Manager Manager Manager

Junior

Manager

Junior

Manager Junior

Manager

Junior

Manager

Junior

Manager

Junior

Manager

Assistant

Managers

& Officers

Assistant

Managers

& Officers

Assistant

Managers

& Officers

Assistant

Managers

& Officers

Assistant

Managers

& Officers

Assistant

Managers

& Officers



Branch Hierarchy

Major Groups Trade with Standard chartered bank of Pakistan Major parties or huge customer of Bank Al Habib Ltd are;

Kamal Group

Ibrahim Group

AB Group

Nishat Group

Pepsi cola Int.

Nestle Pakistan

Branch Manager

Credit Manager Operation Manager Foreign Trade

Assistant Manager

OG

I (2)

OG II (2)

Cash Operations

Unit Incharge

OG II

S.O (3)

A/C Opening (OG II)

Clearing (S.O)

Remittance

Manager

2 Assistant Manger

OG I (2) OG II (2)



Priorities of 2014:

Standard Chartered is well positioned to capitalize on the growing international trade flows as a

result of our broad geographical footprint, the depth of our customer relationships, delivery of

our product capabilities and the expertise of our people. The Group is investing in dynamic

markets and benefiting from the shift in economic power from West to East.

Superior Financial Performance

Continuous improvement

Build leadership

Be the right partner for regulators & community

FINANCIAL KEY FIGURES Rupees in million

2006 2007 2008 2009 2010 2011

Revenue 14,023 22,339 22,985 23,167 23,473 26,755 Operating Profit 8,923 10,179 10,330 10,802 9,993 12,912 Profit before Tax 7,360 4,126 1,014 1,384 5,563 8,431 Profit after Tax 5,709 2,767 608 746 3,606 5,446 Net Mark-up Income before provision

10,336 16,192 16,419 16,284 17,278 20,540

Non Mark-up Income

3,687 6,147 6,566 6,883 6,195 6,215

Non Mark-up Expenses

5,100 12,160 12,655 12,365 13,480 13,843

Shareholders Equity

40,230 43,066 42,769 47,717 51,073 54,589

Total Assets 246,318 255,545 264,629 312,845 321,923 356,405 Advances - net 129,004 119,537 125,601 124,447 139,269 129,620 Investments - net

34,629 40,696 29,587 83,785 72,637 104,375

Deposits 156,878 177,162 174,552 206,958 220,266 235,953 Expense / Income Ratio

36% 54% 55% 53% 57% 52%

Advances / Deposits Ratio

82% 67% 72% 60% 63% 55%

Return on Equity 23.48% 6.64% 1.42% 1.65% 7.30% 10.31% Return on Assets

3.19% 1.10% 0.23% 0.26% 1.14% 1.61%

Earnings per - - - - - 1.41



Introduction to International Banking:

The sessions so far have focused on banking in a domestic context. In this lecture we are going

to look at the issues which arise from the internationalization of banking, which has been a

growing trend since the 1960s. After looking at the nature of international banking and reasons

for its growth, we shall focus on risks. The most important risks are the problem of sovereign

risk and the behavior of the international interbank market (IIBM), although exchange rate risk

can also pose difficulties.

Definition of IBD in terms of its functions

The international banking department of a bank is primarily responsible for

Financing foreign customers or domestic clients involved in foreign dealings. The operations

Typically handled by a bank's international department include:

1. Exchange operations.

2. Opening of documentary credits of importation, as well as providing notices and Confirmation

of export documentary credits.

3. Remittance to correspondents of documents for collection and handling of collections

Received from them.

4. Issuing bond guaranties on foreign countries or issuing bonds or guaranties for the

Account of foreign banks or firms in favor of local firms.

5. Handling foreign currency assets of the bank.

6. Granting lines of credit to banks or firms abroad and securing and handling lines of credit

granted to the bank by its correspondents.

7. Maintaining public relations to assure permanent contact, directly or indirectly, with customers

within the country or abroad.

8. Maintaining close supervision of relations with correspondent banks worldwide, which, aside

from credit and service aspects, also means permanent control over reciprocity received or

given.

9. Compiling statistical data to evaluate the evolution of bank operations in the international

sector

Note: All these function are practicing in standard charted bank of Pakistan



Foreign Currency Account SCP

Foreign Currency Account is a transactional account denominated in a currency other

than the home currency and can be maintained by a bank in the home country or a

bank in another country. Foreign Currency Current Account enables customers to

derive maximum benefits from their foreign currency deposits.

Features:

Account can be opened in US Dollar, Pound Sterling or Euro currency.

Minimum balance equivalent to 100 (USD, GBP, EUR).

No maximum balance limit.

No restriction on deposit and withdrawal transactions.

Can be opened singly or jointly.

Free SMS Alerts (On Transaction Equivalent to Rs 25,000 & above).

Free Cheque Books.

Free Remittances (Two Per Month)

Documents Required:

Copy of valid CNIC.

Two passport sizes colored Photographs of Applicant.

Verified signatures from bank.

Source of Income.

For opening foreign currency account, customer requests to the banker to open his

foreign currency account. According to customers wish banker will tick the box of the

foreign currency in the account opening form and then fill all other required fields

according to the provided information by the customer.



Branch Information As our respected Sir Saleem sb assigned us a project of international banking and provided us visiting letter of standard chartered Bank of Pakistan and so, we go there in the branch of standard chartered bank which is located at Kotwali road Faisalabad and it was a corporate branch which also deals in International Banking. Then we met with the branch manager Syed Mohsan Abbas and told him About our presentation and he is such a nice person and deal with us very warmly and refer us to the person who is actually dealing in international banking then we have asked certain questions about our Project

Corporate Banking Standard chartered Bank offer the following products and services 1. Account services 2. Trade services (Regulated by SBP) (import & Export) 3. Working capital finance 4. Project finance 5. Musharakah finance 6. Mudarabah finance 7. Ijarah

TRADE SERVICES: Standard chartered Bank offer a wide range of import and export services Which includes:

1. Bank Guarantee

2. Services for export: a. Export bills for collection. b. L/C Advising and Confirmation services. c. Islamic Export Refinance services. d. Pre-shipment and post-shipment financing on Islamic modes of financing.

3. Services for Importers: e. Letter of credit

f. Import financing by way of Murabaha/Ijarah.

METHOD OF PAYMENT IN INTERNATIONAL BANKING

Introduction:

Bank developed various instrument of payment and a range of method of settlement

mechanisms to meet their customers needs. They also shaped up their international banking

departments to meet the challenges posed by increasingly varied demands from their

customers. Corresponding banking arrangement come into the picture as a solution to serve the

banks customers spread across far corners of the globe.

What are Remittances and their techniques?



A remittance is one method of sending money from one country to another country. The person

sending the money is usually a foreigner working in thehost country. The foreign worker sends

money back to their home country to assist family there. Remittances allow for economic growth

within the countries. It also contributes to the stability of the country, and the people living in it.

Types of remittances offered by SCP

Family remittances,

Migrant worker Remittances,

Social worker remittances, and

Community remittances

Family Remittances:

It refers to remittances that are sent by individual immigrants working in the foreign locations to

their family, relatives or friends in their home country. These remittances are sent every month

and they assist the families of the migrants to survive.

Community Remittances:

It refers to the remittance that is sent by individual immigrants generally and also includes the

remittance sent by various hometown associations to organizations and communities in their

home country. This money has been used for the developmental activities of communities such

as in building infrastructure, church, parks, and roads.

Migrant worker Remittances:

These remittances refer to the cash transfers done by migrant workers for sending the money to

the families, friends and relatives back home. The migrant worker remittances make up a large

chunk of money inflows into home country by the people who have migrated to foreign locations

in the search of money, job or education.

Social Remittances:

These remittances basically comprise of various ideas, practices, and social capital that make

up the backbone of many remittances that flows from workers of one country to another. Thus

social remittances assist the traditions and culture of one race or community, to socialize with

the cultures and traditions of another community.

Remittance techniques

Inward remittances

Outward remittances



Inward remittances

The term 'inward remittance" means purchase of foreign currencies in whatever form

and includes not only remittances by M.T., T.T., draft etc., but also purchase of travelers

cheques, drafts under travelers letters of credit, bills of exchange, currency notes and

coin etc. Debit to banks' non-resident Rupee accounts also constitutes an inward

remittance.

Outward remittances

The term "outward remittance" means sale of foreign exchange in any form and

includes not only remittances by T.Ts, M.Ts, drafts etc., but also sale of travelers

cheques, travelers letters of credit, foreign currency notes and coin etc. Outward

remittance can be made either by sale of foreign exchange or by credit to non-resident

Rupee account of banks' overseas branches or correspondents

NOSTRO ACCOUNTS OF STANDARD CHARTERED BANK OF PAKISTAN

Slandered chartered bank of Pakistan has Nostro accounts in 17 different currencies throughout

the world including:

USA $

UK pound

Japanese Yen

Canadian $ etc

VOSTRO ACCOUNTS OF STANDARD CHARTERED BANK OF PAKISTAN

Due to devaluation of Pakistan rupee there are few Vostro accounts are maintained by standard

chartered bank of Pakistan which includes

Sri Lankan rupee

Afghanistan rupee

Indian rupee and etc.

LORO ACCOUNTS OF STANDARD CHARTERED BANK OF PAKISTAN

As we have asked about loro accounts, financial consultant Mr. Hamid Riaz told us this is just

facility which we have used in case of need with cooperation of different local banks . So this is

not regular facility.



Old technique through which Standard chartered Bank sends money internationally?

The old technique which is used by banks is through Telex, Courier. Telex is just like a

Typewriter and connected with a telephone wire and used to send money in different countries

And each telex machine has a different number such as out PTCL numbers. This telex machine

on that time was placed anywhere in the home, in the office and in banks etc. Due to this fact,

the Chances of fraud become higher. The main drawback of that machine was that every man

can easily access to this machine.

Definition of 'Telegraphic Transfer - TT'

An electronic method of transferring funds. Telegraphic Transfers are used primarily for

Overseas wire transactions. These transfers are used most commonly in reference to CHAPS,

Clearing House Automated Payment System, transfers in the U.K. banking system.

Telegraphic Transfers are also known as Telex Transfers, abbreviated TT. TTs can also refer to

Other types of transfers. Telegraphic Transfers are usually fairly expensive, due to the fast

nature of the transaction.

New technique through which Standard chartered Bank sends money internationally?

SWIFT (Society for the Worldwide Interbank Financial Telecommunication)

Founded in Brussels in 1973, the Society for the Worldwide Interbank Financial

Telecommunication (SWIFT) is a co-operative organization dedicated to the promotion and

development of standardized global interactivity for financial transactions. SWIFT's original

Mandate was to establish a global communications link for data processing and a common

Language for international financial transactions. The Society operates a messaging service for

Financial messages, such as letters of credit, payments, and securities transactions, between

Member banks worldwide. SWIFT's essential function is to deliver these messages quickly and

securely -- both of which are prime considerations for financial matters. Member organizations

create formatted messages that are then forwarded to SWIFT for delivery to the recipient

member organization. SWIFT operates out of its Brussels headquarters and processes data at

Centers in Belgium and the United States.



In Banking Practices SWIFT:

As I asked about SWIFT from the head of international department and he told me that its a

Very costly software and operating it all over the world and not a single bank is able to

purchased it due to its high cost and he also told us we use a term MT which means that

message type, while they sending money in foreign countries. SWIFT is just install in our

financial institutions. In SWIFT there is unlimited methods to send message through the SWIFT

and each & every message have a code such as:

103 for payment

202 for individual person

203 for more than two persons

In SWIFT there is 8 digit alphabetical id and next four digit used for branch code of that branch

like:

D K P P U 0 4 3

INTRODUCTION TO DOCUMENTARY CREDITS

One of the important functions of the commercial banks in the world is to undertake import of

merchandise into the country and payment of foreign exchange towards the cost of the

merchandise to the foreign suppliers. Foreign exchange department of Standard Chartered

bank (SCB) is one of the most important departments among all other departments.

Definition: Letters of credit are often used in international transactions to ensure that payment will be received. Due to the nature of international dealings including factors such as

distance, differing laws in each country and difficulty in knowing each party personally, the use

of letters of credit has become a very important aspect of international trade. The bank also acts

on behalf of the buyer (holder of letter of credit) by ensuring that the supplier will not be paid

until the bank receives a confirmation that the goods have been shipped.

TYPES OF DOCUMENTORY CREDIT & SCP

REVOCABLE

IRREVOCABLE

STAND BY

RED CLAUSE/ GREEN CLAUSE

Note: SCP is offering only Irrevocable L/C in Pakistan



IMPORTS:

I CASH LETTERS OF CREDIT:

AA. OPENING : 1st Qtr Each subsequent Qtr.

Or part there of

Minimum

Annual Volume/ Committed business during the

calendar year :

(Commission)

o Up to Rs 10 Million 0.40% 0.20%

o Over Rs 10 Million to Rs 100

Million

0.30% 0.15%

o Over Rs 100 Million to Rs 200

Million

0.15% 0.10%

o Above Rs 200 Million 0.10% 0.10%

L/C Cancellation Charges Rs 750 plus

commission as per I

AA. Above.

EXPORTS:

I LETTERS OF CREDIT:

Advising - for Customers Rs 1,000 plus courier charges

- for Non- Customers Rs 2,000 plus courier charges

Amendment Advising - for Customers Rs 750 plus courier charges

- for Non- Customers Rs 1,500 plus courier charges

Negotiation of Rupee Bills under Export L/Cs 0.30% - Minimum Rs 1,000

Confirmation Minimum Rs 1000 per quarter

Maximum Case to case basis

e. Transfer of Export L/Cs Rs 1,000

f. Reimbursement payment to other local banks from Non-Resident

Rupee Account.

Rs 250

II IF THE DOCUMENTS ARE SENT TO OTHER BANKS FOR

NEGOTIATION UNDER

Rs 1,000

III COLLECTIONS:

Documentary (on which bank does not earn exchange difference)

Rs 500

Rs 2,000 Min

Schedule of Standard chartered Bank of Pakistan

Charges

Effective From

January 01, 2014 to June 30,

2014



ROLES, RESPONSIBILITIES & AUTHORITY OF MANAGERS AND STAFF OF TRADE SERVICES

The LC application is stamped & received on the counter with date and time and delivered to

the respective CSC (Customer Service Center) team through a register.

The documents submitted for opening L/C are:

LC application Form

Pro forma Invoice/ Indent

LCA Form

IMP Form

Insurance Cover Note (LC Value + 10%) & Money receipt, Form Ga

IOF (Inspection Order Form)

Pay Order/ Request for issuance of Pay Order for the Insurance Company

Other additional documents if required by Import Policy Order (IPO) or NBR or (i.e.) viz

Block list from Drug Administration, Ministry of Agriculture Import Permit, Fertilizer

Association Allocation Letter, BOI Allocation Letter.

In respect of import by industrial unit under bonded warehouse system, open marine

policy is acceptable.

The basic components of letters of credit:

Importer (Applicant/Buyer/Opener/Account Party)

Seller (Beneficiary / Shipper/Consignor)

Issuing Bank (Opening Bank) SCP

Advising Bank

Confirming Bank

Negotiating Bank

Reimbursing Bank

Transferring Bank

Accepting Bank

Nominated Bank

Drawee Bank

Amount

Terms

Expiry

Banking Day

Complying presentation

Confirmation

Honor ( sight, deferred, acceptance)



Guidelines Adhered to Trade Services of Standard Chartered Bank

1. Under normal circumstances, Letters of Credit (LC) will be issued on the basis of facilities established for a customer. Limit in system (eBBS) and current BCA must be in place.

2. In the absence of facilities, LCs may be opened based on adequate cash margin or liened deposit and subject to appropriate credit approval. The minimum margin is normally 110% of the LC value in equivalent local currency

3. LCs to be opened for non-corporate customers should bear the approval of the appropriate authority from respective Unit and Credit Control divisions.

4. Any LCs which deviate from the established Business Credit Application (BCA) terms of the customer need to be referred to the Unit Head /Relationship Manager in Client Relationship, Wholesale Banking and or SME Banking under Consumer Banking, for necessary disposal.

5. Local L/Cs should be issued as unsecured L/Cs. 6. All L/Cs issued must be recorded in the banks books in the currency of the credit and at

the highest possible drawing amount. 7. LC is booked under Product code 086 for Client Relationships accounts and under

Product code 390 for SME accounts 8. Trade Policy, PPG, CPA & other group memorandum /circulars are Group Standards

which are routinely issued, covering several areas of our business and must be adhered to by all units.

9. LC should comply to SBP regulations.

Documents required submitting along with LC Application:

Import Registration Certificate (IRC), which will be returned later Proof of payment of renewal fees for IRC for the concerned financial year NOC from the nominated bank (where nominated bank in IRC is other than SCB) NTN certificate VAT certificate Valid and renewed Trade License Copy of Board Resolution A declaration in the companys letterhead pad, that the importer has paid income tax or

submitted income tax return for the preceding year. A new company can declare that the requirement is not applicable or the company is enjoying tax holiday.

General Guidelines using L/C for the Buyer/Importer:

Before opening a letter of credit, the buyer should come to an agreement with the seller on all aspects of quantity and quality of goods to be sent, schedules of shipment, payment procedures, and documents to be supplied. As with the seller, it is very important for the buyer to be fully aware of all terms and conditions that need to be fulfilled before the application for the letter of credit is made.



When dealing with letters of credit, the buyer should take into consideration the standard payment methods in the country of the seller.

When setting the dates in the letter of credit, the buyer should define a tight but reasonable shipping schedule. If dates are improperly set, this will lead to amendments to the letter of credit leading to additional costs, or simply to non-shipment.

The buyer should be prepared to amend or renegotiate terms of the letter of credit with the seller. Amendments are a common procedure in international trade.

In order to eliminate foreign exchange risk, the buyer may cover himself by using the futures/forward markets.

The letter of credit validity should give the seller enough time to produce and ship the goods. With the expiry date and the latest shipping date, the buyer should give the seller ample time to present documents to the bank. For instance, several countries, particularly those in the Middle East, require that documents be legalized. This requires that some of the documents be sent to the destination countrys consulate, in the country of origin, for a stamp before presentation. This is a routine procedure, but it adds a few days or more to the time needed for presentation.

Export Letter of Credit:

When export is made against L/C, the exporter should examine the following terms of L/C to avoid any future complicity to execute the order:

The terms and conditions of L/C are definite, clear and explicit and also in conformity with those of the contract.

The L/C should be an irrevocable one and be confirmed by the advising bank. If the import of goods is under control in buyers country, the buyer holds a valid import

license. If the L/C is transferable or otherwise, it should be clearly mentioned in the L/C. The L/C should provide sufficient time for shipment and a reasonable time for shipment

and a reasonable time for negotiation. If nothing is mentioned, the shipper would be allowed 21 days to negotiate the documents.

Following documents should be sent to C&F agent by the exporter.

Export Registration Form (ERC) Commercial Invoice Packing List Copy of the Sale contract/Export L/C Any other documents relevant to the specific cargo, such as, GSP* certificate or Export

permit. Beneficiarys Certificate Weight Certificate: Sanitary Certificate: Analysis Certificate



Advantages & Disadvantages of Documentary Credit:

Advantages:

Shifts credit risk from the Importer to the Importers Bank (Issuing Bank). An undertaking from the Issuing Bank that payment will be made under the Letter

of Credit, provided that you meet all terms and conditions of the Letter of Credit. If the Letter of Credit is not issued as agreed, the exporter is not obligated to ship

against it.

Disadvantages:

Documents must be prepared in strict compliance with the requirements stipulated in the Letter of Credit. Non-compliance leaves you exposed to risk of non-payment and removes the protection afforded by the Issuing Bank since the final decision on the documents then rests with the Importer.

Many exporters cannot prepare documents as per the provisions of documentary credit

Submit discrepant documents most common of which are late shipment, late presentation etc.

Big customers bargain for exchange rates. Reluctant to comply the regulations (importer) Do not waive discrepancies that can be ignored (importer) Sometimes creates pressure to reject documents (importer) Bargain with margin and other charges of banks (importer)



Summary:

Standard chartered bank of Pakistan is one of those banks which are taking part for the betterment of life throughout the world. Standard chartered bank of Pakistan is biggest international bank having track record of 150 years in Asia, Africa, And middle east. It is performing there function from 150 years in sub-content. Only international bank which has AAA+ rating by PACRA. Standard chartered bank of Pakistan was re-established in 2006 in Pakistan with the merger of union Bank. It has many branches in all over the Pakistan, in Faisalabad it is situated at Kotwali road Faisalabad. Standard chartered bank of Pakistan offers many products and services like account services, product services etc. for the people Standard chartered bank of Pakistan also provides remittance to the common people because its an international banking network. Standard chartered bank of Pakistan gives the remittance services to its customers through Nostro and Vostro accounts. Some private companies also interact with the outward and inward remittance. Standard chartered bank of Pakistan use different techniques to send money internationally like telex, courier, and a new technique SWIFT (Society for the Worldwide Interbank Financial Telecommunication) SWIFT is a costly method, and having message type sending and every message has its own code. Major clients for import & export of Standard chartered bank of Pakistan are: Interlope, Arshad Groups, Pasban IT & Computers, Kashmir (UNITED INDUSTRIES LIMITED).Letters of credit are often used in international transactions to ensure that payment will be received. Due to the nature of international dealings including factors such as distance, differing laws in each country and difficulty in knowing each party personally, the use of letters of credit has become a very important aspect of international trade. Standard chartered bank of Pakistan provide only Irrevocable Letter of credit in Pakistan.



BIBLIOGRAPHY

References:

Standard Chartered Bank Annual Report (2013). Prospectus of Standard Chartered Bank (2006). Uniform Customs & practice (UCP) 600. Incoterms January 1, 2007. Department Operational Instruction. The Customs Act, 1969 (Act IV of 1969), first schedule. Ministry of Commerce, Government of the Pakistan

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