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Foreign Exchange

Foreign Exchange is a process or system of conversion of one national currency into another national currency and of transferring money from one country to another.

FOREIGN EXCHANGE

1) EXPORT

3) FOREIGN REMITTANCE

2) IMPORT

4) DEALING ROOM OPERATION

International TradeThe activities of buying and

selling of commodities or services between two different countries is termed as international trade.

Exchange Rate:The rate at which one currency is

converted into another currency is the rate of exchange between the currencies concerned . If Bangladeshi bank exchanged US dollars for TK. 68.40 a dollar , the exchange rate between taka and dollar can be expressed as USD 1=Tk.68.40 .

Authorized Dealers:

The Banks or the Traders who have been authorized to deal in foreign exchange by Bangladesh Bank are known as authorized dealers.

1) The Import Export control Act-1950

2) Import Policy Order–2009-2012

6) The Customs Act-1969

5) Bangladesh Bank Guidelines for Foreign Exchange Transactions.

4) The Foreign Exchange Regulation Act-1947

Act > Policies > Rules > Regulations

3) Export Policy –2009-2012

7) ICC Publications

Parties involved in International trade:

a) Importer b) Importer’s bank(LC opening) c) Advising Bank d) Confirming Bank e) Nominated Bank f) Reimbursing bank g) Exporter

Authority & Agency involved

Bangladesh Bank Commerce MinistryADsCCI & EChamber of Commerce Indentor

Shipping AgentCustoms AuthorityC & F AgentExport Promotion Bureau.

Authority & Agency involved

REQUIREMENT for IMPORT1) Valid IRC (Issued by CCI&E)2) Indent / Proforma Invoice

5) Follow Foreign Exchange Regulation Act-19474) Follow Import Policy Order 2009-12

8) Follow Bangladesh Bank Guidelines for Foreign Exchange Transactions

3) TIN Certificate

6) UCPDC-600

7)International Standard Banking Practice

DOCUMENT NEEDED for IMPORT

1) LCA(LC Authorization) Form

2) Prescribed LC Application & Agreement Form

4) IMP Form

3) Insurance Cover Note

Letter of Credit: Letter of credit is an undertaking by

the importer’s bank that if the exporter exports the goods and produces documents as stipulated in the credit, the bank would make payment to the exporter.

REQUIREMENT for EXPORT1) Valid ERC (Issued by CCI&E)2) Bill of Exchange

5) Follow Foreign Exchange Regulation Act-19474) Follow Export Policy

7) Follow Bangladesh Bank Guidelines for Foreign Exchange Transactions

3) Bill of Lading/TR/AWB

6) UCPDC-600

8) Certificate of Origin9) PSI

Foreign correspondent Accounts Involved

Nostro A/CVostro A/CLoro A/C

Foreign Remittance

Inward Remittance Outward Remittance

Foreign remittance is madea) Between two different countriesb) Two or more currenciesc) Bank’s Involvement is a must

Source of Inward Remittance Expatriate Bangladeshis Exporters Bangladeshi Nationals Working

Abroad Commission, Fees etc Earned by

Local Business People Foreign Loans and Grants Foreign Donation and Gifts

Modes of Foreign Inward Remittance

Telegraphic Transfer (T.T) Mail Transfer (M.T) Foreign Demand Draft (F.D.D) Travelers Cheque (T.C) Foreign Currency Notes. Electronic Fund Transfer (EFT) On line Remittance Purchase of Bills

Purpose of Remittance

Family maintenance Indenting Commission Recruiting Agents Commission Realization of Export Proceeds Donation Gift. Export Broker’s Commission Etc.

Purpose of Outward Remittance

To settle Import Payment. To meet Travel Expenses To meet Medical Expenses To meet Educational Expenses etc.

FOREIGN EXCHANGE

DEALING ROOM OPERATION

Sonali Bank Dealing Room Start Functioning from 15-11-1994.

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