An overview of int'l trade finance
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Transcript of An overview of int'l trade finance
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AN OVERVIEW Of
INTERNATIONAL TRADE FINANCE
Md. Abdus SalamFaculty Member (SPO)JBSC, Dhaka
January 28, 2017
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Objectives of the Session
To enhance the customer services and
maintained it by negotiating with AD
Branches. To discuss the overall process or
structure of international trade.
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Session Outline
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Int’l Trade & Its Importance
Definition:exchange of goods and services across international borders or territories.
Importance:To meet up internal demands
To earn FC which leads to GDP
To contribute to the World Economics.
To generate the employment opportunities.
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Foreign Exchange Activities
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Process of a Typical Foreign Trade Transaction
Importer’s Bank
(Issuing Bank)
Exporter’s Bank
(Advising Bank)
Importer /Local Buyer
Exporter/Foreign Seller
Money Market Investor
Purchase order1
L/C
app
lica t
ion
2 Issue/trasmit LC3
L/C
not
ifica
tion
4 S
hip p
ing
doc u
me n
ts
a
a
nd ti
me
draf
t
6
Paym
ent
or
Dis
c oun
t ed
B/A
9
5 Shipment of goods
Rec
e ive
d fa
ce V
a lue
of
B/ A
at m
a tur
it y
13
re
cei v
ed f u
nd o
r Si
g ned
prom
isso
r y n
o te
for
FV o
f B/ A
10
Sh
ipp i
ng d
o cum
e nts
11
Shipping Documents and
Payment or time draft acceptance7
Payment or Banker’s Acceptance8
B/A
12
Paymen
t Face
Value
B
/A15 B/A presented at maturity
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Wings of Int’l Trade Finance
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Import Finance
Import Finance
Pre-Import
Post Import
Opening of L/C
Payment against Document (PAD)
Loan against Imported Merchandise (LIM)
Loan against Trust Receipt
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Export Finance:
Export Finance
Pre-shipment
Post-shipment
Packing Credit (PC)
Back-to-Back Letter of Credit (BBLC)
Negotiation of Export Bill (FDBP)
ECC (H) (P)
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Foreign Remittance
Foreign Remittance
Inward
Outward
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Int’l Trade Products and ServicesTrade Products & Services Commercial LC- Import &
Export Standby LC Back to Back LC Documentary Collections
Trade Finance Working Capital Loans for
exports e.g ECC Import Financing Export Financing Overseas Financing
Sources of Import Finance Cash – Cash reserve of BB Wage earners FC balance (living in abroad) External Financial Aid (Loan or Grant) Commodity exchange (Barter & STA)
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International Payment Methods
Open Account
Cash in Advance
Documentary Collections
Letters of Credit
Consignment Sale (payment after sale)
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Int’l Methods of Payment
Low
High
High
Low
Exporter Risk Importer Risk
• Open Account
•Documentary Collection
• Letter of Credit
• Cash in Advance
Payment Methods & Risk Comparison
Trade Terms
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Guideline, Regulations and Practices
Import Policy (2015-2018)Export Policy (2015-2018)UCPDC- 600 : ICC Uniform Customs and Practice for
Documentary Credits (UCP-600) INCOTERMS-2010: International Commercial Terms ISBP : International Standard Banking Practices
(ISBP-745)Foreign Exchange Regulations Act-1947(up to date
amendments).Guidelines for Foreign Exchange Transactions (Vol. I
& II)- 2009.
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Guideline, Regulations and Practices
URR: Uniform Rules for Bank-to-Bank Reimbursements (URR- 725).
URC: Uniform Rules for Collection (URC- 522).URDG- Uniform Rules for Demand Guarantee
(URDG-758). ISP-98Other related ICC PublicationsForeign Exchange Circulars of Foreign Exchange
Policy Department of BB
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?
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THANK TO THANK TO ALLALL