check list of Foreign Exchange transaction in bank

7/29/2019 check list of Foreign Exchange transaction in bank

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CHECKLIST OF

FOREIGN EXCHANGETRANSACTIONS



1) Approval from Head Office (if required).

2) IRC checking / original copy of IRC / genuineness and its validity /checking payment of IRC fees.

3) Putting IRC fees.

4) Entitlement of IRC on IMP.

5) Validity of Indent / Proforma Invoice.

6) Renewal of the indent by the indentor.

7) Indent / Proforma Invoice signed by the Importer & indentor/supplier.

8) Copy of Trade License.

9) Certificate from chamber of Commerce and Industries / Trade

Association.10) TIN / VAT registration.

11) Any other document if required by CCI & E.

12) L/C application and LCAF properly, correctly and completely filled,stamped & signature of the importer verified properly.

Proper care should be taken by the concerned Officials on

the under noted points on their day to day operations.



13) LCAF issued to other than L/C applicant

14) Stamp and signature of A/D on the back of exchange control copy of LCAF.

15) Reporting of remittance should be ensured on LCAF with related IMP formnumber.

16) FC payment exceeding LCAF value.

17) Endorsing sale of FC on the back of LCAF with proper seal / signature of A/D.

18) Permission of Bangladesh Bank against remittance of excess value of the

LCAF.19) Disposal of fully utilized or unutilized LCAF.

20) Utilization / cancellation / reversal of the sale of L/C on the back of LCAF with

proper seal / signature of AD.

21) Bangladesh Bank registration number correctly reproduced in IMP.

22) Approved Margin properly retained.

23) Checking banned country and item list.

24) Affixation and cancellation of stamps.



25) VAT/IT on L/C commission recovered properly.

26) Ensure that the relevant particulars of L/C application conform with those

stipulated in Indent / Proforma invoice.

27) Verification of Importer signature in PI / Indent.

28) L/C opened against conditioned Indent.

29) Verification Indentors principal inclusion.

30) Correctness of H.S. Code.

31) Collecting credit report in time.

32) Validity of LCA entitlement of goods, amount etc. conforms to the L/C

application.

33) Conversion and rate of exchange correctly applied .

34) Proper realization of charges like L/C commission, postage, courier, telexetc.

35) Insurance Cover Note- in the name of Issuing Bank-A/C Importer

covering required risks and voyage route.

36) Non-receipt of Money Receipt.



37) L/C opened without insurance cover note.

38) Affixation of proper stamp in the cover note / Money Receipt.

39) L/C advising copy / SWIFT L/C correctly & completely typed with required

terms and conditions.

40) Incorporation of instructions for Negotiating Bank as per bank’s existingarrangement.

41) Reimbursement instructions for Reimbursing Bank.

42) If foreign bank’s confirmation is required, necessary permission should

be obtained from Head Office, International Division and accordingly

advising bank is advised as per bank’s existing arrangement.43) If add confirmation is required on account of the applicant – charges

should be recovered from the applicant.

44) Incase of usance L/C, mention rate of interest clearly in the Letter of

Credit.

45) Details of L/C properly put in the L/C opening register.

46) L/C properly dispatched / couriered or transmitted in time to the

respective advising Bank address.

47) PSI copy properly retained and forwarded to the address.

48) Proper submission of LCAF / LC copy to CCI&E. / Bangladesh Bank.



Amendment:

1) Obtain written application from the applicant of the credit duly signed and

verified by the bank.

2) In case of increase of value, application for amendment is to be

supported by revised Indent/Proforma invoice evidencing consent of the

beneficiary.3) In case of extension of shipment period, it should be ensured that relative

LCA is valid / revalidated / increased up to the period of proposed

extension.

4) Amendment on increase of Credit amount and extension of shipment

period-both the cases amendment of Insurance Cover Note also to be

submitted.

5) Proper recording and filling of amendment is to be maintained.

6) Amendment charges (if on account of applicant) will be recovered and

necessary voucher is to be passed).



Lodgment

1) Intimation should be given to the party in time.2) Acceptance letter from the party.

3) Conversion of foreign currency in to Bangladesh currency.

4) Entry in to PAD registers, along with PAD number.

5) Entry in to L/C opening registers by rounding the L/C No. with date.

6) Relative LCAF is to be endorsed showing the utilization of credit amount.

The utilized amount also to be noted in L/C file.7) Stamping dispatch received seal and signature, date on the document

and Dispatch Register.

8) Proper Debit authority / Reimbursing Authority to the foreign Bank.

9) Affixation of stamp in bill of Exchange.

10) Attestation of IMP form.

11) Irregularities in IMP matching.12) IMP forms duly signed / stamped by the importer are to be filed in the

respective L/C file.

13) Passing of all vouchers, Reversal of Liability vouches, Lodgment to HeadOffice vouchers properly.

14) Reporting of L/C payment to Bangladesh Bank in the respective monthlyreporting.

15) Payment against discrepant Bill without obtaining bill of entry.



Retirement:

1) Calculation and realization of PAD interest as per prescribedrate of the Bank.

2) Realization of PAD interest against Bill on collection basis .

3) Determination of Other charges.

4) Preparation of cost memo (in printed form) on account of the

customer giving detail head of charges payable ;-5) Proper entry in the Register

6) After retirement, document along with custom purpose copy of LCAF to be delivered to the importer giving followingendorsement-

7) (a) Received payment (b) Certified converted foreign currency

(c) The B/L, Transport document is to be endorsed for takingdelivery of goods as “please deliver to ................. or to theorder of M/S. ....................

8) After retirement all types of loan (LIM, LTR) should bemonitored properly for its timely adjustment.



Reporting:

1) Ensure reporting to Bangladesh bank with all necessary

schedule in the respective reporting month.

2) Timely / Correctly submission of all LCAF / L/C copy / IMP to

Bangladesh Bank / CCI & E.

3) Submission of outstanding Bill of entries and (outstandingexceeding 4 months) to Bangladesh Bank (quarterly) in time.

4) All other related statement



(B) EXPORT:

1) A/D Branches shall ensure proper checking of the Export L/C and shallascertain genuineness of the issuance of the Export L/C.A/D branch shallensure that there exists arrangement for TEXT for authentication of SWIFTL/C.

2) A/D Branch shall also ensure that there is no ambiguity in the L/C terms, it

meets all exchange control formalities and reimbursement instruction isclear and proper.

3) If L/C received by transfer by the first beneficiary, the A/D branch should besatisfied, whether the transfer has been properly effected by the firstbeneficiary. AD branch shall not entertain any Export L/C if the same isbeing delivered by the customer himself to the counter of the Bank.

4) Entry made in the L/C advising Register.5) Advising charges recovered.

6) Back to Back L/C properly advised / opened.

7) Valid bonded warehouse license.

8) Valid registration with CCI & E.



9) Validity of the Master L/C.

10) Value added portion of FOB.

11) Usance period of the L/C.

12) Usance interest rate.

13) Update amendments of Master L/C

14) Pre-shipment inspection condition.

15) Effective watch on imported raw material and export

manufacturing performance.

16) Realization of Export Bill.

17) Delay / non realization of export proceed.

18) Overdue unrealized Export Bill exceeding 4 months.

19) Discount against export Bill.

20) Advance remittance of export bill and completion of its formalities

(ARV).



21) Short shipment.

22) Verification of export proceed realization certificate.

23) Realization of overdue interest on export value.24) Application of exchange rate on realized export bill.

25) Export failure and its reporting to NBR / Bangladesh Bank.

26) Credit Report on Foreign Buyer.

27) Verification of Authorized Signature of shipping companiesofficials.

28) Proper Examination of Export Documents (i) B/L/AWB (ii)

Commercial invoice (iii) Bill of Exchange (iv) Packing list (v)

Certificate of Origin (vi) Pre-shipment Inspection Certificate (vii)other required documents.

29) EXP signed by the Exporter / Legal authorized person.

30) Exporter’s registration with CCI & E.



31) Proper issuance of EXP and certification of EXP form.

32) EXP properly filled.

33) Maintenance Export performance register/FBPAR register properly34) Dispatch of export documents.

35) Collection of EXP in time.

36) Submission of duplicate EXP to Bangladesh Bank within 14 days of

shipment.

37) Payment of BTB / IFBC liability in maturity.

38) Non-payment of Accepted Bills against Import / Export.

39) Reporting of outstanding overdue export bill to Bangladesh Bank

quarterly in time.

40) EPZ exports.

41) Proper Disposal of Export proceeds under EPZ type ABC.



C. Check List of common discrepancies

in shipping documents.

General:

1) Late shipment.

2) Late presentation of documents.

3) Early shipment i.e. shipment made prior to issuance of L/C or time

stipulated in L/C

4) L/C expired.

5) L/C overdrawn / Amount Exceeded.

6) Part shipment or Transshipment effected in contrary to L/C terms.

7) Cutting / alternations in documents not authenticated

8) Documents inconsistent with each other.

9) Description of documents on collection schedule differs with

documents presented.



Bill of Exchange:

1) Amount of bill of exchange differs with that of invoice.

2) Not drawn on L/C issuing Bank.

3) Not signed.

4) Tenor of Bill of Exchange not identical with L/C

5) Amount in figures corresponds exactly with the amount in words.6) Bill of exchange is not endorsed correctly.

7) Bill of exchange payable on an interminable date.



Invoice:

1) Not issued by the beneficiary / or as stipulated in the L/C.

2) Not made out in the name of the applicant.

3) Description, unit price, quantity etc. differs with the L/C terms or not

mentioned.4) Not market as “Original”

5) Other discrepancies not comply with L/C terms.



Packing List:

1) Packing list not submitted.

2) Gross weight, Net weight and measurement, number of

cartons/ packages differ with those of B/L.

3) Not marked as “Original”

4) Shipping marks differ with that B/L

5) Wightman certificate not presented

6) Other discrepancies not comply with L/C terms.



Bill of Lading:

1) Full set of B/L not submitted.

2) B/L is not drawn / endorsed to the order of issuing bank.

3) “Shipped on Board” “Freight Prepaid” etc. notations are not marked on

the B/L.

4) Name and address of the Notify Party (ies) are not mentioned or not as

per L/C stipulation.

5) B/L does not indicate the name and capacity of the party i.e carrier of

master, on whose behalf the agent is signing the B/L.

6)“Shipped on Board” notation not showing name of intended vessel

7) Short form B/L.



9) Third party Bill of Lading submitted (Unless stipulated in the L/C)

10) Charter party B/L (unless stipulated in the L/C)

11) Description of goods in B/L does not agree with that of invoice and packinglist.

12) Alteration on B/L not authenticated.

13) Loaded on Deck (goods shipped on deck-unless stipulate in the L/C)

14) Claused (unclean) Bill of lading.

15) ON BOARD notation in Bill of lading undated / unauthenticated.

16) Shipment effected from port other than the stipulated in the credit.

17) Certificate notifying insurance company of shipment not presented

18) Shipping marks and numbers differ between documents

19) Bill of lading does not evidence whether freight is paid or not

20) Forwarder’s cargo receipt not acceptable (unless provided in the L/C)



THANKS TO ALL