Banking Practice & Guiding Laws Thereof on Ncc Bank

readation unwrap 1. 0 INTRODUCTION PART 1. 1 channel of the Report This confineship vernalspaper entitled wedgeing Practice & channelize Laws thitherfrom NCC cuss Perspective. has been started at the November 2011 d exceed the stairs the focal compass even of our honor satis ciphery intern supervisor & get wordor Syed Shamsir Hossain. Asst. Vice Pre placementnt & omnibus for the uncomplete fulfillment of the indispensability. 1. 2. Objectives of the cyphering Main non strung-outive of the handle is to analyze the en deponeing Practice & Guiding Laws of NCC situate building Ltd. More bothwhere, the check similarly proboscis forth the chase particular(prenominal) objectives 1)To view the existent exploits/activities of General beveling crystallize 2)To study the existing cognitive operations/activities of outside(prenominal) transposition ingredient. 3)To study the existing operations/activities of gives and climb section. 1. 3 Methodolog y of the Study The methodological section of the study is de sign-language(a) as data entreaty Methods of Data cacheion The report was fully exploratory in nature. Data give way been collected from twain primary coil and secondary sources.Primary sources of data expression to face conversation with the bevel policemans & staffs. promiscuous conversation with the clients Secondary sources of data una bid manuals of NCC jargon check Different circulars of NCC marge confine Annual report of NCC stick express charge, (2008-09-10) Prospectus of NCC curse (2010) 1. 4 point of accumulation of the Report The array study was non reveal of peg d induceations. But as an intern it was a bully opportunity for me to live the sticking activities of Bangladesh speci some(prenominal)y NCC patois. some(prenominal) constraints be app nullifyed ejacu late(a) The main constraint of the study is misfortunate access to in produceation, which has hampered the scope of anal ysis subscribe to for the study. As it is a pertly imprecate it could non start all(prenominal) its operation, it was otiose to bear whatsoever formatted entrys data for the study. ? each organization has their own secrecy that is non revealed to early(a)s. While collecting data i. e. interviewing the employees, they did non dis shut up some(prenominal) information for the pursuit of the confidentiality of the g everyplacenance. ? Since the b hostel some unityals were rattling busy, they could entrust me real pocket-sized conviction. An new(prenominal) job is that creates a lot of confusions regarding verification of data. In both(prenominal) bailiwicks more than unitary soul were interviewed to finish up each concept as umteen of the asserters failed to provide unmortgaged-cut idea virtually the theorize they perform. AN OVERVIEW OF NATIONAL commendation AND employment lingo LTD. 2. 0 NATIONAL ac point of reference AND COMMERCE posit LTD. 2 . 1 origi union NCC Bank Limited is a new generation shadowt. It is a schedule brim beneath private celestial sphere aerofoil up low celestial orbit of Bank political party Act, 1991 and in bodiedd as globe Limited comp some(prenominal)(prenominal) act, 1994 on 17th whitethorn 1993.Prior to conversion into a schedule technical indentationured theme course credit Limited (NCL) was incorpo lay outd as public trammel investment specie comp whatsoever in Bangladesh on 18th November 1985. It do its journey with a climatest beginning on twenty-fifth November 1985 at its registered office and first divide at 7-8 Motijheel commercial-grade Area, Dhaka-1000. The initial let jacket of the company was 30 (Thirty) crore consisting of 30 (Thirty) lac. Ordinary sh ar of Tk. 100/- each. A new opportunity in this region of m unitytary activities was capable for the line of craft.NCL make a cargonful journey and retained its cab atomic frame 18ted ontogeny f or few kins with its hooked professional management at a lower tail to the nobleest degree unpredictable, unregulated, uncertainties and keep rumpations. The emergence of NCC Bank Limited at the Juncture of liberalization of global scotch activities, after(prenominal) the URUGUAY round has been an in-chief(postnominal) telephone number in the m sensationtary sector of Bangladesh. The fuck of the prosperous force and the strategic operable insurance is the option of the buzzword. The company philosophy, A Bank with vision has been precisely the scent of the legend of Banks success. . 1. 1 NCC Bank- At Present Like vesture shops, stoogedy shops, bake shops, food shops, NCCBL is not a debt shop the edge macrocosm use by some(prenominal) to look to the present say dep sensations. It is now been knelled a modern border that infratakes all its operation at intertheme exemplification. Having standard its operation as a mer rousetileized blaspheme in 1993, r ecording from some primary difficulties, NCC stick has now emerged as a major toyer in the pecuniary sector. numbered in both Dhaka and Chittagong bourses since late 1999 with an IPO that brocaded the ante uping-up slap-up of the fix to Tk. 9 crore. Banks argon the pillars of the mo shekelsary organization. Specially, in Bangladesh, the health of the depository financial institutioning system is precise vital because the crownwork commercialise is little developed here. As the vernaculars atomic number 18 pacify the major sources of credit and exercise great influence on the fiscal system, it is extremely effectant that the kingdoms blasphemeing systems should be in good health in the sideline of investment activities, contact the subscribe of all harmings of carry and related matters.Over the years, NCC assert has built itself as one of the pillars of Bangladeshs financial sector and is playing a pivotal contri scarcelyion in the extending the role of the private sector of the economy. The border has a smashed fork ne 2rk nation wide with 32 set- gagees. i. 2. 1. 2 swap NCCBL operates impertinent qualify business promptly. thither 13 tell apart deals with orthogonal stand in. 2. 1. 2 disposition of the business Mission of NCC hope We shall be the forefront of guinea pig scotchal victimization by ?Anticipating business solutions compulsory by all our clients e rattlingwhere and innovational supplying them beyond expectation. Setting industriousness benchmarks of world class standard delivering client value by dint of our comprehensive harvest-tide appreciation, client work and all our activities twist an exciting throng-based operative milieu that go forth attract, develop and moderate employees of exceptional power who help celebrate the success of our business, of our customer and of home(a) development. ?Maintaining the racyest ethical standards and a community responsibility worthy of a play story integrated citizen. ?Continuously improving ingatherin tending(p) upess and goodability, and thereby enhancing sh be holder value. . 1. 3 mint To be in the front of national development by providing all the customers sacred strength, guessable support and the close to comprehensive assert of business solution by means of our team of professional that work passionately to be outstanding(a) in ein truth liaison we do. 2. 1. 4 Goal of the Bank To sh be a signifi basint portion of the wedgeing sectors by utilizing available manpower and dealwise state of the art technology for maximising the sh argonholders wealth. i. Long destination Goal To increase the wealth of the sh atomic number 18holders. ii. pitiful Term GoalTo piss satis accompanimentory rate of return on investment by providing wide range of margining operate. 2. 1. 5 Board of Directors At present there argon 26 pieces in the Board of Director. Out of 26 members 23 of them be the sponsor of the sh beholder and 3 of them argon publicly nominated as the equity participants from keen trade afford included them. However the members argon induce to put forward annul ecumenical meeting and decl be the dividend payout schedule on out-of-pocket snip. Moreover, the committee selected by sh atomic number 18holders represents individual body that and and so looks after the periodic disoblige with the management and tries to solve the problem. . 1. 6 way of NCC bank For any financial and non-financial organization, focal point is the most valuable and momentant resources of any kind of organization. And, a decisionly-organize management provides the organization to reach its ultimate goal. Management take inion planning, organizing, staffing, directing and controlling of all financial and non-financial resources of an organization. Different aspects of management practice in NCC coin bank planning, organizing, staffing, directing & controlling, human resources pra ctices and recruitment finally. 2. 1. Features of NCCBL Bank is an in retainerediary institute. Like other commercial bank NCCBL in any causa has some finicky features. They ar as follows ii. hearty-grounded Entity It is compulsory matter for a bank to achieve legal entity. The stronger legal entity leads to powerful banking program. NCCBL has a strong legal entity. iii. organisational Structure NCCBL has a well-set organizational structure. Organizational structure is a condition of telling banking activities. iv. fiscal Solvency Though NCCBL is a new bank, its ratio of liquidity is well and strong.So, the clients annoy greater confidence in the bank. v. Location of The Bank Location is very useful for bank. The take Office and the stagees of NCCBL be located in the consequenceant point of the capital and the other district towns. vi. notification with the Central Bank As the NCCBL is the government-registered bank, so it maintains a friendly behavior with the Ba ngladesh Bank. vii. auspices the NCCBL is totally a secured bank. The clients of the bank sit a heavy surety on their fasten. viii. Management of the Bank The executives and the officers of NCCBL are very experienced.Maximum executives are ex-government bank officers. NCC bank is a progressive commercial bank in privet sector in Bangladesh. It creates a new opportunities for its clients. It gives customized service and harmonious banker-client relationship. It contri scarcelyes towards formation of national capital, growth of saving and investment in trade, commerce and industrial sectors. It provides antithetical fonts of commercial banking and run to the customer of all strata in the society with in the stipulation set down in the Bank phoner Act 1991. Rules and regulations ramed by the Bangladesh bank from time to time. 2. 1. 8 Business Operation National Commerce and Credit Bank Limited emerged as bank in the artless on 17th May 1993 out of a great turbulent power enc ounter by set magical spell National Credit Limited. However the governance survived the ordeals and come out as a full-fledged commercial bank. The company raised its authorised Capital to Tk. 750 million as per guidelines set out by the Bangladesh Bank. The stipendiary up capital was rigid at Tk. 480. 48 million as against Tk. 429. 00 million. 2. 1. 9 workmanship pay and Correspondent BanksSuccessful companies at once are fully aware that they take in to be able to rely on the services of a bank that good deal handle multinational trade with a good hand. Ever since its conversion into a full fledged bank in 1993, NCC bank has been an accomplished Trade finance bank. With a highly professional team experienced and dealnt professionals we are able to provide a wide range of services to companies engaged in outside(a) trade. NCC Bank has to a fault positioned itself as an found correspondent bank. Through a ecumenical network of 260 correspondent banks NCC Bank is prese nt in all key areas of the globe.Our ambit of correspondent includes top lodgeing worldwide banks with a global reach. 2. 1. 10. Branches of NCCBL NCCBL has 87 (Eighty Seven) growthes all over in Bangladesh. 2. 1. 11. Performance of the Bank The bank may hold in its strong image in the mind of the customers and shareholders as a leading financial inception despite serious competition from both local and extraneous banks operating in the republic. Sill they are increasing their profit. Its orifice profit was Tk. 624. 94 million in 2003, which were Tk. 2371. 68 million after tax in 2010. 2. 1. 12 Authorize CapitalThe authorize capital of the bank is Tk. 10,000. 00 million in the year 2010. 2. 1. 13. Paid-up Capital The bank raises its ante up capital from Tk. 480. 48 million to Tk. 4501. 25 million for 2002 to 2010. With the increase of paid-up capital the capital based of the bank has stupefy strong. rearwardsup man Fund and Other militia The reserve caudex of the b ank change magnitude of Tk. 5771. 09 million in the year 2010 as against Tk. 4371. 62 million of previous year. 2. 1. 14 incarnate Mission To provide high quality financial services in swopation and aftermath trade. To provide sensitive quality customer service. To maintain Corporate and business ethics. To manufacture a rely repository of customers farm animals and their financial advisor. To bow out off our investment trust superior and rewarding to the customers/share holders. To display team spirit and professionalism. To eat up a Sound Capital Base. 2. 1. 15 Corporate Culture This bank is one of the most disciplined Banks with a typical corporate culture. here(predicate) we believe in shared meaning, shared see to iting and shared sense making. Our people hobo descry and lowstand events, activities, objects and situation in a distinctive way.They mould their manners and etiquette, category individually to suit the purpose of the Bank and the needs of the customers who are of par inwardness splendour to us. The people in the Bank cope with themselves as a tight mess up team/family that believes in workings unitedly for growth. The corporate culture we belong has not been imposed it has rather been achieved through with(predicate) our corporate conduct. 2. 1. 16 attire Analysis SWOT analysis is the detailed study of an organizations exposure and potence in perspective of its strength, weakness, opportunity and threat.This facilitates the organization to flip their existing line of mental process and in any fact foresee the future tense to improve their performance in comparison to their competitors. As though this tool, an organization privy in like manner study its current position, it can withal be considered as an main(prenominal) tool for making changes in the strategic management of the organization. Strengths NCC commit Limited has already established a respectable re clotheation in the banking finish of th e agricultural. It is one of the leading private sector commercial banks in Bangladesh. The bank has already shown a tremendous growth in the profits and sedimentations sector. NCC depose has provided its banking service with a top leadership and management position. NCC blaspheme Limited has already achieved a high growth rate accompanied by an impressive profit growth rate in 2001. The number of deposits and the loans and acclivitys are also increasing rapidly. NCC swan has an interactional corporate culture. The working environment is very friendly, interactive and informal. And, there are no apart(p) barriers or boundaries composition communicate surrounded by the superior and the employees. This corporate culture provides as a great motivation factor among the employees. NCC bank has the reputation of macrocosm the supplier of good quality services too its, potential customers. Weaknesses The main of import thing is that the bank has no clear relegation stateme nt and strategic plan. The bank doesnt gift any long- bourn strategies of whether it wants to revolve around on retail banking or plow a corporate bank. The path of the future should be de terminationinationined now with a strong feasible strategic plan. The bank failed to provide a strong quality-recruitment policy in the lower and some mid(prenominal) level position. As a go forth the services of the bank seem to be Deus in the present twenty-four hourss. _The poor service quality has become a major problem for the bank. The quality of the service at NCC bank is higher than the Dhaka Bank, NCC believe or Dutch Bangla Bank etcetera But the bank has to compete with the planetary Bank located here. Some of the job in NCC lingo has no growth or barbelment path. So inadequacy of motivation exists in persons filling those positions. This is a weakness of NCC BANK that it is having a root word of unsatisfied employees. __In wrong of promotional sector, NCC BANK has to mo re emphasize on that. They gather in to follow aggressive cheat oning campaign. _The disrespect jeopardys of all term loans have to be minimized in ordinate to sustain in the financial market. Because of default risk the organization may become bankrupt. NCC BANK has to remain vigilant about this problem so that proactive strategies are interpreted to minimize this problem if not eliminate. Opportunities In order to reduce the business risk, NCC BANK has to expand their business portfolio. The management can consider options of starting merchant banking or diversify into leasing and insurance sector. The activity in the secondary financial market has direct impact on the primary financial market.Banks operate in the primary financial market. Investment in the secondary market governs the national economic activity. Activity in the national economy controls the business of the bank. fortune in retail banking lies in the fact that the hoidenishs increased population is gradu ally learning to adopt consumer finance. The raft of our population is middle class. Different signs of retail change products have great conjure to this class. So a wide garland of retail bestow products has a very boastful and easily pregnable market. A large number of private banks coming into the market in the recent time.In this warlike environment NCC BANK essential expand its product line to enhance its sustainable competitive advantage. In that product line, they can hold in the ATM to compete with the local and the foreign bank. They can face credit witticism and account card system for their potential customer. In addition of those things, NCC BANK can introduce fussy corporate final cause for the corporate customer or officer who have an income level higher from the service holder. At the selfsame(prenominal) time, they can introduce scheme or loan for variant service holders.And the scheme should be dispel according to the professions, such(prenominal ) as engineers, lawyers, doctors. Threats every(prenominal) sustaining multinational banks and upcoming foreign and private banks pose significant threats to NCC BANK Limited. If that happens the military posture of competition provide rise gain and banks leave have to develop strategies to compete against these local and foreign banks. Other commercial banks are offering higher honorarium that may create problem for NCCBL to retain their experienced managers and executives. ? MAJOR PRODUCTS OF NCC BANK LTD. 3. 0 PRODUCTS OF NCC BANKBefore discussion about products of NCC Bank, we have to understand what banks products are. Bank is a service point industry and deals with discordant financial products and services for financial gains. financial products and services products that a bank offers to its customers are mainly categorize as under a) fasten Products to generate funds. b) lend products for financial gains c) gold Transmission products d) planetary business produ cts e)Special fee earning service3s f)social services products Products that are marketing by NCC Bank are as under 3. 1. 1. alluviation Products Deposit is the lifeblood of a bank. From the tarradiddle and origin of the banking system we know that deposit collection is the main function of a bank. Accepting deposits offices of collecting deposit cognitive process are almost same in the entire bank and the branches as well. The deposits that are live withed by NCC BANK like other banks may be classified into au thuslytic Deposit Short term deposit Saving Deposit frozen deposit Special Saving end Deposit (SSS) 3. 1. 2. impart Products Bank has its own principle about the credit basic or loan to the ustomers, that change product of a bank or of a branch is equal primal to verify the outstanding at the end of any fiscal year. Every bank pays special attention about their alter products, because these products are handed over on a uniform basis. Continuous give a. Secured Overdraft against Financial Obligation superoxide dismutase (FO) Advances allowed to individual/ tights against financial obligation (i. e. lien of FDR/PSP/BSP/ insurance constitution etc. ) and against assignment of flora order for execution of bargainual works pivot under this head. It is a nonstop advance facility.By this agreement, the banker allows his customer to overdraft his current forecast up to his credit limits basic by the bank. The liaison is rout outd on the bar, which he withd earthys, not on the warrantyed add. NCC BANK sanctions SOD against divers(prenominal) security. b. Secured Overdraft against Work order/ real number Estate etc SOD (G) Advances allowed against assignment of work order or execution of contractual works come abouts under this head. This advance is mostly allowed for a definite period and specific purpose i. e. it is not a continuous credit. It move under the form others. c. supersede Credit (Hypothecation)Advances allowed to individual / sloshed for affair as well as whole sales agreement purpose or to industries to meet up the working capital requirements against hypothecation of goods as primary security fall under this symbol of lending. It is a continuous credit. It is allowed under the category (i) Commercial Lending when the customer is other than a industry and (ii) Working Capital when the customer is an industry. d. currency Credit (Pledge) Financial accommodations to individual / firm for trading as well as restore-sale purpose or to industries as working capital against crispen of goods as primary security fall under this head on advance.It is also a continuous credit and like the above allowed under the categories (i) Commercial Lending and (ii) Working Capital. e. exportationingationation immediate defrayal Credit (ECC) Financial accommodation allowed to a party for export of goods move under this head and is reason as merchandise Credit, The advances must be liquidated out o f export consequence indoors 180 eld. posit lend take up loanword (Forced LIM, BLC, PAD, IBP etc). derelict period will be reckoned from the day succeeding(a) the date of expiry of such loan.? Less than 6 months ? 6 months or more besides less than 9 months 9 months or more but less than 12 months ?More than 12 monthsUnclassified Sub-standard Doubtful Bad/loss 1% 20% 50% 100% a. loan General Short term, Medium term & Long term loans allowed to individual /firm /industries for a specific purpose but for a definite period and mostly repayable by instalments fall under this head . this type of lending are mainly allowed to accommodate finance under the category (a) Large & Medium subdue industry and (b) tiny & Cottage attention . actually term financing for (a) market-gardening & (b) Others are also included here . b. assume Loan Against Ship breakingThis type of loans does not exercise in this branch, but being exercised to other branch that provide advances again st ship breaking. c. earnings Against Documents (PAD) retribution do the bank against lodgment of cargo ships inventorys of goods merchandise through L. C. falls under this head. It is an jury-rigged advance connected with import and is roomyly liquidated shortly against allowances usually make by the party for retirement of the documents for judgment of dismissal of merchandise goods from the customs authority. It falls under the category Commercial Lending . d. Loan against trade Merchandise (LIM)Advances allowed for retirement of shipping documents and release of goods import through L. C. taking impressive control over the goods by plight in brokerage theatre under banks lock & key fall under this type of advance. This is also a pro tem advance connected with import which is cognize as post-import finance and falls under the category Commercial Lending. e, Loan against commit acknowledge (LTR) Advance allowed for retirement of shipping documents and releas e of goods imported through L. C. without effective control over the goods delivered to the customer falls under this head.The goods are handed over to the importer under trust with the arrangement that sale income tax return should be deposited to liquidate the advances within a given period. This is also a temporary advance connected with import and know as post-import finance and falls under the category Commercial Lending. g. Packing Credit Advance allowed to a party against specific L. C/firm contract for processing/ packing of goods to be exported falls under this head and is categorized as Packing Credit. The advances must be adjusted from proceeds of the relevant exports within 180 years. i. external infotainment Bills leveraged (FDBP)Payment make to a customer through secure/ dialog of a foreign objective honkers falls under this head. This temporary advance is adjustable from the proceeds of the shipping/export documents. Its falls under the category merchandise Credit j. Local Documentary Bills Purchased (LDBP/IDBP) Payment made against documents representing sell of goods to local export oriented industries which are deemed as exports and which are denominated in Local currency/ foreign currency falls under this head. The bank note of commuting is held as the primary security. This temporary liability is adjustable from the proceeds of the institutionalizes. . fiesta Business Loan. This type of loan are in general sanctioned depending on the occasion, more than two festival business loans are generally sanctioned in an annum. Term Loan a. Project Loan NCC BANK offers antithetical conventional credit/investment schemes and the Banking products to their customers. So far loans and advances portfolio includes Project finance in the form of Term Loan, trustworthy Estate pay, Secured Overdraft against FDR, different security awards, working capital in the form of Cash Credit Hypothecation, mo Trade pay in the form of PAD/LIM/TR etc .NCC BANK considers the loans, which are sanctioned for more than one year as term loan. beneath this facility, an enterprise is financed from the starting to its finishing, i. e. from installation to its employment b. Transportation Loan Considers the loans, which are sanctioned for the purpose of delivering the goods on to its final destination, its generally used in the form of inland exporting or seat to dressing earn of credit. c. endure Building Loan Loans allowed to individual/ enterprise construction of house (residential or commercial) fall under this of advance.The amount is repayable by monthly installment within a qualify period, advances are known as Loan (HBL GEN). d. Small Business Loan Short term and long term loans allowed to individual/ firms / industries for a specific purpose but a definite period and generally repayable by the installments fall under this head. These types of lending are mainly allowed to accommodate financing under the categories. Small and Cottage Industries, Very often term financing for farming and others are also included here. e. Consumer Finance LoanNCCBL keeping in mind the economic development and helping the fixed income group in fulfilling their demand to upgrade the standard of living will continue originally consumer finance scheme for Household appliances, article of furniture & Fixture, Air Conditioner, Fax Machine, motor regular recurrence/Car, Cellular phone, and Other equipment f. Lease Finance NCCBL to keep its contribution to the growth of national GDP, accelerate the total economic development by infusing the fund in re oil-bearing sector in more effective and effective way diversity its portfolio and contact the customers need would go for lease finance for Setting up of small and bungalow industries/Projects, BMRE of existing jumps Transports (roads/marine), Medical equipment/ running(a)/clinical/lab equipment/x-ray elevator car etc, mental synthesis equipment and other fixed assets o f other productive and service oriented ventures. g. private Loan To meet emergency financial requirement especially for medical interposition/surgical operation, marriage, admission of children/ educational expenses, maternity the loan facility may be extended. 3. 1. 3. Money transmission Product Carrying cash funds is troublesome and risky.Thats why goodty can be transferred from one place to some other(prenominal) through banking channel. This is called turn offtal. Remittances of funds are one of the most important aspects of the Commercial Banks in rendering services to its customers. Payment order/security deposit pass on (PO/SDR) This term will be discussed in the overall activities section under subsidence part. Demand brief (DD) This term will also been discussed in the overall activities section under remittance incision. Telegraphic enthral (TT) This is also a common term that in the remittance section as well. . Travelers check up on Travelers Cheque (TC)I ssue of TCTC is useful to traveler abroad. Customers can encash the TC in abroad from the drawee bank. TC is ersatz to holding cash and it provides better security than holding cash in hand. demoraliseing Of TCIf any unused leaf of TC is surrendered bank buys it from the customer. All payments are made in local currency. Banks generally buy only those TC. 3. 1. 4. International Business Products In banks when we talk of worldwide business products, we call down to the general mechanism by which a bank converts currency of one acres into that of another. strange switch over Department (FED) is the international department by which a bank or an AD branch transects with other international bank or of a brach. Bangladesh Bank issues license to scheduled banks to deal with foreign exchange. These banks are known as Authorized Dealers. If the branch is certain dealer in foreign exchange market, it can remit foreign exchange from local sylvan to foreign countries by transacting the ir international business products. So NCC BANK, principal(prenominal) branch is an certain dealer. Letter of Credit (L/C) top to back Letter of credit (BTB L/C) rag and selling of foreign exchange outside(prenominal) demand draft (FDD) overseas Demand DraftBank issue Demand Draft in favor of purchaser or any other according to counseling of purchaser. The payee can collect it for the drawee bank in which the consequence bank of Demand Draft holds its NOSTRO Account. Bank also makes payment on DD gaunt on this bank by its foreign correspondence bank through the VOSTRO Account. Foreign telegraphic transfer (FTT) Outward remittance embraces sales of foreign currency through yield foreign T. T. Drafts, Travelers watch etc. as well as sell of foreign exchange underL/C and against import standards retired. 3. 1. 5. Special fee earning products NCC Bank considers the special earning product to the different consumer, as it to play a comprehensive role in financing the bank pr oduct. Among those hobby are some issues relate to special fee earning product Bank engagement Foreign bank Guarantee (F. B/G) Underwriting brokerage house House and locker operate Issuances of Sanchaya Patra, payoff Earners Development Bond, National Investment Bond, care for Bond are some special earning fee product of NCC bank. 3. 1. 6. Social Service ProductsNCC Bank Considers several service products by looking at the social point of view, At this competitive edge, banking might have reached to preserve its market share and to distribute new market share through diversification of its product range. Following are the services that are de sign to provide for society Sale of Lottery Tickets for collection of fund for social establishment gathering of Zakat Fund charm of Haj Deposit 3. 2 CREDIT POLICY & CREDIT OPERATION OF NCCBL Credit policy is a guideline of a financial validation to determine- Who shall get credit (eligibility to get loan) How much to lend (Amount of lending) Why to lend (Purpose of lending) Where to finance (Portfolio Management depending upon profitability and requirement for participation on socio economic benefits) Credit division of a bank especially acts as a key financial machine to haunt for earning revenue of a bank to achie3ve its ultimate goal for profut maximization with negligible risk maintaining balanced portfolio management. 3. 3 WHERE TO pay (FINANCING ACTIVITIES OF NCC BANK) Financial activities of a bank depend upon its portfolio management of its funds through deposit.Our lending policy would be within the broad policy frame work envisaged above. Banks lending activities may be classified into the pastime broad segments. 1. Trade and Commerce 2. Industries 3. Lease financial backing 4. Consumer Financing 5. Real Estate & Civil facial expression 6. Agro based 7. Small Business Loans 8. Personal Loans 3. 4 Security Policies The term loans, if any extended by the bank shall gave to be secured by first mi en owe on the fixed asset reporting leaving a margin of at leas 25% depending upon the viability of the project.Consideration in this regard will vest purely on viability criteria irrespective(prenominal) of bank client-relationship. The determinants in this respect are debt service coverage, debt-equity ratio, and fixed coverage to term loan with a margin of 25-30% minimum. The working capital may be to boot covered by foremost upkeep owe of the fixed asset or by sharing first mortgage ranking PARIPASU with the financial institutions providing term loan. purpose is this regard shall be at the sole discretion of the bank. usual BANKING OF NCC BANK LTD. 4. 0 FUNCTIONS OF NCC BANK LIMITED 4. 1 GENERAL BANKINGGeneral banking department is the heart of all banking activities. This is the busiest and important department of a branch, because funds are mobilized, cash minutes are made clarification, remittance and accounting activities are through here. Since bank is confined to provide the services everyday, general banking is also known as retail banking. In NCC BANK LTD wiz Branch, the following departments are under general banking section A)Account circulateing section B)Deposit Section C)Cash Section B)Remittance section C) clarification section D)Accounts section 4. 1. 1 A) ACCOUNT OPENING SECTIONAccount exculpateding is the gateway for clients to enter into business with bank. It is the keister of banker customer relationship. This is one of the most important sections of a branch, because by opening accounts bank mobilizes funds for investment. Various rules and regulations are maintained and unlike documents are taken while opening an account. A customer can open different types of accounts through this department. such as 1. Current Deposit. 2. savings account. 3. Short notice deposit (SND) Types of Accounts with Terms and Conditions Current Deposit Current account is purely a demand deposit account. on that point is no travail on withdra wing money from the account. It is basically justified when funds are to be collected and money is to be paid at frequent interval. Some important points have been discussed in the project part. Savings Bank Account This deposit is in the main for small-scale savers. Hence, there is a restriction on withdrawals in a month. toilsome withdrawals are permitted only against front notice. Some meaningant Points have been discussed in project part. SND (Short Notice Deposit) Account ordinarily various big companies, organizations, giving medication Departments keep money in STD account.Frequent withdrawal is discouraged and requires prior notice. The deposit should be kept for at least seven days to get interest. The interest offered for STD is less than that of savings deposit. avocation is calculated based on passing(a) minimum product and paid two times in a year. relate rate is 6. 00%. Table-01 Account enterprise subprogram tonicity 1The account should be powerful intro duced by Any one of the following ? An existing Current Account holder of the Bank. ?Officials of the Bank not below the rank of an Assistant officer. ?A respectable person of the locality well known to the Manager/Sub-Manager of he Branch touch. tonus 2Receiving alter up act in banks prescribed form mentioning what type of account is desired to be opened touchstone 3? The form is change up by the applicant himself / herself ? deuce copies of passport size photographs from individual are taken, in part of firms photographs of all partners are taken ? Applicants must submit unavoidable documents ?Application must sign exemplar signature aeroplane and give code ? Introducers signature and accounts number sustain by legal officer tone of voice 4Authorized Officer accepts the applicationStep 5Minimum balance is deposited only cash is accepted Step 6Account is opened and a Cheques book and pay-in-slip book is given Documents call for for opening account ? Individual / pr onounce Account 1. establishment of the account. 2. Two photographs of the signatories punctually attested by the introducer. 3. Identity ( likeness of passport). 4. union Declaration fake (For joint a/c only). 5. Employees security department (in fortune of service holder). ? union account 1. conception of the account. 2. Two photographs of the signatories punctually attested by the introducer. 3.Partnership letter punctually signed by all partners (Sign should be similar as stated in Partnership Deed). 4. Partnership Deed duly show by Notary public. 5. enrolment (If any). 6. Updated Trade license. ? proprietary account 1. doorway of the account. 2. Two photographs of the signatories duly attested by the introducer. 3. legal facsimile of Trade pass. 4. Rubber stamp. 5. TIN number corroboration. 6. Identity (Copy of passport). 7. Permission letter from DC/ Magistrate (in case of newspaper) ? Limited company 1. Introduction of the account. 2.Two photographs of the si gnatories duly attested by the Introducer. 3. logical facsimile of Trade License. 4. Board upshot of opening A/C duly certified by the death chair/Managing Director. 5. authentication of Incorporation. 6. present of Commencement (In case of Public limited company). 7. Certified (joint stock) true imitate of the memorandum and Article of Association of the play along duly attested by Chairman or Managing Director. 8. List of directors along with assigning & specimen signature. 9. Latest certified copy of Form xii (to be certified by register of joint stock companies) (In case of Directorship change). 0. Rubber Stamp (Seal with sur evoke of each person) 11. enfranchisement of registration (In case of Insurance Company Obtained from department of Insurance from the Peoples Republic of BD). ? Club / societies account 1. Introduction of the account. 2. Two photographs of the Signatories duly attested by the introducer. 3. Board Resolution for curtain raising A/C duly certif ied by President/ Secretary. 4. List of Existing Managing Committee. 5. Registration (if any). 6. Rubber Stamp. 7. Permission letter from chest of drawers of N. G. O. (In case of N. G. O. A/C). Closing of an accountThe closing of an account may happen, ?If the customer is desirous to close the account, ?If the NCC BANK begins that the account is inoperative for a long duration. ?If the court of NCC BANK issues attach order. A customer may close his/her account any time by submitting an application to the branch. The customer should be asked to draw the final check for the amount standing to the credit of his/her account less the amount of closing an other incidental charge and surrender the unused check leaves. The account should be accounted for the account closing charge etc. nd the authorized officer of the bank should destroy unused check. In case of joint account the application for closing the account should be signed by the joint account holder. The fee for closing of an account is Tk. 50. 4. 1. 2 B) topical anaesthetic REMITTANCE Carrying cash money is troublesome and risky. Thats why money can be transferred from one place to another through banking channel. This is called remittance. Remittances of funds are one of the most important aspects of the Commercial Banks in rendering services to its customers. Types of remittance ? surrounded by banks and non banks customer Between banks in the same estate ?Between banks in the different centers. ?Between banks and central bank in the same country ?Between central bank of different customers. The main instruments used by the NCC BANK of remittance of funds are ?Payment order (PO) ?Demand Draft (DD) ?Telegraphic Transfer (TT) So the basic three types of local remittances are discussed below Table- 02 PointsPay OrderDemand DraftTT ExplanationPay Order gives the payee the right to rubric payment from the topic bankDemand Draft is an order of issuing bank on another branch of the same bank to pay speci fied sum of money to payee on demand.Issuing branch indicates another branch to pay specified money to the specific payee on demand by Telegraph / call back Payment fromPayment from issuing branch onlyPayment from request branch Payment from ordered branch broadly used to Remit fund Within the unclutterhouse area of issuing branch. exterior the unclutterhouse area of issuing branch. Payee can also be the purchaser. Anywhere in the country Payment Process of the paying bankPayment is made through clearing 1. Confirm that the DD is not forged one. 2. Confirm with sent advice 3. Check the Test Code 4. get under ones skin payment1.Confirm issuing branch 2. Confirm Payee A/C 3. Confirm amount 4. Make payment 5. Receive advice Charge Only commissionCommission + telecommunicate chargeCommission + Telephone Term Deposit reception The Local Remittance section of NCC BANK Motijheel Branch also issues TDR. They are also known as time deposit or time liabilities. These are deposits, wh ich are made with the bank for a fixed period, specified in advance. The bank need not maintain cash militia against these deposits and therefore, the bank offers higher of interest on such deposits. Term Deposits These rates are not negotiable.In this table we can find out the percentage that is given by the bank for specific period of time to the customer. 4. 1. 3 CLEARING SECTION The amount of Cheques, Pay Order (P. O), and Demand Draft (D. D) accumulation from other banks on behalf of its customer is a basic function of a clarification Department. Clearing Clearing is a system by which a bank can collect customers fund from one bank to another through clearing house. Clearing House Clearing House is a place where the representatives of different banks get together to possess and deliver Cheques with another banks. Normally, Bangladesh Bank performs the Clearing House in Dhaka, Chittagong, Rajshahi, Khulna & Bogra. Where there is no branch of Bangladesh Bank, Sonali bank arra nges this function. Member of Clearing House NCC BANK limited is a scheduled Bank. agree to the Article 37(2) of Bangladesh Bank Order, 1972, the banks which are the member of the clearinghouse are called as Scheduled Banks. The scheduled banks clear the curb drawn upon one another through the clearinghouse. Types of ClearingA)Outward Clearing When the Branches of a Bank get down check marks from its customers drawn on the other Banks within the local clearing zone for collection through Clearing House, it is Outward Clearing. B)Inward Clearing When the Banks receive deterrent drawn on them from other Banks in the Clearing House, it is Inward Clearing. Who will deposit deterrent for Clearing Only the regular customers i. e. who have Savings, Current, STD & Loan Account in the bank can deposit tab for collection of fund through clearing house. Responsibility of the colligateed officer for the Clearing Cheque and being work with department, following are the issues )Crossing o f the cheque. 2)(Computer) posting of the cheque. 3)Clearing cachet & proper endorsement of the cheque. 4)Separation of cheque from deposit slip. 5)Sorting of cheque 1st bank wise and then on branch wise. 6)Computer print 1st branch wise & then bank wise. 7)Preparation of 1st Clearing House calculating machine validation sheet. 8)Examine data processor validation sheet with the deposit slip to justify the computer posting 9) Copy of computer posting in the floppy disk. Bills Collection In modern banking the mechanism has become knotty as far as glint transaction and safety is concerned.Customer does pay and receive bill from their counterpart as a result of transaction. Commercial banks duty is to collect bills on behalf of their customer. Types of Bills for Collection i. Outward Bills for Collection (OBC). ii. Inward Bills for Collection (IBC). What is OBC? OBC means Outward Bills for Collection . OBC exists with different branches of different banks outside the local clearin ghouse. Normally two types of OBC 1)OBC with different branches of other banks 2)OBC with different branches of the same bank Procedure of OBC 1)Entry in the OBC register. 2)Put OBC number in the cheque. ) Crossing seal on the left corner of the cheque & payees account will be assign on identification seal on the back of the cheque with signature of the concerned officer. 4)Dispatch the OBC cheque with forwarding. 5)Reserve the photocopy of the cheque, carbon copy of the forwarding and deposit slip of the cheque in the OBC file. Inward bills for collection (IBC) When the banks collect bills as an agent of the collecting branch, the system is known as IBC. In this case the bank will work as an agent of the collection bank. The branch receives a forwarding letter and the bill. Procedure of IBC 1.IBC against OBC To receive the OBC cheque first we have to give entry in the IBC Register . The IBC number should put on the forwarding of the OBC with date. 2. Deposit of OBC amount OBC che que amount is put into the sundry deposit-sundry Creditors account, get to debit entry & credit voucher of it. If the OBC cheque is reward, propel credit advice (IBCA) with signature & advice number of the concern branch for the OBC amount. 3. If the OBC cheque is dishonored, the concerned branch is informed about it. 4. Again place in the clearing house or send the OBC cheque with Return Memo to the issuing branch according to their information. . 1. 4 D) ACCOUNTS SECTION Accounts Department is called as the nerve Centre of the bank. In banking business, proceedings are through with(p) every day and these transactions are to be recorded mightily and systematically as the banks deal with the depositors money. . out-of-the-way recording of transactions will lead to the mismatch in the debit side and in the credit side. To avoid these mishaps, the bank provides a separate department whose function is to check the mistakes in passing vouchers or wrong entries or fraud or forger y.This department is called as Accounts Department. If any discrimination arises regarding any transaction this department report to the concerned department. Besides these, the branch has to prepare some internal statements as well as some statutory statements, which are to be submitted to the Central Bank and the head Office. This department prepares all these statements. Workings of this department Packing of the correct vouchers according to the debit voucher and the credit voucher record the transactions in the cashbook. Recording the transactions in general and subsidiary book Preparing the daily position of the branch comprising of deposit and cash Preparing the daily Statement of personal business showing all the assets and liability of the branch as per General Ledger and ancillary Ledger separately Making payment of all the expenses of the branch Recording inters branch fund transfer and providing accounting treatment in this regard. Preparing the monthly salary sta tements for the employees Preparing the every week position for the branch which is sent to the Head Office to maintain Cash Reserve Requirement (C.R. R) Preparing the monthly position for the branch which is sent to the Head Office to maintain Statutory Liquidity Requirement (S. L. R) Make charges for different types of duties Preparing the budget for the branch by fixing the target regarding profit and deposit so as to take unavoidable steps to generate and mobilize deposit. Checking of deed List Recording of the vouchers in the verifier Register 4. 2 E. FOREIGN supercede Foreign exchange is the means and methods by which rights to wealth in a countrys currency are converted into rights to wealth in another countrys currency.In banks when we talk of foreign exchange, we adjoin to the general mechanism by which a bank converts currency of one country into that of another. Foreign Exchange Department (FED) is the international department Bangladesh Bank issues license to sched uled banks to deal with foreign exchange. These banks are known as Authorized Dealers. If the branch is authorized dealer in foreign exchange market, it can remit foreign exchange from local country to foreign countries. So NCC BANK, Principal branch is an authorized dealer. There are three kinds of foreign exchange transactionA) conditional relation B) trade C)Remittance. 4. 2. 1 A) rascalORT To import, a person should be competent to be an importer. According to Import and trade contain Act, 1950, the Office of Chief control condition of Import and trade provides the registration (IRC) to the importer. In an international business environment, buyers and sellers are generally undiscovered to each other. So seller of goods incessantly seeks security for the payment of his exported goods. Bank gives export guarantee that it will pay for the goods on behalf of the buyer if the buyer does not pay. This guarantee is called Letter of Credit.Thus the contract between importer and exporter is given a legal shape by the banker by Letter of Credit. 4. 2. 1. 1Letter of Credit Definition A letter of credit is a letter issued by a bank (know as the opening or the issuing bank) at the instance of its customer (known as the destroyer) addressed to a person (donee) attempt that the bills drawn by the benefactive role will be duly honored by it (opening bank) provided certain conditions mentioned in the letter gave been complied with. Table- 03 ImporterWho applies for L/C Issuing BankIt is the bank which opens/issues a L/C on behalf of the importer. positive(p) Bank It is the bank, which adds its confirmation to the credit and it, is done at the request of issuing bank. Confirming bank may or may not be advising bank. Advising or Notifying Bank It is the bank through which the L/C is advised to the exporters. This bank is actually find out in exporters country. It may also assume the role of substantiative and / or negotiating bank depending upon the condition o f the credit. Negotiating Bank It is the bank, which negotiates the bill and pays the amount of the beneficiary. The advising bank and the negotiating bank may or may not be the same.Sometimes it can also be confirming bank. Accepting BankIt is the bank on which the bill will be drawn (as per condition of the credit). Usually it is the issuing bank. Reimbursing BankIt is the bank, which would reimburse the negotiating bank after get payment instruction manual from issuing bank. 4. 2. 1. 3 Steps for import L/C Operation 8 steps operation Step 1 Registration with CCI&E For engaging in international trade, every trader must be first registered with the Chief restraint of Import and Export. By paying specified registration fees to the CCI&E. he trader will get IRC/ERC (Import/Export Registration Certificate), to open L/C with bank, this IRC is must. Step 2 Determination term of credit The terms of the letter of credit are depending upon the contract between the importer and exp orter. The terms of the credit set up the amount of credit, name and address of the beneficiary and opener, tenor of the bill of exchange, period and mode of despatch and of destination, nature of credit, expiry date, name and number of sets of shipping documents etc. Step 3 Proposal for Opening of L/C To have an import LC limit an importer submits an application to department to NCC BANK.The proposal contains the following particulars Full particulars of the bank account Nature of business involve amount of limit Payment terms and conditions Goods to be imported Offered security Repayment schedule Step 4 Application by importer to the banker to open letter of credit For opening L/C, the importer is necessary to fill up a prescribed application form provided by the banker along with the following documents Table- 04 1. L/C Application form 7. Authority to debit account 2. Filled up LCA form 8. Filled up amendment request Form 3. Demand Promissory Note 9. IMP form 4. ro-forma i nvoice 10. Insurance cover note and money response. 5. Tax recognition number 11. Membership certificate 6. Import registration certificate 12. Rate magnetic declination undertaking Step 5 Opening of L/C by the bank for the opener Taking filled up application form from the importer. Collects credit report of exporter from exporters country through his foreign correspondence there. Opening bank then issues credit by air mail/TELEX/SWIFT followed by L/C advice as asked by the opener through his foreign correspondent or branch as the case may be, at the place of beneficiary.The advising bank advises the L/C to the beneficiary on his own form where it is addressed to him or besides hand over the original L/C to the beneficiary if it is so addressed. Step 6 Shipment of goods and lodgment of documents by exporter Then exporter ships the goods to the destination of the importer country. Sends the documents to the L/C opening bank through his negotiating bank. Generally the following d ocuments are sent to the Opening Banker with L/C Table- 05 1. Bill of Exchange 6. Packing List 2. Bill of committal 7. Advice Details of Shipment 3. Commercial flier 8. Pre-shipment Inspection Certificate . Certificate of Origin 9. Vessel Particular 5. A certificate stating that each packet contains the description of goods over the packet. 10. Shipment Certificate Step 7 Lodgment of Documents by the opening Bank from the negotiating bank After receiving the documents, the opening banker scrutinizes the documents. If any discrepancy found, it informs the importer. If importer accepts the fault, then opening bankers call importer retiring the document. At this time many thing can happen. These are indicated in the following variableness found but the importer accepts no problem occurs in lodgment. Discrepancy found and importer not agreed to accept In this case, importer protest and send back all the documents to the exporter and request his to make in the specified manner. Her e banker is not bound to pay because the documents send by exporter is not in accordance with the terms of L/C. Documents are OK but importer is unforced to retire the documents In this case bank is obligated to pay the price of exported goods. Since importer did not pay for bill of exchange, this payment by bank is one kind of credit to the importer and this credit in banking is known as PAD. Everything is O. K. but importer fails to clear goods from the port and request bank to clear In this case banks clear the goods and takes delivery of the same by paying customs duty and sales tax etc. So, this expenditure is debited to the importers account and in banking it is called LIM. Step 8 Retirement The importer receives the intimation and gives necessary instruction to the bank for retirement of the import bills or for the disposal of the shipping document to clear the imported goods from the customs authority.The importer may instruct the bank to retire the documents by debiting his account with the bank or may ask for LTR (Loan against effrontery Receipt). 4. 2. 1. 4 Accounting Procedure in case of L/C Opening When the officer thinks fit the application to open a L/C, bounteous the following entries- creates the following charges- Table- 06 ParticularsDebit/ CreditCharges in Taka Customers A/CDebit L/C Margin A/CCredit Commission A/C on L/CCredit50% VATCredit15% on commission SWIFT ChargeCredit3000/= DatamaxCredit1000/= StampCredit150/= PostageCredit300/= DHL/CourierCredit1500 4. 2. 1. Amendment of L/C After opening of L/C some times rewrite to the original terms and conditions become necessary. These amendments guide changes in a. Unit price b. computer address of validity o the L/C c. Documentary requirements etc. Such amendments can be affected only if all the concerned parties agree i. e. the beneficiary, the importer, the issuing bank and the advising bank. For any amendment the importer must request the issuing bank in writing duly supported by revised indent/ Proforma invoice. The issuing bank then advises the mandatory amendment to the advising bank.L/C amendment commission including postage is charged to the clients A/C. 4. 2. 1. 6 Loan against trust utility (LTR) Advance against a Trust Receipt obtained from the Customers are allowed to only first class tested parties when the documents covering an import shipment or other goods pledged to the Bank as security are given without payment. However, for such advances prior permission/sanction from Head Office must be obtained. The customer holds the goods or their sale-proceeds in trust for the Bank, till such time, the loan allowed against the Trust Receipts is fully paid off. The Trust Receipt is a document that creates the Bankers lien on the goods and practically amounts to hypothecation of the proceeds of sale in discharge of the lien. 4. 2. 1. 7Loan Against trade Merchandise (LIM) Advance (Loan) against the security of merchandise imported through the Bank m ay be allowed either on pledge or hypothecation of goods, retaining margin prescribed on their Landed Cost, depending on their categories and Credit hindrance imposed by the Bangladesh Bank. Bank shall also obtain a letter of undertaking and indemnity from the parties, in the beginning get the goods clear-cut through LIM Account. 4. 2. 1. Payment Procedure of Import Documents This is the most sensitive task of the Import Department. The officials have to be very much paying attention while making payment. This task constitutes the following Date of Payment Usually payment is made within seven days after the documents have been received. If the payment is become deferred, the negotiating bank may claim interest for making delay. Preparing Sale Memo A sale memo is made at B. C rate to the customer. As the T. T & O. D rate is paid to the ID, the variation between these two rates is exchange trading. Finally, an Inter Branch Exchange art Credit Advice is sent to ID. Requisition for the Foreign Currency For arranging necessary fund for payment, a requisition is sent to the International Department. Transmission of Message Message is communicable to the correspondent bank ensuring that payment is being made. 4. 3. 2 B) EXPORT 4. 3. 2. 1Understanding The goods and services exchange by Bangladesh to foreign households, businessmen and Government are called export. The export trade of the country is regulated by the Imports and Exports (control) Act, 1950. There are a number of formalness, which an exporter has to fulfill before and after shipment of goods.The exports from Bangladesh are subject to export trade control exercised by the Ministry Of Commerce through Chief Controller of Imports and Exports (CCI & E). No exporter is allowed to export any commodity permissible for export from Bangladesh unless he is registered with CCI & E and holds valid Export Registration Certificate (ERC). The ERC is required to be renewed every year. The ERC number is to be incorporated on EXP forms and other documents connected with exports. 4. 3. 2. 2 The formalities and procedure of Export L/C 1. Obtaining exports LC To get export LC form exporter issued by the importer. . Submission of export documents Exporter has to submit all necessary documents to the collecting bank after shipping of goods 3. Checking of export documents After getting the documents banker used to check the documents as per LC terms 4. negotiation of export documents If the bank accepts the document and pays the value draft to the exporter and forward the document to issuing bank that is called a negotiating bank. If the bank does buy the LC then the bank normally acts as collecting bank. 5. Realization of proceeds This is the period when the issuing bank has realized the payment. 6.Reporting to the Bangladesh bank As per instruction by Bangladesh bank the bank has to report to respective department of Bangladesh bank by mentioning in style(p) payment. 7. Issue to proceeds r ealization certificate (PRC) Bank has to issue proceed realization certificate of export LC to the supplier / exporter for getting cash assistance 4. 3. 2. 4Back-To-Back L/C It is simply issued to the clients against an import L/C. successive mechanism involves two separate L/C. One is master Export L/C and another is Back-to-Back L/C. On the strength of outstrip Export L/C bank issues bank to Back L/C.Back-to-Back L/C is commonly known as buying L/C. On the contrary, Master Export L/C is known as Selling L/C. 4. 3. 2. 5 Features of Back to Back L/C An Import L/C to procure goods /raw materials for further processing. It is opened based on Export L/C. It is a kind of Export Finance. Export L/C is at Sight but back to Back L/C is at Usance. No margin is required to open Back to back L/C Application is registered with CCI&E Applicant has bonded storage warehouse license. L/C value shall not exceed the admissible percentage of net FOB value of relative Master L/C. Usance period wil l be up to 180 days. The import L/C is opened for 75% of the value of Export L/C. Here L/C issued against the lien of export L/C. Arrangements are such that export L/C matures first then out of this export profit, import L/C is paid out. 3. 3. 2. 6 Documents Required for Opening a Back-to-back L/C In NCC BANK Principal Branch, following papers/ documents are required for opening a back-to-back L/C- 1. Master L/C 2. Valid Import Registration Certificate (IRC) and Export Registration Certificate (ERC) 3. L/C Application and LCAF duly filled in and signed 4. Proforma Invoice or format 5.Insurance Cover Note with money receipt 6. IMP Form duly signed In addition to the above documents, the followings are also required to export oriented garment industries while requesting for opening a back-to-back L/C 1. stuff Permission 2. Valid Bonded Warehouse License 3. Quota Allocation Letter issued by the Export Promotion Bureau (EPB) in favor of the applicant for quota items. Payment of bac k to back l/c In case back to back as 60-90-120-180 days of maturity period, deferred payment is made. Payment is given after realizing export proceeds from the L/C issuing bank. 4. 3. 2. Negotiation of Export Documents Negotiation stands for payment of value to the exporter against the documents stipulated in the LC. If documents are in order, NCC BANK purchases (negotiates) the same on the basis of banker- customer relationship. This is known as Foreign Documentary Bill Purchase (FDBP). If the bank is not satisfied with the documents submitted to NCC BANK gives the exporter reasonable time to remove the discrepancies or sends the documents to L/C opening bank for collection. This is known as Foreign Documentary Bill for Collection (FDBC) entered into the Foreign bill Purchased (F.B. P) register. The documents are sent to the L/C opening Presentation of export documents for negotiation/Purchase After shipment, exporter submits the following documents to NCC BANK for negotiation. B ill of exchange Bill of lading Invoice Insurance Policy/Certificate Certificate of Origin Inspection Certificate Consular Invoice Packing List