Since last year, due to mismanagement and other factors, The Farmers Bank Limited Bank of Bangladesh has seen more frequent vicious L / C defaults, causing huge losses to Chinese enterprises in international trade in Bangladesh. On January 20, 2019, the Economic and Commercial Counselor's Office of the Chinese Embassy in Bangladesh issued a security risk alert on its official website, officially blacklisting the bank.
After analysis, the bank has more serious financial risks, not cases of credit arrears. The Economic and Commercial Counselor's Office of the Chinese Embassy in Bangladesh now blacklists the bank.
He also reminded all Chinese - funded enterprises to strengthen risk prevention and control, avoid accepting letters of credit issued by the bank in their trade with Bangladesh, and put an end to trade risks.
In fact, the problem of letter of credit settlement in Bangladesh has always existed, which has affected Bangladesh's international image. The Daily Star reported on December 13, 2018 that Mahahab, chairman of Bangladesh International Trade Association, said at the seminar that the association frequently received complaints about commercial banks' non-compliance with the terms of letters of credit and untimely payment, which damaged Bangladesh's international image. It hoped that commercial banks would perform their duties in the payment of letters of credit, strictly abide by international trade rules, and urged the central bank to take special rectification measures for the payment of letters of credit.
Preventive Measures for Chinese Exporters
01
When issuing a credit card, a Bangladeshi customer must know the credit standing of the issuing bank in advance.
Banks with good credit include:
Primer Bank Ltd
Prime Bank Limited
One Bank Limited
Export import bank of bangladesh limited ( eximbank ), etc.
Foreign banks in Bangladesh have good reputation, such as Hongkong and Shanghai Banking Corporation, Standard Chartered Bank and Citibank.
Banks with poor credit are:
IslamiBankBangladeshLimited
SocialInvestmentBankLtd.
MutualTrustBankLtd.
MercantileBankLtd.
BangladeshKrishiBank ( state - owned bank )
Sonali bank
AsiaBank
Janata bank
Sounth east bank Ltd.
02
Under the normal situation of presentation of documents, if the customer raises the quality problem of the goods and claims before the bank does not pay, it is not easy to accept them.
According to UPC600, customers cannot take delivery of goods without completing the payment procedures under sight documents. If customers raise quality problems and explain the bank's illegal operations, they will hand down documents to customers without payment. Generally speaking, exporters should completely refuse the customer's request and insist on the issuing bank's obligation to pay. The quality problems raised by customers can be solved by other means.
If the quality problem raised by the customer can indeed be proved by an official inspection agency, and the customer has a reliable reputation, in order to continue to maintain a long-term trade relationship with the customer and solve the collection problem as soon as possible, the customer's requirements can be properly considered and a certain discount can be given, but it is suggested that this method should not be adopted as far as possible to solve the problem, so as not to encourage the bank to violate the rules.
03
Strictly do a good job of examining and approving letters of credit
Ensure that there are no discrepancies. If discrepancies are found, the certificate must be amended before delivery, especially the delivery date, so as to make it conform to the stipulations of the letter of credit. Before opening the letter of credit, we must ask the guest to give us the draft of the letter of credit for reference, find out any discrepancies or ambiguities, and negotiate with the guest to amend it until all terms and conditions are clear and clear. However, the letter of credit in Bangladesh is very rare. Even subjective words like " satisfied" can be found. Guests say these are stipulated by the bank. We can ignore them and they will pay. This depends on oneself to judge whether to trust the guest.
04
Pay attention to each date
For example, shipment date, negotiation time, etc. If it exceeds the time limit, it will be quite troublesome.
05
Shipment time should be as sufficient as possible.
Generally 40 days after receipt of the letter of credit is appropriate. The validity of the L / C should be extended by 20 days from the time of shipment. As in Bangladesh this time, it's a good thing that the time for bank documents to be presented has been pushed back by 15 days, otherwise there is a risk that the documents may not be presented on time.
06
T/T+L/C combination
Although Bangladesh stipulates that all imported goods must have a letter of credit to clear customs, this does not mean that 100%L/C must be done. We can make T/T+L/C with our guests. The two kinds of payment can be combined to reduce risks. As for the proportion, both parties have to negotiate.
When making the contract, it is better to make three copies, one is the general contract ( this is very important, it should be stated in the general contract that this transaction is subject to this contract, the other two are sub - contracts, attached to this contract ) one is T/T and one is L/C ( guests on L/C will require to write it as 100%L/C, this does not matter, because only in this way can guests clear customs, otherwise their customs will catch their petty grievances, besides, L/C can only be used as a payment method, without the validity of the contract, so don't worry about it ). Must first T/T success before starting to do goods, the guest takes a fancy to is L/C, but T/T is the most important to me. I saw some people's case that T/T will be issued after shipment, which is very unfavorable to us. This payment method is meaningless to the seller, because T/T is the role of deposit.
07
China Insurance Corporation
For large export contracts, it is recommended that exporters take out export credit insurance with PICC.
08
Israel Shipping Company is not allowed
There are a lot of Maersk or MCC ships that go through Bangladesh alone. L/C usually requires a ship's license and cannot use Israeli shipping companies or the Israeli flag on board. Now the bill of lading exported to bangladesh requires ainor BIN code. Generally speaking, McCoocl Pilapl XXXXXX Nyml is the main ship. ZIM ships usually fly the Israeli flag, except ZIM.
09
CHATTOGRAM port attention
Bangladesh is relatively backward. From containers exported from China to CHATTOGRAM, there is no container terminal at the port of destination. The goods should be taken to the warehouse designated by the customs, unpacked and unloaded in the supervised warehouse, and then the consignee should pick up the goods. Attention should be paid here: your actual packed goods should be consistent with your declared goods, or else the quantity of containers picked up in CHATTOGRAM is wrong, and Bangladesh customs will impose a high fine on you or the consignee, basically above USD 300.
Generally speaking, shipping is done by sea. However, in CHATTOGRAM, it is suggested to use freight forwarders because of the serious corruption in Bangladeshi customs. Finding a freight forwarder with government background in CHATTOGRAM can save the consignee a lot of trouble.
Another thing to note is that most of the goods shipped from Shanghai port to CHATTOGRAM are transferred in SINGAPORE or PORT KELANG. SGP and PKL are relatively large ports. during peak transportation season, containers may be pressed at SGP or PKL. because when SGP or PKL are transferred to CHATTOGRAM, the capacity of the local shipping company is relatively small and cannot bear too much cargo transportation volume, so it is necessary to do a good job of delaying the arrival of the goods, at least one week, one month more. the key depends on the shipping company's transportation capacity arrangement.
At present, there are direct ships in Chittagong, Bangladesh. MSK and PIL17 can arrive at the port in 17 days, with relatively high cost performance. If foreign customers do not have specific requirements, these two ships are a good choice.
10
All documents must indicate the credit number and date.
If the letter of credit needs to be amended, it is important to check whether the amended letter of credit number is consistent with the previous letter of credit number.
