Letter of Credit Related Important Information

Letter of Credit Related Important Information

LIMITATION OFEXPIRY DATE:

In addition to stipulating an expiry date for presentation of documents every credit, which calls for a transport, documents should also stipulate a specified period of time after the date of shipment during which presentation must be made in compliance with the terms and conditions of credit. If no such period of time is stipulated, banks will not accept documents presented to them later than 21 days after the date of shipment. In any event documents must be presented not later than the expiry date of the credit.

Extension of Expiry Date:

If the expiry date of the credit and / or the last day of the period of time for presentation of documents stipulated by the credit on a day a bank to which presentation has to be made is closed for reasons other than by act of gods, riots, civil commotions, insurrection, war etc. The stipulated expiry date and / or the last day of period of time after the date of shipment for presentation of documents, as the case may be, shall be extended to the following day on which such bank is opened.

L/Cs under Aid/Loan/Grant/Credit etc. In Bangladesh, huge quantity of goods is imported against funds provided by different donor agencies/countries (Aid/Loan/Grant/Credit etc). After completion of agreement between the Government of Bangladesh and the donor agency/country, Bangladesh Bank issued F.E. circular giving detail terms and condition including procedure for opening of L/C under the Aid/Loan/Grant/credit etc.

LCAF: The bank will issue LCAF to the importer as per Public Notice issued by CCI & E or as per provision of F.E circular. LCAF must indicate the name of Aid/Loan/Grant/Credit etc. against which it is issued. Whether the LCAF is to be registered with Bangladesh Bank Registration Unit or not, is advised in the concerned F.E circular.

Designated Bank: Bangladesh Bank nominates certain schedule Banks to handle banking transactions of particular Aid/Loan/Grant/Credit etc. and those nominated schedule banks are known as designated banks. All L/C’s under the particular Aid/Loan/Grant/Credit etc. are to be opened through designated banks.

Eligible Commodity and Eligible Country:

Investment Agreement specifies the name of the items to the imported and also name of the countries form where those items will be imported. The items are known as eligible commodities and countries for that particular Aid/Loan/Grant/Credit etc. Bangladesh announces the name of eligible commodities and eligible countries through F.E circular.