This document provides an overview of various aspects of international trade exports handled by the bank, including: 1. The roles of the Central Processing Unit (CPU) and branches in advising export letters of credit, negotiating export bills, handling export collections, and processing advance payments and shipments against advances. 2. The processes for lodging and reversing export bills purchased, negotiating export collections, and realizing and distributing collection proceeds. 3. Details on local bill discounting, export refinance schemes from the State Bank of Pakistan, and the role of the WeBOC electronic form system.

1. 1
Committed to you
Welcome to
Basics of International Trade
Unit 3

2. 2
Committed to you
EXPORTS
 Form "E" WeBOC (EFE)
 Export L/C Advising
 Export Negotiations
 Local Bill Discounting
 Export on Collection Basis
 Advance Payments against Exports
 SBP Refinance (Pre & Post Part I / Part II)

3. 3
Committed to you
Export L/C Advising:
• Branch Role:
• Export Letter(s) of Credit and/or Amendments received directly
• by CPU or through any other branch will be handled by CPU.
• Proper record of L/C Advising will be maintained at CPU.
• After making necessary endorsement and recovery of the advising charges,
• CPU will forward the original L/C / Amendment to TCS of the
• respective branch with whom the beneficiary of
• L/C / Amendment is maintaining their account, for onward delivery of
• the instrument to the Beneficiary.
• In case the Beneficiary of L/C / Amendment is not a customer of
• our Bank and located in Karachi,
• the Advising Letter addressed to the Beneficiary will be sent by CPU
• on the same date and upon receipt of L/C advising charges, original L/C
• and/or Amendment will be advised to the beneficiary.

4. 4
Committed to you
Export Negotiations (Lodgment of FBP)
• Export Letter(s) of Credit and/or Amendments received directly
• by CPU or through any other branch will be handled by CPU.
• Proper record of L/C Advising will be maintained at CPU. After making
necessary endorsement and recovery of the advising charges,
• CPU will forward the original L/C / Amendment to TCS of the
• respective branch with whom the beneficiary of L/C / Amendment
• is maintaining their account, for onward delivery of the instrument
• to the Beneficiary.
• In case the Beneficiary of L/C / Amendment is not a customer of our
Bank and located in Karachi, the Advising Letter addressed to the
Beneficiary will be sent by CPU on the same date and upon receipt of
L/C advising charges,
• original L/C and/or Amendment will be advised to the beneficiary.

5. 5
Committed to you
Export Negotiations (Lodgment of FBP)
Branch Role:
Exporter submits original shipping documents along with original
export L/C to TCS who will ensure that all the documents mentioned
in customer’s covering letter have been submitted and verifies
customer signature.
Enter the document details into the E-form Certification Register.
Scrutinizes the documents at initial level to check whether the
documents are clean or discrepant. In case of discrepant documents,
TCS will contact the exporter for due rectification. In case of non-
rectifiable discrepancy(s), TCS will obtain Indemnity from the
customer.
TCS will forward the original sets of documents to CPU for processing
along with the domicile branch’s cover letter and the appropriate
approvals from CAD and FID for the purchase of Bill.

6. 6
Committed to you
CPU Role: (FBP)
Upon receipt of original documents, CPU will update their
record and assign the next chronologically arranged FBP
Reference Number to them.
Detailed scrutiny of the documents will be conducted by CPU
and discrepancies found, if any, will be conveyed to the branch
to seek customer’s approval or rectification of the same through
e-mail / fax.
Upon receipt of treasury rate from TCS, CPU will report the same
to treasury and post transactions into the books of respective
branch through on-line system. With Holding Tax against Exports
(WHT), Export Development Surcharge (EDS) and EDS Charges
will be recovered by CPU.

7. 7
Committed to you
CPU Role: (FBP)
Export documents are prepared according to the L/C terms and
dispatched to the L/C Opening bank under the bank’s prescribed
covering schedule for FBP.
Copy of covering schedule and customer’s credit advice will be
forwarded to the respective parent branch for onward delivery
of the same to the customer.
FBP file is prepared and outstanding record is kept at CPU.

8. 8
Committed to you
Export Negotiations (Reversal of FBP)
CPU Role:
Upon receipt of proceeds on maturity date of FBP in our
Nostro Account, reversal of FBP transaction will be posted in
the system and FBP reversal reporting will be submitted to
treasury. Any short realization will be recovered from
customer at TT Selling Rate along with the delayed period
mark up (if any)
Proceeds Realization Certificate (PRC) and Annexure “A” will
be prepared and forwarded to TCS of the respective branch
for onward delivery of the same to the customer.

9. 9
Committed to you
Export Negotiations (Reversal of FBP)
Branch Role:
Upon receipt of PRC and Annexure “A”, TCS will mark
realization in the E-Form certification register and receive
delivery acknowledgment of these documents from the
customer and forward the same to CPU for their record.

10. 10
Committed to you
Local Bill Discounting
Branch Role:
Local Bill Discount (LBD) is a local currency bill, since foreign
currency is not involved, therefore, the customer does not
submit E-form, B/L, AWB, etc. TCS of the domicile branch will
conduct the initial scrutiny the documents. In case of
discrepancy(s), TCS will contact the customer for rectification
purpose and subsequently forward the original documents to
CPU.
CPU Role:
Since documents like E-Form, B/L / AWB are not required for
LBD, therefore, CPU will discount the local Bill in accordance
with the relevant approval. LBD does not require treasury
reporting.

11. 11
Committed to you
Export on Collection Basis (Lodgment)
Branch Role:
Exporter submits original shipping documents at the domicile
branch, TCS will ensure that all the documents mentioned in
customer’s covering letter have been submitted and verifies
customer signature.
TCS will enter relevant details into the E-Form Certification
Register and forward the original set of documents to CPU
along with the branch’s covering letter.
Copy of the covering schedule and customer’s debit advice (if
any) forwarded to the respective parent branch for onward
delivery of the same to the customer.
Export file is prepared and outstanding record is kept at CPU.

12. 12
Committed to you
Export on Collection Basis (Lodgment)
CPU Role:
Upon receipt of documents, designated officer at CPU will
check the same and enter its details into the Export Collection
Register and assign a chronologically numbered serial no. to
the same.
A Contra liability voucher against export collection will be
posted in the books of respective branch through on-line
system. Collection and Postal/Courier charges will be recovered
from the customer.
Documents will be prepared and dispatched to the foreign
bank in accordance with the exporter’s instructions inscribed in
our bank’s covering schedule for export collection

13. 13
Committed to you
Export on Collection Basis (Realization)
CPU Role:
Upon realization of proceeds against Export Collection Bill in
our Nostro Account, payment will be advised to the exporter
through TCS
Branch Role:
TCS will contact the exporter and negotiate treasury’s exchange
rate with them. Upon acceptance of rate by the customer, TCS
will communicate the same to CPU immediately via telephone
followed by fax/e-mail.

14. 14
Committed to you
Export on Collection Basis (Realization)
CPU Role:
CPU will report the agreed rate to treasury and post
transactions in the books of the domicile branch through on-
line system. Contingent liability will reversed, WHT, EDS and
other charges (if any) will also be recovered and customer’s
account will be credited with the net amount.

15. 15
Committed to you
Export on Collection Basis (Realization)
Proceeds Realization Certificate PRC / Annexure “A” will be
prepared and forwarded along with the Credit Advice to TCS
for onward delivery of the same to the exporter.
Branch Role:
Upon receipt of PRC and Annexure “A”, TCS will mark
realization in the E-Form certification register and receive
delivery acknowledgment of these documents from the
customer and forward the same to CPU for their record.
Advance Payment:
CPU Role:
Upon receipt of proceeds in shape of Export Advance Payment,
CPU will contact TCS to inform the exporter accordingly.

16. 16
Committed to you
Export on Collection Basis (Realization)
Branch Role:
TCS will contact the exporter and obtain their stamp and
signature on the Advance Payment Voucher (APV) in duplicate.
One copy of (APV) will be retained by TCS and relevant
particulars will be entered into the Advance Payment Register
(for certification of E-form against advance payment, if
required) and forward one original copy to CPU.
Exporter’s agreed foreign exchange rate will be communicated
to CPU via telephone and e-mail
CPU Role:

17. 17
Committed to you
Export on Collection Basis (Realization)
CPU will report the agreed rate to treasury and post
transactions in the books of the domicile branch through on-
line system. WHT will be recovered and customer’s account will
be credited with the net amount.

18. 18
Committed to you
Advance Payment (Shipment against Export Advance
Payment):
Branch Role:
Exporter approaches TCS and submits shipping documents
against advance payment received earlier.
TCS checks the documents that should be comprised of
duplicate and triplicate copies of the E-Form (WeBOC)along
with the copies of invoice and shipping documents (e.g. AWB,
B/L, etc.). TCS will update E-form Certification Register and
forward the documents to CPU.

19. 19
Committed to you
Advance Payment (Shipment against Export Advance
Payment):
CPU Role:
Upon receipt of documents, CPU will submit the office copy of
the original Advance Payment Voucher along with the copy of
BL, Commercial Invoice and WeBOC (EFE )along with the short
shipment notice (if applicable) to the SBP

20. 20
Committed to you
SBP Refinance (ERF)
Introduced by SBP in 1973.
To provide concessionary finance to exporters for promotion of
exports of non – traditional and newly emerging commodities
(currently at --% pa).
Subsequently scope of scheme was enlarged to include all
manufactured goods.
In October 1977 the scheme was divided into two parts, Part –
I, & Part- II.
Under Part –I finance is allowed on case to case basis.
Pre shipment & Post shipment
Under part – II finance is allowed on revolving basis on the
basis of previous year’s export performance.

21. 21
Committed to you
SBP Refinance (ERF)
An overall revolving Refinance limit for both the parts is
sanctioned by SBP for each applicant bank at the beginning of
financial year.
In case sanctioned limit falls short of bank’s actual
requirement, SBP may increase the limit provided overdue
export bills of the applicant bank are at an acceptable level and
regulatory requirements are, by and large complied with by the
bank.
SBP may, any time reduce or cancel the limit granted to any
bank under ERF scheme.

22. 22
Committed to you
SBP Refinance (ERF)
Pre-shipment;
 Exporter receives Export LC or Firm order from the overseas
buyer, and approaches the branch maintaining his account.
 Finance from banks is available to Exporter up to 100% of LC /
Firm Export Order/ Contract received from overseas buyer.
 ERF – I (Pre-shipment) limit is valid, and cushion for present
request exists
 Export LC / Firm order is valid.
 Item to be exported is eligible for ERF.
 Exporter is beneficiary of ELC / Firm Order.
 Export LC is otherwise eligible for negotiation
 No overdue finance on account of the borrowing exporter is
existing.

23. 23
Committed to you
SBP Refinance (ERF)
ERF, Post Shipment
 Branch scrutinizes party’s request to see that,
Exported item is eligible for ERF..
Exporter is beneficiary of export documents.
Prove of shipment
Exporter has not obtained any other finance against the
involved LC / Firm order under the scheme or the balance
is sufficient to cover the required amount.

24. 24
Committed to you
SBP Refinance (ERF)
Finance is allowed for export of eligible goods only, for
180 days to direct exporter and 120 days to indirect
exporter ,total amount must not exceed 100%
No overdue finance on account of the borrowing
exporter exists in the branch .
Borrowing exporter is not defaulter of any other bank or
our bank.

25. 25
Committed to you
SBP Refinance (ERF)
ERF Part – II,
 Finance is allowed for export of eligible goods only, on
revolving basis for 180 days
 Direct exporter is entitled to avail finance limit equivalent to
50 % of his export performance during the preceding fiscal
year (from July – June).
 Finance is allowed subject to sanction of finance limit on the
basis of statement EE , in terms of bank’s credit policy.
 Matching the required performance with availed finance
,remains obligation of the borrowing exporter
 Indirect exporter can avail the finance for supply of inputs
which are eligible for finance under the scheme

26. 26
Committed to you
SBP Refinance (ERF)
Branch Role:
Customer approaches TCS along with Refinance request and
Refinance documents as per SBP requirement including Firm
Contract or L/C, Undertaking on Stamp Paper, Demand
Promissory Note and (EE Statement in case of Refinance Part-II).
Initial scrutiny of the documents will be the responsibility of
TCS, for instance, whether the exporter has submitted all
required documents and the amount of Revenue Stamps affixed
on the D. P. Note is correct. TCS will obtain approval from CAD,
verify exporter’s signature and forward the approved ERF case
to CPU.

27. 27
Committed to you
SBP Refinance (ERF)
ERF -CPU Role:
Upon receipt of approved ERF documents, CPU will prepare and
attach other documents like Form-D etc. and file it separately after
entry the details in ERF register.
On the same date, CPU will credit the customer’s current account by
debiting the loan account of the said customer through on-line
system, with 100% of the requested / approved amount and submit
the respective ERF case, latest by the next working day.
Upon receipt of credit from SBP, CPU will debit the SBP Account and
credit the SBP Borrowing Account and enter the SBP loan number and
maturity in register.

28. 28
Committed to you
SBP Refinance (ERF)
ERF -CPU Role:
In case of shipment against L/C and negotiation is required, CPU staff
will check whether or not the exporter has obtained Refinance against
this shipment, if not then the amount will be credited into customer’s
account, otherwise refinance loan will be settled.
In case of collection, on due date or upon realization of export bills
against which refinance was granted, CPU will adjust the ERF loan
(Principal plus Mark-up), credit the SBP account and send debit
authority to the State Bank for either partial or full and final
settlement of the respective ERF loan.