The document discusses the process of lodging and retiring shipping documents for import bills under a letter of credit. It describes how an issuing bank will scrutinize documents for completeness, consistency, compliance with standards, and conformity with credit terms. Documents found to comply will be paid, while non-compliant documents will not be paid and the procedure for handling discrepancies will be followed, including providing notice of refusal. It also briefly discusses settlement of foreign payments, including through the Asian Clearing Union, which facilitates payments between member country central banks.

1. Lodgment and Retirement ofLodgment and Retirement of
Shipping DocumentsShipping Documents
Presented by-Presented by-
Nazrul IslamNazrul Islam
Assistant Vice President &Assistant Vice President &
Head of BranchHead of Branch
Ibrahimpur Branch, KafrulIbrahimpur Branch, Kafrul
Prime Bank Ltd; DhakaPrime Bank Ltd; Dhaka

3. Import Bills: Scrutiny, Lodgment & Retirement
 Receipt of import bills drawn under letter of credit.
 Scrutiny of all the documents within reasonable time.
Examination of documents generally include the following
points :
i) completeness of the documents ;
ii) consistency of the documents with each other;
iii) compliance with UCPDC
iv) conformity with the L/C terms

4.  Upon receipt of the shipping documents, Importer is to
be advised with full particulars of the date of lodgment
with
request to retire the document.
First of all, it must be ensured that-
 Full set of documents has been received.
 Documents have been negotiated within the country of
the beneficiary on or before the expiry of the credit.
 The amount drawn does not exceed the amount stated
in the credit.
 The credit has not been amended or subjected to any
notations or special instructions which might alter the
value or character of the credit.

5. Category of shipping documents as per UCPDC:
• Transport Documents
• Commercial Invoice
• Insurance Documents
• Other documents.

6. Scrutiny of Bill of exchangeScrutiny of Bill of exchange
 the bills properly stamped (if required)
 It is drawn by the party indicated as the beneficiary of the
credit .
 The tenor is in conformity with that stipulated in the credit .
 Amount is identical with that mentioned in the invoice.
 The amount in figures corresponds exactly with the amount
in words.
 The draft is in good order .

7. Scrutiny of invoices
 Merchandise is invoiced by the beneficiary.
 Merchandise is invoiced to the party on whose account
the credit is opened.
 Description and the unit price of the goods correspond
with that given in the credit .
 No extraordinary expenses in invoice unless authorized
in the terms of the letter of credit.
 Import license number appears on the invoice and that
the invoice is strictly in accordance with the pro forma
invoice.
 As many copies of the invoice as the credit stipulates,
are presented.

8. Scrutiny of the insurance
 insurance on import covered in Bangladesh.
 The risks to be insured are mentioned in LCAF.

9. Scrutiny of the Bill of Lading
 clean and of the class called for in the credit.
 cover the merchandise described in he invoice.
 The port of shipment, destination, the date of shipment,
the consignees, the party to be notified etc; are in
agreement with those mentioned in the credit.
 In “On Board” shipment, “On Board” bill of lading is used
as an evidence of such shipment.
 Blank endorsed bills of lading (if required) are endorsed
correctly.
 Bills of lading are signed either by the steamship
company or by their authorized agents.

10.  Contain evidence that freight has been prepaid if this
required by the credit clauses.
 No clause appears on the bills of lading that freight is to
be collected abroad, if the invoice includes freight
charges;
 No clause appears on the bills of lading stating the
merchandise was received in other than good condition.
 a full set of lading.
 Don’t indicate merchandise shipped ‘ Docked’ unless
insurance specifically covers this.
 dates on the bills of lading (or other documents) are not
‘stale’.
 Charter party bills of lading are not acceptable unless
stipulated in the letter of credit.

11. Scrutiny of Certificate of Origin/Consular Invoice:
 Merchandise covered therein is the merchandise
covered by the invoice.
 weight and description are identical with those shown in
other documents.

12. Scrutiny of other Documents
 weight lists
 packing lists
 inspection certificates
 certificate of analysis

13.  Issuing bank determines whether or not the documents
appear on their face to be in compliance with the terms
and conditions of the documentary credit.
Documents Comply
Or
Documents do not comply

14. 1. : When a nominated Bank acting on its nomination, a confirming bank ,if any,
or the issuing bank determines that a presentation does not comply, it may
refuse to honor or negotiate.
2 : When an issuing bank determines that a presentation does not comply, it
may in its sole judgment approached the applicant for a waiver of the
discrepancy (ies).
3. : Nominated Bank, if any, and the issuing bank shall each have a maximum
of 5(Five) banking days following the day of presentation to determine if a
presentation is complying
UCP 600 Article 14(b)
If the documents do not comply the bank will not effect payment
and follow the following procedure
Handling Discrepant Documents: UCP 600 Article 16

15. 4 : If the issuing bank or nominated bank decides to refuse to honor
or negotiate , it must give a single notice to the presenter.
The notice must state :
a)That the bank is refusing to honor or negotiate and
b)Each discrepancy to mentioned
c)i)that the bank is holding the documents pending further
instruction from the presenter or
ii) the bank is holding the documents until it receives a waiver
from the applicant
iii)that the is returning the documents or
iv)the bank is acting with instructions previously received from
the presenter.
5. : UCP 600 Article 16(c)
The notice must be given by telecommunication no later than
the close of fifth banking days following the day of presentation.
6. : When an issuing Bank refuses to honor or a confirming bank
refuses to honor or negotiate and has given notice to that effect
in accordance this article, it shall then be entitled to claim a
refund , with interest , of any reimbursement made.

16. Settlement of Foreign Payment
 After scrutiny, if the document is found in order, AD branch
will make payment against the bill to the
negotiating/presenting Bank through tested TLX/
authenticated SWIFT. Payment should be made as per
Instruction on the forwarding schedule of the Negotiating/
Presenting Bank.
 Payment will be made through Reimbursing Bank.

17. Asian Clearing Union (ACU)Asian Clearing Union (ACU)

18. Establishment of Asian Clearing Union (ACU)Establishment of Asian Clearing Union (ACU)
• The ACU was established at the initiative
of the United Nations Economic and
Social Commission for Asia and the
Pacific (ESCAP). The Decision to
establish the ACU was taken at the Fourth
Ministerial Conference on Asian Economic
Cooperation held in December 1970 at
Kabul

19. Members
• ■ Bangladesh Bank,
■ Royal Monetary Authority of Bhutan,
■ Reserve Bank of India,
■ Central Bank of the Islamic Republic of
Iran,
■ Maldives Monetary Authority,
■ Central Bank of Myanmar,
■ Nepal Rastra Bank,
■ State Bank of Pakistan, and
■ Central Bank of Sri Lanka.

20. •Thank YouThank You