Section of Loan and other topics

Sanction of Loan

If the limit of the loan lies within the powers of manager then he sanctions the loan. Otherwise manager with the covering letter along with all necessary documents sends it to the concerned sanctioning authority.

Foreign exchange department:

Foreign exchange is an important department in bank system. In the foreign exchange department, all the operations of the bank are done in the same way as in all other departments of the bank. This department also involve in deposits, inward/outward remittances and advances but the difference with other department that the foreign exchange department deals in foreign currency rather than in local currency. Except this, this department involves in account opening/maintenance, operation, state bank reporting and import export. National Bank of Pakistan acts as importer bank as well as exporter bank for different parties who are interested in the business of export & import.

 

Import & export:

First of all importer and exporter have a conversation. They have done their dealings. There is a written agreement between them. Exporter pays commission to the broker. This is SBP’s law that commission will be 10% of exports and will be pay within 90 days of export realization. Paid commission is mentioned on form M and this is reported to the state bank of Pakistan. SBP verified that commission is not paid more than 10%.

Head office’s role:

Head office search for the customers. Compare markup rates with other banks and convince the customers. H.O makes different policies. Bank can make negotiations for specific parties but for this sake have to take permission from H.O.

 

Documents required for Export:

The person who is exporting goods to the foreign countries requiring the following documents.

      National tax number

      Registration with export promotion Bureau

      Sales tax registration

      Commercial Invoices

      Bill of Lading

      Packing List

      Bill of exchange

      Promissory Note

      E-Form

      Letter of Credit

      Certificate of origin

      Beneficiary certificate

After sending all these tasks to importer bank, now its responsibility of importer to make payment.

 

Payment from Importer Bank:

It is the choice of importer to open L/C from any bank and the bank from which L/C is opened can also refer to some other bank for payment. So bill of exchange is sent to refer bank and other documents are sent to L/C opening bank.

Documents for import bank:

      Performa invoice signed by importer

      category pass book copy attested by any bank

      L/C opening application filled in by the customer

      Importer registration with export promotion bureau

      Verification of signature by S.S. Card

      L/C issued on basis of L/C application form

      Insurance if covered by buyer

      Insurance cover note

      Insurance policy

When collect documents from foreign country, there is no discounting. Documents send to importer. When payment is made, then deduct charges. When receive foreign bills e.g. cheque, then send that cheque to the standard charted bank Karachi then made processing.

Account opening:

There is no legal requirement from foreign country to open an account except if remittance received to check the purpose.

Dormant account:

If in an account there are no transactions till 6 months that is called dormant account. To activate it customer give application to the bank.

Terms and conditions:

Account opening requires two things:

      National ID card of the customer

      Introducer

Procedure of Account Opening:

First of all, bank takes interview of customer and asks what is the purpose of opening this account, if banker is satisfied with his answer then bank will open the account. In following currency account open in NBP:

      Dollar

      Pound

      Euro

      Yen

The customer is required to fill an application form. Then he attaches the photocopy of his identity card and fills the signatory cards. Then he is allotted an account number by entering in the account opening register. Now he fills the pay-in slip and deposits money on the counter.

Following things are needed for opening of account:

      Account opening form

      Signature card

      Letter of kinship

      Letter of thanks

      Issuances of cheque book