Overview of LC in export and import

Abstract

Throughout the timeline of my whole university life I have gained various knowledges from the courses of my BBA program majoring in Human Resource Management which is offered by BRAC Business School, BRAC University. This was the period of learning concepts and next learning step was to implement all those concepts and knowledges practically. The internship program offered by BRAC University enables students to gain that experience. I have learned about importance of Letter of Credit in the world of export and import during my internship program in the Trade Service Division of “Prime Bank Ltd.” Prime bank is one of the renowned private bank of Bangladesh consisting of 146 branches and 170 ATM and operation in corporate, consumer, MSME and sustainable banking. The business started on April 17,1995 and currently they are providing a huge support on the economy of Bangladesh. This report is based on my 90 days internship experience in Trade Service Division of “Prime Bank Ltd.” which focuses on overview of “Prime Bank Ltd.”, Trade Service Division, LC, LC process, other LC related information and in depth analysis of my learnings and recommendations for the bank. The first chapter is about the necessary information of interns and a small trailer of my internship period in Trade Service Division of “Prime Bank Ltd.” while the second chapter will give reader the knowledge about “Prime Bank Ltd.” Third chapter contains information and related to LC process, importance of lc in export and import and other lc related information knowledge which I have gained from my internship. In this world exporting and importing is the key to all businesses. There might be less risks while doing businesses domestically but while doing international business there is a significant amount of risk involved in the payment and delivery of the products because there is no guarantee that seller will send products or buyer will pay the amount or any other alternatives. Another simple but important factor is communication which is plays effective role in doing international businesses. Letter of Credit or LC is the “x” factor of this equation because it ensures safety of both buyer and seller. Letter of Credit can be called one form of agreement which ensures that the buyer will have to pay when the seller has the proof that the items have been shipped to the destination. There is no need for advance payment for buyer and it is also an assurance for the seller if the buyer is unable to pay or if any legal action arises. Banks are the ones who process the LC and they take the liability of all of the risks which is a time consuming and lengthy process but safety is ensure for both exporter and importer.