TFFE 98th Banking Professional Exam: Short Notes

Write short notes on any five of the following:

(a) Bill of Entry (BOE)

A Bill of Entry (BOE) is a customs document submitted by the importer or its Clearing and Forwarding (C&F) agent when imported goods arrive in Bangladesh. It contains the description, quantity, and value of the imported goods. It is used to assess customs duty and taxes and to complete import clearance. After clearance, an authenticated copy is provided to the bank as proof of importation. The bank uses it for Bangladesh Bank reporting and closing the import file.

(b) Crawling Peg

A Crawling Peg is an exchange rate system where the central bank sets a reference exchange rate and allows it to change gradually within a limited range. It is a middle ground between a fixed and a floating exchange rate. Bangladesh Bank introduced the Crawling Peg Mid-Rate (CPMR) in May 2024. It helps reduce sudden exchange rate fluctuations and supports a gradual move towards a market-based exchange rate. It also helps maintain stability in the foreign exchange market.

(c) Export Processing Zone (EPZ)

An Export Processing Zone (EPZ) is a special industrial area established by the Bangladesh Export Processing Zones Authority (BEPZA) to promote export-oriented industries. EPZs offer various facilities to attract local and foreign investment. Industries in EPZs mainly produce goods for export and enjoy duty-free import facilities for machinery and raw materials. They also receive various tax and customs benefits. EPZs have contributed significantly to Bangladesh’s export growth.

(d) Buyer’s Credit

Buyer’s Credit is a financing facility where a bank or financial institution provides a loan to the importer so that the exporter can receive payment immediately. The importer repays the loan later according to the agreed terms. It provides the importer with medium-term foreign currency financing and may have a lower cost than local borrowing. It is commonly used for importing capital machinery and raw materials. However, the importer bears the foreign exchange risk during repayment.

(e) Bill of Lading (B/L)

A Bill of Lading (B/L) is a transport document issued by the shipping company after receiving goods for shipment. It serves as a receipt for the goods and provides evidence of the contract of carriage. It also acts as a document of title to the goods. A clean B/L contains no adverse remarks about the goods or their packaging. In documentary trade, banks use the B/L as an important document for controlling the release of goods.

(f) Online Payment Gateway Service Providers (OPGSP)

An Online Payment Gateway Service Provider (OPGSP) is a licensed intermediary that facilitates small-value cross-border online payments for goods and services. It supports e-commerce, freelancing and other digital services. OPGSPs enable exporters and service providers to receive foreign payments through formal banking channels. They operate through a partner bank and reduce the need for traditional payment methods such as Letter of Credit (LC). Their transactions are subject to Bangladesh Bank rules.

(g) Currency Convertibility

Currency convertibility means the ability to exchange one country’s currency for another currency without major restrictions. It is important for international trade and foreign payments. Current Account Convertibility allows trade-related foreign exchange transactions, while Capital Account Convertibility allows investment-related transactions. Partial convertibility means that only certain types of transactions are freely convertible, whereas full convertibility covers both current and capital account transactions. Bangladesh has had current account convertibility since 1994, while the capital account remains largely restricted.