Features & Benefits

1. Cash Credit (Hypothecation):

This is continuous credit under which a limit is allowed to procure stocks for trading concern and raw material for manufacturing/assembling/other value adding concern.

Features/Norms:

• This is a continuous loan.
• Continuous drawing subject to limit and adjustment is allowed
• Validity of the limit is given for one year or less. It may be renewed for further period at the request of the customer but at Bank’s own norms and discretion.
• It is operated through crediting the sale proceeds in the account on regular basis.
• Stock in trade remains under customers’ custody.
• Pricing: As per decision of ALCO from time to time.
• Primary security: Hypothecation of stock in trade or stock of raw material (RM), work in process (WIP), and finished goods (FG).
• Collateral Security: Land, Building of acceptable and marketable category with reasonable value and clean ownership of the mortgagor is generally taken as collateral.

2. Overdraft (General):

This type of continuous credit limit is allowed as working capital for trading, manufacturing and services where adequate stock is not maintained.

Features/Norms:

• This is a continuous loan.
• Continuous drawing and adjustment is allowed.
• Validity of the limit may be one year or less. It may be renewed for further period at the request of the customer but at Bank’s own discretion.
• Pricing mode: As per decision of ALCO from time to time.

3. SOD (FO):

This continuous credit limit is allowed against financial obligations (FDR and different Scheme Deposits) of our Bank.

Features/Norms:

• This is a continuous loan.
• Continuous drawing and adjustment is allowed.
• Validity of the limit may be one year or less.
• Pricing: As per decision of ALCO from time to time.
• Primary security: Lien on corresponding Financial Obligations (FOs).

4. Time Loan:

This facility is allowed favoring a customer to meet emergency/seasonal fund requirement in the business.

Features/Norms:

• All specific Time Loan and each Time Loan under a revolving limit is demand loan by nature.
• Time Loan is a single time disbursement loan with specific purpose and validity.
• Generally, the loan is allowed for short period. But maximum validity can be up to 360 days from the date of creation depending on the purpose of the loan. 
• It is adjusted through crediting sales proceeds of the respective goods/from own source of the customer. 
• Pricing: As per decision of ALCO from time to time.
• Primary security: Hypothecation of stock in trade, work in process, finished goods.

5. Short Term Loan(STL):

A loan that is approved to be paid back in a short period of time, typically within 180 days from the date of creation to meet up urgent fund requirement in the business of reputed and/or trusted borrowers.

Features/Norms:

• Short Term Loan is a single time disbursement loan with specific purpose and validity.
• Generally, the loan is allowed for short period, but maximum validity can be 180 days depending on the purpose of the loan.
• Usually, STL is allowed to meet short term obligations of reputed and/or trusted borrowers.
• It is adjusted through crediting sales proceeds of the respective goods and /or from own source of the customer.
• Pricing: As per decision of ALCO from time to time.
• Primary security: Hypothecation of stock in trade, work in process, finished goods.

6. Payment Guarantee:

This guarantee is provided in favor of the suppliers/service providers and on behalf of the Customers to avail certain amount of supplies/services on credit, as an assurance of receipt of payment against the services/ supplies as per terms of the supply. 

7. Term Loan for CMSME:

This is a mode of term financing for expansion of business purpose.  The customer is entitled to use the asset at his own risk & responsibility throughout the loan tenure.

Features/Norms:

• It is a term loan.
• Liability is adjusted through deposit of Installments at regular frequency (generally monthly)
• Pricing mode: As per decision of ALCO from time to time.
• Primary security: Hypothecation of the asset, duly insured (as applicable)

Features & Benefits

This is a mode of term financing for completion of new project.  The customer is entitled to use the asset at his own risk & responsibility throughout the loan tenure.

Features/Norms:

• It is a term loan.
• Liability is adjusted through deposit of Installments at regular frequency (generally monthly)
• Pricing mode: As per decision of ALCO from time to time.

Primary security: Hypothecation of the asset, duly insured (as applicable)

Features & Benefits

1. Letter of Credit (L/C):

This is an obligation to the exporter’s Bank on behalf of the importer to import any permissible item from both local & foreign sources. Inland L/Cs are allowed for manufacturing unit at sight basis only.

L/Cs are of different types as under:

1. Sight L/C: When payment against the LC is made on sight basis against receipt of shipping documents/bills in order.
2. Deferred Payment (DP) L/C: A type of L/C, payment against which is made after an agreed period of time.
3. UPAS LC: It is actually a combination between Sight and Usance LC. UPAS is an Usance LC that is payable at sight basis to the seller (beneficiary), while the payment by the applicant (buyer) to the issuing Bank will be made at the end of usance term.
4. Back to Back (BTB) LC: BTB LCs are opened by keeping lien of master LC/Contract to import permissible items/raw-materials of required quantity to execute export orders. BTB LCs are allowed to the eligible customers to import/procure raw materials for manufacturing and exporting finished goods.

Pricing mode: As per schedule of charge of the Bank.

Primary Security: LC Margin, LC related shipping documents and acceptance etc.

2. Loan against Trust Receipt (LTR):

This facility allowed for the retirement of shipping documents by adjustment of PAD liability, is known as LTR.

Features/Norms:

• This is a demand loan.
• This is a post-import finance.
• Usually allowed to retire shipping documents against L/C (sight).
• Usually LTR amount is less than or equal to PAD liability.
• Importer controls/possesses the imported goods.
• Usually the tenure of LTR would be 30, 60, 90, 120, or 180 days based on the nature/marketability/ perishability of the goods but essentially in compliance with the instruction of Bangladesh Bank guidelines/directives.
• Borrower has to adjust the loan within the tenor of LTR.
• Pricing: As per decision of ALCO from time to time..
• Primary security: Hypothecation of imported goods and usual charge documents including Letter of Trust Receipt in each case.

3. Local Documentary Bill Purchased (LDBP):

This facility is provided to purchase/negotiate documents/ bills (duly accepted by issuing Bank) submitted by the exporter/supplier (deemed) after export/supply made to local export-oriented industries against inland LC export L/C) usually denominated in Foreign Currency.

Features/Norms:

• This is a demand loan.
• This is usually a deemed Post Shipment export finance.
• The acceptance must be communicated by the accepting Bank through SWIFT message (under valid SWIFT Code) upon request of the purchasing Bank.
• A customer may be allowed LDBP maximum up to 90% of accepted bill value against confirmed acceptance.
• The tenure of each LDBP is as per the maturity date of the confirmed acceptance.
• Liability is to be adjusted from the proceeds of the Bill.
• Pricing: As per decision of ALCO from time to time.
• Primary security: Unconditional acceptance of the LC issuing Bank and usual charge documents.

4. Foreign Documentary Bills Purchased(FDBP):

This facility is provided to negotiate (purchase) Foreign Documentary bills/documents which must be in order as per terms and conditions of Export LC which must be kept under lien. 

Features/Norms:

• This is a demand loan.
• This is a mode of export finance (post shipment finance).
• All specific FDBP and each FDBP created under a revolving limit are demand loan by nature.
• The documents/bills have to be in order (no discrepancy) as per export LC terms.
• Residual cash drawing is allowed under FDBP, after adjustment of BTB L/C, PC, and other liabilities associated to the particular export.
• Usually tenure will be 21 days from the date of negotiation for sight L/C.
• The FDBP shall be adjusted from the realization of concerned export proceeds and/or from own sources, where required.
• Pricing: As per decision of ALCO from time to time.
• Primary Security:  Lien on export LC and discrepancy free documents and usual charge documents.

5. Packing Credit (PC):

It is a short-term Pre-Shipment, export credit facility allowed to the customers against export LC and/or sales contract for processing/packing/shipping of goods to be exported.

Features/Norms:

• This is export finance by nature.
• All specific PCs and each PC created under a revolving limit are demand loan by nature.
• PC amount should not exceed 10% of net FOB value of Export L/C/Contract at any point of time or proportionate of raw materials received considering import entitlement/BTB opened. Total finance (including ABP) against an export LC or Contract should not exceed 90% of the FOB value.
• Borrower/Exporter will be entitled to avail PC upon receipt of goods at factory premises under BTB L/C.
• PC will be adjusted with the proceeds of negotiating export bills/from the relevant export proceeds/ own source of the customers where required.
• Pricing: As per decision of ALCO from time to time.
• Primary security: Export LC/Sales Contract and usual charge documents for each case.

6. Loan against EDF:

EDF facility is provided to the exporters including deemed exporters of the selected category for making payment at sight for their imports against Sight Back to Back LC/ Sight LC. The facility provides support to the importers for making payment to the input suppliers before they receive payment against their exports. Under EDF, the Fund is provided in FC.

Features/Norms:

• EDF liability has to be repaid within 6 months. In case of overdue, rate of interest will be charged @ commercial rate of interest.
• This facility is an interim payment arrangement to the suppliers, which is allowed to meet Sight LC or Sight BTB LC payment for importing export inputs where export payment will be due later.
• Liability shall have to be generally adjusted from the export proceeds within the tenor as decided by Bangladesh Bank. However, in case of failure, the loan has to be adjusted by creating Forced Time Loan.
• Pricing: As per decision of ALCO from time to time.
• Primary security: Deemed export L/C, Export LC documents/bills.
• All specific loans against EDF and each loan against EDF created under a revolving limit are demand loan by nature.

Features & Benefits

Term Loans allowed for purchasing of commercial space or construction of houses for commercial purpose fall under this category.

Features/Norms:

• It is a term loan.
• HBL (Com) facility may be allowed for the following purposes:

1. Purchase of space for commercial purpose.
2. Construction of commercial building.
3. Construction of residential building for selling out to the public (where approval of the competent authority will be obtained for commercial construction).
4. Purchase or renovation of commercial building.

• Usually loan disbursed at multiple phases, depending on satisfactory utilization of the previous disbursed fund.
• It is usually medium/long term financing.
• It is adjusted through deposit of periodical installments.
• Debt Equity Ratio should be 70:30 (maximum) or as may be decided from time to time.
• Pricing: As per decision of ALCO from time to time.
• Primary security: Registered Mortgage with RIGPA of the underlying land & building.

Features & Benefits

1. Overdraft (WO):

This facility is allowed to the contractors for execution of work/supply order awarded by the Government, Semi-Government and Autonomous Bodies. Progress of the financed work orders/contracts are periodically reviewed and documented. It is a non cheque account. 

Features/Norms:

• Work Orders/Supply Orders financed are kept under Lien/Assigned favoring the bank with Letter of Confirmation from the work awarding authority to issue Payment instrument against completed works/advance payment favoring the bank on account of the client.
• Usually disbursement is made with the progress of execution.
• Usually customer is allowed drawing judiciously up to a determined percentage of the work order/supply order value.
• It is adjusted through deduction at a rationally specified rate from the assigned bills received from the work/supply order awarding authority.
• Pricing: As per decision of ALCO from time to time.
• Primary security: Assignment of the bills against the work/supply order with confirmation from the work awarding authority.

2. Bank Guarantee (BG):

A Bank guarantee is an unconditional undertaking of the Bank on account of its customer in favor of the beneficiary to pay a specified amount of money if the customer (on account of whom the guarantee is issued) fails to fulfill the terms of the Bank Guarantee.

Guarantees are of different types:

1. Bid Bond (BB): This guarantee is issued on behalf of a bidder/contractor (customer) to participate in a tender favoring tender inviting authority. 
2. Performance Guarantee (PG): This guarantee is issued on account of a contractor (after being successful bidder) favoring the work/supply order awarding authority for getting formal work/supply order.
3. Advance Payment Guarantee (APG): This guarantee is issued on behalf of contractor (Customer) favoring the work/supply order awarding authority against advance to be made by them generally as mobilization fund or meeting emergency expenses to execute a work.
4. Retention Money Guarantee: This guarantee is issued on behalf of contractor (Customer) favoring the work/supply order awarding authority after completion of work/supply order for withdrawing the money retained by them from the bills.
5. Guarantee against Counter Guarantee: Such guarantees may be issued, subject to the guidelines of Foreign Exchange Transactions, by a local bank, against Counter Guarantee of a Foreign bank on behalf of Foreign customer usually represented by their local agent for generally participating in a bid in the issuing country.

• Pricing mode: As per schedule of charge of the Bank.
• Primary security: Margin, Counter Guarantee etc.