Standard Chartered Bank of Pakistan

INTERNATIONAL BANKING 2014
GC UNIVERSITY FAISALABAD Page 1

A WELL-KNOWN QUOTE
A dream doesnt become reality through magic; it
takes sweat, determination and hard work.

A FINAL PROJECT
S ST TA AN ND DA AR RD D C CH HA AR RT TE ER RE ED D B BA AN NK K O OF F P PA AK KI IS ST TA AN N
HERE FOR GOOD


PRESENTED TO:
Sir .Saleem
Lecturer
Dept. Banking and finance
GC University Faisalabad
PRESENTED BY:
ALI RAZA RAFIQ 7108
Cell # 03447996241
ABDUL HANNAN 7103

Class: BBA 7th (E-B)

Dept. Banking and finance
GC University Faisalabad


Table of contents
Dedication ... 4
Acknowledgement.5
Preface...6
History . .07 to 14
Introduction of Standard Chartered Bank of Pakistan
The Global Operating Regions of Standard Chartered Bank:
Mission and vision
Logo
Approach
Core values
Awards and achievement
Board Of directors
Associated companies
Commitment to stakeholders
PACRA credit rating
Organizational structure
Branch hierarchy
Major clients
Financial Key figures ......15
Priorities of 2014..15
Introduction to international banking.16
Foreign currency account ..17
Branch Information ..18
Corporate banking ...18
Methods of payments in international banking.18
Types of remittances.....20
Remittances techniques....20
Nostro accounts of SCP...21

Vostro account of SCP.....21
Loro account of SCP21
'Telegraphic Transfer - TT'..22
SWIFT.....21
LC and its Types ..22
Schedule of Standard chartered Bank of Pakistan..23
Basic component of LC.24
Guidelines Adhered to Trade Services of Standard Chartered Bank25
Documents required submitting along with LC Application..25
Documents required ..26
Advantage and disadvantage of LC.....27
Summary .....28
Bibliography..29


DEDICATION

WE would like to dedicate this project to our beloved
parents and very respectable teachers who are best
in our life.
They also gave me courage, enthusiasm, support &
guidance for my studies & carrier at various
occasions of my life
Thanks a lot!!!!!!!!!!


ACKNOWLEDGEMENT

All praises for Almighty Allah, whose uniqueness, oneness &
wholeness is unchallengeable guided us in different and congeal
circumstances.
We are grateful to our teachers, especially Sir Saleem & Dr. Bilal
Aziz they really support us during this project.

We must acknowledge our gratitude to Mr. Syed Mohsan Abbas
Branch Manager of STANDARED CHARTED BANK OF PAKISTAN
(kotwali road branch) and Me.Hamid Riaz Finance Manager of
STANDARD CHARTERED BANK OF PAKISTAN they really helps us to
complete this report


PREFACE
Being students of BBA (B&F) GC University Faisalabad we are
pleased to disclose this report through which we have gain a
lot.
We have realized theory and practices both are obligatory to
become a good manager. Someone has rightly said that
practical knowledge is far better than classroom teaching.
After doing successful work on this international banking
project we are able to analyze international banking practices
like method of Remittances, Import procedure, export
procedure and whole procedure of letter of credit which are
common practices in international banking


Standard chartered bank of Pakistan
Introduction
Standard Chartered is a leading international banking group. It has operated for over 150 years
in some of the world's most dynamic markets and earns around 90 per cent of its income and
profits in Asia, Africa and the Middle East. This geographic focus and commitment to developing
deep relationships with clients and customers has driven the Bank's growth in recent years.
Standard Chartered PLC is listed on the London and Hong Kong stock exchanges as well as
the Bombay and National Stock Exchanges in India.
With 1,700 offices in 70 markets, the Group offers exciting and challenging international career
opportunities to over 88,000 staff. It is committed to building a sustainable business over the
long term and upholding high standards of corporate governance, social responsibility,
environmental protection and employee diversity. Standard Chartered's heritage and values are
expressed in its brand promise, 'Here for good'.
Background of Standard Chartered Bank:
Standard Chartered Bank (SCB) is incorporated in England with limited liability by Royal
Charter 1853, now it is one of the worlds best international banks, with operations throughout
the globe. Standard Chartered Bank has a history of about 150 years. The name of the bank
came from the two original banks the Standard Bank of British South Africa and the
Chartered Bank of India, Australia and China. Of the two banks, the Chartered Bank was
established in 1853 by a Royal Charter granted by Queen Victoria of England. The key person
behind the Chartered Bank was a Scot, James Wilson who has started The Economist, which
is still one of the worlds pre-eminent publications. He visualized the advantages of financing the
growing trade links with the areas in the East, where none of the other financial institutions were
present at that time and therefore the Chartered Bank opened two branches in 1858 in Chennai
and Mumbai. On the other hand, the Standard Bank was founded by another Scot, John
Paterson in 1862. He immigrated to the Cape Province in South Africa and became a
successful merchant there. Coming from the similar background, he also visualized the great
opportunities through linking between Europe and South Africa.
From the very beginning both the banks were keen to capitalize on the huge expansion of trade
between Europe, Asia and Africa and to reap the handsome profits to be made from financing
on that trade. Therefore, although they were separate entities, survived the First World Ware
and the Depression. But were directly affected by the wider conflict of the Second World War in
terms of loss of business and closure of branches and for that they decided to merge in 1969.
After the merger the new shares of the Standard and Chartered Banking Group Limited were
listed in the London Stock Exchange on January 30, 1970. Although the two banks merged in
1969, but their operations were being executed from two different headquarters, until on June

1980, the original building of the Chartered Bank was demolished and a new headquarter of the
Standard Chartered Bank was opened on March 20th, 1986. Right after the merger the bank
embarked on a vigorous mission to expand its business in Europe and the USA
In the last thirty years, Standard Chartered Bank has experienced continuous growth, which led
to its becoming one of the top 100 listed banks in the world. In the year 1993 and 1994 it was
judged as the best bank in the Asia Pacific region for its excellent service and growth rate as
well. The bank excels in providing the most efficient, consistent and timely services through 600
offices in more than 57 countries of Asia, Africa, Middle East and European region incorporated
in the UK with its Headquarter as 1 Aldermanbury Square, London. At present, it is maintaining
corresponding relationship with over 600 banks in 157 countries. SCB specializes in personal,
corporate, institutional and personal finance and custodial service with having a staff of about
33,000 people. SCB is well established in growth markets and aims to be the right partner for its
customers. This Bank is trusted across its network for its standard of governance and its
commitment to making a difference in the communities in which it operates. Standards
Chartered Bank aims to be a banker of choice by understanding, meeting and consistently
exceeding their customer requirements. They aim to provide security and value to their
customers by offering a wide range of innovative and safe products that are benchmarked
against their competitors best offerings.
The Global Operating Regions of Standard Chartered Bank:
Standard Chartered is headquartered in London where it is regulated by the UKs Financial
Services Authority. The Groups head office provides guidance on governance and regulatory
standards. Our Wholesale Banking team in London plays a key role in serving corporate clients
and financial institutions doing business in our markets. The Standard Chartered Group is
operating in 57 countries in various extents. These countries are grouped into 5 regions based
on their locations and business core focus.
Asia Pacific
Africa
Latin America
Middle East and South Asia (MESA)
UK and USA
150 Years in Asia
First branches opened in Calcutta, Shanghai and Mumbai in 1858, followed by branches in
Hong Kong and Singapore in 1859.
Over 80% of total Group staff work in Asia

Largest international bank in India & Pakistan
Locally incorporated in China in 2007
Over 80% of Groups profits generated from Asia
Standard Chartered Bank Pakistan
Standard Chartered Bank (Pakistan) Ltd. is the oldest and largest international bank in Pakistan.
It is also the first international bank to be awarded Islamic banking licence and the first to open
an Islamic banking branch.
Standard Chartered celebrated 150 Years in Pakistan in 2013. The Bank, which started as the
Chartered Bank opened its first office in Karachi in March 1863.
The Banks serves both Consumer and Wholesale Banking customers. Consumer Banking
provides credit cards, personal loans, deposit taking and wealth management services to
individuals and small to medium sized enterprises. Wholesale Banking provides corporate and
institutional clients with services in trade finance, cash management, lending, securities
services, foreign exchange, debt capital markets and corporate finance. It also offers a complete
suite of Islamic banking solutions under its Standard Chartered Saadiq brand.
Standard Chartered was assigned a rating of AAA/ A1+ by PACRA. In 2012 and 2013 it won the
award for Best Bank in Pakistan by The Asset Triple A for two consecutive years.
The Bank employs over 4,500 people in Pakistan and has a network of 116 branches of which
10 are dedicated Standard Chartered Saadiq branches as well as 191 ATMs.
Logo: Here for good
Here for good is the essence who we are. It's about sticking by our clients and customers
through good times and bad, and always trying to do the right thing.
Mission:
Standard Chartered bank aims to be a banker of choice by understanding, meeting and
consistently exceeding their customer requirements. They aim to provide security and value to
their customer by offering a wide range of innovative and safe product that are benchmarked
against our competitors best offerings. Their motto is to be the worlds best international bank.
Vision:
Leading the way by providing best customer services.


BOARD OF DIRECTORS
(AS AT OCTOBER 28, 2013)
MR. MOHSIN ALI NATHANI CEO / EXECUTIVE DIRECTOR
MR. CHRISTOS PAPADOPOULOS NON EXECUTIVE DIRECTOR & CHAIRMAN OF THE BOD
MR. RAHEEL AHMED NON EXECUTIVE DIRECTOR
MR. ANDREW BAINBRIDGE NON EXECUTIVE DIRECTOR
MR. NAJAM I. CHAUDHRI NON EXECUTIVE DIRECTOR & CHAIRMAN AUDIT COMMITTEE

MR. PARVEZ GHIAS INDEPENDENT NON EXECUTIVE DIRECTOR
Awards & Achievements
Finance Asia Country Awards 2011
Best Foreign Commercial Bank in Pakistan
Best Foreign Investment Bank in Pakistan
The Asset Triple A Awards for 2011
Best Bank in Pakistan
Best Debt House in Pakistan (for the fourth consecutive year)
Euro money Awards for Excellence 2011
Best International Trade Bank in Pakistan
Global Finance Magazine Award 2011
Best Consumer Internet Bank in Pakistan for the second consecutive year
The Asset Triple A Awards for 2011
Best Country Deal in Pakistan
First ever local currency shipping finance transaction for Pakistan National Shipping
Corporation of US D10.3bn Pakistani rupees - financing equivalent to USD 120mn
Associated Companies:
Standard Chartered Modaraba
Website: www.scmodaraba.com
Standard Chartered Leasing Ltd.
Website: www.standardcharteredleasing.com
Bank Auditors:
M/s KPMG Taseer Hadi & Co. Chartered Accountants


Website links of Stock Exchanges:
www.kse.com.pk
www.lse.com.pk
www.ise.com.pk
We are leading the way through our:
o Growth Markets
o Innovative Products and Services
o Talented and Diverse Teams
o Sustainable Business Strategy
Brand Promise:
Leading by Example to be The Right Partner
Core Values:
Responsive
Trustworthy
Creative
International
Courageous
Approach:
Participation: Focusing on attractive, growing markets where we can leverage our
customer relationships and expertise.
Competitive Positioning: Combining global capability, deep local knowledge and
creativity to outperform our competitors.
Management Discipline: Continuously improving the way we work; balancing the
pursuit of growth with firm control of costs and risks
Commitment to Stakeholders:
Customers:passionate about our customers success, delighting them with the quality of our service.
Our People: Helping our people to grow, enabling individuals to make a difference and teams to win.
Communities: Trusted and caring, dedicated to making a difference.
Investors: A distinctive investment delivering outstanding performance and superior returns.

Regulators: Exemplary governance and ethics wherever we are

PACRA Maintains the Ratings of standard chartered bank of Pakistan

Standard Chartered was assigned a rating of AAA/ A1+ by PACRA. In 2012 and 2013 it won the award
for Best Bank in Pakistan by The Asset Triple A for two consecutive years.

Organizational Structure:

CEO-SC PAKISTAN
Head of
Corporate
Banking
Head of
Consumer
banking
Head of
International
Banking
Head of
treasury
Head of
legal &
compliance
Head of
Human
resource
Unit head
d

Unit head
Unit head Unit head Unit head Unit head Unit head
Manager Manager
Manager Manager Manager Manager
Junior
Manager
Junior
Manager
Junior
Manager
Junior
Manager
Junior
Manager
Junior
Manager
Assistant
Managers
& Officers
Assistant
Managers
& Officers
Assistant
Managers
& Officers
Assistant
Managers
& Officers
Assistant
Managers
& Officers
Assistant
Managers
& Officers

Branch Hierarchy

Major Groups Trade with Standard chartered bank of Pakistan
Major parties or huge customer of Bank Al Habib Ltd are;
Kamal Group
Ibrahim Group
AB Group
Nishat Group
Pepsi cola Int.
Nestle Pakistan

Branch Manager
Credit Manager Operation Manager Foreign Trade
Assistant Manager
OG

I (2)
OG II (2)
Cash Operations
Unit Incharge
OG II
S.O (3)
A/C Opening (OG II)
Clearing (S.O)
Remittance
Manager
2 Assistant Manger
OG I (2) OG II (2)

Priorities of 2014:
Standard Chartered is well positioned to capitalize on the growing international trade flows as a
result of our broad geographical footprint, the depth of our customer relationships, delivery of
our product capabilities and the expertise of our people. The Group is investing in dynamic
markets and benefiting from the shift in economic power from West to East.
Superior Financial Performance
Continuous improvement
Build leadership
Be the right partner for regulators & community

FINANCIAL KEY FIGURES
Rupees in million

2006 2007 2008 2009 2010 2011

Revenue 14,023 22,339 22,985 23,167 23,473 26,755
Operating Profit 8,923 10,179 10,330 10,802 9,993 12,912
Profit before Tax 7,360 4,126 1,014 1,384 5,563 8,431
Profit after Tax 5,709 2,767 608 746 3,606 5,446
Net Mark-up
Income before
provision
10,336 16,192 16,419 16,284 17,278 20,540
Non Mark-up
Income
3,687 6,147 6,566 6,883 6,195 6,215
Non Mark-up
Expenses
5,100 12,160 12,655 12,365 13,480 13,843
Shareholders
Equity
40,230 43,066 42,769 47,717 51,073 54,589
Total Assets 246,318 255,545 264,629 312,845 321,923 356,405
Advances - net 129,004 119,537 125,601 124,447 139,269 129,620
Investments -
net
34,629 40,696 29,587 83,785 72,637 104,375
Deposits 156,878 177,162 174,552 206,958 220,266 235,953
Expense /
Income Ratio
36% 54% 55% 53% 57% 52%
Advances /
Deposits Ratio
82% 67% 72% 60% 63% 55%
Return on Equity 23.48% 6.64% 1.42% 1.65% 7.30% 10.31%
Return on
Assets
3.19% 1.10% 0.23% 0.26% 1.14% 1.61%
Earnings per - - - - - 1.41

Introduction to International Banking:
The sessions so far have focused on banking in a domestic context. In this lecture we are going
to look at the issues which arise from the internationalization of banking, which has been a
growing trend since the 1960s. After looking at the nature of international banking and reasons
for its growth, we shall focus on risks. The most important risks are the problem of sovereign
risk and the behavior of the international interbank market (IIBM), although exchange rate risk
can also pose difficulties.
Definition of IBD in terms of its functions
The international banking department of a bank is primarily responsible for
Financing foreign customers or domestic clients involved in foreign dealings. The operations
Typically handled by a bank's international department include:
1. Exchange operations.
2. Opening of documentary credits of importation, as well as providing notices and Confirmation
of export documentary credits.
3. Remittance to correspondents of documents for collection and handling of collections
Received from them.
4. Issuing bond guaranties on foreign countries or issuing bonds or guaranties for the
Account of foreign banks or firms in favor of local firms.
5. Handling foreign currency assets of the bank.
6. Granting lines of credit to banks or firms abroad and securing and handling lines of credit
granted to the bank by its correspondents.
7. Maintaining public relations to assure permanent contact, directly or indirectly, with customers
within the country or abroad.
8. Maintaining close supervision of relations with correspondent banks worldwide, which, aside
from credit and service aspects, also means permanent control over reciprocity received or
given.
9. Compiling statistical data to evaluate the evolution of bank operations in the international
sector
Note: All these function are practicing in standard charted bank of Pakistan


Foreign Currency Account SCP
Foreign Currency Account is a transactional account denominated in a currency other
than the home currency and can be maintained by a bank in the home country or a
bank in another country. Foreign Currency Current Account enables customers to
derive maximum benefits from their foreign currency deposits.
Features:
Account can be opened in US Dollar, Pound Sterling or Euro currency.
Minimum balance equivalent to 100 (USD, GBP, EUR).
No maximum balance limit.
No restriction on deposit and withdrawal transactions.
Can be opened singly or jointly.
Free SMS Alerts (On Transaction Equivalent to Rs 25,000 & above).
Free Cheque Books.
Free Remittances (Two Per Month)

Documents Required:
Copy of valid CNIC.
Two passport sizes colored Photographs of Applicant.
Verified signatures from bank.
Source of Income.

For opening foreign currency account, customer requests to the banker to open his
foreign currency account. According to customers wish banker will tick the box of the
foreign currency in the account opening form and then fill all other required fields
according to the provided information by the customer.


Branch Information
As our respected Sir Saleem sb assigned us a project of international banking and provided us
visiting letter of standard chartered Bank of Pakistan and so, we go there in the branch of
standard chartered bank which is located at Kotwali road Faisalabad and it was a corporate
branch which also deals in International Banking. Then we met with the branch manager Syed
Mohsan Abbas and told him
About our presentation and he is such a nice person and deal with us very warmly and refer us
to the person who is actually dealing in international banking then we have asked certain
questions about our Project
Corporate Banking
Standard chartered Bank offer the following products and services
1. Account services
2. Trade services (Regulated by SBP) (import & Export)
3. Working capital finance
4. Project finance
5. Musharakah finance
6. Mudarabah finance
7. Ijarah

TRADE SERVICES:

Standard chartered Bank offer a wide range of import and export services Which includes:
1. Bank Guarantee
2. Services for export:
a. Export bills for collection.
b. L/C Advising and Confirmation services.
c. Islamic Export Refinance services.
d. Pre-shipment and post-shipment financing on Islamic modes of financing.
3. Services for Importers:
e. Letter of credit
f. Import financing by way of Murabaha/Ijarah.

METHOD OF PAYMENT IN INTERNATIONAL BANKING
Introduction:
Bank developed various instrument of payment and a range of method of settlement
mechanisms to meet their customers needs. They also shaped up their international banking
departments to meet the challenges posed by increasingly varied demands from their
customers. Corresponding banking arrangement come into the picture as a solution to serve the
banks customers spread across far corners of the globe.
What are Remittances and their techniques?

A remittance is one method of sending money from one country to another country. The person
sending the money is usually a foreigner working in thehost country. The foreign worker sends
money back to their home country to assist family there. Remittances allow for economic growth
within the countries. It also contributes to the stability of the country, and the people living in it.
Types of remittances offered by SCP
Family remittances,
Migrant worker Remittances,
Social worker remittances, and
Community remittances
Family Remittances:
It refers to remittances that are sent by individual immigrants working in the foreign locations to
their family, relatives or friends in their home country. These remittances are sent every month
and they assist the families of the migrants to survive.
Community Remittances:
It refers to the remittance that is sent by individual immigrants generally and also includes the
remittance sent by various hometown associations to organizations and communities in their
home country. This money has been used for the developmental activities of communities such
as in building infrastructure, church, parks, and roads.
Migrant worker Remittances:
These remittances refer to the cash transfers done by migrant workers for sending the money to
the families, friends and relatives back home. The migrant worker remittances make up a large
chunk of money inflows into home country by the people who have migrated to foreign locations
in the search of money, job or education.

Social Remittances:
These remittances basically comprise of various ideas, practices, and social capital that make
up the backbone of many remittances that flows from workers of one country to another. Thus
social remittances assist the traditions and culture of one race or community, to socialize with
the cultures and traditions of another community.
Remittance techniques
Inward remittances
Outward remittances

Inward remittances
The term 'inward remittance" means purchase of foreign currencies in whatever form
and includes not only remittances by M.T., T.T., draft etc., but also purchase of travelers
cheques, drafts under travelers letters of credit, bills of exchange, currency notes and
coin etc. Debit to banks' non-resident Rupee accounts also constitutes an inward
remittance.
Outward remittances
The term "outward remittance" means sale of foreign exchange in any form and
includes not only remittances by T.Ts, M.Ts, drafts etc., but also sale of travelers
cheques, travelers letters of credit, foreign currency notes and coin etc. Outward
remittance can be made either by sale of foreign exchange or by credit to non-resident
Rupee account of banks' overseas branches or correspondents
NOSTRO ACCOUNTS OF STANDARD CHARTERED BANK OF PAKISTAN
Slandered chartered bank of Pakistan has Nostro accounts in 17 different currencies throughout
the world including:
USA $
UK pound
Japanese Yen
Canadian $ etc
VOSTRO ACCOUNTS OF STANDARD CHARTERED BANK OF PAKISTAN
Due to devaluation of Pakistan rupee there are few Vostro accounts are maintained by standard
chartered bank of Pakistan which includes
Sri Lankan rupee
Afghanistan rupee
Indian rupee and etc.
LORO ACCOUNTS OF STANDARD CHARTERED BANK OF PAKISTAN
As we have asked about loro accounts, financial consultant Mr. Hamid Riaz told us this is just
facility which we have used in case of need with cooperation of different local banks . So this is
not regular facility.

Old technique through which Standard chartered Bank sends money internationally?
The old technique which is used by banks is through Telex, Courier. Telex is just like a
Typewriter and connected with a telephone wire and used to send money in different countries
And each telex machine has a different number such as out PTCL numbers. This telex machine
on that time was placed anywhere in the home, in the office and in banks etc. Due to this fact,
the Chances of fraud become higher. The main drawback of that machine was that every man
can easily access to this machine.
Definition of 'Telegraphic Transfer - TT'
An electronic method of transferring funds. Telegraphic Transfers are used primarily for
Overseas wire transactions. These transfers are used most commonly in reference to CHAPS,
Clearing House Automated Payment System, transfers in the U.K. banking system.
Telegraphic Transfers are also known as Telex Transfers, abbreviated TT. TTs can also refer to
Other types of transfers. Telegraphic Transfers are usually fairly expensive, due to the fast
nature of the transaction.
New technique through which Standard chartered Bank sends money internationally?
SWIFT (Society for the Worldwide Interbank Financial Telecommunication)
Founded in Brussels in 1973, the Society for the Worldwide Interbank Financial
Telecommunication (SWIFT) is a co-operative organization dedicated to the promotion and
development of standardized global interactivity for financial transactions. SWIFT's original
Mandate was to establish a global communications link for data processing and a common
Language for international financial transactions. The Society operates a messaging service for
Financial messages, such as letters of credit, payments, and securities transactions, between
Member banks worldwide. SWIFT's essential function is to deliver these messages quickly and
securely -- both of which are prime considerations for financial matters. Member organizations
create formatted messages that are then forwarded to SWIFT for delivery to the recipient
member organization. SWIFT operates out of its Brussels headquarters and processes data at
Centers in Belgium and the United States.

In Banking Practices SWIFT:
As I asked about SWIFT from the head of international department and he told me that its a
Very costly software and operating it all over the world and not a single bank is able to
purchased it due to its high cost and he also told us we use a term MT which means that
message type, while they sending money in foreign countries. SWIFT is just install in our
financial institutions. In SWIFT there is unlimited methods to send message through the SWIFT
and each & every message have a code such as:
103 for payment
202 for individual person
203 for more than two persons
In SWIFT there is 8 digit alphabetical id and next four digit used for branch code of that branch
like:
D K P P U 0 4 3

INTRODUCTION TO DOCUMENTARY CREDITS
One of the important functions of the commercial banks in the world is to undertake import of
merchandise into the country and payment of foreign exchange towards the cost of the
merchandise to the foreign suppliers. Foreign exchange department of Standard Chartered
bank (SCB) is one of the most important departments among all other departments.
Definition: Letters of credit are often used in international transactions to ensure that
payment will be received. Due to the nature of international dealings including factors such as
distance, differing laws in each country and difficulty in knowing each party personally, the use
of letters of credit has become a very important aspect of international trade. The bank also acts
on behalf of the buyer (holder of letter of credit) by ensuring that the supplier will not be paid
until the bank receives a confirmation that the goods have been shipped.
TYPES OF DOCUMENTORY CREDIT & SCP
REVOCABLE
IRREVOCABLE
STAND BY
RED CLAUSE/ GREEN CLAUSE
Note: SCP is offering only Irrevocable L/C in Pakistan

IMPORTS:
I CASH LETTERS OF CREDIT:
AA. OPENING : 1st Qtr Each subsequent Qtr.
Or part there of
Minimum
Annual Volume/ Committed business during the
calendar year :
(Commission)
o Up to Rs 10 Million 0.40% 0.20%
o Over Rs 10 Million to Rs 100
Million
0.30% 0.15%
o Over Rs 100 Million to Rs 200
Million
0.15% 0.10%
o Above Rs 200 Million 0.10% 0.10%
L/C Cancellation Charges Rs 750 plus
commission as per I
AA. Above.

EXPORTS:
I LETTERS OF CREDIT:
Advising - for Customers Rs 1,000 plus courier charges
- for Non- Customers Rs 2,000 plus courier charges
Amendment Advising - for Customers Rs 750 plus courier charges
- for Non- Customers Rs 1,500 plus courier charges
Negotiation of Rupee Bills under Export L/Cs 0.30% - Minimum Rs 1,000
Confirmation Minimum Rs 1000 per quarter
Maximum Case to case basis
e. Transfer of Export L/Cs Rs 1,000
f. Reimbursement payment to other local banks from Non-Resident
Rupee Account.
Rs 250
II IF THE DOCUMENTS ARE SENT TO OTHER BANKS FOR
NEGOTIATION UNDER
Rs 1,000
III COLLECTIONS:
Documentary (on which bank does not earn exchange difference)
Rs 500

Rs 2,000 Min
Schedule of Standard chartered Bank of Pakistan
Charges

Effective From
J anuary 01, 2014 to J une 30,
2014


ROLES, RESPONSIBILITIES & AUTHORITY OF MANAGERS AND STAFF OF TRADE SERVICES
The LC application is stamped & received on the counter with date and time and delivered to
the respective CSC (Customer Service Center) team through a register.
The documents submitted for opening L/C are:
LC application Form
Pro forma Invoice/ Indent
LCA Form
IMP Form
Insurance Cover Note (LC Value + 10%) & Money receipt, Form Ga
IOF (Inspection Order Form)
Pay Order/ Request for issuance of Pay Order for the Insurance Company
Other additional documents if required by Import Policy Order (IPO) or NBR or (i.e.) viz
Block list from Drug Administration, Ministry of Agriculture Import Permit, Fertilizer
Association Allocation Letter, BOI Allocation Letter.
In respect of import by industrial unit under bonded warehouse system, open marine
policy is acceptable.
The basic components of letters of credit:
Importer (Applicant/Buyer/Opener/Account Party)
Seller (Beneficiary / Shipper/Consignor)
Issuing Bank (Opening Bank) SCP
Advising Bank
Confirming Bank
Negotiating Bank
Reimbursing Bank
Transferring Bank
Accepting Bank
Nominated Bank
Drawee Bank
Amount
Terms
Expiry
Banking Day
Complying presentation
Confirmation
Honor ( sight, deferred, acceptance)


Guidelines Adhered to Trade Services of Standard Chartered Bank
1. Under normal circumstances, Letters of Credit (LC) will be issued on the basis of
facilities established for a customer. Limit in system (eBBS) and current BCA must be in
place.
2. In the absence of facilities, LCs may be opened based on adequate cash margin or
liened deposit and subject to appropriate credit approval. The minimum margin is
normally 110% of the LC value in equivalent local currency
3. LCs to be opened for non-corporate customers should bear the approval of the
appropriate authority from respective Unit and Credit Control divisions.
4. Any LCs which deviate from the established Business Credit Application (BCA) terms of
the customer need to be referred to the Unit Head /Relationship Manager in Client
Relationship, Wholesale Banking and or SME Banking under Consumer Banking, for
necessary disposal.
5. Local L/Cs should be issued as unsecured L/Cs.
6. All L/Cs issued must be recorded in the banks books in the currency of the credit and at
the highest possible drawing amount.
7. LC is booked under Product code 086 for Client Relationships accounts and under
Product code 390 for SME accounts
8. Trade Policy, PPG, CPA & other group memorandum /circulars are Group Standards
which are routinely issued, covering several areas of our business and must be adhered
to by all units.
9. LC should comply to SBP regulations.
Documents required submitting along with LC Application:
Import Registration Certificate (IRC), which will be returned later
Proof of payment of renewal fees for IRC for the concerned financial year
NOC from the nominated bank (where nominated bank in IRC is other than SCB)
NTN certificate
VAT certificate
Valid and renewed Trade License
Copy of Board Resolution
A declaration in the companys letterhead pad, that the importer has paid income tax or
submitted income tax return for the preceding year. A new company can declare that the
requirement is not applicable or the company is enjoying tax holiday.
General Guidelines using L/C for the Buyer/Importer:
Before opening a letter of credit, the buyer should come to an agreement with the
seller on all aspects of quantity and quality of goods to be sent, schedules of
shipment, payment procedures, and documents to be supplied. As with the
seller, it is very important for the buyer to be fully aware of all terms and
conditions that need to be fulfilled before the application for the letter of credit is
made.

When dealing with letters of credit, the buyer should take into consideration the
standard payment methods in the country of the seller.
When setting the dates in the letter of credit, the buyer should define a tight but
reasonable shipping schedule. If dates are improperly set, this will lead to amendments
to the letter of credit leading to additional costs, or simply to non-shipment.
The buyer should be prepared to amend or renegotiate terms of the letter of credit with
the seller. Amendments are a common procedure in international trade.
In order to eliminate foreign exchange risk, the buyer may cover himself by using the
futures/forward markets.
The letter of credit validity should give the seller enough time to produce and ship the
goods. With the expiry date and the latest shipping date, the buyer should give the seller
ample time to present documents to the bank. For instance, several countries,
particularly those in the Middle East, require that documents be legalized. This requires
that some of the documents be sent to the destination countrys consulate, in the country
of origin, for a stamp before presentation. This is a routine procedure, but it adds a few
days or more to the time needed for presentation.
Export Letter of Credit:
When export is made against L/C, the exporter should examine the following terms of
L/C to avoid any future complicity to execute the order:
The terms and conditions of L/C are definite, clear and explicit and also in conformity
with those of the contract.
The L/C should be an irrevocable one and be confirmed by the advising bank.
If the import of goods is under control in buyers country, the buyer holds a valid import
license.
If the L/C is transferable or otherwise, it should be clearly mentioned in the L/C.
The L/C should provide sufficient time for shipment and a reasonable time for shipment
and a reasonable time for negotiation. If nothing is mentioned, the shipper would be
allowed 21 days to negotiate the documents.
Following documents should be sent to C&F agent by the exporter.
Export Registration Form (ERC)
Commercial Invoice
Packing List
Copy of the Sale contract/Export L/C
Any other documents relevant to the specific cargo, such as, GSP* certificate or Export
permit.
Beneficiarys Certificate
Weight Certificate:
Sanitary Certificate:
Analysis Certificate


Advantages & Disadvantages of Documentary Credit:
Advantages:
Shifts credit risk from the Importer to the Importers Bank (Issuing Bank).
An undertaking from the Issuing Bank that payment will be made under the Letter
of Credit, provided that you meet all terms and conditions of the Letter of Credit.
If the Letter of Credit is not issued as agreed, the exporter is not obligated to ship
against it.
Disadvantages:
Documents must be prepared in strict compliance with the requirements
stipulated in the Letter of Credit. Non-compliance leaves you exposed to risk of
non-payment and removes the protection afforded by the Issuing Bank since the
final decision on the documents then rests with the Importer.
Many exporters cannot prepare documents as per the provisions of documentary
credit
Submit discrepant documents most common of which are late shipment, late
presentation etc.
Big customers bargain for exchange rates.
Reluctant to comply the regulations (importer)
Do not waive discrepancies that can be ignored (importer)
Sometimes creates pressure to reject documents (importer)
Bargain with margin and other charges of banks (importer)


Summary:

Standard chartered bank of Pakistan is one of those banks which are taking part for the
betterment of life throughout the world. Standard chartered bank of Pakistan is biggest
international bank having track record of 150 years in Asia, Africa, And middle east. It is
performing there function from 150 years in sub-content. Only international bank which
has AAA+ rating by PACRA. Standard chartered bank of Pakistan was re-established in
2006 in Pakistan with the merger of union Bank. It has many branches in all over the
Pakistan, in Faisalabad it is situated at Kotwali road Faisalabad. Standard chartered
bank of Pakistan offers many products and services
like account services, product services etc. for the people Standard chartered bank of
Pakistan also provides remittance to the common people because its an international
banking network. Standard chartered bank of Pakistan gives the remittance services to
its customers through Nostro and Vostro accounts. Some private companies also
interact with the outward and inward remittance. Standard chartered bank of Pakistan
use different techniques to send money internationally like telex, courier, and a new
technique SWIFT (Society for the Worldwide Interbank Financial Telecommunication)
SWIFT is a costly method, and having message type sending and every message has
its own code. Major clients for import & export of Standard chartered bank of Pakistan
are: Interlope, Arshad Groups, Pasban IT & Computers, Kashmir (UNITED
INDUSTRIES LIMITED).Letters of credit are often used in international transactions to
ensure that payment will be received. Due to the nature of international dealings
including factors such as distance, differing laws in each country and difficulty in
knowing each party personally, the use of letters of credit has become a very
important aspect of international trade. Standard chartered bank of Pakistan provide
only Irrevocable Letter of credit in Pakistan.


BIBLIOGRAPHY
References:
Standard Chartered Bank Annual Report (2013).
Prospectus of Standard Chartered Bank (2006).
Uniform Customs & practice (UCP) 600.
Incoterms January 1, 2007.
Department Operational Instruction.
The Customs Act, 1969 (Act IV of 1969), first schedule.
Ministry of Commerce, Government of the Pakistan
Website:
Date Accessed On
http://www.standardchartered.com (12-01-14, 9:40)
http://www.standardchartered.com/pk (22-01-14, 11:20)
http://www.google.com (25-01-14, 3:20)
http://www.amex.com (03-01-14, 6:10)

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Standard Chartered Bank of Pakistan

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INTERNATIONAL BANKING 2014

GC UNIVERSITY FAISALABAD Page 1

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