lnlLlally known as LasL aklsLan 8angladesh ls a poor counLry feaLurlng negaLlve Lrade balance slnce lLs

lndependence ln 1971 1he counLry's economy experlenced vasL lmprovemenL ln Lhe 1990s Powever
forelgn Lrade ln SouLh Aslan reglon sLlll ls an area of concern
1he value of lmporLs doubled beLween 1971 and 1991 as compared Lo Lhe value of exporLs 1he Lrade
deflclL has decllned conslderably owlng Lo an lncrease ln exporLs slnce 1991 A closer look aL Lhe Lrade
sLaLlsLlcs of Lhe counLry reveals LhaL ln 198990 lmporLs exceeded exporLs by 120 1hls percenLage
came down Lo 36 ln 1996 and 62 ln 1997 1he economy of 8angladesh was once rldlng on [uLe lLs
ma[or produce unforLunaLely Lhe Lrend of polypropylene producLs across Lhe globe led Lo a seLback for
Lhe [uLe lndusLry of 8angladesh
lmporL and exporL condlLlon ls noL so good ln 8angladesh Many Llmes 8angladesh lmporL many
producLs from oLher counLrles 1hrough lmporL and exporL one counLry can earn more forelgn
currencles LhaL are helped Lo economlc developmenL Some counLrles Lhey LoLally depends on lmporL or
exporL Lrade So lmporL and exporL ls essenLlal ln our counLry ever oLhers counLrles

1he maln channel for selllng goods ln 8angladesh ls Lhrough a local agenL le an agenL wholesaler or
dlsLrlbuLor lf auLhorlzed companles may use Lhelr local agenLs Lo servlce lndusLrlal consumers and
suggesL on governmenL conLracLs 1he organlzaLlons prefer Lo deal wlLh local flrms acLlng as excluslve
agenLs or dlsLrlbuLors of forelgn manufacLurers and suppllers lorelgn flrms should conslder hlrlng an
excluslve agenL/dlsLrlbuLor Lo monlLor Lhese [obs AgenLprlnclple agreemenLs may be elLher excluslve
or

hLLp//wwwepbgovbd/lndexphp?noarameLer1hemedefaulLScrlpLexporLLrend LxporL
promoLlon bureau


|etter of cred|t


ueflnlLlon
L/C A blndlng documenL LhaL a buyer can requesL from hls bank ln order Lo guaranLee LhaL Lhe paymenL
for goods wlll be Lranferred Lo Lhe seller 8aslcally a leLLer of credlL glves Lhe seller reassurance LhaL he
wlll recelve Lhe paymenL for Lhe goods ln order for Lhe paymenL Lo occur Lhe seller has Lo presenL Lhe
bank wlLh Lhe necessary shlpplng documenLs conflrmlng Lhe shlpmenL of goods wlLhln a glven Llme
frame lL ls ofLen used ln lnLernaLlonal Lrade Lo ellmlnaLe rlsks such as unfamlllarlLy wlLh Lhe forelgn
counLry cusLoms or pollLlcal lnsLablllLy
Letter of Credit (L/C)
Letter oI credit is an undertaking by the importers bank (Issuing Bank) that iI the exporter
exports goods and make a complying presentation oI documents that was stipulated in the letter.
The letter oI credit is superior method devised Ior settlement oI debts which could assure the
exporter that iI he exports the goods as per the contract entered into with importer and produces
draIts, shipping documents and such other papers he would receive payment without deIault.
Balance of Payment
Balance oI payment is a record oI all transactions made between one particular country and all
other countries during a speciIied period oI time. Balance oI payment compares the currency oI
the amount oI exports and imports, including all Iinancial exports and imports.


$teps Taken for Remittance Process Improvement
Government as well as private sector has undertaken various strategies to make remittance
transIer easier and hassle Iree. Now, the Nationalized Commercial Banks (NCBs) have some
overseas branches/remittance wings Ior transIerring remittances. The private commercial banks
(PCBs) also become aggressive in transIerring remittances by providing quick and reliable
services. Some oI the PCBs also have established oversees branch or correspondence
relationship with Banks/Exchange Houses. Although the nationalized and private commercial
banks have taken various marketing strategies to transIer remittances, but even today, the choice
oI remittance channel is 46 Iormal and 54 inIormal.
Recently, illegal transIer oI money slid down drastically, as Bangladesh Bank (BB) has stepped
up monitoring oI such transactions at home. BB so Iar gave license to 660 exchange houses to set
up oIIices abroad to Iacilitate remittance. Local banks are now able to deliver money to
recipients in weeks.
Introduction to Remittance in Bangladesh
Remittance is the liIe line oI Bangladesh economy. Some 4.5m nonresident Bangladeshis are
working abroad |9|, and sending home hard earned Ioreign currencies. It is believed that the
actual number oI Bangladeshi migrants, both legal and illegal, would be close to 7.5 million. In
the Iirst 10 months oI FY 2006-07, number oI manpower export stood at 0.42m, showing
83.14 rise, compared to 0.25m in FY2004-05 |7|. In FY2005-06, the number stood at 0.29m,
current year to year growth is around 16 |7|. In addition to achieving higher export earnings,
the country witnessed a 44 percent growth in remittance earnings during the Iirst quarter oI
2008-09 Iiscal year compared to the same period oI the previous Iiscal year |11|. The other
records oI remittance earnings in a single month are $820.71 million in July and $808.72 million
in March oI year 2008|11|. A total oI 9,81,102 Bangladeshi people went abroad in 2007-08 Iiscal
year which is about 74 percent above the previous Iiscal year Iigure, Bangladesh Bank statistics
|1| show|11|. According to the statistics, on monthly average basis more than 81,000
Bangladeshis went abroad in 2007-08 Iiscal year. The Iigure was 46,000 in the previous Iiscal
year |11|. Non-resident Bangladeshis (NRBs) sent $2.345 billion to Bangladesh between July
and September oI 2008, according to the Bangladesh Bank statistics |1|,|11|. Meanwhile, private
bank oIIicials said the global economic slowdown, mainly in the US and European countries, is
yet to impact the remittance inIlow. They, however, apprehend that iI the crisis continues it may
have a negative impact on the inIlow |11|.
The remittance market oI Bangladesh has been showing a steady growth in terms oI incoming
remittance volume. Considering the current macro-economic indicators: it seems that this
growth run will continue in the coming years. Central Bank |1| predicts that our annual incoming
Ioreign remittance will touch $10 billion in the next 3 years. The reasons Ior such robust growth
can be summarized as: