Wednesday, October 15, 2014

Difference between Bill of Exchange and Letter of Credit (L/C)

In brief, a "bill of exchange" or a "Hundi" is a kind of legal negotiable instrument used to settle a payment at a future date. It is drawn by a drawer on a drawee wherein drawee accepts the payment liability at a date stated in the instrument. The Drawer of the Bill of Exchange draw the bill on the drawee and send it to him for his acceptance. Once accepted by the drawee, it becomes a legitimate negotiable instrument in the financial market and a debt against the drawee. The drawer may, on acceptance, have the Bill of Exchange discounted from his bank for immediate payment to have his working capital funds. On due date, the bill is again presented to the drawee for the payment accepted by him, as stated therein the bill. 

Letter of Credit (LC) is a declaration of financial soundness and commitment, by a bank for its client, for the amount stated in the LC document, to the other party (beneficiary) named therein. The LCs may or may not be endorse-able. In case of default of payment by the party under obligation to pay, the LC issuing Bank undertakes to honour the payment - with or without conditions. Normally, there may be sight LCs or DA LCs containing a set of conditions in both the cases. There "may be" Bills of Exchange(s) drawn under the overall limits of the LC amount for payment later on.


Friday, July 1, 2011

Sharing internet connection from laptop to android phone

Just yesterday I got my new htc wildfire phone. To do the battery conditioning (to be discussed later), I needed to finish all the charge of the phone as quickly as possible. I thought browsing will be an ideal option. I've been using internet in my laptop through wimax. I knew both my laptop & my phone have wifi support. So I wanted to use internet on my phone through my laptop.

I could use internet on the phone directly with the operator service. But I was not even using a sim on my phone! Anyway, so searched on the net and found a freeware "mhotspot". It creates a wifi hotspot on the pc and if u share the internet connection on this hotspot, u can connect to the internet through this. It's a very easy to use software. Even there is a tutorial for this on youtube.

Link to the freeware site:

Thursday, December 3, 2009

Cash Withdrawal by Bangladeshi Credit Cards

Now-a-days, almost all the banks of Bangladesh issue credit cards. U'll get a limit for purchasing through the card, but when u want to get cash from it, that's pretty costly! Bcoz, withdrawing cash from ATM with Credit Card costs: 3% charge + 15% vat on charge amount + interest from the day of your cash withdrawal. (That's hell a lot of money!)
So, you have been given a credit limit, and u can't use it (except purchasing from some too expensive stores!) How can we get this problem solved? We will discuss that in this discussion.
The solution for this problem is "Card Cheque". After issuance of the card, if u need a cheque book, u need to order for that (cheque requisition). After receiving the cheque book, u send the acknowledgement slip to Card Division, and wait for the suitable DAY.

The suitable DAY will come on the first working day after the statement date of ur credit card. Now don't tell me that u don't know what's ur statement date is! (Well if u don't know, then) The statement date is not the date of payment due date. Generally, statement date is a date 15 days before the payment due date. If ur payment due date is 25th of the month, then ur statement date may be the 10th(considering that ur bank has the policy of 45 days of interest free, most banks follow this, except BRAC Bank and Prime Bank, both of them follow the policy of 50 days of interest free). (Anyway, don't go for so much hassle, statement date is mentioned on ur monthly statement.
So, let, ur statement date is 10th. Deposit the cheque on the 11th into a third party account (bcoz card cheques cannot be issued in the cardholder's name). When the balance is available after clearing, u place a cash cheque of ur affiliate and get the money.
In this way, u'll get the scope to use this fund upto 42-44 days. Let, ur statement date is 10th and u placed the cheque on 11th of January. So, u'll have to pay the money on 25th of February (considering 45days of interest free).
Pay the full amount. Otherwise, u'll b charged interest @30.00%.
Pay at the due date. Otherwise, u'll b charged a late payment fee.
Card Cheque Issuing Banks of Bangladesh (So far I know):
1. SCB,
2. Southeast,
3. UCBL,
4. EBL,
5. BRAC Bank,
6. Bank Asia,
7. AMEX (by City Bank).

What r the costs related:
Well, u'll hv to pay 1% cheque processing charge (1.5% for Bank Asia and BRAC Bank) + 15% Vat on cheque processing charge.
Let, u withdraw Tk. 50,000.00 by card cheque. It'll cost Tk. 500.00 + Tk. 75.00 = Total Tk. 575.00