In Lesson 8, Opening an import LC: who and how, Rakib learned that a bank opens LCs only for its own known customers, and that every import LC must be a documentary one. He felt ready for anything. Then Fahim walked in.
Fahim imports onions and machinery parts, and his goods don't come by ship. They come by truck, through Benapole land port. "Onion prices are going up again," he says, "and my customers are crying even before they cut one. Please open my LC today."
Rakib reaches for the usual LC template. Sadia, his team lead, stops him with a smile. "Not so fast. A land port is not a seaport with the water taken out. The circular gives us six extra steps for land ports. And before any LC, we check one more thing: is there a time limit for opening it?"
This lesson covers both: the land port steps (B-4) and the timing rule (B-5).
For imports through a land port, ADs follow six extra instructions:
(a) One port, named clearly. The LC or purchase contract (as the case may be) must name only one land port of entry, specifically.
(b) Let the ports know you. The AD must send to all the land ports the specimen signatures of the officials working on its import-export desks, plus the AD's contact phone and fax numbers.
(c) Matching payment with the Bill of Entry. ADs may follow the usual procedure to match the import payment with the Bill of Entry, as set out in paragraph 17 of Part B. But this applies only at land custom houses that use the electronic system ASYCUDA for import clearance. The circular doesn't say here what to do at a land custom house without it.
(d) A set payment clause. Instead of a reimbursement authority or debit authority, the LC or contract must include, among its terms, this line: "Upon receipt of documents complying with credit terms, we shall effect payment as per instructions of Negotiating Bank/Collecting Bank". In short: right documents in, then pay as the negotiating or collecting bank instructs.
(e) SWIFT for bigger LCs. An LC worth more than USD 5000 (more than USD 10,000 for coal), or the equivalent, should go to the advising bank through SWIFT or a similar arrangement. The circular doesn't say here how smaller LCs are sent.
(f) NOCs that can be traced. If there is an NOC, it must show the officials' names with their P.A. numbers and the official seal. (The circular uses only the short form "P.A. nos." and doesn't spell it out.)
At the desk
Fahim's LC application for onions says, "Port of entry: Benapole or any nearby land port." Rakib is about to accept it when Sadia taps that line. "One land port only, named clearly." Fahim writes "Benapole". Rakib adds the set payment clause in place of a reimbursement authority and, because the LC is above USD 5000, sends it to the advising bank by SWIFT.
Key words
Land port
A border crossing where imported goods enter Bangladesh by land, such as Benapole.
Port of entry
The place where imported goods first enter the country.
Specimen signature
A sample of an officer's signature, kept on file so others can check that a signed paper is genuine.
ASYCUDA
The electronic system that some custom houses use for import clearance.
Read the rule as written (Para B-4)
For import through land ports, following instructions are to be followed by ADs while importing through land ports:
(a) Only one port of entry (land port) is to be mentioned specifically in the LC/purchase contract (as the case may be);
(b) Specimen signatures of the officials working in the import-export desks of the concerned AD bank, contact phone and fax nos. of ADs are to be sent to all the land ports;
(c) ADs may follow usual procedure to match import payment with bill of entry as per stipulation of paragraph 17 of this part. This procedure shall be applicable only for those land custom houses using electronic system (ASYCUDA) for import clearance.
(d) LCs/purchase contracts shall contain inter alia the following payment terms instead of reimbursement authority/debit authority:
"Upon receipt of documents complying with credit terms, we shall effect payment as per instructions of Negotiating Bank/Collecting Bank".
(e) LC covering value more than USD 5000 (more than USD 10,000 in case of coal import) or equivalent should be sent through SWIFT or other similar arrangements to the advising bank;
(f) NOC (if any) shall contain name of the officials along with P.A. nos. and official seal.
Source: Bangladesh Bank, FEPD-1 Circular No. 30, 13 August 2026, Part B, paragraph 4 (page 11). The original circular is the authority.
When may an LC be opened? The rule is one sentence: an LC for importing goods into Bangladesh should be opened within the period, if any, prescribed in the IPO in force.
Two small phrases do the heavy lifting:
"if any": the IPO may set a period for opening LCs, or it may not. B-5 itself sets no number of days or months.
"in force": use the IPO that applies today, not an old copy sitting in the drawer since last year.
So the bank's job is simple. Before opening the LC, check whether the IPO in force sets a period. If it does, open the LC inside that period. It's like a cinema ticket: the hall decides the show time, and you just need to arrive before the doors close.
At the desk
Fahim wants his onion LC opened quickly. Rakib asks Sadia, "How many days do we have?" Sadia says, "Our circular doesn't give a number. It sends us to the IPO in force. Check whether it sets a period, and if it does, we open inside it." Rakib puts away the old IPO copy from his drawer and opens the current one.
Key words
Import Policy Order (IPO)
The government's rule book on what may be imported and on what conditions. Issued by the Ministry of Commerce for a few years at a time.
Opening an LC
The day the importer's bank issues the letter of credit to the seller's side.
Read the rule as written (Para B-5)
LC covering import of goods into Bangladesh should be opened within the period, if any, prescribed in the IPO in force.
Source: Bangladesh Bank, FEPD-1 Circular No. 30, 13 August 2026, Part B, paragraph 5 (page 12). The original circular is the authority.
So far: imports through land ports follow six extra steps. Name only one land port of entry. Send desk officers' specimen signatures and contact numbers to all land ports. Match payment with the Bill of Entry under paragraph 17 where the custom house uses ASYCUDA. Use the set payment clause instead of a reimbursement or debit authority. Send LCs above USD 5000 (above USD 10,000 for coal) by SWIFT. Make sure any NOC carries names, P.A. nos. and an official seal. And every import LC is opened within any period the IPO in force sets.
Next: Lesson 10, Firm orders and the right payment route. Why a bank wants a firm order and a credit report on the seller before it opens an LC, and where and in what currency the payment may go.
Check yourself
30 questions, in 3 sets of up to 10. Nobody sees your answers but you.
Set 1 of 3
The LC or purchase contract must specifically mention only one land port of entry. (B-4)
The AD sends the specimen signatures of officials working in its import-export desks. (B-4)
Signatures and contact numbers are to be sent to all the land ports. (B-4)
The AD sends its contact phone and fax numbers together with the signatures. (B-4)
The circular limits this procedure to land custom houses using ASYCUDA for import clearance. (B-4)
B-4(c) refers to the stipulation of paragraph 17 of the same part. (B-4)
Land port LCs carry the set payment clause instead of a reimbursement or debit authority. (B-4)
The clause says payment is made as per instructions of the Negotiating Bank/Collecting Bank. (B-4)
The clause starts "Upon receipt of documents complying with credit terms". (B-4)
LCs above USD 5000 or equivalent should be sent through SWIFT or a similar arrangement. (B-4)
Set 2 of 3
For coal, the line is more than USD 10,000 or equivalent. (B-4)
The LC is sent through SWIFT or a similar arrangement to the advising bank. (B-4)
An NOC must contain the officials' names along with P.A. nos. and the official seal. (B-4)
LCs should be opened within the period, if any, prescribed in the IPO in force. (B-5)
B-5 gives no number of its own; it refers to any period prescribed in the IPO in force. (B-5)
True. The line is more than USD 5000 for most goods and more than USD 10,000 for coal. (B-4)
False. It applies only to land custom houses using ASYCUDA for import clearance. (B-4)
True. B-4(a) asks for only one land port of entry, mentioned specifically. (B-4)
False. Signatures and contact numbers go to all the land ports. (B-4)
True. LCs are opened within the period, if any, prescribed in the IPO in force. (B-5)
Set 3 of 3
Only one land port of entry may be mentioned, and it must be named specifically. (B-4)
A land port LC above USD 5000 should be sent to the advising bank through SWIFT or a similar arrangement. (B-4)
For coal, B-4(e) covers LCs of more than USD 10,000; the circular doesn't say here how smaller LCs are sent. (B-4)
Land port LCs carry the set payment clause instead of a reimbursement or debit authority. (B-4)
An NOC must contain the officials' names with P.A. nos. and the official seal. (B-4)
Specimen signatures of officials working in the import-export desks are to be sent to all the land ports. (B-4)
At land custom houses using ASYCUDA, ADs may follow the usual matching procedure under paragraph 17. (B-4)
B-4(c) limits the procedure to land custom houses using ASYCUDA and is silent on others. (B-4)
B-4(a) asks for only one land port of entry in the LC or purchase contract, as the case may be. (B-4)
B-5 refers to the period prescribed in the IPO in force, so only the current IPO counts. (B-5)
Found this useful? Pass it on.
One tap before you go: which describes you best?
Anonymous. It only adds one to a count, so we know who the lessons are helping. We never learn who you are.