Offshore banking unit(OBU)
Ans:
“OBU stands for offshore banking unit “where comes into Bangladesh in 1985 through Bangladesh bank circular no: 02.
“Main purposes of OBU in Bangladesh”
The main purposes of the offshore banking unit (OBU) in Bangladesh are to boost up corporate financing in Bangladesh rapidly and also facilitate trade finance to the long-term project. A 100% export-oriented company may easily enjoy a foreign currency loan from the Offshore Banking Unit at a lower interest rate subject to the approval of the Board of Investment (BOI).
Who can conducted an offshore banking unit (OBU) in Bangladesh?
Any scheduled bank willing to operate an offshore banking unit (OBU) in Bangladesh but shall have to obtain approval from Bangladesh Bank and also shall have to apply to the banking regulation and policy department (BRPD) of Bangladesh bank.
“Let’s we start Accounting treatment offshore banking unit (OBU) in Bangladesh.”
Say for example,
"ABC" A 100% export-oriented group of a company currently requested to the bank for 90% discounting of USD1,20,000.00 under OBU facility. The company insure the bank the following IBP bill acceptance has been received from your branch the particular of this bill is mention below.
1. LC no & date IBP- NO, LC- Value $
LC-1201010420 dt.05.04.21 IBP-21/10322 Value $39,000.000
LC-1029520050 dt.20.04.21 IBP-21/10335 Value $25,500.000
LC-1029520030 dt.09.05.21 IBP-21/10330 Value $55,500.000
Grand Total LC Value= $ 120,000.000
Additional information (Uses imaginary figure only)
1.Each bill discount or purchase at 90% of Bill Amount and credited to ABC,s CD Account after charging tk.600.00 as a bank charge.
2. After 120 days when it is maturity date each bill are collected or realized after charging discrepancy charge $58 ,Source Tax-0.50% of LC value of each bill also some others charges remaining to ABC.s credited to CD Account.
03.Interest rate-9% use only-120 days in respective IBP liability..
Steps-01.IBP creation of each bill in to the Tally (under the Journal entry after 90% discount).
Bank charge(IF)TK. 600.000
To SIBL-IBP-21/10322, LC-1201010420 (credit) TK.29,04,125.000
Description:(To record90% OBU purchase $35,100.000@82.7215 dt.10.11.2021). Bank charge(IF)TK. 600.000
To SIBL-IBP-21/10335 ,LC-1029520050 (credit) TK.18,99,058.000
Description:(To record 90% OBU purchase $22950@82.7215 dt.12.11.2021).C.CD Account(57920)( $55,500.000*.90)@82.7215(Debit) TK.41,31,938.000
Bank charge(IF)TK. 600.000
To SIBL-IIBP-21/10330 , LC-1029520030 (credit) TK.41,32,538.000
Description:(To,record90% OBU purchase $49,950.000@82.7215 dt.13.11.2021).
Steps-02.Remaining 10% of final bill is collected at maturity date,so we should record realized voucher & posting to the tally.
A. SIBL-IBP-21/10322, LC-1201010420 (Debit) TK.29,04,125.000
CD Account if Say (57920) (Debit) TK.3,20,000.000
AIT-( $39,000.000*0.50%)*82.7215( (Debit) TK.16,130.000
Discrepancy charges($58@82.7215)(Debit) TK.4797.000
Interest on IBP (debit)TK.87123.000
Overdue interest(debit) TK.15500.000
To party (XYZ)TD.($39000.000@83.80)(credit)TK.32,68,200.000
To foreign exchange (gain /Loss(IF) (credit)Tk.79475.000
Description:( To record final settlement bill $38942@82.7240 dt.17.02.2021 ).
B. SIBL-IBP-21/10335 ,LC-1029520050 (Debit) TK.18,99,058.000
CD Account if Say (57920) (Debit) TK.213690.000
Advance income tax (AIT) (Debit) TK.10,546.000
Discrepancy charges($58@82.7215)(Debit) TK.4797.000
Interest on IBP (debit)TK.56,971.000
Overdue interest(debit) TK.12500.000
To party (XYZ)TD.($25,500.000@83.80)(credit)TK.2136900.000
To foreign exchange (gain /Loss(IF) (credit)Tk.60662.000
Description:( To record final settlement bill $38942@82.7240 dt.17.02.2021 ).
C. To SIBL-IIBP-21/10330 , LC-1029520030 (Debit) TK.41,32,538.000
CD Account if Say (57920) (Debit) TK.2,00,000.000
CD Account if Say (58920) (Debit) TK.1,50,000.000
Advance income tax (AIT) (Debit) TK.22,955.000
Discrepancy charges($58@82.7215)(Debit) TK.4797.000
Interest on IBP (debit)TK.1,23,976.000
Overdue interest(debit) TK.25,500.000
To party (XYZ)TD.($55,500.000@83.80)(credit)TK.46,50,900.000
To foreign exchange (gain /Loss(IF) (credit)Tk.8866.000
Description:( To record final settlement bill $38942@82.7240 dt.17.02.2021 ).
The END..........