36 Questions
What is the primary function of a Trade Services Department in a bank?
To facilitate trade payment and trade finance
What is the primary risk associated with cash in advance payment method for the buyer?
Non-delivery of goods
Which of the following trade services products is not commonly used in international trade?
Investment insurance
What is the primary reason why a seller may request cash in advance?
To avoid credit risk
What is the primary benefit of cash in advance payment method for the seller?
Reduced risk of non-payment
Which of the following trade services products is not a form of trade finance?
Cash in advance
Why may buyers not want to continue importing goods if they are required to make cash in advance payments?
Because they can turn to other suppliers offering better terms
What is the primary difference between cash in advance and open account payment methods?
The timing of payment
What is the primary benefit of a documentary collection over a documentary credit?
Lower costs for the seller
What is required for full security of a documentary collection?
A negotiable bill of lading and consignment to the bank in the importing country
What is the purpose of the ICC Uniform Rules for Collections?
To establish guidelines for collections
What is the primary purpose of a documentary credit or letter of credit?
To balance risks between buyers and sellers
What is the condition for payment in a documentary credit?
Submission of certain documents in a certain form
What is the benefit of the seller stipulating that documents be handed over against the buyer's acceptance of a bill of exchange or signature on a promissory note?
The seller can discount the bill or note for immediate payment
What is the primary advantage of a documentary credit over a documentary collection?
Greater payment security for the seller
What is the role of the bank in a documentary collection?
To manage the document-handling process
What is the scope of the Convention's provisions?
To all contracts of multimodal transport falling within its provisions
What was the role of the UNCTAD's Committee on Shipping in 1986?
It instructed the secretariat to elaborate model provisions for multimodal transport documents
What was the basis for the UNCTAD/ICC Rules for Multimodal Transport Documents?
The Hague/Visby Rules and existing documents such as the FBL
When did the UNCTAD/ICC Rules for Multimodal Transport Documents enter into force?
1 January 1992
What was the result of the joint UNCTAD/ICC working group's meetings?
The preparation of the UNCTAD/ICC Rules for Multimodal Transport Documents
What is the relationship between the UNCTAD/ICC Rules for Multimodal Transport Documents and the UN Convention on International Transport of Goods?
The UNCTAD/ICC Rules were created pending the entry into force of the UN Convention
What is the primary goal of the URDG 758?
To provide a clearer and more comprehensive set of rules for demand guarantees
What is the purpose of the ISBP 745?
To provide guidance to documentary credit examiners and practitioners
Can the ISBP 745 change the UCP 600 rules for Letters of Credit?
No, the ISBP 745 cannot change the UCP 600 rules
What is the latest and most comprehensive guide to handling and examining trade documents under Letters of Credit?
ISBP 2013
When was the revised ISBP 2013 published by the ICC?
June/July 2013
What is notable about the revised ISBP 2013 guide?
It is a substantial update to the former version with new interpretations and new chapters
What is the primary purpose of the standard format for purchase/sale agreement in the banking system?
To protect the interests of clients and mitigate risks
Why is the contract considered less important in the case of LC?
Because the terms and conditions are expected to be in the LC itself
What is the reason for the limited use of standard sales/purchase contract in Bangladesh?
Due to the widespread use of documentary credit
Which of the following countries is NOT a signatory to the UN Vienna Convention?
Bangladesh
What is the primary function of the Bangladesh Bank under the FERA, 1947?
To regulate all kinds of foreign exchange dealings
What is the purpose of the circulars/guidelines issued by the Bangladesh Bank?
To regulate trade payment and financing activities
What is the focus of the FERA, 1947?
To maintain the proper accounting of foreign currency receipts and payments
How many sections are there in the FERA, 1947?
27
This quiz covers the risks associated with trade services products and market trends in a global context. It's a study material for advance level on trade services for NCC Bank Limited.
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