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L/C (Letter of Credit) Opening Cost Calculator Bangladesh
Estimate bank commission, SWIFT charges, stamp duty, insurance, and VAT for opening an import or back-to-back L/C in Bangladesh. No account needed — numbers update as you type.
Banks usually quote L/C commission per quarter, and even a short validity can still be billed as one full quarter. Use this page to sense-check the bank schedule before you lock import costing.
Step By Step
How to Use This Calculator
7 steps
- Choose the currency you want to cost in.
- Select whether the transaction is a normal import L/C or a back-to-back L/C.
- Enter the L/C face value from the invoice or proforma.
- Set the tenor by quarter. In practice, even a short-term L/C may still be billed as one full quarter.
- Enter the commission rate your bank quoted.
- Add SWIFT, stamp/stationery, and insurance figures to get closer to the real opening cost.
- Use the breakdown before approving costing, because the small charges add up quickly on frequent imports.
Worked Example
Worked Example: USD 50,000 Import L/C
Use this sample to sanity-check your inputs and understand what the final result represents.
- 1L/C value: USD 50,000 | Tenor: 1 quarter | Commission: 0.25%.
- 2Bank commission: USD 50,000 x 0.25% = USD 125.00.
- 3Marine insurance at 0.15%: USD 75.00.
- 4SWIFT fee converted from BDT 2,500: about USD 22.73.
- 5Stamp/stationery converted from BDT 1,500: about USD 13.64.
- 6VAT at 15% on commission + SWIFT + stationery: about USD 24.20.
Final Result
Opening cost comes to about USD 260.57, or roughly BDT 28,663 at 110 BDT/USD. That is about 0.52% of the L/C value before retirement or amendment charges.
Methodology
L/C Commission, VAT & Service Charge Formulas
This section explains the calculation logic, assumptions, and source material used to make the result more trustworthy and easier to verify.
1. Bank commission: - Commission = L/C value x Commission rate x Number of quarters - Quarters are usually counted in 90-day blocks
2. Insurance premium: - Insurance = L/C value x Insurance rate
3. SWIFT and service charges: - Usually flat charges per L/C or per amendment
4. VAT on banking services: - VAT = (Commission + SWIFT + Stationery) x 15%
5. Total opening cost: - Total = Commission + Insurance + SWIFT + Service charges + VAT
6. Back-to-back L/C: - Same structure, usually with lower commission than a standard import L/C
Practical Guidance
Practical Ways to Keep L/C Cost Under Control
- 1If you open L/Cs regularly, negotiate commission yearly instead of treating each transaction as a one-off.
- 2Back-to-back L/Cs are usually cheaper than standard import L/Cs, so use the correct structure where it genuinely applies.
- 3Try to keep validity inside one quarter if shipment timing allows. Crossing 90 days can trigger another full commission block.
- 4Amendments are rarely free. Confirm quantity, price, and shipment window before opening whenever possible.
- 5Do not assume the bank's default insurance quote is competitive. Compare it with market options.
- 6For usance L/Cs, add acceptance cost separately. Opening cost is only one part of the total finance cost.
Frequently Asked Questions
What is an L/C in simple terms?+
An L/C is a bank-backed payment commitment used in trade. It gives the seller confidence that payment will be made if the required documents are presented correctly.
Why is a back-to-back L/C usually cheaper?+
Banks often view back-to-back L/Cs as lower risk because they are tied to an export order. That usually means lower commission and easier margin treatment than a regular import L/C.
How do banks count L/C commission periods?+
Most banks count commission in quarter blocks. That means a short validity can still be billed as one full quarter, and once you move past 90 days the next quarter may start.
Does VAT apply to every L/C-related charge?+
No. VAT usually applies to banking service charges such as commission or SWIFT, but not every government fee or insurance item is treated the same way.
Is opening cost the full cost of an L/C?+
No. Retirement, amendment, acceptance, discrepancy, and payment-related charges can come later. Opening cost is only the first part.