Government of India has, vide its Notification F.No. 4(7)-W&M/2016 dated August 29, 2016, announced that the Sovereign Gold Bonds 2016 – Series II (“the Bonds”) will be open for subscription from September 01, 2016 to September 09, 2016.The issue price of the Sovereign Gold Bond 2016-17 Series II tranche has been fixed at ₹ 3150/-…
We all know that in the international trade of goods and services transactions takes place between the people belonging to different continents, languages, culture, and laws. Since the language used for communication of terms and conditions of LC may suggest different meaning in different parts of the world, people across the world realised the need…
Letter of credit (LC) also known as Documentary credit is an undertaking from a bank on behalf of its customer (importer/buyer) wherein the beneficiary (exporter) is fully assured of payment provided he fulfills his part of the sale contract embodied in Letter of Credit. To understand LC mechanism, let us take an example of a…
(This post explains the meaning of Standby LC, Green Clause LC, Red clause LC, Without Recourse LC, back to back LC, Revolving credit LC, Irrevocable Letter of Credit confirmed by advising bank, Irrevocable Credit not confirmed by advising bank, Irrevocable Credit, Revocable Credit etc.) Revocable credit: Credit may be either revocable or irrevocable. Revocable credits may…
Co-acceptance of bills means “an undertaking from the third party (Bank) to make payment to the drawer of the bill (seller/exporter) on due date even if the buyer/importer fails to make the payment on that date”. Thus, in the Co-acceptance of the bills, the bank which stands as co-accepter acts as a guarantor similar to LC…
Letter of credit (LC) is an undertaking from a bank on behalf of its customer (importer/buyer) wherein the beneficiary (exporter) is fully assured of payment provided he fulfills his part of the sale contract embodied in Letter of Credit. Similarly, Co-acceptance of bills means “an undertaking from the third party (generally a Bank) to make payment…
The word ‘bills’ is the acronym to ‘bills of exchange’. There are different kinds of bills of exchange viz. Clean Bills, Documentary bill, Demand bills, Usance Bills, Accommodation Bills etc. Clean Bill: When the document of title to goods (like LR/RR/BL/Airway bill etc.) is not accompanied by a bill of exchange, it is called as a clean…
The terms ‘bills purchase’,’ bills discount’, and ‘bills negotiation’ are respectively used by the bank for financing against ‘Demand Bills’,’Usance Bills’, and LC bills. The seller of goods (exporter) gets immediate money from the bank for the goods sold by him irrespective of whether it is a purchase, discount, or negotiation by the bank according…
Meaning of Inland Bills; A bill of exchange which is drawn or made in a country and paid in the jurisdiction of the same country is called inland bill. The section 11 of Negotiable Instrument Act 1881 provides that the bills of exchange (including cheques/promissory notes) drawn or made in India and made payable in or…
A buyer of goods requires original shipping documents to take delivery of goods shipped to him by the seller. The seller (exporter) after shipment of goods prepares necessary set of documents related to goods like Bill of lading/Airway bills, LR, RR, dock warrant, dock receipt, warehouse receipt, etc. along with the invoice of the goods…