The process of converting foreign currency liability of the importer into Indian Rupee liability is called the crystallization of import LC bills. The idea behind the crystallization of import bills is to transfer the probable exchange risk of a non-retired bill amount in foreign currency to the importer. An LC can be issued either against sight…
The loans and advances granted to an exporter for procuring materials, processing, manufacturing or packing of goods at the pre-shipment stage are called Packing Credit (PC) facility. These types of facilities are also available for the working capital requirement to an exporter for the rendering of services to the overseas buyer. The packing credit loan…
Banks in India offer various credit facilities to exporters both at pre-shipment stage (Packing Credit) and Post-shipment stage viz. Purchase of export bills, Discount of Export Bills, Negotiation of Export bills, Advance against Undrawn Balances on Export Bills, Advance against Retention Money, Advance against Duty Draw Back, Advance against Deemed Exports, Advance against the export of Goods for…
In simple words, the process of converting foreign currency liability of the exporter into Indian Rupee liability is called ‘crystallization of foreign currency export bills’. The purpose of crystallization is to transfer the exchange risk involved in a belated receipt of export bill payment to the exporter. The export bills negotiated/purchased/discounted by a bank are…
Normal Transit Period (NTP) is commonly misunderstood for the time taken for the goods to reach the destination. It is not so. The term Normal Transit period (NTP) used for the average period normally involved from the date of negotiation/ purchase/ discount of a bill, till the credit of that bill proceeds in the Nostro…
The Reserve Bank of India has notified to issue Sovereign Gold Bonds 2016-17 – Series IV. Applications for the bond will be accepted from February 27, 2017, to March 3, 2017. The Bonds will be issued on March 17, 2017. The Bonds will be sold through banks, Stock Holding Corporation of India Limited (SHCIL), designated…
The law of limitation means the time-limit for different suits within which an aggrieved person can approach the court to obtain a decree against the principal debtor and surety. The different time limit or period of limitation is prescribed for different types of suits, appeals, or applications in the ‘Schedule’ to the Limitation Act, 1963.…
What is QR code? QR code stands acronym for Quick Response code made up of black and white squares. These two-dimensional codes can be read by the camera of a smartphone and they are used for storing URLs and other information. What is the Bharat QR code? The Bharat QR code is low cost, interoperable…
Definition of Guarantee: A contract of guarantee means a contract to perform the promise or discharge liability of the third person in case of his default. A guarantee which extends to series of transactions is called continuing guarantee. The meaning of Surety (Guarantor), principal debtor, and creditor: The person who gives the guarantee is called…
(The law of limitation applicable to a general guarantee and the guarantee issued by banks and financial institutions are different. This article explains the law of limitation explicitly applicable to bank guarantees, invocation and cancellation of bank guarantees) The law of limitation of time means the time-limit for different suits within which an aggrieved person…