“Delivered at Terminal’ or three letter abbreviation DAT refers to common contractual term used in international trade. The term DAT replaces earlier term ‘Delivered ex quay’. As per ‘Delivered ex quay’ term seller must deliver the goods at a wharf, and was thus applicable to goods delivered via waterways (whether inland or sea). The term…
Liberalised Remittance Scheme (LRS) is a scheme introduced by RBI as liberalisation measure to facilitate Resident Individuals (RI) to freely remit funds up to USD 2,50,000/- outside India in a financial year (April to March) for any permissible current or capital account transaction or a combination of both. Any resident individual including a minor is…
All financial exchanges between one country and another country of the rest of the world are made up of the current account transactions (such as exports and imports of goods and services of a country) and the capital account transaction that reflects net change in ownership of national assets. Capital account includes all kinds of…
Generally, correspondent banking arrangement involves two banks establishing reciprocal accounts with each other through bilateral agreements. These accounts are established to enable the domestic bank to make payments or money transfers on behalf of the foreign bank. The most common services provided by correspondent banks are currency exchange, wire transfer, handling business transactions and trade…
(This post elucidates various terminologies used by banks in their dealing rooms for limit fixed to them in their day to day operations by their management) The Treasury operations in the forex (foreign exchange) market are between the banks. The inter-bank foreign currency operations are taking place for two purposes namely (i). Buying and selling…
Trade Credit (Buyer’s credit/supplier credit) can be raised by Indian importers in any freely convertible foreign currency (FCY-denominated TC) or Indian Rupee (INR-denominated TC), as per the Trade Credits (TC) framework. Buyers’ credit finance means finance for payment of imports in India arranged by the importer (buyer) from a bank or financial institution outside India.…
The interest Equalisation Scheme (IES) for pre and post shipment rupee export credit is being implemented by Directorate (DGFT) through commercial banks.The scheme came into effect from 01.04.2015 and is for a period of 5 years.(The scheme was earlier called as ‘interest subvention scheme’ which was existing for the period from August 2010 to 31.03.2015).…
Foreign exchange Management Act (FEMA) 1999 came into effect in India from June 1, 2000 replacing earlier law FERA 1973. FEMA is a regulatory mechanism that enables the Reserve Bank of India to pass regulations and the Central Government to pass rules relating to foreign exchange in tune with the Foreign Trade policy of India.…
Option is an agreement between two parties offering to buy or sell a security (a stock, bond, commodity or other instruments) from or to the other party at a specified price within a specific time period. In option contracts, there is no obligation on the part of buyer or seller to buy or sell the…
A forward contract is a privately negotiated agreement between two parties to buy or to sell an asset at a specified price on a future date. Under forward contract, there is an obligation for the buyer to pay for what has been bought and receive delivery thereof as per contract, and for the seller to give…