(This post explains about LC on Sight Payment and LC on Usance terms, LC (Inland) and LC (Foreign), Freely negotiable and Restricted Letters of Credit, Uniform Customs and Practice (UCP) for Documentary Credits.) Definition of Letter of Credit: Letter of credit (LC) is an undertaking letter issued by the importer’s (buyer’s) bank wherein the seller…
A Standby LC is a form of irrevocable guarantee for a payment. Since American Banks are prevented from giving the guarantee in that country, the concept of ‘Standby LC’ came into existence. Standby Letter of Credit is an agreement wherein the buyer’s bank promises full payment of goods/services sold by him if the buyer fails to…
The government of India vide Gazette notification no.26011/01/2014-IC-I dated 9.1.2015 notified that all the existing ‘Person of Indian Origin’ (PIO) card holders shall be deemed to be Overseas Citizen of India (OCI) card holders under Indian Citizenship Act of 1955. Now let us find out what it means to foreigners of Indian origin. Meaning of…
The extant ECB guidelines allow the local borrower to offer security to the overseas lender / supplier for securing ECB. According to the latest directions of RBI, AD Category-I banks may allow creation of charge on immovable assets, movable assets, financial securities and issue of corporate and / or personal guarantees in favour of overseas…
[This post contains fundamental aspects of foreign exchange; forex markets; as well as over 100 terminologies used in forex dealings such as direct and indirect Quote;buying rate, selling rate,forward exchange rate, swap rate,spot rate,cross rate, transaction date,value date, Spread, premium, discount, points, arbitrage, Interest arbitrage,Interest parity, future, hedging, Loro account, Nostro Account,Vostro account, etc.] Foreign…
Foreign currency cheques A foreign currency cheque is one in which cheque amount is denominated in foreign currency like US Dollar, EURO, GBP, JPY etc. The personal -cheque, cashier cheque, travellers’ cheque, demand-draft etc. which are denominated in foreign currency are payable/ drawn on a bank outside India. Cash Letter Arrangement For collection of foreign…
The SWIFT financial messages are trusted as the most authentic and universal financial messages world over. SWIFT financial message is also the most convenient and fastest medium through which banks can meet customer’s requirement to send and receive message to and from any countries. Reasons for trusting SWIFT messages by banks and financial institutions: SWIFT stands…
(This post provides details about 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 export of Goods for Exhibition and Sale) Post-shipment Export credit facility in banks means finance made to an exporter…
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 suppliers’ credit means credits extended for imports directly by the overseas supplier instead of a bank or financial institution. Although both buyers credit and supplier credit are credit facility to the…
Exporters will have to declare all the export transactions in export declaration form and submit the same to Authorised Dealer (AD) bank along with shipping documents within twenty one days from the date of shipment. Export declaration forms were used according to form of export and type of exports. RBI vide its circular A.P. (DIR Series) Circular…