Rescheduling or Restructuring of External Commercial Borrowings (ECB)

The Reserve Bank of India has relaxed rules for rescheduling/restructuring of ECBs by permitting an increase in the total cost of borrowing offshore. In suppression of earlier provisions, this year the banking regulator has delegated powers to the designated AD category-I banks to allow changes/modification in the draw-down and repayment schedules notwithstanding the average maturity period or…

Who are the parties in a letter of Credit?

(Generally, there are eight parties involved in letter of credit transactions, out of which four principal parties involved in any transaction. This article briefs about four principal parties and other four ordinarily involved in letters of credit transactions). Definition of Letter of Credit: Letter of credit (LC) is an undertaking letter issued by the importer’s…

What is Standby Letter of Credit?

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…

Fundamentals of foreign exchange market and terminologies used in dealings

[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…