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…

What is the meaning of ‘cooling period’ in collection of foreign currency cheques?

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…

SWIFT Financial messages: authentic and universal

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…

What are the types of post-shipment finance available from banks?

(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…