Domestic Trade Services

Our experienced and dedicated trade finance team is focused on structuring bill discounting products to meet customer needs – be it short-term or medium-term finance.

In fact, our services go beyond plain bill discounting to encompass a complete range of supply chain management solutions. We aim to increase the efficiency of the entire cycle, ensuring that transactions are executed effectively. We will soon offer integrated supply chain services on an electronic platform.

Invoice discounting entails 'discounting' an accepted invoice bill for the sale of goods to provide working capital. We offer our clients the dual advantage of simple documentation and absence of collateral requirements. Finance is extended either by crediting the current account of the supplier or by issuing a pay order.

Purchase order financing is an innovative program where we offer flexible finance to supply chain partners of corporates. This involves 'discounting' a contract/purchase order to help finance the manufacturing cycle for goods ordered by the corporate. This service is particularly useful for vendors with seasonal increases in working capital requirements.

Highlights

• Service extended to key vendors identified by the corporate
• Pre-shipment loan against Purchase Order from corporate
• Corporate pays the bank directly for all supplies by the vendor
• Maximum tenure is currently 45 days

We offer a wide spectrum of guarantees that address varying client requirements and risk profiles. These include performance and financial guarantees, bid bonds, tender and customs guarantees, etc.

• A Financial BG is a contractual obligation that triggers the payment under the guarantee, is a financial one e.g. Guarantee of a loan/Dividend/Interest/Insurance payments, Lease payments, etc.
  
• A Performance BG is a contractual obligation that triggers the payment under the guarantee, is related to non-performance of an act e.g. Bid/Performance/Advance payment bonds.

Parties to Letter of Credit:

• Applicant: the party which arranges for issuance of the LC (the importer)
• Beneficiary: the party in whose favor the LC is issued (the exporter)
• Issuing Bank: applicant's bank that opens, issues or establishes the LC
• Advising Bank: the bank that authenticates and advices the issuance of the LC to the beneficiary
• Negotiating / Nominated Bank: usually exporter bank, transfer funds to exporter and also at its discretion to advance funds to the beneficiary against confirmed documents
• Confirming Bank : By adding Confirmation, the confirming bank adds its guarantee to the undertaking given by the Issuing Bank. Confirming Bank takes the risk on Issuing Bank and the country of the Issuing Bank.
• Advising an Export LC / Amendment: The basic responsibility of an Advising Bank is to advise the LC received from the Issuing Bank only after checking the apparent authenticity of the credit and to inform the exporter on the arrival of LC in his favour once the LC is ready for collection.
• Confirmation of Exports LCs: the bank that adds its irrevocable commitment to the exporter against the LC
• Negotiation of Export LCs: LC Issuing Bank nominates a Negotiating Bank, or Unrestricted for Negotiation (freely negotiable) The Exporter may require funds before due date, and approaches the Negotiating Bank Hence, the Negotiating Bank takes the credit risk on the Issuing Bank or Confirming Bank, if the LC is confirmed. Issuing Bank may refuse the payment, in case, if the discrepancies are discovered. Hence, the Negotiating Bank bears the documents risk too.
• Reimbursement of Export LCs: Issuing Bank may nominate a Bank allowing the Negotiating Bank to collect the money from the Reimbursing Bank. Reimbursing Bank does not involve in checking of any LC documents