We have a strong, experienced trade finance team that focuses on client trade-related requirements, whether domestic or international. This team advises and guides clients on documentation and transactions ensuring:
Quick turnaround times through smooth document processing
Faster payments through constant follow-ups with correspondent banks for timely recovery of funds
Excellent trade support
Arrangement of credit reports of overseas parties
Specialised advice on international trade related issues as well as technical issues such as ECM requirements, RBI reporting, new circulars and international developments
We have developed a global network of correspondent banks that enables us to handle large volume collection portfolios. We offer world-class facilities for handling collections related to international trade.
We also handle documents where proceeds have been received by the exporter on an advance payment basis and the actual shipment takes place later. In such cases, the documents need to be accompanied with a Foreign Inward Remittance Certificate (FIRC) as proof of receipt of the advance payment.
We offer pre-shipment credit to exporters by way of packing credit, enabling them to finance operations like purchase/import of raw materials or processing and packing of export goods. Exporters can avail of this pre-shipment credit either in rupees or foreign currency.
We offer post-shipment credit to exporters, helping them finance export sales receivable for the time lag between shipment of goods and date of realization of export proceeds. Exporters can avail of the following
Negotiation/payment/acceptance of export documents under Letter of Credit
Purchase/discount of export documents under confirmed orders/export contracts etc.
Advances against export bills sent on collection basis
Advances against exports on consignment basis
Advances against undrawn balance on exports
Advances against approved deemed exports
Exporters can avail of this post-shipment credit either in rupees or foreign currency
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: tBy 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
Export Bills Purchased / Discounted :The Post-Shipment credit is extended to the Exporter by purchasing the bills drawn at Sight (D/P), or by discounting the usance bills drawn on D/A basis.
Export Bills Negotiated : Negotiation means the giving of value for draft(s) and/or document(s) by the bank authorized to negotiate (known as the "nominated bank"). The L/C is a secure mode of trade transaction. The risk of non-payment is low, as the L/C issuing bank guarantees payment, subject to meeting the terms & conditions of L/C.
The risk is further reduced, if a reputed bank adds its confirmation to the L/C.
Due to this inherent security/low level of risk, banks are often ready to provide the finance against bills under L/C.