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Trade Credit through Stand By Letter of Credit / Buyers Credit & Suppliers Credit
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Introduction
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Benefits
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Features
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Eligibility
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Interest Rates & Charges
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Terms & Conditions
- Trade Credit through SBLC is one where the advance is made to the Importer against an SBLC (MT 760) issued by a bank for making payment of Import Bill & on due date the SBLC issuing bank will make the repay to the funding bank.
- Under Supplier’s credit, Letter of Credit (LC) is the underlying instrument which is issued by the Importers / Buyers Bank in which funding is being done directly to supplier of goods.
- The Suppliers Credit facility is to extended after obtaining authenticated Acceptance advise from the LC Opening Bank through SWIFT, confirming the acceptance of the documents under the LC and advising the due date and undertaking to remit the bill amount on the due date.
- The suppliers’ Credit system works on the presumption that the tenor of the Letter of Credit is usance, whereas we shall pay to the beneficiary through their banker on sight basis.
- Easy access to Foreign Currency Funds sitting in India.
- Advantage of same Time Zone
- Dedicated Relationship Manager
- Period: For Import of Capital Goods -3- years from the date of shipment & For non-capital goods, this period shall be up to one year or the operating cycle whichever is less.
- Amount: Up to USD 150 million or equivalent per import transaction for oil/gas refining & marketing, airline and shipping companies. For others, up to USD 50 million or equivalent per import transaction.
- Person resident in India acting as an importer
- Market determined ceiling subject to maximum All-in-Cost ceiling at per RBI Guidelines
- Master Direction - ECB, Trade Credits and Structured Obligations by RBI latest Dec 10, 2021 and as amended from time to time
