Friday, 22 August 2014

Overview of LC Discounting and That Process Sequences

Overview of LC Discounting

For businesses that export or import, letters of credit are the monetary security of international trade. A letter of credit permits an exporter to create that order is crammed and shipped before payment is formed and also the importer is bonded cash can bought the products shipped overseas. LC Discounting permits exporters to get their cash quicker.

The Letter of Credit from the prime banks or monetary establishments is taken into account as an entire security. A recipient can give the LC to the loaner and acquire the loan sanctioned. The loan quantity is also up to 100% of the  price. Once the Letter of Credit is dead the quantity against LC is settled by the loaner against the loan disbursed to the recipient. Letter Of Credit Discounting helps the importers to lift finance quickly for a shorter amount of your time.

NumeroUno Business Consultants

Sequence Step of the LC Discounting Process

The following are the sequence of steps taken by the banks on receipt of completed application forms.
  • •Application form is established and approved.
  • •Personal interview /discussions are held with the customers by the bank’s officials.
  • •Bank's Field Investigation team visits the business place/work place of the applicant.
  • •(All the documents submitted are verified by the bank with the originals thus on make sure the legitimacy of identical.)
  • •Bank verifies the follow record of the applicant with the general information sharing bureau (CIBIL).
  • •In case of fresh projects the bank analyses the back ground of the applicant/firm/company and the Technical feasibility/financial viability of the project based on various parameters and also the existing market conditions.
  • •Depending on the size of the project the file is put up for sanction to the appropriate level of authority.
SANCTION AND DISBURSEMENT:
  • •On approval/sanction, the sanction letter, is issued specifying the terms and conditions for the disbursement of the loan. The acceptance to the terms of sanction is taken from the human.
  • •The process charges as specified by the bank got to be paid to proceed additional with the disbursement procedure.
  • •The documentation procedure takes place viz. Legal opinion of varied property documents and conjointly the valuation reports.(Original Documents to title of the immovable assets are to be submitted)
  • •All the mandatory documents as specified by the legal dept., in step with the terms of sanction of the loan of the bank are dead.

Disbursement of the loan takes place when the Legal Dept. Certifies the Correctness of execution documents.

Source: NumeroUno Business Consultants

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