For businesses that export or import, letters of credit are the financial security of international trade. A letter of credit permits an exporter to make that order is crammed and shipped before payment is made and additionally the importer is warranted money will bought the product shipped overseas. LC Discounting permits exporters to get their money faster.
The Letter of Credit from the prime banks or financial institutions is taken under consideration as a whole security. A recipient will offer the Letter of Credit to the loaner and acquire the loan sanctioned. The loan amount is additionally up to 100% of the value. Once the Letter of Credit is dead the amount against LC is settled by the loaner against the loan disbursed to the recipient. Letter Of Credit Discounting helps the importers to carry finance quickly for a shorter quantity of it slow.
Sanction and Disbursement of the LC Discounting / Negotiation:
- 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 should to be paid to proceed extra with the disbursement procedure.
- The documentation procedure takes place viz. official document of property documents and put together the valuation reports. (Original Documents to title of the unmovable assets are to be submitted).
- All the necessary 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 once the Legal Dept. Certifies the Correctness of execution documents.
This article are taken from Post Overview of LC Discounting and That Process Sequences