Our Customisable Solutions: Import
1. Documentary Credit Issuance
A Letter of Credit (LC) is a written promise by an Issuing Bank to make payment to a beneficiary (Exporter) either immediately or within a specified period, upon the beneficiary's fulfilment of the conditions laid down in the LC.
Types of LCs available:
- Sight credit - allows beneficiary to receive payment immediately upon presentation of documents called for under the LC
- Term credit - beneficiary receives payment upon maturity of a draft drawn under the terms of the credit
The Exporter gets a better assurance of payment in the event that the applicant (Importer) becomes insolvent, as the Issuing Bank guarantees the payment.
2. Shipping and Airway Guarantees
These are Bank Indemnities given to the Carrier of Goods , so that the goods can be released to Importer before arrival of Bills of Lading or AirWay Bill.
Importer gets to avoid demurrage charges which otherwise will be imposed if delivery of the goods is not taken up due to the absence of shipping documents.
3. Inward Bills For Collection
This is a process whereby an exporter collects payment from the importer using the banks as trusted 3rd parties without creating an LC. The exporter states conditions for release of documents to the importer and sends the shipping documents to its bank, which then forwards the documents to the importer's bank. The conditions can be D/P (Documents against Payment) or D/A (Documents against Acceptance).
4. Trust Receipt/ Bills Receivable (Purchase) Financing
A Trust Receipt is a document prepared by a bank and signed for by the importer. It facilitates short-term financing for the importer, which allows him/her to obtain the goods without first settling the payments due under an LC arrangement.
A Bill Receivable (Purchase) is also a form of short-term import financing. However, it is used when the shipping documents are legally ineligible as Trust Receipt to the bank (e.g. Incomplete sets of BLs consigned to the importer instead of to the bank).