Buyer/Seller - Details
What is Suppliers Credit
If you want to import something into India, you can get credit from the seller or the seller's country. Supplier's credit is a type of trade credit. This is only available with a Letter of Credit (LC), and it's not available for any other payment method.
How Does it Works?
Steps
1. Buyer(importer) approaches Zircon with relevant transaction details about the import i.e., before LC issuance.
2. Zircon gets an offer from overseas financial institutions.
3. The buyer confirms the pricing offered and gets the LC issued through his working capital banker. LC’s are generally restricted to overseas FI’s counters.
4. Upon shipment, the Supplier submits the documents to their bank, which in turn is sent to overseas FI from whom Supplier’s credit is being availed for scrutiny of documents.
5. This is further forwarded to the buyer’s bank by overseas FI for acceptance. Upon acceptance by Buyer, buyer’s bank sends overseas FI guaranteeing payment on the due date.
6. Overseas FI discounts the bill and makes the payment to the supplier through their bank.
7. On the due date, Importer makes the payment to his bank, which in turn is paid to overseas FI to settle the transaction.