Buyer/Seller - Details
Buyers Credit Discounting and Their Type
Following the RBI's decision to prohibit the use of LOUs and LOCs for buyer credit transactions, importers and banks are experimenting with various structures that may be useful in facilitating import finance.
Some of these structures are as follows:-
- Buyers Credit Against SBLC (Standby Letter of Credit) / Bank Guarantee -Using this procedure, loans for the payment of imports into India are negotiated on the importer's behalf through an international bank or an Indian bank's overseas branch, with the SBLC issued by the importer's bank in India as security. As soon as the payment is received, the offshore branch credits the NOSTRO of the bank in India, and the Indian bank transfers the funds to the exporter's bank as an import bill payment on or before the due date.
- Suppliers Credit
- Reimbursement Finance (Usance LC Reimbursement at Sight)