Import Letter of Credit
Guaranteed payment in a specified currency to the exporter
A Letter of Credit is a written commitment to pay, by a buyer's or importer's bank (called the issuing bank) to the seller's or exporter's bank (called the accepting bank, negotiating bank, or paying bank). A letter of credit provides guaranteed payment of a specified sum in a specified currency to the exporter, provided the seller meets precisely-defined conditions and submits the prescribed documents within a fixed timeframe, offering flexibility and better management of cash flows for the SMEs.
1. Expertise of Axis Bank in examining if the underlying documents are compliant with the terms of LC.
2. Faster processing and same day delivery of LC for customers.
3. Procure with confidence across the globe on the strength of our wide network of correspondent banking relationships.
4. Quick and Convenient LC issuance process both through branches and online channels.
5. Can be availed against sanctioned credit limits or against Fixed deposit.
1. The Buyer and seller enter into business contract. The seller needs a letter of credit to guarantee payment on due date
2. Buyer applies to his bank (Issuing bank) for a LC in favour of the seller.
3. Buyer’s bank approves the buyer’s credit risk, issues and forwards the LC to the seller’s bank (Advising bank) usually located in the same geography as the seller.
4. Seller’s bank will authenticate the LC and advise the LC to the seller.
5. Seller ships the goods, and prepares documentary requirements (invoices, bill of lading, insurance certificate etc.) in line with the terms and conditions of the LC.
6. Seller presents required documents to his bank to check and forward the same to the LC issuing bank for payment.
7. Seller’s bank examines the documents for compliance with LC terms & conditions.
8. If the documents are correct, the seller’s bank will forward the ‘compliant documents’ to the LC issuing bank and claim the funds under LC.
9. Buyer’s bank examines documents within 5 banking days and if compliant makes the payment/acceptance to pay on the due date. If the documents are discrepant, the same is adviced to the buyer for acceptance of the discrepancies.
10. The buyer’s account will be debited on payment date as per terms mentioned in the LC (sight/usance).
11. The buyer takes delivery of the goods.
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Product offering is subject to certain eligibility criteria as per Bank's internal policy and is subject to Bank's discretion