Customer of the Bank enters into Back-to-Back Sales Contract and Purchase Contract with the Buyer, and Supplier, respectively.
Axis Bank reviews the transaction documents, and ascertains if the various conditions mentioned in the Sanction Letter are met
Buyer issues Master LC from an acceptable financial Institution and transmits it to the Axis Bank counters.
Axis Bank reviews Master LC, and BTB LC application, and issues Back-To-Back LC to the Supplier as per the agreed credit terms with the Client.
Supplier ships the goods and presents documents under the Back-To-Back LC through its relationship bank or directly to Axis Bank branch and claims credit.
Customer provides/ substitutes certain documents and makes presentation under the Master LC
The presentation is discounted, and payment is made to the Supplier under the Back-To-Back LC. From the residual amount, the Bank recovers the applicable transaction charges etc and the rest is remitted to Customer as profit
Documents under Master LC are presented to the Buyer’s bank, and Bank claims credit against documents.