Export LC Working Procedure

Export LC Working Procedure

When the exporter requires funds before due date then he can discount or negotiate the L/C with the negotiating bank. The negotiating bank bears the risk associated with the document that sometimes arises when the issuing bank discover discrepancies in the documents and refuses to honor its commitment on the due date.

Product Details

Export L/C working procedure

Oulian company’s L/C service can help customers to handle the letter of credit, which can help the them goods earlier in international trading. The following is the export L/C working procedure so that the customer can understand more about its operation method.

Export Letter of Credit is issued in for a trader for his native country for the purchase of goods and services.


Advising an Export L/C service

The basic responsibility of an advising bank is to advise the credit received from its overseas branch after checking the apparent genuineness of the credit recognized by the issuing bank. It is also necessary for the advising bank to go through the letter of credit, try to understand the underlying transaction, terms and conditions of the credit and advice the beneficiary in the matter.

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The main features of advising export L/C service are:

1. There are no credit risks as the bank receives a onetime commission for the advising service.

2. There are no capital adequacy needs for the advising function.

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Advising of Amendments to L/Cs

Amendment of L/C is done for various reasons and it is necessary to fallow all the necessary the procedures outlined for advising.


Confirmation of Export Letters of Credit

It constitutes a definite undertaking of the confirming bank, in addition to that of the issuing bank, which undertakes the sight payment, deferred payment, acceptance or negotiation.

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Discounting/Negotiation of Export L/C service

When the exporter requires funds before due date then he can discount or negotiate the L/C with the negotiating bank. However, in such a situation, the negotiating bank bears the risk associated with the document that sometimes arises when the issuing bank discover discrepancies in the documents and refuses to honor its commitment on the due date.

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Reimbursement of Export L/C service

Sometimes reimbursing bank, on the recommendation of issuing bank allows the negotiating bank to collect the money from the reimbursing bank once the goods have been shipped.

In return, the reimbursement bank earns a commission per transaction and enjoys float income without getting involve in the checking the transaction documents.







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