L/C-Hundies

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Ganesh (Querist)

25 November 2007 Hello! Friends,

Can anybody know about
Letter of Credit (L/C) for
Indian Banks for domestic supplies
for a customer in India.

If any body knows about the above subject, please provide detailed
information and web sites relating
to above.

Regards

Ganesh

R.V.RAO

R.V.RAO (Expert)

26 November 2007 IT IS NORMAL THAT INLAND LETTERS OF CREDIT ARE OPENED IN FAVOUR OF DOMESTIC SUPPLIERS IN INDIA, BY THE INDIAN BUYERS.
SAME AS FOREIGN LETTER OF CREDIT OPENED IN FAVOUR OF FOREIGN SUPPLIER.
THERE IS NO DIFFERENCE EXCEPT THAT CURRENCY INVOLVED OF BOTH BUYER AND SUPPLIER IS SAME.NO NEED TO FOREX. COVER FOR THE CONTRACT AS THERE ARE NO CURRENCY FLUCTUATIONS.
PLEASE OBTAIN AN APPLICATION FROM YOUR BANKERS FOR OPENING AN INLAND L/C IN FAVOUR OF YOUR SUPPLIER.
PLEASE FILL UP ALL DETAILS AND SUBMIT TO BANKERS WITH PROFORMA INVOIVE OF YOUR SUPPLIER, ALSO STATE WHETHER IT IS SIGHT L/C( PAYMENT BY YOUR BANKER IMMDTLY ON RECEIPT OF SUPPLIER'S DOCUMENTS AND DEBITING YOUR ACCOUNT) OR USANCE L/C
( PAYABLE BY YOUR BANKER ON DUE DATE AS PER YOUR CREDIT TERMS AND PAYMENT TERMS AGREED BETWEEN YOUR SUPPLIER AND YOUR COMPANY) .
THIS L/C AFTER RECEIVED BY YOUR SUPPLIR CAN BE DISCOUNTED BY HIM WITH HIS BANKER TO GET FAST PAYMENT.
PL. REMENBER TO OPEN EVEN INLAND L/C LIKE FOREIGN L/C, YOU NEED TO HAVE L/C LIMITS SANCTIONED BY YOUR BANKER. OTHERWISE YOUR BANKER DEMANDS 100% DEPOSIT OF THE L/C AMOUNT.RATE OF INT. AND OTHER L/C OPENING CHARGES ETC.. AS PER BANK GUIDELINES WILL BE CHARGED.
WHILE SUBMITTING L/C OPENING APPLICATION TO YOUR BANK,SPECIFY WHAT QYTY. QUALITY , PRICE AND OTHER TERMS YOU AGRREED WITH YOUR SUPPLIER SO THAT ALL DETAILS WILL FORM PART OF THE L/C DOCUMENTATION.
ANY L/C (INLAND OR FOREIGN) IS OPENED WHEN BUYER AND SUPPLIER DONT KNOW EACH AND BANKING CHANNELS ARE A MEDIUM OF TRUST.
R.V.RAO

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