Buyer's Credit - Steps Involved

Steps Involved

  1. The customer will import the goods either under LC, collections or open account
  2. The customer requests the Buyer's Credit Arranger before the due date of the bill to avail buyers credit financing
  3. Arrange to request overseas bank branches to provide a buyer's credit offer letter in the name of the importer. Best rate of interest is quoted to the importer
  4. Overseas bank to fund Importer's bank Nostro account for the required amount
  5. Importer's bank to make import bill payment by utilizing the amount credited (if the borrowing currency is different from the currency of Imports then a cross currency contract is utilized to effect the import payment)
  6. Importer's bank will recover the required amount from the importer and remit the same to overseas bank on due date.
  7. It helps importer in working capital management.

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