NON FUND BASED FINANCE & CREDITS:

B-1. Letters of Credit What is Letter of Credit? When a buyer want to purchase goods or importer wants to import goods from an unknown seller or exporter, he can take assistance of banks in such buying or importing transactions. On the basis of creditworthiness, a Bank issues a Letter of Credit addressed to the supplier or exporter who, on the strength of Letter of Credit issued by a reputed bank, will not hesitate to supply or export goods to such unknown buyer/ importer. After the goods are supplied, A Signed Invoice with a Letter of Credit is presented to the banker of buyer / importer and the payment is made to the seller/exporter directly by the bank. Letter of Credit facilitates your purchases of goods in trading operations, both domestic and international. Backed bank's strong reputation, you will be able to build better trust in trade and forge business relationships faster. The bank's vast network of branches and correspondent banks enables your enterprise to sustain a seamless flow of business on a wide platform. Further, the bank's informed trade finance crew can provide you with sophisticated credit and trade information and market knowledge, helping you extract more value from business.

Depending on the credit worthiness of the borrower, Letter of Credit can be availed with as low as 10% of Cash Margin and Mortgage of Immovable Properties. B-2. Bank Guarantees ( Performance / Financial) What is Bank Guarantee A Bank Guarantee is a guarantee issued by a banker that, in case of an occurrence or non-occurrence of a particular event, the bank guarantees to make good the loss of money as stipulated in the contract. Bank analyses the creditworthiness or the business capacity of its clients and then issues various types of bank guarantees like Financial Guarantees, Performance Bank Guarantees, Deferred Payment Guarantees. Bank guarantees can be issued against Cash Margin and Mortgage of Immovable Properties. Bank Guarantee can be availed to submit Tender Bid Money / Earnest Money Deposit / Security Deposit / Maintenance Deposit Performance of a Tender / Bid Contract, Bid Bond Guarantee Advance Payment Guarantee Performance Guarantee Down Payment Guarantee Retention Money Guarantee Overseas Borrowing Guarantee

Depending on the credit worthiness of the borrower, Bank Guarantee can be availed with as low as 10% of Cash Margin and Mortgage of Immovable Properties. B-3. Suppliers Credit Inland- Import and Export A financing arrangement under which an exporter extends credit to a foreign importer to finance his purchase. Usually the importer pays a portion of the contract value in cash and issues a Promissory note or accepts a draft as evidence of his obligation to pay the balance over a period of time. The exporter thus accepts a deferred payment from the importer, and may be able to obtain cash payment by discounting or selling the draft or promissory notes created with his bank. B-4. Buyer's Credit Inland- Import and Export Buyer's credit is the credit availed by an Importer (Buyer) from overseas Lenders i.e Banks and Financial Institutions for payment of his Imports on due date. The overseas Banks usually lend the Importer (Buyer) based on the letter of Credit (a Bank Guarantee) issued by the Importers (Buyer's) Bank. In fact the Importers Bank brokers between the Importer and the Overseas lender for arranging buyers credit by issuing its Letter of Comfort for a fee. Buyers credit helps local importers access to cheaper foreign funds close to LIBOR rates as against local sources of funding which are costly compared to LIBOR rates.