The document describes the process flow for bill discounting backed by a letter of credit (LCBD). Key steps include:
1) A buyer opens an LC with the seller as beneficiary. The seller draws a bill of exchange on the buyer favoring the LC discounting company and submits documents including the LC, invoices, and assignment letter to the discounting company.
2) The discounting company forwards documents to its representative bank, which endorses the bill of exchange to the LC issuing bank.
3) Upon confirmation from the issuing bank, the representative bank notifies the discounting company and discounts the LC, paying the seller.
4) On the due date, the issuing bank
The document describes the process flow for bill discounting backed by a letter of credit (LCBD). Key steps include:
1) A buyer opens an LC with the seller as beneficiary. The seller draws a bill of exchange on the buyer favoring the LC discounting company and submits documents including the LC, invoices, and assignment letter to the discounting company.
2) The discounting company forwards documents to its representative bank, which endorses the bill of exchange to the LC issuing bank.
3) Upon confirmation from the issuing bank, the representative bank notifies the discounting company and discounts the LC, paying the seller.
4) On the due date, the issuing bank
The document describes the process flow for bill discounting backed by a letter of credit (LCBD). Key steps include:
1) A buyer opens an LC with the seller as beneficiary. The seller draws a bill of exchange on the buyer favoring the LC discounting company and submits documents including the LC, invoices, and assignment letter to the discounting company.
2) The discounting company forwards documents to its representative bank, which endorses the bill of exchange to the LC issuing bank.
3) Upon confirmation from the issuing bank, the representative bank notifies the discounting company and discounts the LC, paying the seller.
4) On the due date, the issuing bank
Process Flow for Bill Discounting backed by Letter Of Credit (LCBD)
GROUP COMPANY TRANSACTIONS:-
Buyer will open an LC with Seller as beneficiary. (Advised for authenticity by another bank) Seller will draw a BOE on buyer favouring LC Discounting Cos representative Bank w.r.t. invoices & LC issued. Client will submit to LC discounting company the followings :-
Request Letter for LC Discounting Original LC Duly accepted BOE Invoices + LR Assignment Letter Other documents as per LC terms and conditions
LC discounting company will forward a set of all the documents to LC Discounting Companys representative Bank (Including original BOE and Original LC) along-with a request letter to call for confirmation from the LC issuing bank in their favour. LC Discounting Cos representative Bank will endorse that BOE in favour of LC issuing bank and forward the same along-with required set of documents to LC issuing bank. LC issuing bank will give confirmation to LC Discounting Cos representative Bank (After doing their procedure for issuing confirmation letter) On receipt of same, LC Discounting Cos representative Bank will send to LC discounting company the following :- o Xerox of LC or Due date confirmation issued by LC issuing bank. o A letter stating that they have verified the signatures of the person signed on the confirmation and that they will pay to LC discounting company on receipt of money from LC issuing bank. LC discounting company will discount the LC and pay to Group Company / Seller On due date, LC issuing bank will pay to LC Discounting Cos representative Ban006B and in turn they will pay to LC discounting company.
Format of Bill of Exchange
On Drawers Letter Head
To Name & Address of Drawee
BOE No. BOE Date BOE Amount Due Date
At ____ days after the Date/Dt of invoice/Dt of receipt of Material (remove whichever is not applicable) (inclusive of grace days), pay to Our representative Bank, Our representative House, 425, Lamington Road, Mumbai - 04 or Order, a sum of Rs __________ (Rupees_____________________) for value received.
This Bill of Exchange has been drawn in connection with the sale of goods to you covered under the LC No. _______________________ dated _________ issued by ___________________________. Details of the invoices are as under :-
Sr. No. Invoice No. Date Amount
Presentment, Notice of Dishonour & noting & Protest waived by all the parties entitle to the same.
Rubber Stamp & signature of Drawer
Accepted for payment at Mumbai on due date as per tenure & terms of the bill Received Goods in order & to our satisfaction and there is no trade dispute in regards to the materials accepted.
Rubber Stamp & signature of Drawee
(Format of Request Letter from Client to LC discounting company)
Ref. : _________________
Date : _________________
LC discounting company , Fort Mumbai
Kind Attn. : Mr. Buyers Name / Address LC Opening Bank LC Nos. / Date Last Date of Negotiation of LC LC Amount
Sub : Negotiation of inland sales bills drawn under LC No. ______________________________
Dear Sir, With reference to the subject matter, we are enclosing herewith the following:-
(1) Original / Certified true copy of invoice & copies of LR as per following details :- S. No, Invoice No. / Date Amount LR / Challan No. LR Date
TOTAL
(2) Original Bill of Exchange No. ____________ duly accepted by _______________________
(3) Original LC. No _________________ dated __________ for Rs. ______________
(4) Such other documents as mentioned in the LC
We undertake that the transactions covered under this LC are the bonafide trade transactions.
Kindly forward the documents to the LC Issuing Bank at the following address :-
LC Issuing Banks Name and Address
We request you to please discount the above mentioned bills after receipt of confirmation of documents and due date from LC issuing bank and credit the proceeds to the CC account of ______________________ (Seller) having CC account no _______________________ maintained with ________________________ and oblige.
Sub : B/E no ______________ Amount L/C no :__________________
This has reference to captioned subject and the documents submitted for collections and confirmation on our behalf.
Please be informed that all the rights/benefits arising out of despatch of goods covered under the LC no. ___ have been irrevocably and unconditionally assigned in favor of LC discounting company, we have drawn B.O.E. No _______ dated _______ in your favour and we hereby authorize Our representative Bank to credit the collection proceeds to the account of LC discounting company.