Trade Financing Essay


Trade Fund in India comprises of financing against imports into India, export coming from India and inland trade transactions. Whilst doing this study, it is important to know about the regulations governing such deals in India. Import and Export trade is controlled by the Directorate General of Foreign Control (DGFT) under Ministry of Commerce & Industry, Section of Trade, Government of India. Banking companies in India, authorized simply by Reserve Bank of India to handle Foreign Exchange are known as Authorised Dealers. Sanctioned dealers, while undertaking import and foreign trade transactions, should ensure that the imports in to India and export by India are in conformity with the Export Import Coverage in force and Foreign Exchange Supervision (Current Bank account Transactions) Guidelines, 2000 presented by Government and the directions issued simply by Reserve Bank under Foreign Exchange Management Take action from time to time. Banking companies also have to stick to credit policy announced by simply Reserve Traditional bank of India from time to time to make sure compliance while dealing with funding of Away from the coast Trade deals. Authorised retailers have to follow normal bank procedures and adhere to the provisions of varied rules presented by Worldwide Chamber of Commerce, Paris, france and onshore credit policy of the nation. Banks in India utilize following trade products to satisfy financing requirements of the clients: Imports:

1 ) Opening of Letter of Credit and Follow up Loans

2 . Buyer's Credit / Supper's Credit rating in the form of short-run credit pertaining to Imports in India 3. Trust Invoice Financing

4. Simple Overdraft Facility

5. Issuance of some of the assures to aid imports related activities Exports:

1 . Pre-shipment Credit in Indian Rupees

2 . Pre-shipment Credit in Foreign Currency

three or more. Post-shipment Credit in Indian Rupees

4. Post-shipment Credit rating in Foreign Currency

5. Forfaiting of Export Receivables

six. Factoring of Export Receivables

7. Basic Overdraft Service

8. Issuance of a number of the...