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Trade Finance

We are the financial service provider in case of import and export financing. Hence we can help you in financing only on your import-export payments.

a) Documentary Credit
b) Buyer’s Credit
c) Supplier’s Credit
d) Collections
e) Open Account

loans for payment of imports into India arranged on behalf of the importer through an overseas bank.

Buyer’s Credit refers to loans for payment of imports into India arranged on behalf of the importer through an overseas bank where Importer’s bank provide letter of undertaking on behalf of importer to funding bank.

Terms loans are taken from Indian Banks in Indian Currency and importer have to pay the interest along with bank margin (currency exchange) to pay in foreign currency. Interest in case of term loan is much high.

Buyers Credit is taken from the overseas bank in the foreign currency with very less documentation process.

Raw Materials as well as capital goods allowed as per government policies

Not permissible under RBI guidelines

For Importer
1. Availability of cheaper funds for import of raw materials and capital goods
2. Ease in getting credit in short term
3. Able to meet the Suppliers requirement of payment at sight
4. Ability to negotiate better price with suppliers due to sight payment
For Exporter
1. Realize at-sight payment
2. Avoid the risk of importer’s credit by making settlement with letter of credit

1. Importer imports the goods either under DC / LC, DA / DP or Direct Documents
2. Importer reaches Myforexeye before the due date of the bill to avail buyer’s credit quote
3. Myforexeye approaches overseas bank for indicative pricing, which is further quoted to Importer
4. If pricing is acceptable to importer, overseas bank issue’s offer letter in the name of the Importer
5. Importer approaches his existing bank to get letter of undertaking / comfort (LOU / LOC) issued in favour of overseas bank via swift
6. On receipt of LOU / LOC, Overseas Bank as per instruction provided in LOU, will either funds existing bank’s Nostro account or pays the supplier’s bank directly (using only MT202 payment mode)
7. Existing 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)
8. On due date existing bank to recover the principal and Interest amount from the importer and remit the same to Overseas Bank on due date

Banks outside your country are known as overseas Bank. These banks can be branches of Indian banks and the foreign banks.

Importer’s Bank provides letter of undertking on behalf of its importer

When importer have limit in the bank along with good credit history.

Overseas banks are banks which provides funds to importer’s bank on behalf of imports documents and the importer bank transfer the funds to exporter’s bank.

It’s a guarantee by importer’s bank on behalf of the importer to make payment on due date in case importer defaults in payment.
There are many clauses in the Letter of undertaking based on overseas banks.

No fixed rate , Importer’s Bank decides with importer.

Document against acceptance is method in which importer receive the documents of ownership of import goods only when importer have accepted and promised to pay the related bill of exchange.

Payment in advance

Myforexeye on behalf of our client reaches overseas bank for the interest rates and we negotiate to get best rate.

Letter of Undertaking/Comfort by importer’s bank

Credit from overseas Bank is much cheap than term loans in home country and the documentation process is very easy which in turn reduces the turn around time.

LIBOR / EURIBOR is a benchmark rate that some of the world’s leading banks charge each other for short-term loans for USD/EURO.

Indian Bank’s Credit rate is for financing in the Indian Currency.
LIBOR/EURIBOR is rate for financing in foreign currency

change in Monetary Policy and US Fed Funds Rate

Spread is the percent interest banks take over the LIBOR.

AMOUNT
Tenor
Cost of borrowing of currency

Guarantee from Importer’s Bank

LOU is given by Importer’s Bank and it is processed before funding.

A SWIFT code is an international bank code that identifies particular banks worldwide. It’s also known as a Bank Identifier Code (BIC).

LIBOR + Spread(maximum 350bps)[compulsory]
Swift Charge (voluntary by bank)
Withholding Taxes (foreign Banks)

The customer has to pay WHT on the interest amount remitted overseas to the Indian tax authorities. (The WHT is not applicable where Indian banks arrange for buyers credit through their offshore offices.)

Nostro Account is an account of an Indian Bank with a Bank Outside India In foreign Currency.

Saving and current account are account of individual and firms in Indian banks in indian currency.

* MT202 Cov is a SWIFT message format for financial institution transfer. It is used to order the movement of funds to the beneficiary institution via another financial institution/Intermediary Bank.
* MT799 is a message that is sent between banks; with the aim of showing funds or proof of deposits. It is important to note that it is not used as a method of transferring funds or an undertaking to do the same.

A written, unconditional order by one party (importer) to another party (exporter) to pay a certain amount immediately or at some fixed date in future for the payment of goods imported.

Trade finance includes the following:
Lending facilities
1. Issuing Letters of Credit (LCs)
2. Export factoring (companies receive funds against invoices or accounts receivable)
3. Forfaiting (purchasing the receivables or traded goods from an exporter)
4. Export credits (to reduce risks to funders when providing trade or supply chain finance)
5. Insurance (during delivery and shipping, also covers currency risk and exposure)

Trade loans are the facilities used by importers, exporters and domestic traders for specific transactions used for product purchase and sales. Trade loans are short term in nature and party involved are borrower and lender.

For Raw Material Goods – 360 days
For Capital Goods – 36 months

Yes. Bank guarantee can be issued for services and goods such as commodities.

“Buy now pay later”
In Usance LC Exporter need payment at sight which is paid by importer’s bank and importer pays their bank on maturity.
In Deferred payment mode the exporter gives some credit period, after maturity importer have to make payment to the exporter

THE LETTER OF CREDIT
> THE DRAFT OR BILL OF EXCHANGE
> THE COMMERCIAL INVOICE OR TRADE INVOICE
> CERTIFICATE OF ORIGIN
> WEIGHT LIST / CERTIFICATE
> INSPECTION CERTIFICATE
> TRANSPORT DOCUMENT
> DISCREPANCY CHECKLIST

Buyer’s Bank guarantees payment to seller through seller’s bank when required documents are presented mentioned in Letter of Credit. This mode of payment minimizes the credit risk for exporter.

Myforexeye on behalf of our client reaches overseas bank for the quotes and we negotiate to get best quote.

Right now we deal only in forex services.

Yes, Myforex Fintech Limited is registered as per Companies Act 2013

Yes you can.
However it depends on your bank’s working capital accessment of your company.

Raw Material – upto 360 days
Capital Goods – upto 3 years

Flat charges are kept considering the monthly volume and ticket size of transactions which can vary for lower amount transactions.

For Importer
1. Availability of cheaper funds for import of raw materials and capital goods
2. Ease in getting credit in short term.
3. Able to meet the Suppliers requirement of payment at sight.
4. Ability to negotiate better price with suppliers due to sight payment.
For Exporter
1. Realize at-sight payment
2. Avoid the risk of importer’s credit by making settlement with letter of credit.

No, We charge only our service charges.
Rate of Interest is charged by the overseas funding bank.

Yes, In buyer’s credit process overseas funding banks requires Letter of Undertaking from the importer’s bank as a Guarantee.

Interest in case of Buyer’s credit depends on the LIBOR and Spread.
LIBOR depends upon the currency market which can have impact on the interest rate.
As the cost of borrowing will vary spread will vary.
Hence change in currency rate will impact rate of interest.

it is one of the mandatory bank norms that overseas banks have to follow.

Being specialised in buyer’s credit business we pool the transaction and visit to overseas bank and negotiate for better price so its rare to have better price.
In case you get better rates than us then inform us we can further negotiate on behalf of you.

overdue interest is to be paid that varies from bank to bank

We have tie up with all the indian banks in different geography.

* These are the receipt of the goods
* These are said to be “negotiable documents of title”.
* These documents are as good as money

Change in Monetary Policy and US Fed Funds Rate

1. Importer imports the goods either under DC / LC, DA / DP or Direct Documents.
2. Importer reaches Myforexeye before the due date of the bill to avail buyer’s credit quote.
3. Myforexeye approaches overseas bank for indicative pricing, which is further quoted to Importer.
4. If pricing is acceptable to importer, overseas bank issue’s offer letter in the name of the Importer.
5. Importer approaches his existing bank to get letter of undertaking / comfort (LOU / LOC) issued in favour of overseas bank via swift.
6. On receipt of LOU / LOC, Overseas Bank as per instruction provided in LOU, will either funds existing bank’s Nostro account or pays the supplier’s bank directly (using only MT202 payment mode).
7. Existing 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)
8. On due date existing bank to recover the principal and Interest amount from the importer and remit the same to Overseas Bank on due date.

No, we can not avial buyer’s credit for advance payments.

Myforexeye deals in the financial services for their customers dealing in the foreign market.

Myforexeye Fintech Limited

Trade Finance signifies financing for trade and it concerns both domestic and international trade transactions. A trade transaction requires a seller of goods and services as well as a buyer. Various Intermediaries such as banks and financial institutions can facilitate these transactions by financing the trade.

Overseas Branches of Indian Banks

Letter of Credit is required when Buyer’s and Seller’s are new in business

It is cheaper than any other mode of financing

No, we are intermediatory . We provide Buyer’s Credit Quote

A letter from a bank guaranteeing that a buyer’s payment to a seller will be received on time and for the correct amount. In the event that the buyer is unable to make payment on the purchase, the bank will be required to cover the full or remaining amount of the purchase.

Buyer’s Credit is much cheaper than Cash Credit

If all things required in Letter of undertaking are up to the funding banks requirement then bank ensures for the funding .

Importer’s Bank will issue letter of Undertaking on behalf of Importer to Overseas Funding Bank.

Step 1- Payment must be due on importer for import transaction.
Step 2- Visit importer Bank and request to take guarantee.
Step 3- Visit Myforexeye Fintech Ltd for cheapest interest rate from overseas banks for your transaction.
Step 4- On acceptance of the offered by overseas bank by the importer, Overseas bank will issue an offer letter and will provide format of Letter of Undertaking.
Step 5- Importer’s bank will issue Letter of Undertaking as per format given by funding bank and will send through the Swift Code.
Step 6- On receiving of Letter of Undertaking from importer’s bank, Overseas bank will release funds in the importer bank’s Nostro Account.

Preferably it should be a separate buyer’s credit limit in your bank, In case there is no separate buyer’s credit limit, your bank may process the buyer’s credit option by marking 100 % lien in your CC.

No. It provides a  playing ground as you get final rates better than that of your bank.

Sorry, in that case we are not able to provide you our services.

Funding Bank transfers Funds in the importer’s bank nostro account.
Importer’s Bank makes payment to Beneficiary Bank’s Account.
After funding it take 24 hr. to show amount in Nostro account of importer’s bank

* MT202 Cov is a SWIFT message format for financial institution transfer. It is used to order the movement of funds to the beneficiary institution via another financial institution/Intermediary Bank.
* MT799 is a message that is sent between banks; with the aim of showing funds or proof of deposits. It is important to note that it is not used as a method of transferring funds or an undertaking to do the same.

It is because of  inter bank financing. on behalf of importer, importer’s Bank will give undertaking to pay the amount in case of failure on due date .

Buyer’s credit is a cost effective procedure, Interest cost is very high in case of direct payment.

High Sea sales (HSS) is a sale carried out by the carrier document consignee to another buyer while the goods are yet on high seas or after their dispatch from the port/ airport of origin and before their arrival at the port / airport of destination

Yes, You can get financing for imports under high sea sales arrangement

No, Your Organization’s financial health and credit rating get disturbed in case of default in payment on due date. It is advisable to make payment within due date

We are specialized in this service. We make pool of transactions and reach to overseas bank, which make banks to lower their interest rates.

We deal with the overseas bank of different time zones, In case funding is required on same day, we will provide quote from America and Europe.

In case of buyer’s credit, funds are available at very cheaper rates, so on maturity of payment to exporters, importer can avail buyer’s credit to get more credit period and can use the amount which he was paying to exporter to invest in financial instruments to get better returns.

Buyer’s Credit
1. Can be used for payment mode like LC, LC usance, DA, DP, & Direct Doc
2. Can be arranged after documents have reached the bank or documents are received by importer directly
3. Interest Cost only
Supplier’s Credit
1. Can be used only in case of LC transactions
2. Has to be arranged at the time of opening LC or before shipment of goods.
3. Cost involved
i) LC Advising Cost
ii) LC Amendment Charges
iii) Document Processing Charges
iv) Courier Charges
v) Confirmation Cost
vi) Interest Cost

Both the processes are different and Buyer’s Credit is cheaper as well as very less documentation is required.

From Overseas Banks

We make pool of transactons and reach to overseas bank, which make banks to lower their interest rates.

No, there are other modes i.e Document against Payment, Open account and document against acceptance and bank guarantee.

We are sorry. Rates are based on the amount and tenor so amount along with the tenor is required.

Buyer’s Credit is very cheap and requires less documentation.

We are specialized in this service. We make pool of transactions and reach to overseas bank, which make banks to lower their interest rates.

Please provide us the contact details of the concerned person , we will approach them.