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Import L/C Negotiation
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Import L/C negotiation is a kind of short-term facility the letter of credit issuing bank offers the exporter (the applicant). After our bank has opened letter of credit upon your application and with certain deduction of your margin, your company might face short term liquidity problem and is unable to carry out your payment obligation for compliant documents. After approval by our bank, we could make payment to the foreign correspondent bank or exporter on your behalf and your company could return the negotiated fund and its interest to our bank within stipulated tenor. - Advantages
As a kind of finance under letter of credit opened with certain deduction of margin, import negotiation has simple operation procedure. In comparison to foreign currency loan, it simplifies the approval procedure at the foreign exchange administration departments.
With a combination of sight letter of credit, this kind of finance offers the importer a substitution for finance under usance letter of credit. - Subject of the Loan
Import negotiation is suitable for import export trading companies with frequent trade business, tight capital turnover, regulated management, good credit record, normal financial and business operation status and reliable product quality. - Types of the Loan
According to the way of guarantee, the import negotiation business offered by our bank includes:
(1) Negotiation on credit, namely negotiation without guarantee.
(2) Import negotiation with pledged manifest
The negotiation is provided upon the trust receipt issued by the importer and the pledge of the goods as well as the pledged dock warrant. The importer should make the corresponding payment for the goods before it could ask our bank to release the dock warrant and pick up the goods.
(3) Import negotiation with guarantee
A guarantee other than pledge of dock warrant is provided for the finance, such as mortgage, pledge and guarantee. Currently our bank only accepts import negotiation application under sight letter of credit. - Amount, Tenor, Currency and Interest Rate
(1) Amount
The amount should be the liable payment for submitted document amount under the letter of credit less the margin which has already been deposited by the applicant to the bank.
(2) Tenor
The tenor is decided according to the application of the applicant and the actual need of trade revolving. It starts from the payment date under letter of credit and shall not exceed 90 days principally and maximum 180 days. The tenor could not be extended.
(3) Currency
In the same currency as the letter of credit currency (RMB, US Dollar, Japanese Yen, Euro, Hong Kong Dollar, British Pounds or other foreign currency listed on the foreign exchange rate board of our bank)
(4) Interest Rate
If the negotiation currency is RMB, the interest rate should comply with the loan interest rate for the same tenor published by the People's Bank of China. If the negotiation currency is foreign currency, the interest rate should be the interest rate of the basic loan interest rate for the same currency and same tenor published by our bank plus a spread. Interest rate calculation starts from the date of payment under letter of credit and ends by the date of repayment of the loan. The interest should be settled together with the principle. | | | | | | |
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