How to use Back-to-Back LC for an increase in Export / Sales? By Isaac Tudu
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- Опубліковано 5 жов 2024
- How to use Back-to-Back LC for an increase in Export / Sales?
A LC is issued in favour of the seller, who ships the goods and claims payment under LC. It is typically applicable when the Seller is the manufacturer of the goods.
But many times the buyer does the business with a middleman/trader, who is not a manufacturer of the goods and operates on a narrow margin, with limited Working Capital without carrying stocks of goods.
Therefore trader seeks a means of finance for their purchase without engaging their own resources.
Back-to-Back LC meets the above needs.
Back-to-Bank LC is a very good product for exporters, engaged in the trading business, to increase their export/sales business.
I have covered the following topics in this video:
• Need of Back-to-Back LC
• Understanding Back-to-Back LC
• Precaution for Back-to-Back LC
• Work-Flow of Back-to-Back LC
About Speaker:- Isaac Tudu is an ex-banker with India’s largest Banks i.e. ICICI Bank and State Bank of India having more than 25 years of banking experience in Trade Finance and Credit with ICC certifications like CDCS, CSDG & CITF etc.
Isaac Tudu provides "CDCS Exam Preparation Online Course" for Bankers and Professionals working in Export-Import Business.
Isaac’s Vision: To create a financial world where SMEs are well conversant with Trade Finance without any ambiguity. Isaac’s Mission: To help 100,000 SMEs to achieve their Sales & Business Growth drastically by enabling them through the "Hassle-Free Trade Finance" Online Programme.
Stay connected with us: WhatsApp: +91 90999 64682
Email: Isaac.tudu@gmail.com
Visit: www.isaactudu.com
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#importexport #tradefinance#lettersofcredit#lc#msme#sme#bankers#cdcs
Mashallah great way teaching
Great 👍👍
Good video sir thank you so much for answering my query.
Very useful and great presentation.
Thanks a lot Gaurab..
Nice
Very informative session on Back to Back LC mechanism.
Thank you sir 🤟🏻
One difference missed ship of goods directly to ultimate buyer in case of transferable but same is not the case in back to back lc
Good Evening sir
Thanks for your nice explanation about B2B LC , can you please make a video about transferable SBLC ?
For example if first benifciary wants to transfer LC to another benifciary who is a collateral and he wants to use his credit line in favour of first benifciary, so in this case first benifciary also must have credit line to transfer the SBLC or not?
Thank you for your excellent presentation. I have a question: can the trader ask his bank to issue a transferable LC to the supplier back to back to a non-transferable LC received from the buyer. To what extent is a change acceptable in the terms/ what are the limits to the mirroring. Thank you again
Can you Name which banks in USA can accept Back to Back LCs?
Sir can you please make a video on what is the procedure of opening an LC with the bank nd what are the approximate charges? And what are the charges for amendment of LC?
For opening the LC ,first and foremost requirement is one should have Working Capital limits with his/her Bank. Especially Non Fund based WC limit.
Now comes to LC charges, It varies from Bank to Bank. In India, as per FEDAI in LC transaction there are two types of charges:1. Usance Charges and 2. Commitment charges and apart from this there is SWIFT Charges plus applicable taxes on it.
Again, Amendment charges of LC varies from Bank to Bank.
You can negotiate with your Bank on charges part and fetch some concession for LC issuance charges.
Thank you 😊
@@smitgohel8106 thank you for your reply 😊 if I want to open lc amounting 10 lakh what will be the rough estimated or nearby charges?
@@prachikapoor8346 approx 1-2% of LC amount..depend on limit and banking
Use hindi