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Lecture 32: What is Letter of credit (LC) for importers? Does it used for domestic buying as well?

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All about Letter of credit facility in Import/Export business and working capital finance.
Learn about:
1. Detailed working methodology of Letter of credit.
2. Need of Letter of credit facility.
3. Type of LC's covering Inland/Foreign LC, Sight/Usance LC, With/Without recourse LC, Capex LC and Revocable/Irrevocable LC.
4. Payment terms in LC like at sight, After sight, After date etc.
#Letterofcredit #LC #Import #Inlandletterofcredit #Foreignletterofcredit #CapexLC #Capexletterofcredit #revocableLC #revocableletterofcredit #typesofletterofcredit #typesofLC #SightLC #usanceLC #LCaftersight #LCafterdate
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#letterofcreditinhindi
#letterofcreditinenglish
#letterofcreditandbillofexchange
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#letterofcreditvsdocumentarycollection
#letterofcreditimportexport

Опубликовано:

29 авг 2024

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Комментарии : 132

@anishjadhav4701 3 года назад

This is the best understanding I have got. Thank you sir. Hope more people find this. This is gold

@AnkushJain 3 года назад

Thank you Anish.

@prakashsharki17 Год назад

Wow sir can't describe most knowledgeable videos very needful for new joining in the bank as well as clients who take working capital facilities.

@AnkushJain Год назад

Thank you

@VIVAAN-XD 3 года назад

Love your way of explanation. Thanks sir, keep it up.

@AnkushJain 3 года назад

Thank you Amit.

@positiveinvestor 2 года назад

Your lectures are amazing👍😍... Sir Thank you so much for sharing knowledge... 🙏🙏

@AnkushJain 2 года назад

Thank you

@yogeshsaluja488 Год назад

Dear sir you upload amazing content and that too so deeply for every topic it's amazing. Requesting you to please upload videos on ECB, ODI & FDI too.

@AnkushJain Год назад

Thank you

@yjgratitude5 9 месяцев назад

Best Lecture for understanding Letter of Credit topic

@AnkushJain 9 месяцев назад

Thank you

@rahulmakwana3690 6 месяцев назад

Ok sorry sir abhi vo video dekhna baki he

@AnkushJain 6 месяцев назад

@nishantsalve6517 Год назад

Thank You sir now I got Clear information of lc.

@AnkushJain Год назад

Your welcome 👍

@HadotiClassesKota 2 года назад

Really superb lecture sir👏👏👏 Thank you!

@AnkushJain 2 года назад

👍

@MDVaashir Год назад

Extremely Thankyou to you for this video.

@AnkushJain Год назад

👍

@ShaistaSam 2 года назад

Very very good effort and easy understandable language.

@AnkushJain 2 года назад

Thank you 👍

@ShaistaSam 2 года назад

Sir...carry on. May Allah bless u with huge heights of success ❤️

@AnkushJain 2 года назад

Thank you, wish the same for you as well 👍

@surbhisharma7237 Год назад

Superb content sir

@AnkushJain Год назад

Thank you

@mohitvaidya4691 3 года назад

Nice Explanation sir 👏😌

@AnkushJain 3 года назад

Thank you

@kiranjeetkaur8700 2 года назад

Well Explained

@AnkushJain 2 года назад

Thank you

@karansarwal4207 2 года назад

Well explained

@AnkushJain 2 года назад

Thank you

@sauravkumar7594 Год назад

Nice one

@AnkushJain Год назад

Thank you

@rohitbhatia1537 Год назад

Sir A party is availing CC and LC. Following are my queries. 1. How to calculate DP of CC? Is it Stock + Debtors - Creditors Please note all the creditors arose due to Issuance of LC. 2. We have sanctioned LC with usance period of 180 days and 0.50 months lead time. What is the Lead time? Further, party is requesting to allow DP against Debtors of 120 days since he is selling goods at 120 days credit. Further he is requesting to square off the Debtors of more than 120 days with creditors. Is it justified? Please guide

@AnkushJain Год назад

Pl find reverts: Question 1: Yes DP shall be calculated that way only Question 2: lead time is time taken for ship to reach destination port Question 3: 120 days debtors are ok but squaring off debtors more than 120 with creditors is not ok. Since his payment cycle is 120 days only

@rohitbhatia1537 Год назад

@CA Ankush Jain Thanks sir We normally give permission for opening of LC with 180 days from the date of shipment. Then lead period is included in usance? Or can we exclude lead period while assessment of LC limit

@rollingroles 6 месяцев назад

excellent work, kindly tell what is the app or program in which u are doing these drawings and text writings..

@AnkushJain 6 месяцев назад

Thank you. One note app

@PristineAnimation 10 месяцев назад

Sir, I m working in ICICI Bank as in BLG, Your video is very useful. But I want to know about your organisation??

@AnkushJain 10 месяцев назад

I am also in icici

@PristineAnimation 10 месяцев назад

@@AnkushJain Nice sir, I checked. And I m Ayush Raj.

@AnkushJain 10 месяцев назад

😊😊👍👍

@OmparkashRai-wv2zd Год назад

SIR I HAVE SOME QUESTIONES REGARDING LC WHICH ARE AS FOLLOWS: 1) DOES BANK TAKE CHARGES ON LC OPENING FROM LC ISSUE DATE TO LC EXPIRY DATE OR FROM LC ISSUE DATE TO LC PAYMENT DUE DATE ? 2) DOES BANK TAKE CHARGES ON LC OPENING ON DAYS BASIS OR MONTHLY BASIS OR QUARTERLY BASIS ? 3) IF THE USANCE PERIOD OF LC IS 60 DAYS FROM INVOICE DATE AND INVOICE DATE IS BEFORE LC OPENING DATE THEN WHETHER BANK WILL TAKE CHARGES FOR 60 DAYS OR FOR ONE QUARTER FOR LC OPENING ? MY QUESTION ARE ONLY RELATING TO BANK CHARGES ON LC OPNING WHICH I WANT CLARITY ON THE SAME.

@AnkushJain Год назад

I am not much clear about charges point since it is operational matter

@OmparkashRai-wv2zd Год назад

@@AnkushJain, ok

@AnkushJain Год назад

👍

@yogeshmaheshwari5992 8 месяцев назад

Quality certificate hai na sir goods ki guarantee ke liye aapne hi bataya

@AnkushJain 8 месяцев назад

Question kya hai? Main samjha nahi

@yogeshmaheshwari5992 8 месяцев назад

Aapne lecture ke last me bola ki importer ne lc open karwa di to uska kaam, pura par exporter quality goods bhejega ye Guarantee nahi. To maine yeh comment likha

@shivjha2010 3 года назад

Sir I am also a cost account and feel that your lacture is superb. Ratio analysis relating to credit manager not get uploaded.can you plz share the same

@AnkushJain 3 года назад

I have only covered current ratio as of now. Lectures relating to other ratios shall come soon. Pl go to playlist section where I have made separate playlist for ratio analysis

@shivjha2010 3 года назад

@@AnkushJain ok sir thanks

@jyotikiran6403 Год назад

Sir what is the difference between LC AT SIGHT and DP, if in both case we are making payment on spot and getting the documents after payment.

@AnkushJain Год назад

Pl watch this series to understand ru-vid.com/group/PLjlclsu02a_x_dPoEXCXjwFEZ5J23T0c2

@subhajitdutta1610 Год назад

sir, "Revolving lc on value" m irrevocable at sight at per shipment terms ho sakta ha? please help me

@AnkushJain Год назад

Can you elaborate the term, could not get it properly

@subhajitdutta1610 Год назад

@@AnkushJain Because of the High quantity buyer wants to open revolving Lc instead of open a normal lc so many tines, so in lc term I have to export a certain amount in a month(for example- 500 Tonne), so my question is if i shipped 100 Tonne in a week, can i get the first 100 tonne payment at sight?

@Lelomotivation_hub 2 года назад

Dear sir may you please add the assessment also with example for all the products you revealed like CC OD WCDL

@AnkushJain 2 года назад

ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-m2gZnXo4RfU.html LC assessment video

@MONUKUMAR-xu7xg 2 года назад

@@AnkushJain Thanks, Please add one short vedio for How to do Assessment of Capex LC and how to set it in CMA

@nsd1001 2 года назад

Thank you sir v informative. 1 doubt - on the LC due date the importer makes payment to the exporter or exporters bank? thank you.

@AnkushJain 2 года назад

On due date, importers bank makes payment to exporters bank account by deducting from importers account.

@nsd1001 2 года назад

@@AnkushJain thank you!

@AnkushJain 2 года назад

Your welcome

@MONUKUMAR-xu7xg 2 года назад

@@AnkushJain Is it not possible, that on due date, Importer pays to exporter like normal purchase transaction. Banks to come in picture only when importer fails to make payment

@chintansoni2028 2 года назад

Request if you can also share your views on below facilities. Channel Finance/TReDS/Purchase/Sales bill discounting/Recourse-Non recourse structure in LCBD

@AnkushJain 2 года назад

Ok chintan. I will make videos on them

@MONUKUMAR-xu7xg 2 года назад

@@AnkushJain What is TReDS Facility, never heard this name

@rahulmakwana3690 6 месяцев назад

LC limit me jo beneficiary hota he use koi limit leni hoti he

@AnkushJain 6 месяцев назад

Agar LC discount karvani hai tb Leni pdegi

@ca_ayush_mittal Год назад

Sir aap clean shave mai jyaada achche lagte hai

@AnkushJain Год назад

😀😀

@mihirzatakiya124 9 месяцев назад

Sir, What is used more , DA/DP OR LC practically?

@AnkushJain 9 месяцев назад

LC is less frequent than DA/DP however still many cases come of both

@mihirzatakiya124 9 месяцев назад

@@AnkushJain okay thanks Sir.

@AnkushJain 9 месяцев назад

Your welcome

@art_soul_words 3 года назад

Waiting for your new video

@AnkushJain 3 года назад

Thnx. I am preparing it. Will release in 2 hours

@rahulmakwana3690 4 месяца назад

Kya LC Limit aur Bank Guarantee Limit pe haypothication charge aata he?

@AnkushJain 4 месяца назад

Yes

@rahulmakwana3690 4 месяца назад

To usame current asset as a security lete isake liye

@AnkushJain 4 месяца назад

Yes 👍

@hannymittal7910 3 года назад

In case of inland lc how bank confirm that all goods delivered with right quantity and right product as purchaser purchased for lc payments. Further is there any other source which is used by small traders to secure themself other than lc and bg as it takes time and high cost

@AnkushJain 3 года назад

Bank cross checks from invoice, transporters receipts etc w.r.t goods details and terms as per LC. There is not any secure method involving banking sector other than LC or BG.

@hannymittal7910 3 года назад

@@AnkushJain In case of road lorry transport usually description of goods not mentioned practically we also have shop and only they mentioned General goods with weight and qty like 1 cartoon. In that case what is checks followed by banks. Further share your contact no pls so i can connect uf i have doubt

@AnkushJain 3 года назад

@@hannymittal7910 along with th transporter receipt there is invoice of goods, e way bill also. Description of goods can be easily checked from them

@hannymittal7910 3 года назад

@@AnkushJain ok sir

@nsd1001 2 года назад

Hi sir, in recourse LC, what will beneficiary bank recover from exporter? The loss is already borne by exporter (since importer has not paid) right? Thanks

@AnkushJain 2 года назад

No, exporter has taken payment vide discounting of LC from his bank. His bank discounted the LC on confidence that importer bank will pay. Now if money does not come, exporter bank can recover back its money from exporter

@nsd1001 2 года назад

@@AnkushJain got it sir thank you.. so as i understand this recourse/non recourse issue will arise only if exporter has discounted the LC.

@AnkushJain 2 года назад

Yeah

@MONUKUMAR-xu7xg 2 года назад

@@AnkushJain Hii, How would we come to know whether it's recourse LC or Non recourse LC while doing an LCBD proposal. Further Bank would always like to do discounting of Recourse LC only in such situation !

@caaman93 Год назад

Sir Any video available for LC and BG assessment.

@AnkushJain Год назад

I have not made it yet for BG. But for LC please find below link ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-m2gZnXo4RfU.html

@mohitchandrajoshi4454 Год назад

What is SLC fund based working capital?

@AnkushJain Год назад

Standby letter of credit?

@mohitchandrajoshi4454 Год назад

@@AnkushJain yes is standby letter of credit & line of credit same?

@AnkushJain Год назад

Standby letter of credit and normal letter of credit is more or less same. Pl watch next 2-3 videos as well on this topic, many points will get clear

@mohitchandrajoshi4454 Год назад

@@AnkushJain Line of credit is different from letter of credit??

@rajanshah2507 Год назад

Sir, can LC be open for creditor for services??

@AnkushJain Год назад

For purchase of services, there is usually bank guarantees issued than LC. I have not seen any case wherein LC is issued for purchase of services

@rahulwagh6070 2 года назад

Superb video sir. 1 doubt. How is accounting under usance LC after using lc and releasing goods? Dr. Inventory and Cr. Creditors under LC ?? Or we show LC o/s in loan section??. Also impact on DP?

@AnkushJain 2 года назад

LC limit does not appear separately. Only creditors backed by LC appears in books of accounts and they get reduced from DP as well

@rahulwagh6070 2 года назад

@@AnkushJain Thanks sirji

@AnkushJain 2 года назад

👍

@MONUKUMAR-xu7xg 2 года назад

@@AnkushJain We will show equivalent amount of Stock as well in Projections in CMA, so will this not increase our DP for CC Limits ?

@AnkushJain 2 года назад

No it will not. Stock will be backed by limit and by applying in projections, 25% margin point on current assets would come as per MPBF 2 and it will create diff

@caaditkumar7450 2 года назад

Sir lecture 27 to 31 is missing??

@AnkushJain 2 года назад

No, I can see them, pl recheck

@art_soul_words 3 года назад

Who makes payment on due date? Issuing Bank or importer?

@AnkushJain 3 года назад

Primarily importer. But if the importer does not have the money then issuing bank.

@nsd1001 2 года назад

@@AnkushJain sir 1 follow up question. if the issuing bank makes payment, is there a date by which importer has to pay the bank? is it termed as default if issuing bank pays? wont there be penalty etc. Could u pl explain what happens and steps taken by bank to recover etc. thank you

@AnkushJain 2 года назад

It is default. It is called devolvement of LC wherein importer does not pay and bank has to meet its obligation. Default and overdue starts from day 1 after payment. Banks follows up till 90 days for payment, if not received then account becomes NPA and then court proceedings starts

@nsd1001 2 года назад

@@AnkushJain thank you sir!

@AnkushJain 2 года назад

Your welcome

@caarchanachoudhary 2 года назад

How the tenor of LC is decided?

@AnkushJain 2 года назад

Usually it is comfort between buyer and seller. It is upto the foreign supplier as to how much tenor he wants to give to importer. Although ideally tenor should not exceed stock plus debtor cycle of the client

@MONUKUMAR-xu7xg 2 года назад

@@AnkushJain Thanks

@AnkushJain 2 года назад

👍