Trade finance rules, gathered in one place

Trade Credits are credit given by an overseas supplier, bank or approved lender for importing goods.

named by the words Trade Credit · RBI Para 13 · Read it in place

Trade credit comes as either suppliers' credit or buyers' credit.

named by the words trade credit · RBI Para 13 · Read it in place

A unit or developer in an SEZ can raise trade credit for goods bought within or from another SEZ.

named by the words trade credit · RBI Para 15 · Read it in place

A buyer outside the SEZ may also raise trade credit to buy from an SEZ unit.

named by the words trade credit · RBI Para 15 · Read it in place

Trade credit for capital goods can run up to three years from the shipment date.

named by the words Trade credit · RBI Para 14 · Read it in place

The monthly trade credit report must reach RBI by the 10th of the next month.

named by the words trade credit · RBI Para 17 · Read it in place

An importer hedging its trade credit needs a board approved risk policy.

named by the words trade credit · RBI Para 14 · Read it in place

A rupee trade credit cannot later be changed into a foreign currency.

named by the words trade credit · RBI Para 14 · Read it in place

A guarantee for the trade credit cannot be more than the credit itself.

named by the words Bank guarantee · RBI Para 16 · Read it in place

The guarantee cannot last longer than the trade credit's own permitted period.

named by the words trade credit · RBI Para 16 · Read it in place

Trade credit can also be secured by a foreign bank's guarantee or an Indian bank's overseas branch.

named by the words Trade credit · RBI Para 16 · Read it in place

If invoked, total payments cannot exceed the amount owed on the trade credit.

named by the words trade credit · RBI Para 16 · Read it in place

ADs must check that SEZ trade credit is not double financed.

named by the words trade credit · RBI Para 18 · Read it in place

For an SEZ trade credit, the date the goods change ownership counts as the TC date.

named by the words trade credit · RBI Para 15 · Read it in place

A deferred-payment deal beyond three years for capital goods, or beyond one year for goods, is treated as trade credit.

named by the words trade credit · RBI Section B.5.2 · Read it in place

An advance remittance for goods over USD 200,000 needs a standby letter of credit or a bank guarantee.

named by the words Letter of Credit · RBI Section C.1.1 · Read it in place

A trusted importer can skip that guarantee for advance remittances up to USD 5,000,000.

named by the words Letter of Credit · RBI Section C.1.1 · Read it in place

A public-sector importer needs a Finance Ministry waiver before an advance remittance past USD 100,000.

named by the words bank guarantee · RBI Section C.1.1 · Read it in place

Advance payment for an aircraft or helicopter can go up to USD 50 million without a bank guarantee.

named by the words Letter of Credit · RBI Section C.1.3 · Read it in place

A shipping vessel can also be paid for in advance up to USD 50 million, without a bank guarantee.

named by the words Letter of Credit · RBI Section C.1.3 · Read it in place

A public-sector importer of services needs a Finance Ministry approval to skip the guarantee past USD 100,000.

named by the words bank guarantee · RBI Section C.1.4 · Read it in place

Credit for importing platinum, palladium, rhodium or silver may not run past 90 days from the shipment date.

named by the words Letters of Credit · RBI Section C.12.1 · Read it in place

A diamond importer's clean credit, with no letter of credit behind it, may run up to 180 days.

named by the words letter of credit · RBI Section C.12.1 · Read it in place

A merchanting trader's advance for the import leg needs a bank guarantee once it passes USD 500,000.

named by the words Letter of Credit · RBI Section C.14.1 · Read it in place

Trade credit is credit for imports into India, running up to five years.

named by the words trade credit · RBI Para 5 · Read it in place

The all-in cost of trade credit may not exceed 350 basis points over the benchmark.

named by the words Trade credit · RBI Para 5 · Read it in place

The bank must file its trade credit statement by the tenth of the next month.

named by the words trade credit · RBI Para 5 · Read it in place

A bank may approve trade credit up to twenty million dollars per import transaction.

named by the words trade credit · RBI Para 5 · Read it in place

Performance bonds, bid bonds and warranties convert at half.

named by the words letters of credit · RBI Para 22 · Read it in place

Short self liquidating trade letters of credit convert at a fifth.

named by the words letters of credit · RBI Para 22 · Read it in place

Documents may go straight to the buyer only with full advance payment or an irrevocable letter of credit.

named by the words letter of credit · RBI Para C.10 · Read it in place

At least USD 50,000 of that security money must be kept as a foreign currency deposit.

named by the words Bank Guarantee · RBI Para 3 · Read it in place

A bank may issue a standby letter of credit in place of remitting margin money.

named by the words letter of credit · RBI Para 8 · Read it in place

RBI has seen fake bank guarantees sent in for a check. The named branch had issued none of them.

named by the words Bank Guarantee · RBI Para 29 · Read it in place

A bill discounted under a letter of credit need not turn bad with the rest.

named by the words Letter of Credit · RBI Para 37 · Read it in place

A bank guarantee covers both financial and performance guarantees given for a client.

named by the words bank guarantee · RBI Para 4(1) · Read it in place

Only 50 per cent of a guarantee or letter of credit is counted.

named by the words letter of credit · RBI Para 5(3) · Read it in place

A bill discounted under a letter of credit need not turn bad with the rest.

named by the words Letter of Credit · RBI Para 37 · Read it in place

A bill discounted under another bank's letter of credit counts against that bank.

named by the words letter of credit · RBI Para 13 · Read it in place

The customer buys units at their own risk. The bank promises no return.

named by the words bank guarantee · RBI Para 14 · Read it in place

A bill discounted under a letter of credit need not turn bad with the rest.

named by the words Letter of Credit · RBI Para 46 · Read it in place

Undrawn trade finance obligations carry a stable funding factor of 3 per cent.

named by the words letters of credit · RBI Para 231(4) · Read it in place

A bill discounted under another bank's letter of credit counts against that bank.

named by the words letter of credit · RBI Para 17 · Read it in place

Agent prefunding should taper to about 15 percent for deposits and 30 percent for guarantees.

named by the words Bank Guarantee · RBI Para 73 · Read it in place

A bill discounted under a letter of credit need not turn bad with the rest.

named by the words Letter of Credit · RBI Para 50 · Read it in place

Undrawn trade finance obligations carry a stable funding factor of 3 per cent.

named by the words letters of credit · RBI Para 238(4) · Read it in place

Only residents, and outsiders these rules name, may trade credit derivatives.

named by the words trade credit · RBI Para 3 · Read it in place

No one without authority may reach blank cheques, drafts, deposit receipts or signature cards.

named by the words Letter of Credit · RBI Para 22 · Read it in place

Bank guarantees must be properly worded, recorded in the register and renewed on their due dates.

named by the words bank guarantee · RBI Para 12(4) · Read it in place

No one without authority may reach blank cheques, drafts, deposit receipts or signature cards.

named by the words Letter of Credit · RBI Para 31 · Read it in place

No one without authority may reach blank cheques, drafts, deposit receipts or signature cards.

named by the words Letter of Credit · RBI Para 37 · Read it in place

The importer may offer movable or immovable assets, or a guarantee, as security.

named by the words trade credit · RBI Para 16 · Read it in place