Buyers credit (Business Law)

This query is : Resolved

Author : pooja dedhia

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Posted On 11 June 2012 at 00:22

what is the buyer's credit to importer ?
how is it benefit to importer?
what importer has to take care?
how this facility sanction to the importer?

Expert : R.K Nanda

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Posted On 11 June 2012 at 10:51

Academic query.

Expert : malipeddi jaggarao

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Posted On 11 June 2012 at 17:23

If the importer is not in a position to meet the commitment under Letter of Credit opened by him on the due date and if he expects the improvement in funds position he can avail the buyer's credit in foreign currency to meet the LC Liability. Buyer's credit in India can be availed initially for 180 days later can be extended to 360 days. If the importer has regular limits with the Bank like cash credit/LC facilities, he can as well represent his own bank to arrange for buyer's credit to meet his LC commitment on due date. They will arrange either from their own bank abroad or there are many players in the market who can arrange the same at a phone call. The interest is to be paid in foreign currency along with the principal on due date.