Trade Finance

Introduction Trade Finance in India comprises of financing against imports into India, export from India and inland trade transactions. While doing this study, it is important to know about the regulations governing such(prenominal) transactions in India. Import and trade trade Is regulated by the board of directors General of foreign Trade (GIFT) under Ministry of Commerce & Industry, Department of Commerce, Government of India. bevels In India, authorized by Reserve affirm of India to deal In Foreign Exchange are known as certain Dealers.Authorized dealers, while job Import and export ramifications, should suss out that the Imports Into India and export from India are In conformity with the Export Import insurance indemnity In force and Foreign Exchange Management (Current Account Transactions) Rules, 2000 framed by Government and the directions Issued by Reserve Bank under Foreign Exchange Management Act from time to time. Banks also nonplus to follow assign policy anno unced by Reserve Bank of India from time to time to ensure compliance while dealing with financing of Inland Trade transactions.Authorized dealers have to follow normal banking procedures and vex to the provisions of various rules framed by International Chamber of Commerce, Paris and onshore credit policy of the country. Banks in India use the following trade products to meet financing requirements of the clients Imports 1 . Opening of Letter of recognise and act on up Financing 2. Buyers Credit / Suppers Credit in the form of short term credit for Imports into India 3. Trust Receipt Financing 4.Simple Overdraft Facility 5. emergence of some of the guarantees to comfort imports related activities Exports 1. Pre-shipment Credit in Indian Rupees 2. Pre-shipment Credit in Foreign Currency 3. Post-shipment Credit in Indian Rupees 4. Post-shipment Credit in Foreign Currency . Forfeiting of Export Receivables 6. Factoring of Export Receivables 7. Simple Overdraft Facility 8. Issuance of some of the guarantees to aid Export related activities Inland Trade 1. topical anaesthetic Bill Discounting backed by Bill of Exchange 2. Local Bill Discounting backed by Letter of Credit 3. Simple Overdraft Facility 4. Issuance of some of the guarantees to facilitate Inland Trade actively Trade Finance By onshore is regulated by the Directorate General of Foreign Trade (GIFT) under Ministry of Commerce & Industry, Department of Commerce, Government of India. Banks in India, authorized by Reserve Bank of India to deal in Foreign Exchange are known as Authorized Dealers.Authorized dealers, while undertaking import and export transactions, should ensure that the imports into India and export from India are in conformity with the Export Import Policy in force and Foreign Exchange Management issued by Reserve Bank under Foreign Exchange Management Act from time to time. 1. Opening of Letter of Credit and Follow up Financing 2. Buyers Credit / Suppers Credit in the form of short te rm credit for Imports into 4. Issuance of some of the guarantees to facilitate Inland Trade activities