Indian Bank Overseas Branches / Foreign Bank has to carry out many processes pre and post disbursement of buyers credit. Below are the steps from end to end.
- Receipt of BC Request by Buyers Credit Consultant / Indian bank giving transaction details of import into India & offering Indicative pricing .
- On acceptance of quote, offer letter is issued by generating a reference number (for future tracking) or email sent by Overseas Bank is treated as offer letter.
- Maintaining Buyers credit Offer Letter reference number in excel, both company wise and source wise. This is done for funding planning and to avoid companies or consultants who take offer letters but do not use it.
- Receipt of MT 799 LOU from Indian bank. In most bank’s OFAC sanction check is done during this process on automated basis. Incase transaction is related to OFAC, transaction is moved to point number 6.
- Checking all details in LOU like Currency, Amount, Drawdown date, Rate of Interest, Name & Address of Importer & Exporter, Shipment details (BL number, BL date, vessel name, voyage number, port of loading, port of discharge), description & nature of underlying commodity, nostro details, terms and conditions of LOU etc.
- In case of any discrepancy or OFAC query, send a swift message to Indian Bank for amendment / clarification. In case of no discrepancy move to point no. 7.
- Maintaining drawdown wise details of buyers credit transactions in excel for better control.
- On finding all information in place, all buyers credit loan request information are entered in various fields and Verification of account opening is done in Banking Software.
- Drawdown details of buyers credit loan amount in Banking Software & its verification.
- Effecting payment (MT202) of buyers credit.
- Relaying MT799 (with interest and maturity details) to LOU issuing banks.
- Taking print out of payment copy & MT 799 maturity schedule & enclosing with buyers credit loan document, filing of buyers credit loan documents as per maturity.
- On maturity, reverse buyers credit loan by debiting respective currency nostro account. This process may also be automated.
- On due date Transaction Reconciliation is done with Nostro statement and reminders are sent for non-repaid buyers credit with overdue interest amount.
- Buyers credit loan account is closed using Banking Software.
Note: In general the above process is followed. However the sequence of steps followed might vary as per bank’s internal process.