11 December 2009
Revolving Letter of Credit is used when the delivery of goods is in form of partial/ multiple shipments. Revolving Letter of Credit keeps on revolving and is not restricted to a single transaction. Revolving Letter of Credit (LC) can be utilized for subsequent business transactions over a period of time on a continuous basis to the extent of limit sanctioned.
The seller/buyer does not have to go to the bank for sanction of fresh limits every time he gets a new order for executing the same.
11 December 2009
The following are the sequence of steps taken by the banks on receipt of completed application forms.
Application form is accepted and acknowledged. Personal interview /discussions is held with the customers by the bank’s officials. Bank's Field Investigation team visits the business place/work place of the applicant. (All the documents submitted are verified by the bank with the originals so as to ensure the authenticity of the same.) Bank verifies the track record of the applicant with the common information sharing bureau (CIBIL). In case of fresh projects the bank analyses the back ground of the applicant/firm/company and the Technical feasibility/financial viability of the project based on various parameters and also the existing market conditions. Depending on the size of the project the file is put up for sanction to the appropriate level of authority. SANCTION AND DISBURSEMENT :
On approval/sanction, the sanction letter, is issued specifying the terms and conditions for the disbursement of the loan. The acceptance to the terms of sanction is taken From the Applicant. The processing charges as specified by the bank have to be paid to proceed further with the disbursement procedure. The documentation procedure takes place viz.Legal opinion of various property documents and also the valuation reports.(Original Documents to title of the immovable assets are to be submitted) All the necessary documents as specified by the legal dept., according to the terms of sanction of the loan of the bank are executed. Disbursement of the loan takes place after the Legal Dept. Certifies the Correctness of execution documents.
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