Process Flow for Bill Discounting backed by Letter Of Credit (LCBD)

GROUP COMPANY TRANSACTIONS:-

Buyer will open an LC with Seller as beneficiary. (Advised for authenticity by another bank)
Seller will draw a BOE on buyer favouring LC Discounting Cos representative Bank w.r.t.
invoices & LC issued.
Client will submit to LC discounting company the followings :-

Request Letter for LC Discounting
Original LC
Duly accepted BOE
Invoices + LR
Assignment Letter
Other documents as per LC terms and conditions

LC discounting company will forward a set of all the documents to LC Discounting Companys
representative Bank (Including original BOE and Original LC) along-with a request letter to call for
confirmation from the LC issuing bank in their favour.
LC Discounting Cos representative Bank will endorse that BOE in favour of LC issuing bank and
forward the same along-with required set of documents to LC issuing bank.
LC issuing bank will give confirmation to LC Discounting Cos representative Bank (After doing
their procedure for issuing confirmation letter)
On receipt of same, LC Discounting Cos representative Bank will send to LC discounting
company the following :-
o Xerox of LC or Due date confirmation issued by LC issuing bank.
o A letter stating that they have verified the signatures of the person signed on the
confirmation and that they will pay to LC discounting company on receipt of money from
LC issuing bank.
LC discounting company will discount the LC and pay to Group Company / Seller
On due date, LC issuing bank will pay to LC Discounting Cos representative Ban006B and in turn
they will pay to LC discounting company.























Format of Bill of Exchange

On Drawers Letter Head

To
Name & Address of Drawee

BOE No. BOE Date BOE Amount Due Date




At ____ days after the Date/Dt of invoice/Dt of receipt of Material (remove whichever is not
applicable) (inclusive of grace days), pay to Our representative Bank, Our representative
House, 425, Lamington Road, Mumbai - 04 or Order, a sum of Rs __________
(Rupees_____________________) for value received.

This Bill of Exchange has been drawn in connection with the sale of goods to you covered under
the LC No. _______________________ dated _________ issued by
___________________________. Details of the invoices are as under :-


Sr. No. Invoice No. Date Amount




Presentment, Notice of Dishonour & noting & Protest waived by all the parties entitle to the
same.

Rubber Stamp & signature of Drawer


Accepted for payment at Mumbai on due date as per tenure & terms of the bill
Received Goods in order & to our satisfaction and there is no trade dispute in regards to the
materials accepted.


Rubber Stamp & signature of Drawee











(Format of Request Letter from Client to LC discounting company)

Ref. : _________________

Date : _________________

LC discounting company
,
Fort Mumbai

Kind Attn. : Mr.
Buyers Name / Address
LC Opening Bank
LC Nos. / Date
Last Date of Negotiation of LC
LC Amount

Sub : Negotiation of inland sales bills drawn under LC No. ______________________________

Dear Sir,
With reference to the subject matter, we are enclosing herewith the following:-

(1) Original / Certified true copy of invoice & copies of LR as per following details :-
S. No, Invoice No. / Date Amount LR / Challan No. LR Date



TOTAL

(2) Original Bill of Exchange No. ____________ duly accepted by _______________________

(3) Original LC. No _________________ dated __________ for Rs. ______________

(4) Such other documents as mentioned in the LC

We undertake that the transactions covered under this LC are the bonafide trade transactions.

Kindly forward the documents to the LC Issuing Bank at the following address :-

LC Issuing Banks
Name and Address


We request you to please discount the above mentioned bills after receipt of confirmation of
documents and due date from LC issuing bank and credit the proceeds to the CC account of
______________________ (Seller) having CC account no _______________________
maintained with ________________________ and oblige.

Thanking you,
Yours faithfully,

For : Name of the Client

( Authorized Signatory )
Encl : as above


Format of Assignment Letter on Sellers Letterhead


Our representative Bank Ltd
Our representative
Lamington Road
Mumbai - 04


Kind Attn:

Dear Sir,

Sub : B/E no ______________ Amount L/C no :__________________

This has reference to captioned subject and the documents submitted for collections and confirmation on
our behalf.

Please be informed that all the rights/benefits arising out of despatch of goods covered under the LC no.
___ have been irrevocably and unconditionally assigned in favor of LC discounting company, we have
drawn B.O.E. No _______ dated _______ in your favour and we hereby authorize Our representative
Bank to credit the collection proceeds to the account of LC discounting company.



For: M/s ______________________





Authorised signatory