DIFFERENT TYPE OF PROCESS FLOW

IMPORT PROCESS FLOW

 The process starts when the importer places an order to exporter

 After all the product is ready shipping is done, all the shipping documents are transferred,
they also carry bill of lading for further documentation

 Before the shipping arrives the importer hires the CHA , surveyor and tank after this CHA
clear all the custom shipping and port charges for the shipping consignment that will arrive

 After this ship first passes the NOA and then it comes to jetty provided there is NOR received
from the agent

 Customs also check all the documents and valuation after this they give the bill of entry to
them

 Surveyor then comes into picture by taking the cargo from port to the tank

 After all the payments are fully made and documents are transferred than through haulage by
taking cargo to exporters place and returning the empty cargo

 Payment are usually done on different basis as discussed earlier . after clearance and
agreement by banks.

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INCOTERMS
• Free on Board - when the transaction takes place it is being assumed the cost of goods will
be handled by the exporter or seller and import will be entitled to take the delivery from
loading point (Loading Port) and the risk of loss and damages is accounted by importers.

• CRF – cost and freight is a type of incoterm in which when the ship leaves the port from that
time all the risk is transferred to the buyer or the importer and the freight charges are paid by
exporter but It is included in the cost that is charged to importer, the insurance is borne by
importer and insurance claim on any damages should be claimed locally. the disadvantage
here is that things on the port and after that will be in control of the exporter and risk in
importer hands.

• CIF – other than cost and freight insurance is also to be borne by the importer from the port
of origin and all the other formalities remains the same as in CRF but the insurance can only
be claimed at exporters country and not locally and through this the charges on buyer
increases as insurance is a compulsion and cannot be avoided in this case.

TYPES OF PAYMENTS
• Advance payment – In this payment is made in advance to the exporter by the importer
before the stock is delivered and flow of documents is direct from exporter to importer and
bank takes no risk or is liable of any sorts.

• Documents against payments – in this payment is made as soon as the documents are
presented in bank and the flow of documents and payment goes through the nostro account
and the banks

• Documents against acceptance – in this document are released against the acceptance of
bill of exchange, payment to be made as per credit terms not later than 180 days from the
date of shipping(bill of lading) and flow of payment and document are similar as in DP

• Letter of credit at sight - in this at the time of document presentation the payment must be
at that time itself and the flow remains the same as DP but the banks are liable in this case to
make the payment at that time and completion of transaction

• Letter of credit at usance – in this payment type, documents are released on acceptance of
bill of exchange and confirmation of payment on due date as per credit terms. The flow for all
documents and payments remains as of DA but banks remains liable to make payment on due
date.

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 RISK IMPORTER EXPORTER

Advance High low

payment
DP Low low
DA Low High
LC at sight low low
LC usance low low

PLEDGE FUNDING FLOW

 Business team approaches the client and get into agreement with them by fulfilling their
requirements and seeking all the documents needed for KYC and other related process.
 Compliance team makes the background check on different parameters and check the CIBIL,
litigations, background of directors etc. duration allowed here is 2 months
 Credit and risk team check all the financials of the firm as well as major shareholders also
they consider many other environmental factors in taking decision. Duration allowed here is 6
months
 Accounts and finance sets the limits for the company and also check the documents related to
financing
 SR is then issued by the field team when goods are received in the warehouse and PCR issued
to field team for the same goods.
 Field team calls for quality check to get the real value of the commodity for further financing
 Client gets the amount against the commodity after the margin money is being deposited by
them which is usually 30%.
 Operations department makes debit notes which shows the amount of interest that will be
received to the accounts department
 After the tenure the client pays the amount with all the charges and interest to get the
commodity released and transaction gets completed.

AGENCY FUNDING PROCESS FLOW

 Agency financing involves client , client suppliers and our company which acts as a source of
finance for the client to procure the commodity
 Documents involved are agency agreement , agent confirmation , principal insurance
 The process begins with the KYC of the client that is done by business team and the
background check by compliance
 Credit team checks the financials of all the related parties to avoid defaults
 Supplier passes the sauda confirmation with purchase order to the COT team

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 COT team also maintains all the basic details about the client and supplier with how the
transaction is held
 The receipts that is generated for the purchase should be transferred in the name of Edelweiss
and amount is paid for the same to the supplier
 A loan is raised in the name of the client in books of edelweiss for the same amount along
with interest that is needed to be paid
 When there is a sale the COT team issues the receipt for the sale on behalf of the client and
send the same copy to the buyer as well
 The client pays the loan with all the charges and differences in charges to complete the
transaction.

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