Advance Against Undrawn Balances under Export

 

Advance Against Undrawn Balances

 

Advance Against Undrawn Balances under ExportSometimes, the exporter does not draw the bill for the full value of the invoice as per custom of trade in that particular line of business. A part of the invoice value is not drawn due to difference in weight, quality and other factors, not fully settled between the exporter and importer. Buyer settles the final price only after inspection and approval of the goods. Bank advances against the undrawn balance to facilitate the exporter. The undrawn balance cannot be more than 5% of the total invoice value. The exporter has to give undertaking to realise and surrender the balance amount too within the prescribed period of 180 days from the date of shipment of goods.

 

 

 

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