Advance Against Retention Money


Advance Against Retention Money

Advance Against Retention MoneyIn case of some exports, in particular capital goods and project exports, buyer withholds a small part of the invoice value towards guarantee of performance. If this balance amount is payable within one year from the date of shipment of goods/services, banks advance against such retention money at concessional rate of interest. The Maximum period of advance is 90 days. However, if the retention money is payable after a period of one year from the date of shipment of goods, such advances are to be treated as deferred payment advances. In such cases, banks do not extend concessional interest rate. The rate of interest will be as determined by the bank.



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Importance of Bill of Lading

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