What happens, if Bank not received money from buyer after discounting of export bills? Posted on 01 June 2022 Category : Export The information provided here is part of Import Export Training course online What happens, if buyer does not pay export bill? If overseas buyer not paid your sale value of goods you exported, how can you claim such amount? Ok, you would have received amount from your bank this amount as pre-shipment or post shipment finance against such export consignment. However, if bank does not receives such amount, obviously bank debits back to your account. Here, you have received your loan amount against your export bills from bank. However, bank gets amount only as per your contract with buyer – say 60 days from shipment date. What happens, if your buyer did not pay amount on time. Remember, you are discounting bills against the amount you need to receive from buyer after 60 days. So bank charges you a nominal interest rate for 60 days or till receiving money from your overseas buyer. If amount not paid by your buyer, your bank debits back the amount which you had received from bank. Bank also takes insurance with Export Credit Guarantee Corporation against you for an amount of the said export discounting bills. So if bank does not receive amount from overseas buyer, bank claims insurance from ECGC. Bank covers Insurance from ECGC against whom - against default of payment by overseas Buyer or against default of payment by you? Since bank pays amount to you as an exporter, bank covers insurance on default of payment against you and not against overseas buyer. If you have not been approved by ECGC and if no ECGC insurance cover is available, the discounted amount with the applicable rate of interest will be debited to exporter’s account on default of payment by overseas buyer. I hope, I could explain about default of payment by overseas buyer in exports and imports trade with its connection to finance already availed by bank against such consignment. Would you like to add more information about this subject about non payment of export invoice value by overseas buyer and its impact to exporter after receiving finance from bank against such exported bills? Share below your experience and thoughts about the non payment of export bills by overseas buyer and its consequences to exporter who availed loan against the said export bills. The above information is a part of Online Training Course on howtoexportimport Have you satisfied with this article about nonpayment of invoice value of goods by overseas importer/buyer? Comment below your thoughts about this subject - What happens, if buyer not pays export bill? Other information about Export importt tutorial Formalities for Export bills discounting What is bill discounting in exports Is Letter of Credit LC safe for an Importer? Disadvantages of Letter of credit (LC) for Exporter What does ECGC do on default of payment of any overseas buyer? When does overseas buyer prepare Purchase order or Letter of Credit. The legal strength of Bill of Exchange in International Trade. What is Bill of Exchange in International Trade Excise and Customs - Click here to read complete notification under Budget 2014 How to get Export Orders? How to settle dispute in Exports and Imports? Click here to know India Trade Classification(ITC) Pre shipment bank finance to suppliers for exports through other agencies Types of export containers Measurement of export containers Export Import Policy of India 2015-2020 MEIS, Merchandise Exports from India Scheme SEIS, Service Exports from India Scheme Merge your Commercial Invoice and Packing List for all your future exports Export procedures and documentation Comments Kanu Patel: On 14 May 2015 Dear Sir, we had exported our products to Algeria Buyer- and Payment Terms- 60/90 days from B/l date, we have rutted original documents through our bank to buyer bank, buyer had released cargo but after the payments due date till date -Payment not received by our bank. Now what wqe can do in this case- Kindly give us properly guideline so we can take action. Dinesh Mishra: On 24 April 2016 Sir, if in case of export buyer default in payment and will make settlement with bank on personal assets and meanwhile bank also claim with ECGC so name stand in SAAL so in that case what will we do to remove our name from SAAL list. also noted that after long period all money also came but not in other bank. TAPAN BANERJEE: On 07 November 2016 would like to inform you that overseas Buyer made payment of sale value which we exported in 'INR' instead of dollar and Bank issued 'FIRC' in INR In that case how to release 'GR' Please assist Md. Azad Kabir Khan: On 12 June 2017 Dear All, I run my consultancy business about rereleasing payments. If you need such consultancy kindly contact me. Sam: On 17 December 2017 We made shipment on DA90days with ecgc cover.The buyer fail to make payment on due date.ecgc not paid insurance cover to us due various reasons given by ecgc.where as the bank received claim from ecgc and kept in suspense account and not adjusted towards our bill discounted liability Please advice on two things. 1.ecgc claim rejected from brach level and also from General Manager. What is the next steps to claim from ecgc. 2.what is the rules says if bank not adjusting the claim received from ecgc. NEW STAR EXPORTS & IMPORTS: On 21 September 2018 Sir, I exported vegetables worth $7425/- on 30.12.2014 but till now i do not get entire amount. Then how to get get BRC from bank ? Sir please guide me? Bhupinder: On 01 March 2019 Sir. In local LC bank discount LC after four days.The buyer paid amount after 65 days of receipt of good.who will pay the interest of 61 days .buyer or seller .LC condition was 90 days. MOORTHY: On 09 March 2019 Dear Sir, We are Star trading Exports house for 20 years, last 2016 there was an export bill which was defaulted by the overseas client and there is an ECGC claim for Rs. 2cr. In the meantime Bank had received Rs. 1.92 cr from ECGC towards the EPC account for which we had secured under SCR policy for Rs. 6.00 cr. Now there is a claim pending with ECGC for 2cr from Exporters side and Bank has already received 1.92cr from ECGC, Account is NPA and at the time of OTS settlement, we asked the bank to adjust the amount received from ECGC 1.92cr, but bank says it has to be repaid under RECOURSE to ECGC. there is a judgement, WHEN A CLAIM IS PENDING WITH ECGC BANK CAN ADJUST THE AMOUNT SO RECEIVED FROM ECGC as this does not fall under RECOURSE, can you share this sir, as my OTS with bankers is pending because of this. Mohamed: On 22 July 2020 I am straggling to get payment for the rice i have exported to a foreign country. How i have to move legally to get it Ranjeet singh: On 30 July 2020 Wt we can do if our exporter is not providing the proper quantity of goods two times in a row Yogesh Rana: On 13 August 2020 Sir, Can we adjust the payment received from another importer with different importer.... Krishnan : On 30 November 2020 Export of cumin seeds was done in july 2017 from india to dubai and the buyer did not pay for the export till date. A small token amount was only paid. No action is taken regarding the same. People cheated us , lost almost 60 lakhs in the business. Now suffering for a livelihood as jard earned money lost on investment in business, Asfar Shahzad: On 26 January 2022 Sir i have sent rugs to a U.S buyer on 60 days D.A by bank but he has not paid me till now. Vishal Puri: On 15 March 2022 What happened if overseas buyers not pay any export of goods under LUT. In GST Audit shashi: On 24 November 2022 Hi, Buyer is not showing interest to take their shipment after order and neither they are paying which have decided 80% before shipment and rest 20% after checking the goods so what should we do now becasue complete goods are ready with us .