What happens, if Bank not received money from buyer after discounting of export bills?

 

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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. What happens, if Bank not received money from buyer after discounting of export bills copy 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.

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What does ECGC do on default of payment of any overseas buyer?
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Click here to know India Trade Classification(ITC)
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Export procedures and documentation


Comments


Kanu Patel: 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: 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: 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: Dear All, I run my consultancy business about rereleasing payments. If you need such consultancy kindly contact me.

Sam: 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: 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?

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