When does Bank use IncoTerms ?

Banks and Inco Terms of Delivery

Inco terms are directly connected with the Buyer and the Seller related to movement of goods.  The delivery rules  explains about the responsibility of buyer and seller on bearing risks and  costs shared at each point of movement of goods from once place to another.

Banks are mainly related to regulating money thereby inco terms also is used by bank when money involves between buyer and seller.  As you are aware, banks also plays a major role in import export trade in financing exporters and importers other than the regulatory norms for foreign inward remittance and foreign outward remittance.   Since inco terms are used by buyers and  sellers globally, banks require the details of payment to be receivable to the country and payable from the country.  As a regulatory measures, inco terms plays one of the roles to assess the inward and outward remittance.  Inco terms are  under sale contract between buyer and seller also plays one of the roles for allotting pre shipment and post shipment finance to exporters and importers.

In short, Inco terms play one of the role for Banks when payment involved under Business.

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Click here to read latest Inco terms rules for delivery of goods  

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