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An import Loan is a short-term cash advance (with recourse) that enables the customer as an importer to meet the customer‟s immediate payment obligations under a sight or usance Letter of Credit presentation or Import Documentary Collection. Under such arrangements, Standard Chartered Bank finances the customer‟s import commitments by making payment against the Letter of Credit or Documentary Collection and receives payment from the customer at a pre-determined date in the future. Here, the credit period between the time that the bank provides finance and the time the customer repays the bank, should be sufficient for the customer to either manufacture goods for final sale or for direct sale to end buyers.

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  • This will allow the customers more financial resources to clear goods from the port and manufacture, store or arrange for final sale to the end buyer
  • The supplier is independent of the process of raising finance. They need not sign any documentation, but receive payment as per the original contract terms through the Letter of Credit or Bill for Collection
  • As the customer is able to reimburse the suppliers on a sight basis or when the tenor is due, this will increase the bargaining power of the customer – typically in terms of the contract price.

  • A credit limit sanctioned for Import Loan
  • Request for financing should be made in the Bank’s standard form, and duly signed by authorized signatories of the customer‟s company as per the Bank’s records.
  • The Letter of Credit should call for a complete set of original bills of lading that are consigned “to order” and blank endorsed or consigned to the order of Standard Chartered Bank. These bills of lading and other essential trade documents will be released to the customer upon receipt of the duly signed trust receipt form.
  • The underlying goods with which Standard Chartered Bank is financing must be suitable (i.e., Standard Chartered Bank reserves the right to reject financing of fashionable goods, perishable goods or price volatile goods).
  • The financing period that is accorded to the customer must be matched to the customer‟s cash conversion cycle, which typically would be about 90 days or less but in any case should not exceed 180 days.
  • Financing should normally be in the same currency as the proceeds paid under the Letter of Credit or Bill for Collection. However for clients who are in the Domestic Banking Unit (DBU) the financing will be in the local currency, unless they are entitled to borrow in foreign currency.
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