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Here, Tradeindia's members can exchange ideas and ask for help on trade-related issues. To participate, you must be a member of Tradeindia.com. We have assigned moderators to facilitate these discussions. |
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Posted on 30th April 2009 at 19:39:00 |
Mr. Chidambaram Vasu Devan
ARLYN EXPORTS & IMPORTS
Karur, India
Free Member
Joined :10/27/2007
No of Topics Posted : 3
Reply/Comments : 3
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TOPIC : Problem in letter of credit (L/C)
Even though letter of credit (L/C) is given, as a manufacturer we produced the material at the time of delivery. But the buyer is canceling the order. How to manage this? If at all the order is executed then only the exporter can claim from ECGC, right? Let me know if there is any way out.
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Posted on 6th May 2009 at 08:39:00 [Message #2103
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Mr. Kumaravel
Proprietor
JEE EXPORTS
Vellore, India
Paid Member
Joined :12/30/2008
No of Topics Posted : 1
Reply/Comments : 2
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Re: Problem in letter of credit (L/C)
Hello Sir, in the matter of L/C there are many types. If you have Irrevocable Conformed Letter of Credit, the buyer can not change it. You demand from your buyers pls send me Irrevocable Conformed L/C only. Thanking you.
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Posted on 6th May 2009 at 09:36:00 [Message #2104
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Mr. Abdul Wahab N.
C.E.O.
Amalgamated Overseas Services
Chennai, India
Free Member
Joined :05/15/2002
No of Topics Posted : 0
Reply/Comments : 3
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Re: Problem in letter of credit (L/C)
Normally, L/Cs are required to be Irrevocable. That is, once it is opened in favor of seller, it CANNOT be revoked before its expiry. If the L/C which you received was a Revocable one, then the buyer CAN cancel or revoke it, anytime. This type of L/C is dangerous for the seller.
In your case you had produced the specific goods,as required by the buyer within the delivery period and if this Revocable L/C is revoked by the buyer, then you have no safety net. You lose !
It is ALWAYS advisable for the new exporter to sit down with his bankers and discuss the L/C THOROUGHLY with them, so that he understand it COMPLETELY. His Bank will guide him correctly, after all, they also have their money tied up with this transaction !
To get the bank's advise will help the exporter in two ways, at least. One, he knows exactly what needs to be done to complete that order. Second, the bank also monitors his business dealing and will be a better position to strengthen his financial growth and give him the maximum support to enhance his business ! They will guide him away from the pitfalls which may be present in many forms.
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Posted on 6th May 2009 at 11:20:00 [Message #2105
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mr. Sanjay Anand
proprietor
ANAND G. IMPEX
Noida, India
Free Member
Joined :05/08/2005
No of Topics Posted : 0
Reply/Comments : 1
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Re: Problem in letter of credit (L/C)
Mr. Vasu , We also need to be aware of such persons who open L/C with multiple clauses , which even if we try our best are unable to fulfill all the conditions. Then till the time goods are in production the Buyer will make all kinds of promises of waiving discrepancies and once goods are shipped they very conveniently decline the documents . I am myself suffering with this as a manufacturer Exporter and the Buyer owes me 60,000GBP and has raised false quality debit notes of same amount against goods shipped to this Buyer about 6 months to a year earlier. So L/C is also just a piece of paper made mockery of by these kind of Cheaters. Finally i had no option but to take up this matter with our Economic Offences Cell who are helping me through this , it is more than a year now. The concerned Buyer is Indian settled overseas .
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Posted on 6th May 2009 at 12:42:00 [Message #2106
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Antony Senny
Cedar
Croydon, United Kingdom
Free Member
Joined :09/03/2008
No of Topics Posted : 0
Reply/Comments : 1
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Re: Problem in letter of credit (L/C)
If you are in receipt of a confirmed Irrevocable L/C then the order can not be arbitrarily canceled without your consent and cooperation. Contact your own Bankers for advice.
Antony ( UK)
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Posted on 6th May 2009 at 15:49:00 [Message #2108
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Mr. Narshimha
Manager marketing & project
SANTEK EQUIPMENTS PVT. LTD.
Pune, India
Paid Member
Joined :04/06/2009
No of Topics Posted : 0
Reply/Comments : 1
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Re: Problem in letter of credit (L/C)
Ask your client to open irrevocable L/C
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Posted on 7th May 2009 at 14:26:00 [Message #2109
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Mr. VIneet Dewan
Proprietor
SIRALA EXPORTS
Hyderabad, India
Free Member
Joined :06/12/2002
No of Topics Posted : 0
Reply/Comments : 5
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Re: Problem in letter of credit (L/C)
Dear Mr. CVD,
In the future take only confirmed letter of credit with the confirming bank in your town/city and get the documents made exactly as per the L/C. Since all L/Cs are irrevocable, your buyer will have no choice but to take the goods if you ship them within the time frame of the L/C and present documents exactly as per the L/C. The confirming bank in India will check your documents and pay you the money if they are in order and debit the account of the opening bank. Your buyer will have no choice but to take the goods.
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Ms. Sindy Shuai
sale manager
Hongming Machinery Co., Ltd.
Dongguan, China
Free Member
Joined :03/18/2008
No of Topics Posted : 0
Reply/Comments : 6
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Re: Re: Problem in letter of credit (L/C)
As one supplier,there exist big unsafely to do L/C. During the Financial Crisis, many big bank to go bankrupt. Now all L/C is Irrevocable, but still have some problems.
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