Buyers Credit
Import can be against documents or lc with at sight or usance based payment terms. Same can be availed for maximum period up to 360 days in case of raw material and 3 years in case of capital goods from bill of lading date. The lender can be foreign bank or foreign branches of indian bank, which agrees to lend at libor based interest rate based on letter of undertaking (lou) or letter of comfort (loc) provided by importer's bank. In loc/lou, the importer's bank will undertake to repay the loan on maturity with interest to lending bank.
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