Supplier's Credit

Connecting Businesses with Investors

Exporter (Supplier) - Details

Other Details

Supplier's Credit

Supplier's credit is a facility of arranging funds for importers using LC. This credit facility is extended to importers for imports into India by Foregin Bank or Indian Bank branched in overseas based on LC issued by importer's Indian bank.Letter of Credit issued by Indian Banks under Usance bills on behalf of their importers are discounted by Indian bank branches situated overseas or Foreign Banks.

How it Works

  • Before opening LC importer share basic details of trade with to get quote for Supplier credit .
  • identifies best bank with lowest quotes from foreign banks and from Indian banks overseas branches to client acceptance.
  • Upon acceptance of rate by Client, notifies specific clauses to be incorporated in the LC.
  • Importer request their LC opening bank to issues LC .
  • LC issuing bank opens and transmits the LC via SFMS to off shore bank (arranged by which in turn sends LC to beneficiary (i.e Exporter) bank via SFMS.
  • Exporter ships the goods to the client on intimation that the LC has been received by their bank.
  • Exporter lodges the documents evidencing shipment of goods and all documents required as mentioned in LC to their bank which forwards them to LC issuing bank via Off shore bank.
  • Payment is made to the exporter by disbursing supplier's credit once acceptance from LC issuing bank is received.
  • On due date, principal plus interest recovered from client remitted by LC issuing bank to offshore bank.


  • Can Supplier's credit be availed if I do not have a credit facility with any bank?

  • What is the Process flow?

  • What are the costs involved?

  • What are the documents required to avail Supplier's Credit?

  • What are the Regulatory frameworks in this?

  • I need import funding for Capital goods, what options are available to me?

  • I am an importer of Fasteners, I need LC, my supplier is ready to ship on LC. What should I do now?

  • Can Supplier's Credit be availed only under an LC?

  • What's deferred payment and how does it differ from a usance Letter of Credit?

  • We are interested in financing our import of Machinery & Raw material?

  • We are a private limited company looking for back to back letter of credit?

  • We have exports of soyabean from Benin, Africa to India. LC is of State bank of India. Can we get funding for the same in Benin?

  • I am doing import business, I have Non- fund based bank limit. My supplier wants to get full payment before loading of goods, however my bank provides credit only on presentation of BL copy. What are my options?

  • What is the minimum number of days for which Supplier's Credit can be availed?

  • Can Supplier's Credit facility be availed for a new business?

  • In which SWIFT format is the LC issued?

  • Is it important to get the LC advised through funding bank?

  • What if my LC is issued and funding bank has no RMA arrangement with the beneficiary bank?

  • My LC is going to expire soon & documents have not been lodged by the beneficiary with his bank?

  • Beneficiary's bank has sent the documents directly to the issuing bank without forwarding it to the funding bank, what will happen now?

  • Beneficiary's bank has couriered the documents, but issuing bank has not received the documents till now?

  • How much time will it take to arrange Supplier's Credit if the LC is going to be issued soon?

  • What if I do not pay to the Funding bank on date of maturity?

  • When should the acceptance of the payment be sent to the funding bank by the Issuing bank?

  • Is it necessary to send the acceptance to funding bank?

  • Can I avail payment of partial shipments through Supplier's Credit route under LC?

  • Can I avail payment of transhipment through Supplier's Credit route under LC?

  • Can I avail Supplier's Credit in case the LC has been issued?

  • I don't have an LC. Can I still avail Supplier's Credit facility?

  • Can I avail Supplier's Credit in case supplier (exporter) is residing in US / UN sanctioned countries?

  • Can I avail Supplier's Credit for Local Bill discounting?

  • My supplier is not agreeing on the usance clauses of the LC. What to do now?

  • What is maximum amount for which a LC can be opened?

  • What is the maximum interest rate a bank can charge for discounting a LC?

  • Can I avail suppliers credit through foreign banks like Standard Chartered, J P Morgan, etc.?

  • Is Supplier's credit more expensive than INR borrowing?

  • What is the minimum amount of availing Supplier's Credit?

  • How will I get the payment confirmation of the funds which are remitted to the beneficiary by the funding bank?

  • What are the benefits of supplier's credit to importers and Exporters

  • What are the regulatory frameworks in Supplier's Credit?

  • Can we take Supplier's Credit for services?

  • What are overseas banks? How are these banks different from Indian banks?

  • When can the bank give guarantee on behalf of the importer?

  • Any bank can give guarantee or should the importer have an account with the bank?

  • What type of account importer needs to get bank's guarantee?

  • How are importer's bank and exporter's bank different from an overseas bank?

  • What is with-holding tax (WHT)? When is it imposed?

  • Your minimum Service charge seems to be high for lower amount transactions.

  • If a currency rate changes, what will be its impact on rate of interest of Supplier's Credit?

  • If my bank is giving me best quotes so why should we try you?

  • If my funding is not done on the value date, what charges will I have to pay to bank?

  • Why not use Cash Credit / Direct Payment to make payment to exporters?

  • In order to take the benefit of cheaper financing can I import anything which may not be my core business?

  • Why can my bank not finance my import liability locally which will save lots of time?

  • How do you provide a cheaper interest rate than banks?

  • My LC is opened under supplier's credit route for a period of 180 days in which 120 days of credit is provided by the exporter. The exporter discounts the LC at sight by this bank. Now I want to change field 41c (Available with) in the LC in which funding bank name is incorporated. Is it possible to get the LC discounted by the exporter at sight by his bank & after 120 days by the funding bank so that I can get full 180 days of credit?

  • Recently RBI issued some guidelines on Trade Credit for operators in Special Economic Zone (SEZ), is it true that Supplier's Credit be now be availed for purchases of a company operating inside a SEZ?

  • Using a Letter of Credit, what is the procedure for availing credit in foreign currency for purchases within same Special Economic Zone (SEZ)?

  • What is the difference between borrowing in INR v/s borrowing in foreign currency (FCY)?

  • Can I avail trade credit in FCY if I don't want to open an LC?