ForeWord

Volume 1

Volume 2

Volume 3

Volume 4

Volume 5

Volume 6

Foreign Exchange Operation - Volume 3 CH !"E# 6 Foreign Exchange Operation$ %&!O#"' 1(Import trade is regulated by the Office of the Director General of Foreign Trade and its Regional Offices functioning under the Ministry of Commerce, Government of India The !"change Control aspects relating to the imports are set out in R#I Master circulars issued from time to time 1(1($hile handling import business, #ranches perform functions such as establishment of letters of credit, handling of import documents received under letters of credit%collection basis, ma&ing remittances to'ards payment of import bills and other connected purposes, end use verification etc 1(2(#ranches handling import transactions should ensure compliance of( )a*the provisions of the current !"port)Import *olicy, as may be amended by the Government of India through the issue of public notices from time to time )+*the provisions of R#I Master circulars issued from time to time the current F!D+I guidelines )c*I,COT!RM- ./0/ 1 also available in our F!D Online2 1F3 *ermanent 0/4 dated .5 0. ./0/2 )d*the provisions of 6niform Customs and *ractice for Documentary Credits 1.//7 Revision2 ICC *ublication ,o 8// 1hereinafter referred to as 96C*DC:2 ; in respect of Documentary Credit transactions, I-#* 1ICC 8502 )e*the provisions of the 6niform Rules for Collection, ICC *ublication ,o 4.. ; in respect of non)<C collections ),*the current directives of various departments of R#I and )g*the procedural guidelines contained in various circulars issued by Treasury 1Foreign2 Department, Credit -upport -ervices Department and other departments of Central Office in regard to handling of import transactions 1(3(#ranches handling import transactions should ensure that the importer)customer for 'hom an <C is to be established or a remittance 1to'ards import2 to be made has a valid Importer)!"porter Code ,umber allocated by the Director General of Foreign Trade or its Offices and the item of import for

'hich the <C is to be established or the remittance is to be made is allo'ed to be imported into India as per the current !"port Import *olicy In respect of import of items not covered by the ,egative <ist in the current !3IM policy, branches can establish <Cs and arrange remittances 'ithout the need for specific import licence 1(4($herever branches are not satisfied 'ith the information furnished by the importer regarding compliance of conditions of import specified in the import licence%*olicy #oo& and need further clarification, importers should be advised to produce the re=uired information%clarification from the Regional <icensing +uthorities 1(5(#ranches establishing <Cs or arranging remittance to'ards imports should ensure compliance of the *ermitted Methods of *ayment prescribed in R#I +* DIR Circulars > Master circulars issued from time to time *ayments in respect of imports must be made in a currency appropriate to the country of shipment of goods 2(%mport -icence$ 2(1(#ranches should not open letters of credit or allo' remittances for the import of goods included in the negative list unless the importer submits a licence mar&ed 9For !"change Control *urposes: -pecial conditions if any, attached to the licence should be adhered to 'hile opening letters of credit or ma&ing remittances 2(1(1(#ranches should verify the genuineness of the import licence tendered by the importers by reference to special features li&e security paper, 'ater mar& and security seal of the licence issuing office 2(2(#ranches may open letters of credit or ma&e remittances 'here the !"change Control copy of the relative import licence has been issued in the name of a party other than the applicant provided the applicant produces a letter of authority obtained from the import licence holder in his favour authorising him, inter alia, to open letters of credit or ma&e remittances in payment to'ards import under the licence 2(3(#ranches establishing letters of credit as 'ell as handling import bills received for collection covered by import licence should ensure that c i f value of goods and the commission, if any, payable to the local%foreign agents do not e"ceed the face value of import licence 2(4(#ranches should note to endorse on the !C copies of the import <icences under their stamp and

signature the details of letters of credit opened or for'ard contracts boo&ed or remittances made in foreign currency as also the amount of insurance, freight and commission paid by the importer locally in rupees 2(4(1(#ranches should endorse the value of the bac& to bac& inland letters of credit opened by them on behalf of duty free licence holders 1including transferees2 2(5( #ranches may return !C copies of import <icences to their importer customers 1after endorsement2 if they have been partially utilised and further remittances are to be made through another ban& The !C copies of import <icences should be preserved by +D branch for inspection by internal%R#I Inspectors after they have been fully utilised %mport$ through po$t. 3( #ranches may allo' remittances against bills received for collection in respect of imports by post parcel provided the goods imported are normally despatched by post parcel In these cases, the relative parcel receipts must be produced as evidence of despatch through post Importers should also submit post parcel 'rappers 'ithin three months from the date of remittance If the parcel has already been received in India, the parcel 'rapper should be produced in support of remittance application $here goods are imported by post parcel and 'here the branch is not satisfied about the bonafides of the application, the case should be referred to R#I for prior approval 'ith full particulars together 'ith relative parcel receipts 1or 'rappers2 3(1( #ranches may allo' remittance to'ards boo&s, samples etc through post parcel, on production of original invoice by the importer 'ithout insisting on submission of parcel receipt % postal 'rappers provided the import is made in accordance 'ith the current !3IM policy and a declaration is furnished by the applicant that the goods have been imported through post parcel 3(2( #ranches may allo' remittances to'ards import of boo&s by post parcel by boo& sellers%publishers against bills received for collection, irrespective of the amounts involved 'ithout prior approval of R#I against endorsement on the import licence 'here applicable in the normal course #ranches may allo' remittances even if import <icences have been issued subse=uent to the date of import sub?ect to endorsement on such <icences %mport$ through Courier. 3(2(1#ranches should refer to the instructions contained in R#I Master circulars issued from time to time regarding imports through courier and be guided accordingly

4(#ranches should maintain a <icence Movement Register 'herein particulars of all import <icences received by them 1for all <C%,on)<c%+dvance remittances2 should be recorded -uitable entries should be made in the register, 'henever any licence is returned to the importer)customer or surrendered to R#I $henever any licence is handed bac& to the customer, his ac&no'ledgment for having received the licence should be obtained in the <icence Movement Register 5(#ranches should issue freight certificates in form FRC1I2, and%or insurance certificates in form I,C only on specific re=uest from the importer customer and after mar&ing off the freight and or insurance amount%s on the !"change Control copy of import licence 1if the import is sub?ect to a specific import licence2 6( For the purposes of retirement of import bills 'hether under <C or not under <C, branches should apply the bills selling rate ruling on the date of retirement or the for'ard sale contract rate, as the case may be In this connection, attention of branches is invited to F!D+I guidelines in Rule no @ of F!D+I Rules boo&let 1latest revision2 and to relevant paras on 9Rates of !"change and Reporting -ystems: inchapter 0 of this volume of #oo& of Instructions /( #ranches should follo' the guidelines contained in R#I Master circulars issued from time to time regarding remittance of interest on import bills under <C or not under <C 5 Remittance to'ards Import of Technology ) Report u%s A1.2 of R>D Cess Rules +ttention of branches is invited to -ection + 1iii2 of Reserve #an& of India:s 1R#I2 Master Circular on Imports of Goods and -ervices 'herein it is mentioned that Compliance 'ith the provisions of Research > Development Cess +ct, 0B58 has to be ensured for import of dra'ings and designs Technology Development #oard is the +dministrative +uthority of R>D Cess matter under the Research > Development Cess +ct, 0B58 . . +s per Rule A1.2 of the R>D Cess Rules, 0BB8 every industrial concern shall on or before ma&ing any payment to'ards the import of technology, furnish to the +uthorised Dealer through 'hom such payment is made, the counter foil of the Challan Form TR C 8 evidencing the payment of Cess payable under the +ct Therefore #ranches are advised to call for counter foil of the form evidencing the payment of Cess payable under the +ct before ma&ing payment to'ards Import of Technology In case if the customer fails to produce the said counterfoil form, the remittance need not be refused but has to report such transactions to Technology Development #oard at the address given belo' 'ithin a period of @/ days Technology Development #oard $ing +, Ground Floor, Dish'a&arma #ha'an -haheed Eeet -ingh Marg ,e' Delhi C 00/ /08 +D #ranches are advised to strictly adhere to the instructions given herein and note to report the remittance of import of technology transactions 'ithout Challan Form to Technology Development #oard 'ithin the said period of @/ days

1F3 permanent 0// dt 0. 00 ./0/2 FO#& 1

0(For all remittances for imports, 1e"ceeding 6-D 4// or its e=uivalent2 + * 1DIR -eries2 Circular ,o 0/8 dated Eune 0B, .//@ including advance remittances to'ards imports into India, branches should obtain appropriate application in Form +0 duly completed and signed by the importer On being satisfied about the bonafides of the application and correctness of statements%declarations by the importer, branches should complete the certificate portion in the form

0(1(6nder no circumstance, the form +0 should be signed by branches on behalf of their customers In case of any dispute, 'here the importer refuses to submit the form +0 e"ceeding an import value of 6-D4// or e=uivalent, branches should report the fact to F!D%R#I e"plaining the reasons 'hy the importer refuses to sign the form and branches may sign the same after securing prior approval of R#I 0(2(In respect of rupee remittances 1to'ards imports into India2 for credit to non)resident ban& accounts 'ith Treasury Foreign%Other #an&s in India, branches should ensure that Forms +0 are duly filled in and signed by the importers and not by remitting branches 0(3(In respect of imports made%to be made by customers of ,+D branches, the ,+D branch concerned should get the form +0 duly completed by the customer and for'ard it to the designated +D branch 'ho 'ill complete the certificate portion in the form 0(4(In respect of remittances 1to'ards imports2 e"ceeding the po'ers delegated to the +uthorised Dealers, form +0 should be obtained in duplicate from the customer and for'arded to R#I 'ith necessary enclosures The remittance should be made only on receipt of one copy of form +0, carrying the approval of R#I and on satisfying the conditions, if any, stipulated in the approval by R#I #ranches should &eep the import documents received 'hether under <C established by them or on collection basis in separate folders in a chronological order and retain the folders overnight in the strong room or fire proof safe 1( #ranches should &eep the import documents received 'hether under <C established by them or on collection basis in separate folders in a chronological order and retain the folders overnight in the strong room or fire proof safe 12( #ranches should ensure that rupee payments to'ards retirement of import bills dra'n under <C

as 'ell as import bills received from abroad for collection are received, irrespective of the amount, by debit to the account of the importer 'ith themselves or by means of a crossed che=ue dra'n by the importer on his other ban&ers 6nder no circumstance, branches should accept cash payments for retirement of import bills, e"cept in respect of private imports for less than the rupee e=uivalent of Rs 4/,///%)or the amount as may be prescribed by F!D,R#I from time to time 11($hen local payments are to be made out of the proceeds of the foreign currency import bill, branches should note to deduct the foreign currency amount of the local payment from the bill amount at the time of remittance The full amount of the bill should be arrived at the appropriate bills selling rate and the foreign currency amount of the local payment should be converted into rupees at the prevailing TT buying rate 12(For the purposes of determining the rupee e=uivalent of usance bills to be stamped under Indian -tamp +ct, branches should note to convert the foreign currency amount of the bills into rupees at the e"change rate prevailing on the date of acceptance of the 6sance bill 13(#ranches should not deliver shipping documents to a party other than the dra'ee of the bill In case of imports covered by specific import licence, the dra'ee should be the holder of the import licence or the letter of authority transferring the licence in his favour Doubtful cases should be referred to R#I 'ith full particulars 14(6nder Customs regulations, importers have to submit to Customs at the time of clearance of goods a copy of the invoice attested by the +D branch through 'hom remittance has been made, as corroboratory evidence of the value of goods declared in Customs #ill of !ntry To enable the importer to comply 'ith this re=uirement, +D branches should furnish the importer 'ith a duly attested copy of the invoice in all cases 'here relative bills of e"change and%or shipping documents 'ere received through their medium $here documents are received by importer directly, +D branches may attest a copy of invoice, provided the remittance has been or 'ill be made through them E3idence o, %mport. 15( For all the remittances 1including advance remittances2 of 6-D 0//,/// and above made on account of imports into India, 1'hether under <C or not under <C2 +D%,+D branches should follo' up 'ith the importer customers and ensure submission of the evidence of import into our country 1!"change Control copy of #ill of !ntry%*ostal 'rapper2 as per guidelines contained in R#I Master circulars issued from time to time +D branches should verify and preserve the documentary proof of import submitted by the importers 1including the importer)customers of ,+D branches2 and report the particulars of defaulters on account of non)submission of documentary evidence of import into our

country to F!D%R#I in the form #!F every half year as per guidelines contained R#I Master circulars issued from time to time For imports of value 6-D0///// or less the customer should be advised to be in readiness to submit #!F in case of need In case of lesser &no'n customers or one time importers it is better to hold the #O! at our end 15(1( #ranches should scrutinise the #ills of !ntry submitted by importers 'ith particular care to ascertain its genuineness #ranch Manager may at his discretion and particularly in respect of ne'%relatively ne' accounts through 'hich import bills are routed, send copies of fe' #ills of !ntry selected at random basis for verification to the Office of Customs concerned #ranch should follo' up for confirmation or report from them To facilitate chec&ing by customs, branches may send a list containing details of #ills of !ntry such as serial number, date, amount, importers name, item of import, tariff)heading etc +D branches are advised to randomly send bill of entry to customs authorities for verification Regional Offices, during their inspection should verify the above and incorporate in their inspection report

1F3 *ermanent B8 dated 04 /B ./0/2 15(1(1( #ranches may also depute their officials to the Customs Office in such cases to get the #ill of !ntry verified to ensure prompt follo' up 15(2( +ll such correspondence should be &ept on records for verification by internal auditors and inspecting official of R#I 15(2(1( Internal Inspectors or auditors 1appointed by the #an&2 should carry out 0//F verification of all !C copies of #ills of !ntry%*ostal 'rappers of imports above 6-D 0//,/// and +D #ranch should for'ard a certificate to that effect to R#I 15(3( The !"change Control copies of bills of entry for Gome consumption%*ostal 'rappers should be preserved by branches for a period of one year from the date of verification as above In respect of cases, 'hich are under investigation by investigating agencies, the !C copies of bills of entry should be preserved till the investigating agency concerned gives clearance for destruction 16(The entries to be passed by designated +D branches and ,+D branches 'hile handling various import transactions on account of the customers of ,+D branches are furnished in +nne"ure DI E'" 4-%'H&E5" OF %&!O#" -E""E# OF C#E6%" 1/(Only the +D branches of our ban& are permitted to establish letters of credit covering import of

goods or services into our Country ,+D branches receiving re=uests from their customers for establishment of import letters of credit should ta&e up 'ith the designated +D branch, observing the procedural formalities in the relevant paras in this chapter #efore for'arding the re=uest for opening import <C to the designated +D branch, the ,+D branch should e"amine the re=uest and ensure that the transaction is in accordance 'ith the various rules and regulations in force The designated +D branch shall arrange for issuance of the <C, if the application is found in order, and for'ard t'o copies of the <C to the ,+D branch, of 'hich one should be given to the importer and other should be retained by the ,+D branch as their office copy ,+D branches should verify and authenticate the signature of the importer on the <C application form 1/(1(#ranches should ensure that letters of credit are established only on account of their customers, 'ho maintain accounts 'ith them and are &no'n to be participating in the trade ,+D branches for'arding re=uests from their customers to establish <Cs should confirm 1in their for'arding letter2 to the designated +D branch that the applicant to the <C satisfies the above criteria 1/(2(#ranches establishing transferable <Cs should be guided by article @5 of 6niform Customs > *ractice for Documentary Credits, .//7 Revision, ICC *ublication ,o 8// They should also see& approval of Regional Office for opening transferable <Cs 1/(3(#efore entertaining re=uests for establishing import <Cs on account of their customers, branches should verify and ensure that the customer en?oys an une"pired %sanctioned limit or the <C to be established is 'ell 'ithin the discretionary po'ers of the branch manager The <C sought to be established plus the outstanding under the <Cs so far established together 'ith outstanding under <C#R%+cceptances under <Cs should not e"ceed the total <C limit made available to the customer or the discretionary po'ers of the branch #ranches should not establish <Cs on account of customers 'ho have not been prompt in meeting their commitments and %or 'ho have not been submitting the documentary proof of import into India 1viH #ill of !ntry%*ost *arcel $rapper2 in time and such cases should be referred to the Regional Office for decision 1/(4(#ranches receiving re=uests to establish revolving letters of credit should see& permission of Regional Office 1/(5(+s no post import finance is normally e"tended to meet the import bills 'hen received, branches should call for and verify the cash flo' statements and satisfy themselves about the importer:s ability to retire the bills 'hen received, 'ithout need for a last minute rush for additional credit facilities #ranches should also be a'are of the rate%amount of import duty payable on the items of imports for 'hich <Cs are to be established and that the customer has ade=uate source to meet the duty

commitments 1/(6(#ranches should ensure e"ecution of proper documents by the authorised person%partners%directors of the importer)customer for the <C limit, as per the Documentation Manual of our ban& #ranches should also ensure compliance of the norms fi"ed for holding imported ra' materials, spares, etc for purposes of assessment of 'or&ing capital finance and any deviation from the norms should be supported by valid reasons and documentary proof, there for and approved by the sanctioning authority 1/(/(#ranches should call for and verify the original sales contract%proforma invoice%indent and the !"change Control copy of import licence 1if the item is sub?ect to import licence2 in the name of the importer)customer Import <Cs should not be established based on lapsed%e"pired sales contract%proforma invoice%indent On being satisfied that the proposed import transaction is in accordance 'ith the Trade%!"change Control Regulations in force, branches should get the Documentary credit application)cum)agreement 1in form 0/A"2 filled in by the importer)customer +dditionally, branches should ensure that the form 0/A" is duly stamped at the appropriate place 1i e in page @, the +greement proper2 as per -tamp +ct of the -tate concerned 1/(0( ,+D branches should obtain the application in form 0/A" duly e"ecuted by the importer customer along 'ith the !"change Control copy of import licence 1'herever applicable2 and the underlying original sales contract 1/(0(1 +fter ensuring that the application has been properly filled up and the <C to be opened is 'ithin the sanctioned <C limit%discretionary po'ers of the ,+D branch, the ,+D branch should for'ard the <C application 10/A"2, the original sales contract and the import licence 1in original2 to the designated +D branch ,+D branch should also obtain an authorisation letter along 'ith each <C application 1as per anne"ure I2 from the importer agreeing to the ,+D branch for issuing the letter of credit through the designated +D branch and to abide by ban&:s internal procedure in regard thereto that may be in force from time to time, including the procedure for fi"ation of e"change rate for the import bill that may be received under the <C 1/(0(2( ,+D branches should retain photocopies 1duly certified by the #ranch Manager of the ,+D branch2 of the <C application 10/A"2 and the relevant enclosures in their files for reference purposes 1/(1(#ranches should ensure that form 0/A" is signed by the authorised official of the importer and the Importer)!"porter Code ,umber is also indicated therein +ll the corrections%alterations should have been duly authenticated by the authorised official of the importer -ignatures on the <Cs should

be verified by the ,+D branch 1/(12(#ranches should agree to establish <Cs in favour of beneficiaries on 'hom they hold satisfactory credit reports These credit reports should be up dated at least once in every year and every time the limit is sought to be rene'ed%enhanced 1/(11(#ranches should advise the importer)customers to furnish precise and complete details regarding type of availability of credit, description =uantity and unit price of item of import, currency and amount of credit, port of shipment, port of destination, partial shipment, transhipment, documentary re=uirements, place of e"piry of <C, time limit for presentation of documents, mode of advising the <C, etc in the <C application +ny correction%alterations in the terms of the application should be got authenticated by authorised official of the importer 1/(12( The details furnished in the application should be compared 'ith the underlying sales contract and import licence 1'herever applicable2 to ensure that a(description of goods, =uantity, value, unit price, terms of sale, etc conform to the details as found in the underlying sales contractI +(description and =uantity of goods in the application conform 'ith those in the import licence and the value of imports 1including agency commission, if any2 is 'ithin the CIF value of importsI c( last date of shipment%despatch proposed is 'ithin the validity period of the import licence d(e"piry date of <C indicated in the application is not later than 04 days from e"piry date of import licenceI e(the country from 'hich the goods are proposed to be imported is permitted by the import licence and the currency%method of payment is appropriate to the country of shipment of goodsI ,(the documentary re=uirements proposed in the application are in accordance 'ith the terms of underlying sales contract and that they do not contravene any !"change Control Regulation in force in our country #ranches should additionally ensure that special conditions, if any, in the licence are also complied 'ith 1/(13( F!D+I had advised that ban&s at their discretion may not insist on stipulating the ma"imum age of vessel in the <Cs established by them +lthough discretion is given as above regarding age of vessel, branches should bring it to the attention of importer customers the implications of shipment of cargo by old vessels, 'hich 'ould ordinarily attract over age premium If the importer customer desires to retain stipulation regarding age of the vessel, branches should comply 'ith the instructions of the customer

1/(13(1( If ho'ever, the importer desires to dispense 'ith age re=uirement, the same need not be incorporated in the <C In such cases, follo'ing clause may be incorporated J-hipping Companies%-hipping +gents Certificate that the vessel is registered 'ith an approved Classification -ociety as per Institute Classification Clause and Class maintained e=uivalent to <loyds 0// +0 and vessel is sea)'orthyJ 1/(14( #ranches may at their discretion permit 'aiver of preshipment inspection certificate if specifically re=uested by the applicant and sub?ect to the <C amount being less than Rs .//,/// and compliance of the follo'ing conditions( i(past trac& record of the importer in honouring documents is good ii(the beneficiary of credit is internationally 'ell reputed and satisfactory current credit report on the beneficiary is held at the branch iii(the import is being done on a regular basis from a &no'n supplier over a period 1/(14(1( $here the amount of <C to be established e"ceeds the e=uivalent of Rs .//,///%), branches should ta&e up 'ith the Credit -anctioning +uthority for prior approval for permitting the 'aiver and the details of the sanction letter from RO should be recorded in the Out'ard Documentary Credit Register and the letter preserved along 'ith the <C%documents 1In respect of <Cs established by +D branches on account of ,+D branches, the approval for 'aiver should be obtained by the concerned ,+D branch 2 1/(15( #ranches should scrutinise the <C application and additionally ensure that a(in respect of air consignments, +ir'ay bill evidencing consignee as 9Indian Overseas #an& 9 1Issuing branch2 1'ith notification about arrival of cargo to the issuing branch and the applicant2 is called forI +(in respect of shipments by sea, full set of clean on board bill of lading made out to order of the consignor and blan& endorsed or made out to order of issuing branch 1'ith notification about arrival of cargo to the issuing office and the applicant2 is called forI c(in respect of CIF and C>F consignments, the transport documents, mar&ed 9freight prepaid: are called forI d(in respect of FO# and C > I consignments, the transport documents, mar&ed 9freight to pay: are called forI e(in respect of CIF and C>I consignments, insurance documents incorporating appropriate Institute Cargo Clauses are called for, 'ith claims payable in IndiaI

,(in respect of FO# and C>F consignments, the <C application is accompanied by relative contingency insurance cover note ta&en by the applicant from GIC%its subsidiaries 1/(16( #ranches should ensure that the <C application as 'ell as the <C contains the follo'ing mandatory clause regarding commercial invoice( 132 9Invoices for amounts in e"cess of amounts dra'n under the credit are not acceptable: 1/(1/( #ranches should note that <Cs established by them should provide for payment only against delivery of shipping documents +pplications for opening of <Cs providing for payment against other than shipping documents such as 'arehouse receipts, rail bill of lading, etc should be referred to F!D%R#I #ranches may note that such permissions are given by R#I only in respect of imports covered by CG%G!* <icences The applicant should be advised to incorporate follo'ing clauses regarding transport documents in the <C application( i(Transport documents must not indicate the place of final destination as being different from the port of discharge 1This 'ill not apply in the case of multimodal transport document2 ii(Transport documents must not be dated prior to the date of credit iii(Transport documents indicating as the consignor of the goods a party other than the beneficiary of the credit are not acceptable Third party transport document is not acceptable i3(-hort form%blan& bac& transport documents are not acceptable 3(,on negotiable sea'ay bill is not acceptable 1/(10( +s a policy and in vie' of the large number of maritime frauds, branches should not issue <Cs accepting charter party bills of lading Gence, <C applications 'ith such clauses should not be entertained by branches +ny 'aiver in this connection, should be 'ith the prior approval of Credit -anctioning +uthority #ranches should not stipulate conditions such as 9stale bills of lading%documents acceptable: and even if such conditions are stipulated by the applicant in the application, branches should advise the applicant to delete such clauses #ranches should not agree to open <Cs 'ith such onerous clauses 1/(11( $here the applicant desires to call for Multi Modal Transport Document, follo'ing 'ordings must be incorporated in the <C +pplication 10/A"2 as 'ell as in the <C 15/ #2( JFull set in triplicate -igned Multimodal Transport Document made out to order and blan& endorsed%made out to order of Indian Overseas #an&, mar&ed JFreight *repaid%*ayableJ and notify ourselves and applicant mentioning the credit number and date J 1/(22( #y its very nature, Multimodal Transport Document cannot be issued 1initially2 as 9On board:I if

any applicant calls for Multimodal Transport Document 'ith 9on board: notation, it may be called for, ho'ever noting that immediate presentation of documents is not possible as the notation 'ould be made only 'hen the goods are 9on board: vessel after covering the initial part of the transport by road or rail 1/(21( For documents other than transport documents, insurance documents and commercial invoices, branches should ensure that the <C application%<C clearly stipulates a(by 'hom the documents should be issued and +(their 'ording%data content 1e g *ac&ing list in duplicate issued by the beneficiary evidencing that goods ordered are pac&ed in Cardboard bo"es, each bo" containing 4 doHens of should note that unless specific instructions as indicated above are given in the <C, the nominated%negotiating ban& shall accept the documents as tendered provided that their data content is not inconsistent 'ith any other stipulated documents presented 1/(22( +fter scrutiny of the <C application 'ith the sales contract and import licence%negative list as per current !3IM *olicy, and ensuring that the transaction is in accordance 'ith the Trade%F!M+ Guidelines and F!D+I Rules, the <C application, along 'ith other documents should be referred to the Manager in the business referred register, furnishing follo'ing details( <C limit <C outstanding Margin <C#R o%s +cceptances under <Cs Inspection Irregularities Comments on the current application ( For deletion%modification of certain mandatory clauses in the application li&e third party #ill of <ading not acceptable etc, #ranches should ta&e up 'ith credit sanctioning authority for prior permission The branch manager should signify his approval or other'ise on the application as 'ell as in the #usiness Referred Register 1/(23(On approval by the Manager, details of the <C to be established should be recorded in the Out'ard Irrevocable Documentary Credits Register 1R A4)revised2 and the underlying sales contract%proforma invoice, etc should be branded 'ith the branch stamp, carrying the <C number and ( ( ( ( ( ( 1-anction%Discretion2 2 #ranches

date The <C number should be indicated in the register and other documents as follo's( #ranch%IM* %+dvising ban&:s%-erial %Calendar <C %Code % abbreviation )%,umber% Kear % place % e g /04% IM* <C%CM#),K%004%./// 1CM#),K( Chase Manhattan #an&, ,e' Kor& 2 1/(24(Commission as per our ban&:s latest service charges boo&let updated from time to time should be collected and credited to branch * > < account The amount of commission collected and the date on 'hich it is collected should be recorded in the Out'ard Documentary Credit Register under the initials of the authorised official of the branch In respect of <Cs to be established by +D branches on account of the customers of ,+D branches, the ,+D branch should for'ard I#-+ instrument 1for the <C commission2 along 'ith application and other documents 1/(25( #ranches should normally collect the margin amount, as per sanction terms, from the importer customer only Go'ever, in e"ceptional cases, branches may collect margin from a party other than the importer)applicant, provided branch is satisfied 1by studying his cash flo's2 that though the importer)applicant is not in a position to provide the margin no', he 'ill be in a position to meet the bill himself, 'hen it is received $herever margin is received by 'ay of term deposit receipt%s, the deposit receipt%s 'ith undated discharge of the depositor%s over a revenue stamp affi"ed on the reverse of the deposit receipt along 'ith form 8/G e"ecuted by the depositor%s should be obtained and &ept 'ith the documents e"ecuted by the importer for the <C limit Details of margin collected should be recorded in the Out'ard Documentary Credit Register under the initials of the authorised official of the branch 1/(26( In respect of <Cs opened on account of customers of ,+D branches, margin, if any, collected should be held by the ,+D branch in its boo&s 1/(2/( If the item of import is sub?ect to import licence, the !"change Control Copy of import licence should be endorsed as per guidelines in para above, applying #ills -elling Rate%For'ard -ale Rate or the pre)determined e"change rate indicated in the CG 1capital goods2 licence In respect of imports on C>F, FO# and C> I basis, branches should note to earmar& sufficient amount to'ards freight and %or insurance 1/(20( #ranches should decide the mode of issuing the <C based on the instructions of the applicant in form 0/A" #ranches should utilise the follo'ing formats prescribed by Treasury Foreign for issuing import <Cs

i( Tele transmission format ) *re)advising by short tele transmission of issuance of Documentary Credit ) Refer to +nne"ure II ii( Tele transmission format for issuance of Irrevocable Documentary Credit C Refer to +nne"ure III iii( -'ift Format 7// series i3( <C to be advised by airmail C Form 5/# 1/(20(1( #ranches should note to send mail confirmation in form 5/# for all short cable tele"%cable pre)advices issued by them and the airmail confirmation carrying the remar& 9In confirmation of our -hort tele transmission pre)advice of date: should be sent on the day the short tele transmission pre) advice is transmitted 1#ranches are also advised to refer to the relevant articles of 6niform Customs and *ractice for Documentary Credits, .//7 Revision, ICC *ublication no 8// 2 1/(20(2(+s in the case of <Cs issued by +irmail%courier, the office copies or authorised version of the message to be transmitted by tele"%s'ift, after being drafted and corrected, should be signed by the authorised officials viH Des& Officer and DM%Manager%-r Manager%Gead of the #ranch Only after such authentication, should the tele"%s'ift message be sent to the official handling test &eys The Official handling test &eys should not affi"%provide test cypher unless the message copy is properly authenticated 6nless the s'ift message copy is properly authenticated, -'ift -ection should not transmit the message 1/(20(3( <etters of Credit e"ceeding the value of 6- Dollar 0///// should apart from being signed by t'o Officials mentioned above should also be countersigned by the Gead of the #ranch 1/(21( For establishing <Cs by airmail, branches should utilise form 5/# Form 5/# should be neatly type'ritten in a set of four copies The authorised official 1of the +D branch2 handling import transactions should verify the contents of the <C 'ith the <C application and other documents and if found in order, affi" his signature 'ith - - ,umber and also obtain the signature of another authorised official of the branch, preferably, the branch Manager The officials signing the <C should also affi" their initials 'ith date in the Out'ard Documentary Credit Register 1/(32( #ranches should note to affi" the original copy of <C 'ith special adhesive stamp of re=uisite value and mail the first t'o copies to the advising ban&, the third copy to applicant and the fourth copy, the office copy $hen <Cs are established by designated +D branches, on account of the ,+D branches lin&ed to them, form 5/# should be type'ritten in a set of 4 copies, of 'hich the third and fourth copies should be sent to the ,+D branch 'ith instruction to deliver the third copy to the applicant, retaining the fourth as their 1,+D branch:s2 copy

1/(31($hen <Cs are advised by tele"%cable or by short tele transmission pre)advices follo'ed by mail confirmation, branches should note to send a copy of the tele"%cable messages 1'ithout the test2 to the applicant In respect of <Cs for 'hich pre)advices are sent by tele"%cable, a copy of the mail confirmation sent to the advising ban& should also be sent to the beneficiary 1/(32( #efore signing the <C, the authorised officials signing the <C must ta&e e"tra care to ensure that a(name and address of the issuing branch, tele"%telegram addresses are correctly incorporated +(names and addresses of the applicant and beneficiary are properly furnished c(name%s and address%s of the advising%nominated ban& are indicated as per the updated <ist of Correspondents circularised by Treasury Foreign d(the type of availability of credit and the attendant instructions are properly given In this connection, branches are advised to follo' the guidelines contained in the subse=uent paras scrupulously e(the I-O currency code is indicated correctly and the currency and amount in 'ords and figures tally 'ith each other 1*lease refer to +nne"ure D to this chapter for I-O Currency codes 2 ,(the amount of credit is indicated as per the -tandard #ritish ,omenclature, viH , i( In figures( Commas inserted after every @ Heroes e g 0/,//,/// 1ten lacs2 should be indicated as 0,///,/// 1one million2I .4,0/,//,/// 1T'enty five crores and ten lacs2 should be indicated as .40,///,/// 1T'o hundred and fifty one million2 ii( In 'ords( The 'ords 9lacs: and 9crores: should not be used Instead the amount should be e"pressed in terms of 9Thousands:, 9millions: and 9billions: e g one lac should be indicated as one hundred thousand, ten lacs as one million and one crore as ten million g(Description of commodity, =uantity and unit price are indicated as per sales contract%import licence terms 1#ranches should note to give complete and precise instructions regarding the item of importI but in the name of giving complete instructions, branches should not furnish e"cessive details in the <C as it 'ill only lead to confusion #ranches should discourage the habit of enclosing copies of sales contract%proforma invoice to the <C 2 h(the documentary re=uirements are properly furnished in the <C 1ta&ing into account the terms of sales contract, Trade%!"change Control guidelines and the relevant provisions of 6C*DC and guidelines of F!DCO from time to time 2 7 i( date of issue of <C is indicated 1$hile indicating dates in the <C ) 'hether date of <C or last date of shipment or e"piry date of <C branches should adopt the system of mentioning the month, date and

year, in that order e g Euly 0B, .///I October .4, .///I February .5, .///2 8(the last date of shipment, along 'ith the period of time 1after date of issue of transport document2 for presentation of documents and e"piry date for presentation of documents are indicated as per the terms of sales contract and Trade% !"change Control regulations in force 9(instructions regarding despatch of documents by the nominated%confirming ban& in one lot or t'o lots and the mode of despatch 1viH courier%air mail2 are furnished properly l(appropriate reimbursement instructions are given in the copy of <C to be mailed to the advising ban& and in the copy to be retained by the issuing branch 1*lease refer to relevant paras belo' 2 m(the number of signed pages in the <C is indicated at the bottom of each page of <C 1e g This document consists of T$O signed pages2 if there are any additional documents%conditions, branches should use continuation sheet in form 5/C )7* Date of Credit ; For !"change Control purposes, the date on 'hich the terms of the <C are transmitted, by mail% teletransmission to the advising ban& shall be deemed to be the date of establishment of the <C for an import transaction In vie' of this !"change Control re=uirement, branches should ensure that <Cs are despatched%transmitted on the dates indicated in the <C as 9date of issue: In respect of pre)advices sent by short teletransmission, the mail confirmation 1in form 5/#2 is sent on the day on 'hich the short teletransmission 'as transmitted The receipts issued by post offices for the airmail despatches and the ac&no'ledgments issued by telegraph offices should be preserved along 'ith office copies of the <Cs issued and the date of despatch%transmission should be recorded in the Out'ard Irrevocable Documentary Credits register under the initials of the authorised official of the branch 1/(33( #ranches should ensure that the credit is advised through one of our correspondents 1as per instructions of Treasury Foreign in this regard from time to time2 and the credit is made available 'ith the advising ban& Regarding the choice of availability of credit, branches should be guided by the applicant:s instructions in form 0/A" -imultaneously suitable reimbursement authority should be prepared as per guidelines in subse=uent paras and mailed to the reimbursing ban& indicated in the second copy of <C, mar&ed to the +dvising ban& 1/(34( #ranches should note that establishment of <Cs providing for payment on deferred payment terms 1i e remittance either in full or in part beyond si" months from date of shipment%e"piry date of import licence2 is as per the procedural guidelines laid do'n in the latest Master circular on e"ternal commercial borro'ings issued by R#I and updated from time to time #ranches are advised to follo' the separate guidelines given in this chapter for establishing <Cs providing payment on deferred payment terms Go'ever, branches can establish <Cs available 'ith a nominated ban& abroad by deferred payment, 'here payment shall be made to the beneficiary after e"piry of prescribed period from date of shipment or presentation of documents by the beneficiary, provided the due date for payment does not fall beyond si" months from date of shipment abroad 1#ranches are advised to

note the above distinction bet'een credits providing for payment on deferred payment terms and credits available 'ith a nominated ban& by deferred payment terms and for any clarification in this regard, to 'rite to D > + section, Treasury Foreign 2 1/(35( $hen the applicant desires to have the credit available by Deferred *ayment, branches should ensure compliance of the follo'ing aspects( a(The <C shall not call for any draftI +(The <C must specify at 'hich maturity 1other than sight2 payment is to be made and ho' such maturity is to be determined 1e g A4 days after date of shipmentI 04 'or&ing days after presentation of documents, etc 2 -ubse=uently 'hen the credit is prepared, branches should indicate the availability of credit as follo's( JCredit available 'ith LLLLLLLLLLLLLLLLLLLLL 1,ominated ban&2 by 1"2 deferred payment against presentation of documents detailed herein and mar&ed 132 L L L L L L L L L L 1so many days2 after shipment%presentation of documents, for full% F of invoice value 1/(36( +s credits available by deferred payment saves stamp duty on drafts, and also helps the ban& in funding our ,ostro account in time, branches should advise their importer)customers to have the credit available 'ith the nominated ban& by deferred payment $herever credits are to be made available by deferred payment, branches should get the follo'ing clause incorporated under item A+ in page @ of the <C application 10/A"2 under the signature of the importer( J To pay on maturity%on the due date the value of the documents received by me%us released by you under the credit and you are hereby authorised to debit 'ithout previous notice to me%us the amounts of payments made by you on the due date pursuant hereto my%our current account 'ith you J 1/(3/(!ven in cases 'here importers apply for issuance of <Cs available by sight payment or negotiation of drafts, branches may advise the customers to agree for issuance of <Cs available by deferred payment 1i e deferring payment by . or @ days from date of presentation2, as the customers can save on transit period interest and the ban& can also benefit on overdraft interest on funding ,ostro account 1/(30($hen the applicant specifically desires to have the credit available 'ith the nominated ban& by sight payment, branches should indicate the availability of credit as follo's( JCredit available 'ith LLLLLLLLLLLLLLLLLLLLLLLLLL 1,ominated ban&2 by 1"2 sight payment against presentation of documents detailed herein and mar&ed 132 and beneficiary:s draft at sight on the nominated ban&1M2 for full% F of invoice value J

1M2 $hen the applicant does not call for drafts, branches need not call for beneficiary:s drafts 1/(31($hen the applicant desires to have the credit available 'ith a nominated ban& by acceptance, the <C should call for 6sance drafts of specific duration dra'n on the nominated ban&I branches should indicate the type of availability of credit as follo's( JCredit available 'ith LLLLLLLLLLLLLLLLLLLLLLLLL 1,ominated ban&2 by 132 acceptance against presentation of documents detailed herein and mar&ed 132 and beneficiary:s draft at ;; days sight dra'n on the nominated ban& for full% F of the invoice value 1/(42($here the applicant desires to have the credit available by negotiation 'ith any ban&, it is desirable to limit the free negotiability to specific country or city 1refer 9*lace of e"piry: in form 0/A"2 1e g any ban& in +ustralia or any ban& in -ydney2 1/(42(1(In case the applicant desires to open a credit restricting negotiation to a nominated ban&, branch should decide the choice of the nominated ban& and applicant should be advised to indicate 'hether the drafts are to be dra'n at sight or at a stated tenor 1as per terms of sales contract2 1/(42(2(Irrespective of the type of availability of credit, <C should indicate 'hether the credit is available for full value or so much percentage of the invoice value, depending on the terms of underlying sales contract based on 'hich the <C is sought to be opened 1/(41(If specifically re=uested by the applicant in his application 10/A"2 based on underlying sales contract, issuing branch may re=uest the correspondent 1viH the advising ban&2 to add confirmation to the credit issued by them Reimbursement instructions 1/(42(#ranches should follo' the guidelines in these paras and incorporate suitable reimbursement instructions in the copy of <C mar&ed for advising ban&, depending on the type of availability of credit and also have them recorded in the office copy to be retained by the issuing branch +s reimbursement instructions are not part of the <C terms, branches should not incorporate reimbursement instructions in the original <C Go'ever, in respect of <Cs issued by full operative tele"%cable, these clauses may be incorporated in the operative instrument itself 1/(43($hen branches are specifically re=uested by their importer customers to establish <Cs available for negotiation by any ban&, branches should not incorporate instructions to debit our account 'ith a correspondent abroad, as even a non)correspondent ban& may evince interest in the documents and if

the documents are not in accordance 'ith the terms of <C, reclaiming the reimbursement from the negotiating 1non)correspondent2 ban& may prove difficult and time consuming #ranches are advised to incorporate the follo'ing reimbursement instructions in <Cs available for negotiation by any ban&( On receipt of the drafts and accompanying documents at our counters, 'e shall remit the value of the drafts for your account as indicated by you 1/(44($hen branches issue credits available 'ith a nominated ban& abroad by deferred payment, branches should note to incorporate reimbursement instructions, as per guidelines belo', in the second page of the copy of <C mar&ed for advising ban& and in the office copy of <C to be retained by the issuing branch J *lease advise us and our Treasury 1Foreign2 Department Chennai by an authenticated tele"%cable M message details of the dra'ing immediately on presentation Debit our Central Office, Chennai account no OR J*lease advise us and our Central Office, Chennai by an authenticated tele"%cable M message details of the dra'ing immediately on presentation $e have authorised to honour your claim at maturity to the debit of Indian Overseas #an&, Central Office, Chennai account 'ith them If the claim is not satisfied by them on first demand, 'e are to be informed by tele"%cable J 7 In the case of credits denominated in 6- Dollars and Great #ritain *ounds, 'here the value of the credits are belo' certain specified amounts say 6-D 4/,/// or G#* .4,///%), branches need not re=uest the nominated ban& to advise Treasury Foreign of the dra'ings in the above instructions In respect of all other currencies, the instructions are valid irrespective of the amount 1/(45(#ranches may incorporate suitable reimbursement clauses as per guidelines belo'( 1/(45(1( Debit our Central Office, Chennai account number L L L L L LL L L L 'ith you This instruction should be used in case of a credit available by sight payment or by negotiation calling for sight drafts and advised through our correspondent 'ith 'hom our ban& maintains ,ostro account in the currency of credit 1e g <C issued in 6- Dollars and advised through CITI #an&, ,e' Kor& 2 Debit our Central Office, Chennai account number LLLLLLLLLLLLLLLLLLLLLLLL 'ith you on due date This instruction should be used in case of 6sance credit%deferred credit advised through our correspondent 'ith 'hom our ban& maintains ,ostro account in the currency of credit Though advising ban& is also the reimbursing ban& in the above instances separate reimbursement authority 1in form @5/2 should be made to the advising%reimbursing ban& and copy retained along 'ith copy of <C and other documents 'ith you on the due date J

1/(45(2($e have authorised L L L L L L L L L L L L L L to honour your claim to the debit of Indian Overseas #an&, Central Office, Chennai account number L L L L L L L L 'ith them If the claim is not satisfied by them on first demand, 'e are to be informed by tele"%cable This instruction should be used in the case of sight payment credit or negotiation credit issued 'hen reimbursement is provided through a third ban& 1e g <C issued in 6- Dollars and advised through Midland #an&, <ondon and reimbursement provided through CITI #an&, ,e' Kor& 2 $e have authorised L L L L L L L L L L L L L L to honour your claim +T M+T6RITK to the debit of Indian Overseas #an&, Central Office, Chennai account number L L L L L L L L L L 'ith them If the claim is not satisfied by them on first demand, 'e are to be informed by tele"%cable This instruction should be used in case of credits available by deferred payment 'here reimbursement is provided through a third ban& $hile the above instructions shall be recorded in the copy of credit mar&ed for advising ban&, separate reimbursement authority 1in form @5/2 should be prepared and mailed to the reimbursing ban& indicated in the copy of <C mar&ed for the advising ban& Copy of the <C need not be mailed to the reimbursing ban& 1/(45(3( *lease advise us by an authenticated teletransmission message details of the payment%negotiation On receipt of such an advice, 'e shall remit the value of drafts for your account as indicated by you This instruction should be used to provide TT reimbursement under a sight payment credit or negotiation credit *lease advise us and%Central Office Chennai by an authenticated teletransmission message details of the payment%negotiation On receipt of such an advice, 'e shall remit the value of the drafts for your account as indicated by you This instruction should be used to provide TT reimbursement under sight payment or negotiation credit of large value 1viH 6-D 4//,/// or e=uivalent2 to enable Treasury Foreign to fund the ,ostro account 'ithout delay $herever drafts are not called for in the credit, the 'ord 9draft: should be substituted by 9documents: 1/(45(4( On receipt of the drafts and accompanying documents at our counters, 'e shall remit the value of the drafts for your account as indicated by you This instruction should be issued for providing reimbursement after receipt of documents in all the types of credits In the case of sight payment and deferred payment the 'ords 9drafts and accompanying: should be deleted to read as( 1 2 On receipt of the documents at our counters, 'e shall remit the value of the documents for your account as indicated by you

6sually this instruction should be used in <Cs issued and advised through ban&s 'ith 'hom 'e are not maintaining any ,ostro account 1/(46($herever reimbursement instructions are given to the advising ban& to claim reimbursement from our Correspondent, copy of the reimbursement authority 1in form @5/2 should be sent to the Correspondent, authorising them to honour the reimbursement claim specifying the <C number and date, currency and amount of reimbursement and the name of nominated ban& 1/(46(1(!ven in respect of <Cs 'here the advising ban& is authorised to reimburse themselves to the debit of our account 'ith them, a separate reimbursement authority 1in form @5/2 should be sent to the advising ban& authorising them to debit our account 'ith them, indicating the currency and amount that can be debited 1/(46(2($herever <Cs are advised by full operative teletransmission, branches should note to send the reimbursement authority also by authenticated teletransmission #ranches should not stipulate presentation of compliance certificate by the nominated%confirming ban& to the reimbursing ban& %$$uance o, -C$ to +e con,irmed +: corre$pondent$ 1/(46(3( #ased on the instructions of the applicant, branch may re=uest the advising ban& to advise the <C adding their confirmation to credit In such cases, in the instructions to the advising ban& in the second page of the <C, an 132 mar& should be placed against the instruction 9+dding confirmation: or 9authorise you to add confirmation: If the advising ban& 1correspondent ban&2 reverts and informs that they are not in a position to confirm our credit, branch should promptly inform the applicant and see& his instructions 'hether the credit maybe advised 'ithout adding confirmation by the correspondent If the applicant agrees in 'riting for advising the <C 'ithout adding confirmation, branch should promptly pass on the instructions to the advising ban& Details of refusal of the correspondent ban& to add confirmation should also be advised e"peditiously to Correspondent #an&ing -ection, Central Office $hen ban& re=uested to add confirmation see&s amendments to the credit, branches should ta&e up 'ith the applicant and act according to his instructions 1/(46(4(Regarding the charges that 'ould be levied by the ban& that adds confirmation to the credit, the <C application and <C should stipulate as to 'hether the confirmation charges 'ould be for the account of the applicant or for the account of the beneficiary to the credit #ranches should verify the underlying sales contract and accordingly incorporate a suitable clause in the <C

1/(4/(-imultaneous 'ith the despatch of the <C to the advising ban&, follo'ing accounting entry should be passed by the +D branch in their boo&s, in respect of the <Cs established on account of their customers( Debit( Customer:s liability under <C 1Foreign2 Credit( #an&:s liability under <C 1Foreign2 The above contra entry should be passed at the current bills selling rate or for'ard rate, as the case may be !ntry should also be made in the <C liability register +ccounting entries for collection of margin, commission and postages should also be passed on the date of issuance of the <C The accounting entries in respect of <Cs established by +D branches on account of the customers of ,+D branches are furnished in +nne"ure)DI 1/(40(-ubse=uent to despatch of the <C to the advising ban& and copy of the <C to the applicant%,+D branch, office copies of the <C and reimbursement authority, if any underlying sales contract and import licence should be retained in a separate Out'ard <C Folder, in a chronological order These documents should be carefully preserved li&e any other advance documents ta&en by the branch 1/(40(1+ copy of <C 1opened by air mail or by -$IFT2 should be given to the customer duly incorporating in the covering letter that the <C has been opened as per application provided by the customer IT should be verified for correctness and if there is any corrections needed, it should be If the branch does not hear 'ithin A5 hours from the immediately brought to the notice of the branch information contained therein mendment$ 1/(41($hen the importer)customers re=uest issuance of an amendment to an <C already issued, branches should call for and verify amendment to the underlying sales contract and if the amendment relates to description, =uantity, unit price, last date of shipment or e"piry date of <C, #ranches should ensure that these amendments sought for are in accordance 'ith the provisions of current !3IM *olicy%Import licence and !"change Control Regulations in force 1/(52(#ranches should obtain a 'ritten re=uest to amend the <C along 'ith the underlying sales contract and !"change Control copy of import licence 1'here applicable2 and indicate the mode of sending the advice of amendment The re=uest for amendment should be referred to the Manager in the #usiness Referred Register for his approval On his approval, the details of the amendment should

date of receipt of <C, it 'ill be construed that they have accepted the <C as advised, 'ith all the

be recorded in the relative folio in Out'ard Documentary Credit Register and details of commission and postages collected should be entered in the register against the initials of the authorised official of the branch 1/(51($hen an amendment is for enhancement of the amount of credit, branches should note to collect additional margin, endorse the !"change Control copy of import licence and pass contra for the increase in amount of credit debiting Customer:s <iability under <C 1foreign2 and crediting #an&:s <iability under <C 1foreign2 at the same e"change rate as the original credit 1/(52(#ranches should use Form .55 for sending amendments by air mail $hen credits are to be amended by teletransmission, branches should utilise the format given in +nne"ure ID to this chapter, get the message tested by authorised official of the branch and advise the beneficiary through the same advising ban& through 'hom the original credit 'as advised If at the time of establishing <Cs, -'ift Formats have been used, for amendments also, the prescribed s'ift formats must be used 1/(53($hen the amendment is to be advised by airmail, branches should for'ard t'o copies to the advising ban& 1through 'hom the original credit 'as advised2, one copy to the applicant and retain a copy for their files $hen the amendment is to be advised by teletransmission, copy of the message 1'ithout the test2should be sent to the applicant 1/(54(In respect of credits to 'hich our overseas correspondents have added their confirmation, the advice of amendment should be sent through the advising%confirming ban& to the beneficiary $here the advising%confirming ban&s are t'o different ban&s, branches should send the advice of amendment to the advising ban& 'ith an instruction to advise the amendment through the confirming ban& 1/(55($here the amendment results in enhancement of amount of credit and advising ban& has been given reimbursement instructions to debit our account 'ith them or 'ith a third ban&, suitable reimbursement instructions should be given to the advising ban& for debiting our account 'ith them%third ban& for the enhanced amount and also send a reimbursement authority to the reimbursing ban& to honour the claim of nominated%negotiating%confirming ban& for the enhanced amount 1/(56(In respect of amendment of <Cs issued on account of customers of ,+D branches, the re=uest for amendment should be verified by the ,+D branch and if found in order, the re=uest along 'ith other relevant documents should be for'arded to the designated +D branch, 'hich 'ill arrange to issue the amendment and for'ard t'o copies of the amendment to the ,+D branch, of 'hich one

should be delivered to the importer ,+D branches should collect commission as per Central Office guidelines issued from time to time and credit percentage of the commission to the designated +D branchI the I#-+ instrument should be sent to the +D branch along 'ith the recommendation of the ,+D branch for issuance of amendment 1/(5/(Copy of the amendment and amended reimbursement authority sent should be retained by branches along 'ith copy of relative <C and other documents 1/(50( +RR+,G!M!,T FOR +DDI-I,G OF 6 - #+-!D <!TT!R OF CR!DIT- #K $!<<- F+RGO #+,N $ells Fargo #an& 1formerly $achovia #an&2 is one of our prime correspondent 'ith 'hom 'e have 6Dollar account $ells Fargo #an& has a good net'or& in 6-+ 'ith more branches spread throughout the country They are providing various services and share income 'ith us $e have good correspondent relationship 'ith $ells Fargo #an& and have various arrangements including *rivate <abel Trade -ervices for re)issuing <Cs in Gong Nong for specified +sian countries through 'hich 'e are earning siHeable income $ith the intention of providing seamless service for advising <Cs bound for 6 - , 'e have no' entered into an arrangement 'ith $ells Fargo #an& for advising all the <etters of Credit established by all our +D branches favoring the beneficiaries in 6-+ through their ,e' Kor& office Their e"tensive net'or& 'ill be an added advantage for us to advise the <Cs to the beneficiaries or the ban& through 'hom the <Cs are to be advised #ranches are advised to route all the 6 - based <Cs through $ells Fargo #an& only 'here the beneficiary is in 6-+ #ranches have to send the <Cs to the -$IFT address ofO *,#*6-@,,KCP The income earned 'ill be passed on to the branches periodically 1F3 *ermenent BA%./0/)./00 dated /. /5 ./0/2 %&!O#" O5 6EFE##E6 ! ;&E5" "E#&' 10(#ranches receiving applications for issuance of import <Cs on deferred payment terms or issuance of deferred payment guarantees should follo' the guidelines contained in updated master circular on guarantees%imports issued by R#I and updated from time to time and collect commission%postages as per our latest service charges boo&let updated from time to time 10(1(#ranches should note that import of goods 1'hether under <C or not under <C2 'here payment to the overseas supplier%seller is to be made on deferred payment terms 1i e over a period of time beyond si" months from date of shipment%e"piry date of import licence2 is as per the procedural guidelines laid do'n in the latest Master circular for e"ternal commercial borro'ings issued by R#I and updated from time to time 10(1(1(In cases of invocation of deferred payment guarantees branches should verify 'hether such invocation is valid and proper, and, after satisfying themselves about it, remit the amount due properly #ranches should also for'ard a report to R#I along 'ith a copy of the claim received from the overseas beneficiary #ranches should also send a detailed report to Treasury Foreign about the invocation 'ith copies to Regional Office The amount remitted should be recovered from the importer customer immediately

10(1(2#ranches should not issue any deferred payment guarantee for import of goods 1or services2 into India 'ithout obtaining prior approval of F!D%R#I in duplicate to R#I along 'ith the draft of the guarantee They should get approval by sending a letter The permission given by R#I for issuance of In such #ranches

the guarantee includes permission for the out'ard remittances if the guarantee is invo&ed valid and proper, and, after satisfying themselves about it, remit the amount due properly beneficiary immediately

cases of invocation of deferred payment guarantees branches should verify 'hether such invocation is should also for'ard a report to R#I along 'ith a copy of the claim received from the overseas #ranches should also send a detailed report to Treasury 1Foreign2 about the invocation The amount remitted should be recovered from the importer customer 'ith copy to Regional Office

10(2(#ranches should not establish import letters of credit on deferred payment terms or issue deferred payment guarantees unless the item of capital goods to be imported is covered by a specific import licence issued on deferred payment terms 1i e #ranches should not establish import <Cs on deferred payment terms in respect of items not included in the ,egative <ist of capital goods and such <Cs should be established providing for payment to beneficiary 'ithin a ma"imum time limit of si" months from date of shipment 2 10(2(1(#ranches should not establish <Cs providing for payment on deferred payment terms or issue deferred payment guarantees or arrange remittances on collection documents received on deferred payment terms on <icences issued on 9cash: basis i e 'here Import Trade Control +uthorities have not indicated any deferred payment terms on the licence 10(3(,+D branches receiving applications from their importer)customers to establish <Cs on deferred payment terms should note to e"amine the application in the light of the foregoing instructions and for'ard them to the designated +D branch, 'hich 'ill establish the <C 10(4(Only +D branches shall issue deferred payment guarantees on behalf of customers of ,+D branches, observing the relevant Trade%!"change Control and F!D+I guidelines in force +ll the re=uired papers%documents should be submitted by the ,+D branches to the designated +D branch In respect of remittances under guarantees, +D branches shall advise ,+D branches in advance the appro"imate rupee e=uivalent so that the ,+D branch can debit the party and credit the +D branch 'ith the rupee e=uivalent The relative form +0 and other documents should be obtained by the ,+D branch from its customer and for'arded to the +D branch along 'ith the I#-+ instrument Reports to Treasury 1Foreign2 and returns to R#I should be submitted by the +D branches

10(5(#ranches establishing <Cs on deferred payment terms or issuing deferred payment guarantees to'ards import of goods into India should ensure that the <C%D*G to be issued is in accordance 'ith the terms and conditions stipulated by the sanctioning authority 10(6(#ranches establishing <Cs on deferred payment terms or issuing deferred payment guarantees should obtain separate agreement%counter indemnity from the applicant for issuance of the <C%Guarantee in 'hich he should underta&e, among other things, to ma&e the payment on the due dates to be specified therein For this purpose, branches should ta&e appropriate instructions from the <egal -ervices Department, Central Office on a case to case basis 10(/(In respect of documents received under <Cs issued on deferred payment terms established on account of the customers of ,+D branches, +D%,+D branches should note to follo' the relevant guidelines in the subse=uent paras ,+D branch should ascertain the appro"imate rupee e=uivalent of each instalment in advance, recover the same to the debit of importer:s account and credit it to the +D branch, so that the latter can arrange the remittance to the nominated ban& abroad on the due date

#E"%#E&E5" OF %&!O#" 4%--' <56E# -E""E#' OF C#E6%" 11(#ranches receiving documents under <Cs established by them should enter them in the In'ard <etters Received Register and affi" the branch stamp 1'ith date2 on the covering schedule of the remitting ban& 11(1(The authorised official of the branch 1handling imports2 should verify 'hether all the documents listed in the covering schedule of the remitting ban& have in fact been received In case the duplicate set of documents has been received first, branch should act on it in the same 'ay as the original set, but &eep the remitting ban& advised of the non)receipt of the first set 11(2(#ranches should e"amine the documents afresh 'ith the office copy of the <C to ascertain that the documents are in strict conformity 'ith the terms of credit and that there are no discrepancies #ranches should bear in mind that a discrepancy is a discrepancy and there is no classification li&e Ma?or or Minor discrepancy #ranches should record their observations in a scrutiny sheet and refer the bill to the Manager in the #usiness Referred Register for instructions The scrutiny sheets should be serially numbered and preserved along 'ith the documents 11(2(1(#ranches should complete the scrutiny of documents 'ith least possible delay and 'ithin a reasonable time not e"ceeding 4 'or&ing days + chec& list for scrutiny of various documents is

appended in +nne"ure DII 11(3(+ll foreign currency import bills under <Cs should be crystallised into rupee liability on the 0/th day from the date of receipt of documents at the <C issuing branch, in case of demand bills and on the due date, in case of 6sance bills In case the 0/th day or the due date falls on a holiday or -aturday, the importer:s liability should be crystallised into rupee liability on the ne"t 'or&ing day Go'ever, the import bill payable on demand may be crystallised before the said period of 0/ days 'ith the specific understanding and 'ritten re=uest from the customer If the crystallisation of the rupee liability of an import bill under For'ard !"change Contract results in early%late delivery, the ban& shall recover s'ap charges and interest if any as per F!D+I guidelines #ranches should arrive at the rupee e=uivalent at the bills selling rate as on the date of crystallisation or the for'ard sale rate, in case a for'ard sale contract has been boo&ed 11(4(#ranches should note that the ten day time limit referred in the above para is for fi"ing e"change rate of import bills under <Cs established by the branches and should not be construed as the time limit for e"amining%re?ecting the documents #ranches should note to e"amine the documents 1'hether under D* terms or under D+ terms2 and decide to ta&e up%refuse the documents 'ithin reasonable time from date of receipt of documents If the documents are in accordance 'ith the <C terms or if the documents are discrepant but the applicant has agreed in 'riting to pay for the documents, branch should crystallise the liability a('ithin 0/ days from date of receipt of documents, if the documents are to be delivered to applicant against payment or +(on the due date, if the documents are to be delivered against acceptance of the dra'ee 11(5(#ranches handling rupee%foreign currency import bills under <C should collect commission%late payment commission%postages, as per our latest services charges boo&let updated from time to time 11(6(#ranches should note to follo' the procedural guidelines in *ara 0. of this chapter regarding stamping of 6sance bills and *ara 04 0, *ara 04 . and *ara 04 @ regarding follo' up and receipt of documentary proof of import and reporting of defaulters on account of non)submission of bill of entry to !CD%R#I 11(/(On reversal of the <C contra, as per guidelines in subse=uent paras, branches should note to round off the <C number in the Out'ard Documentary Credit Register Go'ever, branches should retain copy of <C, reimbursement authority, underlying sales contract, etc along 'ith the relative import documents, until li=uidation of the liability by the applicant On li=uidation of the import bill

liability under the <C, copies of <C, correspondent:s covering schedule and copy of invoice should be preserved in a separate file for verification by inspectors from our ban&%Reserve #an& of India 11(0(#ranches should follo' up 'ith the nominated%confirming ban& and ensure receipt of both the sets of documents $hen one set of documents is delivered to the importer%applicant against payment% acceptance, and the other set is received subse=uently, branches should note to deliver the second set of documents 1branded 'ith the branch stamp and bill reference number2 against the ac&no'ledgment of the importer%dra'ee in the import bills register 1#ranches should not affi" any endorsement on any of the documents received under the second set 2 6ocument$ compl:ing =ith -C "erm$ 22('ight +ill$ 22(1($here the documents are free from discrepancies, branch should for'ard a bill intimation memo to the applicant 1in form 0.0C2, after entering the details of the documents received in the <C#R 1<etters of Credit #ills Receivable Register R 442 Copy of form 0.0C should be preserved along 'ith rest of the documents received from the remitting ban& 22(1(1(#ranches should maintain a diary to diarise the 0/th day after the date of receipt of documents #efore e"piry of the 0/th day after the date of receipt of documents, if the applicant 'ishes to retire the documents ma&ing full payment, branch can fi" the e"change rate 1#ills selling rate%for'ard sale rate, as the case may be2 and report the sale to Treasury Foreign as appropriate If the documents remain unpaid even on the 0/th day after the date of receipt of documents, branches should crystallise the rupee e=uivalent of the foreign currency bill on the tenth day, by applying the bills selling rate or for'ard sale rate, as the case may be In case the 0/th day falls on a holiday or a -aturday, the importer:s liability shall be crystallised into Rupee liability on the ne"t 'or&ing day 22(1(2(#ranches should follo' the procedural guidelines contained in Chapter 0 of this volume for obtaining e"change rates and reporting the transactions to the Dealing Room 22(1(3(#ranches should record the rate and rupee e=uivalent of the bill in the <C#R register and pass the accounting entries given in the subse=uent paras $hile lodging the bill in the <C#R register, branches should note to compute interest 1at the rate prescribed by the #an& from time to time2 on the rupee e=uivalent from the date of debit to our ,ostro account to the date of lodgement and credit the same to Treasury Foreign along 'ith the rupee e=uivalent of foreign e"change sold This interest need not be collected on bills dra'n under <Cs against 'hich remittance is made by the branch after

receipt of the documents in terms of the credit or 'here TT reimbursement is provided In case of remittances by 'ay of credit to the rupee account of non)resident ban&s, this interest should be collected and remitted as per the instructions of the negotiating ban& and in terms of the letter of credit 22(1(4(In case of documents, 'here the branch is convinced that they conform to the credit terms but the applicant for the credit refuses to honour the documents, alleging discrepancy in the documents, the crystallisation should be done on the 0/th day after the date of receipt of documents For any clarification needed by the branch, reference should be made to the D > + -ection, Treasury Foreign 22(1(5(#ranches should also be familiar 'ith the procedure contained in the Gandboo& of *rocedures of !3IM *olicy for ta&ing delivery of cargo, as the Eoint Golder of Import <icence #ranches should refer the full facts of such cases to the sanctioning authority%<egal -ervices Department, Central Office and obtain their instructions%permission, before e"ercising this right as Eoint Golder of Import <icence to have access to goods 22(1(6(Immediately on crystallisation of the rupee liability, branches should ma&e a debit entry in the <C#R liability register and send an intimation 1in duplicate2 to the importer%applicant in form 0.0 + see&ing prompt payment of the bill and retain office copy of form 0.0 + along 'ith the documents, branded 'ith <C#R stamp carrying branch name and date of lodgement 22(1(/(On crystallisation of the rupee liability, branches should reverse the debit entry in the <C liability register and reverse the <C contra passed at the time of issuance of <C $here the <C provides for partial shipments%dra'ings, the <C liability%contra should be reversed only to the e"tent of documents received and liability crystallised even by creating OD%e"cess in the account 22(1(0(#ranches should obtain form +0 duly completed by the applicant, endorse the import licence in column no A of !"change Control copy of import licence 1'herever applicable2 and deliver the documents to the applicant against his ac&no'ledgment in the <C#R register #ranches should retain t'o copies of the invoice 1one to be pinned 'ith form +0 and &ept in R Return folder, and another 'ith correspondent:s remittance schedule and filed in <C#R file2 The authorised official of the branch should complete the certificate portion of form +0 and retain it in the R Return folder, after ma&ing entry in the R Return Register 22(1(1( $hile delivering documents to the applicant against his ac&no'ledgment in the <C#R register, the draft should be branded 'ith the follo'ing stamp 9Received payment: <C#R should be reversed on the same day

*rincipal Interest Commission Others1specify2 Total Manager

Rs Rs Rs Rs ;;;;; Rs ;;;;;

and the bill of lading should be endorsed in favour of the applicant $here the transport document received is an air'ay bill, branches should note to issue delivery order favouring the airline company to deliver the cargo to the applicant 22(1(12(#ranches should note to follo' up 'ith the party and receive%e"amine the documentary evidence of import into our country 22(2(<$ance +ill$ 22(2(1(For the 6sance bills received under <C and conforming to the credit terms, branch should for'ard a presentation memo to the applicant in form 0.0 C, after entering the details of the documents in the <C#R register In the bill presentation memo, branches should advise the applicant to call at the branch and ta&e delivery of documents + separate letter 1as per format given in +nne"ure DIII2 should be obtained from the applicant accepting and ac&no'ledging receipt of documents and underta&ing to ma&e the payment of the bill amount on the due date in terms of the <C application 22(2(2(In respect of usance bills, 'here the 6sance is to run from the date of shipment or from date of bill of lading, the correspondent for'arding the documents 'ould have advised the due date in the covering schedule itself and the due date should be indicated to the applicant in form 0.0 C 22(2(3(+s per 6C*DC 8// a credit should not be issued available by draft1s2 on the applicant and if the credit nevertheless calls for draft1s2 on the applicant, ban&s 'ill consider such draft1s2 as on additional document $hen a 6sance draft under the <C is dra'n on the <C Issuing #an&, there is no need to dra' a separate draft or 6sance promissory note on the applicant and get the same accepted by him 'hile delivering the documents received under the <C In case drafts dra'n on the applicant are received, the same should be handed over to the applicant along 'ith the documents The applicant also need not co)accept drafts dra'n on the <C Issuing #an&

22(2(4(The draft 1dra'n on the Issuing #an&2 received from the negotiating ban& 1or nominated ban&2 need not be stamped and should be returned after acceptance to the negotiating ban& 22(2(5(The contra passed at the time of establishing the <C should be reversed To account for the liability on the due date, the follo'ing contra entry should be passed ma&ing suitable remar&s in the <C#R register Debit( Customer:s liability under acceptances, endorsements and other obligations Credit( +cceptances, endorsement and other obligations as per contras The above contra entry may be passed for the rupee e=uivalent at the bills selling rate%for'ard sale rate 22(2(6(#ranches should obtain form +0 duly completed by the applicant and deliver the documents 1other than t'o copies of invoice2 to the applicant, against his ac&no'ledgment in the <C#R register $hile delivering the documents, the bill of lading should be endorsed in favour of the applicant $here the transport document received is an air'ay bill, branches should note to issue delivery order favouring the airline company to deliver the cargo to the applicant #ranches should retain the form +0, t'o copies of the invoices along 'ith copies of <C, import licence, etc in a separate folder in a chronological order 22(2(/($hile delivering documents to the applicant, branches should advise the applicant)customer to deliver the customs certified !"change Control Copy of bill of entry immediately on clearing the cargo, 'ithout 'aiting for any reminder from the branch #ranches should follo' up and ensure compliance of this stipulation 'ithout much delay 22(2(0(#ranches should diarise the due date and follo' up 'ith the applicants sufficiently in advance about retirement of the bill on the due date On the due date, the foreign currency liability should be crystallised in Indian rupees by applying the ready bills selling rate%for'ard sale rate 1as appropriate2 and the sale reported to Treasury Foreign as per guidelines in chapter 0 of this volume of #oo& of Instructions $hatever be the reason adduced by the applicant, branches should not delay crystallisation of the liability beyond the due date The rate applied and rupee e=uivalent should be recorded against the relative import bill in the <C#R register The +cceptances%!ndorsements contra passed at the time of acceptance of the bill by the applicant should be reversed on crystallisation of the liability on the due date 22(2(1(On crystallisation of the rupee liability, an intimation should be sent to the applicant in form 0.0+ and the rupee liability recovered 1along 'ith interest at the rates prescribed by CO from time to

time2 'ithout delay If the import is sub?ect to import licence, the same should be endorsed and retained along 'ith form +0 1obtained at the time of acceptance of the bill2 !ntry should be made in the R Return Register and the form +0 1along 'ith fully utilised%e"pired import licence and a copy of invoice2 'ith the certificate portion duly completed by the authorised official of the branch should be &ept in the R Return folder separately 6ocument$ under credit$ a3aila+le +: de,erred pa:ment 22(3(In respect of documents received under credits available by deferred payment, the Correspondent for'arding the documents 'ould have indicated the due date on 'hich he 'ill be claiming reimbursement and the due date fi"ed by the correspondent should be indicated in form 0.0C sent 1in duplicate2 to the applicant The applicant should return a copy of form 0.0C agreeing to pay for the documents on the due date indicated therein #ranch should deliver the documents to the applicant only after obtaining applicant:s concurrence in F 0.0C to pay on the due date On due date, branch should crystallise the rupee liability of the applicant and ensure recovery of the same to the debit of the applicant:s account 22(3(1(The other formalities li&e obtaining form +0, follo' up 'ith importer for documentary proof of import, crystallisation and recovery of rupee liability on due date, reporting to Dealing room and entry in R Return register should be follo'ed as in the case of 6sance bills received under negotiation credits 6ocument$ not con,orming to -C term$ 21(1(#ranches should scrutinise all documents received under <C 'ith copy of the <C to ascertain that the documents are in strict conformity 'ith the <C terms If there are discrepancies, the same should be informed e"peditiously 1by authenticated teletransmission to the remitting ban&%beneficiary 1if the documents are received from the beneficiary directly2 in accordance 'ith the provisions of the relevant articles of 6niform Customs > *ractice for Documentary Credits .//7 Revision, ICC *ublication no 8// , indicating that the documents are held at their disposal -imultaneously, the discrepancy should be notified to the applicant in form 0.0 # to see& his instructions #ranches are advised to e"peditiously deliver F 0.0 # to the applicant in person against proper ac&no'ledgment 21(1(1(On receipt of applicant:s agreement 1in 'riting on copy of F 0.0 #2 to honour the documents, branch should send an authenticated teletransmission intimating applicant:s agreement to pay for the documents, despite the discrepancies 1indicated in the earlier tele"%cable ref no 2 and see&ing their concurrence to deliver the documents to the applicant Only on getting the concurrence of the

remitting ban&%beneficiary 1as the case may be2, branch may deliver the documents to the applicant against payment%underta&ing to ma&e payment to the remitting ban&%beneficiary, adopting the procedural aspects prescribed for the documents complying 'ith terms of the credit 21(1(2($hen the applicant does not respond 'ithin t'o days of sending F 0.0#, branch should send a tele"%cable to the remitting ban& to refund the amount reimbursed to them under <Cs in 'hich branch has permitted the nominated%confirming% negotiating ban& to claim reimbursement to the debit of Treasury Foreign ,ostro account abroad In such cases, branches should &eep the Correspondent #an&ing -ection, Treasury Foreign, Central Office informed about the facts of the case and if necessary, see& their assistance to claim the refund of reimbursement claimed by nominated%confirming% negotiating ban& 21(1(3(In case of disputes%difficulties in interpretation of the <C terms, branches should ta&e up 'ith Treasury Foreign , Central Office, through the Regional Office concerned, 'ith full particulars and copies of <C, relevant documents and e"change of correspondence bet'een branch and applicant%remitting ban& 21(2(+D branches should pass the follo'ing accounting entries 'hile crystallising the rupee liability of import bills under <Cs established on account of their customers The entries to be passed by +D%,+D branches 'hile handling import documents under <C established by +D branches on account of customers of ,+D branches are furnished in +nne"ure DI +t the time of fi"ing the e"change rate ( Debit( Credit( Credit( <C#R 1Foreign2 account COM*+-- account Treasury Foreign a%c 1Correspondent2

QFor rupee e=uivalent R transit period interest 1'herever applicable2S *> < a%c commission 1as per our latest service charges boo&let updated from time to time2 In case of rupee bills, if the proceeds are to be remitted to an +D in India for credit of non)resident ban&:s rupee account, entries as applicable to out'ard remittances 1inland2 are to be made On Retirement Debit( Credit( Credit( Current a%c party <C#R 1Foreign2 * > < a%c Discount 1for interest2

Documents under <Cs on account of customers of ,+D branches 22($hen +D branches receive documents under <Cs established by them on account of customers of ,+D branches, the follo'ing procedure should be adopted by the designated +D branches and ,+D branches(

22(1($hen the documents are in accordance 'ith the <C terms, the bill presentation memo in form 0.0C should be sent to the applicant, through the ,+D branch, as e"peditiously as possible The +D branch should hold the documents in case of sight bills till the 0/th day after date of receipt of documents to fi" the e"change rate On the 0/th day, +D branch should lodge the bill in <C#R register and crystallise the rupee liability, under report to Treasury Foreign 22(1(1(The designated +D branch should specifically indicate in its telephonic%telegraphic%tele" report%credit Treasury Foreign advice that the transaction relates to sale of e"change on account of the named ,+D branch On crystallisation of the liability, the designated +D branch should inform the rupee liability of the applicant to the ,+D branch, 'ho should recover the amount to the debit of the applicant:s account 'ith them and send the I#-+ instrument to the designated +D branch, along 'ith form +0 completed by the applicant Only on receipt of the I#-+ instrument along 'ith +0 1completed by the applicant2 from the ,+D branch, the +D branch should arrange to deliver the documents to the applicant, through the ,+D branch, after completing formalities li&e endorsement of import licence, etc and after properly endorsing the documents, 'herever necessary 22(1(2(If the importer desires to retire the documents before the 0/th day after receipt of documents, ,+D branch should ascertain the e"change rate and amount in rupees from the +D branch and credit to the +D branch, along 'ith form +0 duly completed by the importer%applicant 22(1(3(+D%,+D branches should co)ordinate 'ith each other, follo' up 'ith the applicant and ensure compliance of formalities li&e obtention of form +0 and follo' up receipt of documentary proof of import into our country 22(1(4(In case of 6sance bills 1under negotiation credits2, the drafts and documents should be sent to ,+D branch, along 'ith form 0.0C addressed to the applicant, provided the documents conform to <C terms #efore sending the documents to the ,+D branch, the designated +D branch should record the details of the documents in its <C#R register The ,+D branch should send the form 0.0C received from +D branch to the applicant and advise him to call at the branch for acceptance and on acceptance by him, convey the due date to the +D branch e"peditiously +D branch should diarise the due date and crystallise the rupee liability on the due date ,+D branch should release the draft only on complete discharge of the liability by the applicant 22(1(5(On the due date, +D branch should fi" e"change rate, crystallise the rupee liability, report the sale to Dealing room and send bill intimation memo in form 0.0+ to the applicant under copy to the ,+D branch concerned ,+D branch should follo' up 'ith the applicant for payment on due dateI it

should get in touch 'ith the designated +D branch on the due date, ascertain the rupee e=uivalent and other charges to be credited to the +D branch and send I#-+ instrument to the +D branch 1to the debit of applicant:s account 'ith ,+D branch2 'ithout delay The +D branch should reverse the <C#R 1F2 outstanding in their boo&s on receipt of I#-+ instrument from the ,+D branch 22(1(6(In respect of documents received under deferred payment credit, the +D branch should send the documents under cover of 0.0C 1in duplicate2 indicating the due date on 'hich payment is to be made by the applicant ,+D branch should deliver both the copies of form 0.0 C to the applicant and obtain the duplicate copy duly signed by him, agreeing to ma&e the payment on the due date Only on obtaining the agreement of the applicant in 'riting in 1the duplicate copy of2 form 0.0C, ,+D branch should deliver the documents to the applicant under advice to the designated +D branch On the due date, +D branch should crystallise the rupee liability of applicant and ensure recovery of the same to the debit of applicant:s account 'ith ,+D branch 22(1(/(+D branch should share the charges collected from the applicant as per details in chapter 0 of this volume of #oo& of Instructions 22(1(0(For documents not in conformity 'ith credit terms, the +D branch should inform the remitting ban& by teletransmission as per provisions of the relevant articles of 6C*DC and simultaneously send the form 0.0 # 1discrepancy memo2 to the applicant for the credit under advice to the ,+D branch concerned ,+D branch on receipt of copy of F 0.0 #, should ta&e up 'ith the applicant to honour the documents In case of, his refusal to pay or dispute regarding interpretation of discrepancies in documents, reference should be made to Regional Office%Treasury Foreign Central Office, through the designated +D branch 22(1(1(The entries to be passed by +D and ,+D branches 'hile handling documents under <Cs established by +D branches on account of customers of ,+D branches are furnished in +nne"ure DI to this volume of #oo& of Instructions H 56-%5> OF 6OC<&E5"' #ECE%VE6 FO# CO--EC"%O5 23(#ranches should normally handle%collect import documents on account of their customers only $hile handling such collection, branches should e"ercise due care to e"amine their line of business, financial standing, fre=uency of imports etc to establish genuineness of import 23(1(The ris& of fa&e import bills is highest for bills received on collection basis particularly those relating to ne' customers or customers 'ho do not have any credit arrangement 'ith #an& or

customers 'hose business relationship 'ith the #an& is by and large restricted to the retiring of import bills Gence, branches should handle import documents only for customers 'ho are ban&ing 'ith us for a reasonably long time 'ith satisfactory operations in the account and 'hose accounts are properly introduced -ine o, 4u$ine$$. 23(1(1(#ranches should ascertain the line of business of their ne' importer clients by( a(Disiting their place of business%godo'ns +(!n=uiring about their business e"perience 'ith other importers % e"porters in the same trade c($hether the customer is an established dealer%trader%user of goods sought to be imported d(!"amining the #alance -heet of the customer before entertaining their re=uest for remittance e(Obtaining credit opinion%report about the overseas seller from their ban&ers abroad 23(1(2(Operation o, the ccount.

#ranches should monitor such accounts to ascertain( a($hether the sale proceeds of the importer:s firm are regularly credited to their business account or there are only occasional credits to their account +($hether the credits are mostly payorder%drafts%che=ues dra'n on other branches by importers If so, 'hether credits and debits represent normal business transactions or simple transfer of funds from one account to another account In such cases, branches should be more cautious 'hile handling their import bills #ranches should follo' the above procedural drill even in respect of opening import letter of credit 'ith cash margin upto 0//F so that the financial antecedents of the Indian importer and overseas seller are clearly established 23(1(3(Instructions as to the disposal%payment of import bill should be given by the #ranch Manager bearing in mind the above guidelines These directions should be given in 'riting in the Import #ills Register and the reason for the decision ta&en should be clearly recorded 23(Officials handling in'ard import collection bills should be familiar 'ith the provisions of 6niform Rules For Collection, ICC *ublication no 4.., besides the other reference materials%guidelines referred to in para 0 @ of this chapter

23(1(,+D branches receiving import bills%documents from overseas branches%correspondents should for'ard the same 1including the covering schedule of remitting ban&2 to the designated +D branch and advise the overseas branch%ban& to address all future correspondence in respect of the collection to the +D branch, furnishing the full postal, tele"%telegraphic addresses and telephone numbers of the +D branch 23(2(+ll documents received from our overseas branches%correspondents should be recorded in the Registered *osts Received Register and the covering schedule of the correspondent%overseas branch should be branded 'ith received stamp of the branch, 'ith date 23(3(#ranches should verify the documents 'ith the covering schedule of the remitting ban& to ensure that all the enclosures listed in the covering schedule are received in tact If any document or copy of document is found missing, branch should send a tele"%cable to the remitting ban& indicating the details of the document missing and see& further instructions #ranches should ensure that they are not re=uired to underta&e any responsibility or liability other than merely collecting the bill 23(4(If the documents listed in the covering schedule of the remitting branch%ban& have in fact been received, branches should verify the instructions of the remitting branch%ban& and the documents received to ensure that the transaction does not contravene the provisions of the Trade%!"change Control Regulations relating to imports $herever the instructions of the remitting branch%ban& and%or the transaction as per the documents are contrary to the Trade%!"change Control Regulations in force, branches should immediately advise the remitting branch%ban& by cable the inability of the branch to handle the documents and see& disposal instructions In this connection, branches may avail of the assistance of Treasury Foreign Central Office 1D > + -ection2 'herever necessary 23(5($hen documents are received for collection on account of non)customers, branches should politely inform the remitting ban& of their inability to handle the collection and see& their further instructions, as it 'ould be very difficult to follo' up 'ith non)customers regarding compliance of various !"change Control regulations li&e submission of bill of entry, etc 23(6(#ranches should note that remittance against bills received on collection in respect of imports into India can be made provided the bills are accompanied by shipping documents In case of clean bills, importer must be as&ed to produce customs certified !"change Control copy of bill of entry that the goods have been actually imported into India, before arranging the remittance $here, ho'ever, the goods have not arrived, branches should call for and verify documents evidencing shipment%despatch 1viH bill of lading, air'ay bill or post parcel receipt2 and !"change Control copy of import licence 1'herever applicable2 before agreeing to ma&e the remittance In case

of doubts, branches should refer the matter to !CD%R#I 'ith full particulars, under advice to Treasury Foreign , Chennai 23(/(#ranches should enter the details of the documents in the In'ard Demand%6sance #ills 1Foreign2 Register, brand all the documents 'ith ID#F%I6#F stamp and indicate the bill reference number In respect of I6#F bills, branches should ensure that they are duly stamped 'ith special adhesive stamps of ade=uate value as per Indian -tamp +ct, at the time of acceptance of the 6sance bill 1*lease refer to *ara 0. of this chapter for relevant guidelines in this regard 2 23(0(#ranches should prepare the bill presentation memo 1in form F 0.0D2 in duplicate incorporating all the relevant instructions of the remitting branch%ban&, and advising the importer to bring !"change Control Copy of import licence 1if the item of import is sub?ect to import licence2 and mail one copy of the same to the dra'ee indicated in the bill%documents and retain the other copy 'ith the documents to be preserved in a chronological order in a separate folder Details of the bill presentation memo sent should be recorded in the ID#F%I6#F register 23(1(In respect of dra'ees 'ho are ban&ing 'ith a branch other the branch that has received the collection, the dra'ee should be advised to produce a letter of identification by the branch 'ith 'hom he is maintaining the account -uitable instructions in this regard should be incorporated in the bill intimation memo itself 23(12(Immediately on lodgement of the bills in the ID#F%I6#F registers, branches should pass the follo'ing contra entries in their boo&s( 6E& 56 4%--' Debit ( Credit ( In'ard Demand #ill 1Foreign2 <odged 1for the total amount of bills lodged2 In'ard Demand #ill 1Foreign2 Collection 6sance #ills Debit( Credit( In'ard 6sance #ill 1Foreign2 <odged 1for total amount of bills <odged2 In'ard 6sance #ill 1Foreign2 Collections

23(11(#efore accepting payment from the dra'ee%arranging for acceptance of 6sance bill by the dra'ee, branch should call for and verify the !"change Control Copy of import licence 1'herever

applicable2 and ensure that the description, =uantity and value of goods are as per terms of the import licence 23(12(#ranches should be guided by the time limit, if any, given by the remitting ban& for acceptance%payment by the dra'ee The time limit should be indicated in the bill presentation memo sent to the dra'ee In the event of the bill not being paid%accepted 'ithin the time limit given by the remitting ban&, branches should send 'ithout delay advice of non)payment%non)acceptance to the remitting ban& #ranches should ascertain the reasons for such non)payment or non)acceptance and advise accordingly the ban& from 'hich the bill 'as received If no reply or instruction is received from the remitting ban& 'ithin B/ days from date of notice of non)payment%non)acceptance, branches should return the documents to the ban& from 'hich they 'ere received originally 1and reverse the contra entries passed at the time of lodgement, as per guidelines in subse=uent paras2 23(13(In respect of bills accepted by dra'ees but dishonoured on due date, branches should inform the remitting ban& in a manner as indicated in the covering schedule of the remitting ban& for'arding the documents and see& their instructions +ny charge incurred in noting%protesting bills dishonoured by dra'ees on the due date should be collected from the remitting ban& 23(14(#ranches should note to comply 'ith the procedural aspects regarding =uoting of rates and reporting systems contained in chapter I of this volume of #oo& Instructions 6emand 4ill$ 24(On being satisfied 'ith the bonafides of the dra'ee and after ensuring that the transaction is in accordance 'ith the Trade%!"change Control Regulations in force, branches should obtain form +0 duly completed and signed by the importer 24(1(#ranches should collect the rupee e=uivalent from the importer to the debit of his account 'ith the branch at bills selling rate as on date of retirement or for'ard contract rate, in case a for'ard contract has been boo&ed for the transaction and pass the follo'ing accounting entries in its boo&s Debit ( *arty:s a%c 1for the bill amount plus commission as per our latest service charges boo&let updated from time to time Credit ( Treasury Foreign Credit ( * > < a%c commission $hile passing the above accounting entries, branches should reverse the contra passed at the time of lodgement of the bill in the ID#F register

24(2(#ranches should obtain form +0 duly completed by the importer, and endorse !"change Control copy of import licence 1as per guidelines in the latest master circular on imports by R#I updated from time to time +uthorised official of the branch should complete the certificate portion in form +0 and retain the same 'ith 1fully utilised%e"pired2 import licence 24(3(The documents should be delivered to the importer duly endorsed 'herever necessary, against his ac&no'ledgment in the ID#F register #ranches should not deliver the documents to a person other than the dra'ee, 'ho should also be import licence%letter of authority holder 24(4(#ranches should follo' up 'ith the importer and obtain documentary proof of import 'ithin the time limit prescribed by !"change Control and e"amine and retain the same in a separate file as per guidelines contained in latest master circular on imports by R#I updated from time to time The defaulters 'ith regard to submission of bill of entry 'ithin the prescribed time limit should be reported to !CD%R#I as per guidelines in latest master circular on imports by R#I updated from time to time <$ance 4ill$ 25($hen the dra'ee calls at the branch to accept the 6sance bill, branch should establish the bonafides of the dra'ee and affi" the foreign bill stamps of appropriate value on the bill of e"change and obtain the acceptance of the dra'ee on the bill The dra'ee should indicate his acceptance on the bill of e"change as follo's( 9+ccepted for payment at Indian Overseas #an&, overnight inside strong room or fire proof cupboards 25(1(#ranches should recover the stamp duty from the dra'ee, record the due date in the relative folio of I6#F register and advise the due date to the remitting ban&%branch The due dates are to be diarised properly 25(2(In case the dra'ee refuses to accept the bill, the fact should be informed to the remitting ban&%branch, as per instructions in their covering schedule #ranches should also ensure compliance of further instructions received from the remitting ban&%overseas branch 25(3(#ranches should note to obtain form +0 1duly completed by the importer2 at the time of acceptance of the bill and the same should be retained 'ith accepted bill #ranch on : 1due date2 The accepted draft should be &ept under proper custody in the bill bo" 'hich itself must be &ept

25(4(In respect of 6sance bills accepted by the dra'ee, branches should note to follo' up 'ith the importer and obtain documentary proof of import 'ithin reasonable time from date of acceptance and e"amine and retain the same in a separate file as per guidelines contained in in latest master circular on imports by R#I updated from time to time *articulars of Importers 'ho do not submit the documentary proof of import 'ithin the time limit prescribed by R#I should be reported to !CD%R#I as per guidelines contained in latest master circular on imports by R#I updated from time to time 25(5(On the due date, branches should pass the accounting entries as in the case of retirement of demand bills and send the sale report to Treasury Foreign in a manner appropriate to the amount involved 25(6(#ranches should also ensure prompt compliance of other formalities li&e endorsement of import licence, entry in R Return register and retention of fully utilised%e"pired import licence 'ith form +0 6ocument$ recei3ed on account o, cu$tomer$ o, 5 6 +ranche$ 25(/($henever import documents are handled by +D branch for an ,+D branch, +D branch should insist on a detailed -tatus Report Cum Certificate from the #ranch Manager of ,+D branch concerned $here 'arranted, the #ranch Manager of +D branch may depute an Officer to ma&e detailed en=uiries at the ,+D branch to establish bonafides of the customer 25(0(In respect of documents received on account of customers of ,+D branches, the +D branch shall send the bill intimation memo to the dra'ee%importer under advice to the ,+D branch concerned The ,+D branch should personally follo' up 'ith the importer, obtain importer:s concurrence to retire the import bill against payment%acceptance 26(1(6emand 4ill$ 26(1(1(On receiving the 'ritten concurrence of the importer to retire the bill, the ,+D branch should, after ensuring that the importer has sufficient balance in his account, get in touch 'ith the designated +D branch over phone%tele", re=uest them to arrange for the remittance, ascertain the rupee e=uivalent and charges to be remitted, recover the amount to the debit of importer:s account and remit the funds by authenticated Telegraphic%tele"%telephonic transfer to the +D branch ,+D branch should also give a letter of identification to the importer)customer, attesting his signature thereon, so that he can receive the documents from the +D branch 'ithout delay%difficulty 26(1(2(On receipt of telegraphic transfer%#C from ,+D branch for the remittance, the +D branch

should respond the same, fi" the e"change rate, arrange for the remittance and send report to Treasury Foreign as laid do'n The documents should be handed over to the importer on production of identification letter issued by ,+D branch, after obtaining form +0 completed by the importer and endorsing the !"change Control Copy of Import licence 1'herever applicable2 26(2( <$ance 4ill$ 26(2(1(On receiving the 'ritten concurrence of the importer to accept the bill, the ,+D branch should advise the importer to call at the +D branch and accept the bill of e"change and ta&e delivery of the documents ,+D branch should issue a letter of identification to their importer customer so that he can accept the bill of e"change and ta&e delivery of documents from the +D branch 'ithout difficulty The +D branch shall arrange to deliver the documents after acceptance of the bill adopting the same procedure as acceptance of bills by its customers +D branch should advise the due date to the remitting ban& under copy to the ,+D branch 26(2(2(#oth the +D and ,+D branches should diarise the due date, follo' up 'ith the dra'ee and ensure recovery of the rupee e=uivalent from the importer On the due date, ,+D branch should get in touch 'ith the designated +D branch over phone%tele", re=uest them to arrange for the remittance, ascertain the rupee e=uivalent and charges to be remitted, recover the amount to the debit of importer:s account and remit the amount by tele"%telephonic transfer%#C to the +D branch 26(2(3(On receipt of telegraphic transfer or #C from ,+D branch for the remittance on the due date, the +D branch should respond to the same , fi" the e"change rate, arrange for the remittance and send report to Treasury Foreign The bill of e"change must be delivered to the importer %mport 6ocument$ recei3ed directl: +: the Cu$tomer$. 2/(+s a general rule, import bills and documents should be received from the ban&er to the seller by ban&er of the buyer in India #ranches should not therefore, ma&e remittances 'here import bills are received directly by the importers from the overseas sellers e"cept in the follo'ing cases a($here the value of import bill does not e"ceed 6-D @///// 1Master Circular on Imports2 +(Import bills received by $holly O'ned Indian subsidiaries of foreign companies from their principals c(Import bills received by -tatus Golders, 0//F !"port Oriented 6nits in Free Trade Tones, *ublic -ector 6nderta&ings, *ublic <imited Companies and Deemed *ublic <imited Companies and *rivate <imited Companies

2/(1($hile handling such import documents received by customers, branches should strictly comply 'ith the trade control and e"change control regulations in force as applicable to import documents received on collection basis #ranches should apply TT selling rate for all such remittances as per Treasury Foreign guidelines in force %mport 6ocument$ recei3ed ,rom O3er$ea$ 'eller. 20(+t the re=uest of the importer clients, branches may receive import bills directly from the overseas seller for amounts upto 6-D @///// 1Master Circular on Imports2and handle them provided the #ranch Manager 1I <ine2 is fully satisfied about the financial standing%status and trac& record of the importer customer If other'ise, should return the document citing the reason for return to the overseas seller 21( d3ance remittance on account o, %mport +ill 21(1(#ranches may allo' advance remittance for import of goods sub?ect to compliance of guidelines set out in latest master circular on imports by R#I updated from time to time 21(1(1(Documentary evidence indicating the cost of goods and the insistence of the overseas seller on advance payment should be submitted by the importer 21(1(2(The importer should hold the !"change Control copy of a valid import licence if the goods to be imported are those included in the ,egative <ist of imports given in !3IM *olicy 21(1(3(The remittance should be made direct to suppliers by applying TT selling rate 21(1(4(*hysical imports into India should be made 'ithin si" months 1three years in the case of capital goods2 from the date of remittance and the importer should give an underta&ing to furnish documentary evidence of import 'ithin 04 days from the close of relevant period 1#ranches should promptly diarise and follo' up 'ith the importer customers for submission of copies of #ills of !ntry%*ost *arcel $rappers2 21(1(5(If the amount of advance remittance e"ceeds 6-D 0///// or its e=uivalent , a guarantee from an International #an& of repute situated outside India or a guarantee of an +D in India, if such a guarantee is issued against counter guarantee of an International #an& of repute situated outside India should be obtained

The guidelines for effecting advance remittances of more than 6-D 0//,/// are as follo's( 0 The importers are classified into three, viH , ,on)Customers, Customers . *ublic -ector 6nderta&ings and

For ,on)customers no 'aiver of overseas ban& guarantee is permitted

@ In case of the importer being a *ublic -ector or a Department%6nderta&ing of Government of India%-tate Government%s branches are permitted to 'aive overseas ban& guarantee for effecting advance remittances of more than 6-D 0//,/// sub?ect to a specific 'aiver from Ministry of Finance, Government of India A The clearance%approval should be given duly ta&ing a vie' on the customer:s standing, trac& record, sales turnover, line of business, usefulness of the services to be imported in the business, customer:s capacity to raise funds, financial position including implications, integrity, etc For our customers, 0 For advance remittances not e"ceeding 6-D 0//,///, +D branches are permitted to effect the remittance as done hitherto 2. For advance remittances in e"cess of 6-D 0//,/// and upto 6-D 0 Mio for import of goods and in e"cess of 6-D 0//,/// and upto 6-D 4//,/// for import of services, the discretion to 'aive ban& guarantee shall be vested 'ith the respective Regional heads irrespective of their grade For advance remittances in e"cess of 6-D 0 Mio and upto 6-D 4 Mio 1'ithout any limit in case of import of rough diamonds from specified mining companies listed above2 the discretion to 'aive ban& guarantee shall be vested 'ith General Mangers in respect of Regions headed by General Managers and 'ith Corporate Credit General Managers, in respect of other regions @ $aiver of overseas ban& guarantee for ma&ing advance remittances for import of aircrafts%aviation related products in e"cess of 6-D 4 Mio but upto 6-D 4/ Mio may be permitted by CMD General conditions 0 The customer:s account should be fully compliant 'ith our NKC%+M< guidelines . @ NKC and due diligence e"ercise should be done on overseas manufacturer%supplier also -atisfactory credit report on the overseas supplier should be obtainedF

A Customer should furnish re=uest cum 'illingness letter to remit advance payment 'ithout obtaining guarantee 4 Documentary evidence of supplier:s re=uest for advance remittance%inability or refusal to furnish ban& guarantee should be obtained 8 The branch should underta&e the transactions based on their commercial ?udgement and after being satisfied about the bonafides of the transactions 7 +dvance payments to'ards import of goods%services should be made strictly as per the terms of the sale contract and should be made directly to the account of the supplier%service provider

concerned and not through numbered accounts or other'ise 5 +dvance remittances may be permitted for import of rough diamonds 'ithout any limit if the import is being made from the undernoted mining companies( a2 b2 c2 d2 e2 f2 De #eers <imited RIO Tinto, 6N #G* #illiton, +ustralia !,DI+M+, ! * +ngola +<RO-+, Russia Go&haran, Russia

B In case of import of rough diamonds, the should be a recogniHed processor of rough diamonds as per the list approved by Gems > Ee'ellery !"port *romotion Council 1GE!*C2 and should have a good tract record of e"port realiHation and the import should be from any one of the mining companies listed above 0/ ,o remittance is permitted for import of conflict diamonds

00 In case of import of aircraft and aviation sector related products, prior to ma&ing the remittance, branches should ensure that the re=uisite approval of Ministry of Civil +viation%DGC+%other agencies in terms of e"tant Foreign Trade *olicy are available 0. *hysical import of goods into India should be made 'ithin si" months 1three years in case of capital goods2 from the date of remittance and the importer should given an underta&ing to furnish documentary evidence of import, 'ithin 04 days from the close of the relevant period #ranches should follo' up for submission of #ill of !ntry%documents evidencing import of goods into the country by the importer as per guidelines in force In case of import of aircrafts%aviation related products, if the advance is paid as milestone payments, the date of last remittance made in terms of the contract 'ill be rec&oned for the purpose of submission of documentary evidence of import 0@ #ranches should ensure that in the event of non)import of goods 1e"cept rough diamonds2, the amount of advance remittance is repatriated to India or is utiliHed for any other purposes for 'hich release of e"change is permissible under the +ct, Rules or Regulations made thereunder and in case of advance remittances against services and import of aircraft%aviation sector related products, the beneficiary fulfils his obligation, failing 'hich the amount should be repatriated to India 0A branches should submit a report of all advance remittances made 'ithout a ban& guarantee for import of rough diamonds, 'here the amount of advance payment is e=uivalent to or e"ceeds 6-D 4,///,/// to R#I on a half yearly basis in March and -eptember every year 'ithin 04 calendar days after the close of each half year 1F3 *ermanent 8@%.//5).//B dated /8 /0 .//B2 1F3 *ermanent 5/%.//B)./0/ dated .. 0. .//B2 21(1(6(#ranches should ensure that in the event of non)import of goods, the amount of advance remittance is repatriated into India 21(2(#ranches should note that such remittances should be underta&en only for customers having relationship for a reasonably long period of time 'ith e"cellent trac& record The customer:s trac& record in submitting #ill of !ntry for imports in the past should be satisfactory #ranches should obtain a comprehensive and satisfactory credit report on the overseas seller from his ban&er stating 'hether he is good for the commitment including the amount involved

21(3(#ranches should advise the customers that substitution of the goods for 'hich advance remittance has been sent or any change in the &ind of =uality%=uantity of the goods to be imported is not permitted under guidelines contained in latest master circular on imports by R#I updated from time to time #ranches should be a'are of the ris&s and responsibilities attached to +dvance Remittance against imports and act accordingly 'H%!!%5> >< # 5"EE' 32(The procedure for issuing shipping guarantees is laid do'n in Dolume II) Chapter 05 of #oo& of Instructions #ranches should strictly follo' the guidelines% instructions contained in this Chapter at the time of issuing shipping guarantees Registers, #oo&s and Forms 1( #usiness Referred Register 2( Out'ard Documentary Credit Register 3( <C <iability register 4( <C +pplication)cum)agreement 5( <icence movement register 6( <C#R register /( ID#F % I6#F register 0( <C#R intimation memos 1( ID#F%I6#F intimation memo 12( Form +0 11( Form #!F 12( #ills of !ntry%*ost parcel 'rapper file nnexure$ i( -pecimen of underta&ing letter to be obtained by ,+D branches from applicant of <C ii(Teletransmission format ; pre)advising by short teletransmission of issuance of Documentary credit iii(Teletransmission format for issuance of irrevocable documentary credit i3(Teletransmission format for amendment of documentary credit 3(-$IFT Currency Codes 3i(+ccounting procedure for handling Import business by ,+D branches 3ii(+ chec& list for scrutiny of various documents received under <C 3iii(Format of the letter to be obtained from Importer 'hile delivering documents under 6sance <etter of Credit 55E?<#E % 1-pecimen of 6nderta&ing letter to be obtained by ,+D #ranches from +pplicant of the credit2 The Manager Indian Overseas #an& #ranch

Date ( Dear -irs, Our application dated for letter of credit for in favour of In respect of the above application, 'e hereby further agree to your arranging to open the said letter of credit through another branch of your ban& and to abide by the #an&:s internal procedure in regard thereto that may be enforced from time to time, including the procedure for fi"ation of the rate of e"change for the import bill that may be negotiated under the letter of credit Kours faithfully, 1+6TGORI-!D -IG,+T6R!2 1+mount2

55E?<#E %% "eletran$mi$$ion ,ormat pre-ad3i$ing +: $hort teletransmission o, %$$uance o, 6ocumentar: Credit To +dvising #an& -e=uence Te"t 1(Test or 7 $e have re=uested our directly to you 2($e hereby issue our Irrevocable Documentary Credit ,o 3(Date of issuance 4(!"piring in ( Credit +pplicant 6(#eneficiary /(+mount not e"ceeding 1in figures and in 'ords2 0(*artial -hipment 1(Transhipment 12(7 -hipment%despatch%ta&ing in charge at%from for transportation to on Office to authenticate this message

11(<atest date 12(Merchandise FO#%CIF%C>F 13(Details of Import <icences ( 14(7 Full details to follo'%Details airmailed%Mail confirmation 'ill be the operative credit instrument 7 to be inserted as appropriate 55E?<#E %%% "eletran$mi$$ion ,ormat ,or i$$uance o, %rre3oca+le 6ocumentar: Credit To +dvising #an& -e=uences Te"t 1(Test or 7 $e have re=uested our to you 2($e hereby issue our Irrevocable Documentary Credit ,o 3(Date of issue 4(!"piring in 5(Credit applicant 6(#eneficiary /(amount not e"ceeding 1in figures and in 'ords2 0(+vailable 'ith for full% F of invoice value by dra'n on 1(7 +gainst presentation of documents and Draft1s2 at 12(*artial shipment 11(Transhipment 12(7 -hipment%despatch%ta&ing in charge at%from for transportation to 13(<atest date( 14(Documents( 16(Further conditions ( 1/(Charges ( +ll #an& charges outside India are for the account of 10(*resentation period 11(+ll documents unless other'ise must be atleast in duplicate Drafts if called for should bear this credit ,o date and name of issuing #an& 22(!"cept so far as other'ise e"pressly stated this credit is sub?ect to 6niform Customs and practice on Office to authenticate this message directly

for Documentary Credits 10BB@ revision2 ICC, *aris, France *ublication ,o 4// 21(+dvising Instruction ( *lease notify credit to beneficiary confirmation 22(Through through another intermediary ban&2 23(Reimbursement instructions( 24( Instructions for the nominated ban& ( The original documents should be sent to us by first available Registered +irmail and the rest of the document by the ne"t Registered airmail 7 to be inserted as appropriate 55E?<#E %V "eletran$mi$$ion ,ormat ,or amendment o, 6ocumentar: Credit To +dvising #an& -e=uence 1( Test Te"t or 7 $e have re=uested our 3( Date of issue 4( Kour Ref ,o 5( +pplicant 6( #eneficiary /( Credit amended as follo's ( Te"t of amendment 0( +ll other terms and conditions remain unchanged 1( *lease notify amendment to beneficiary 7 to be inserted as appropriate 55E?<#E V C<##E5C; CO6E' )'O<#CE 'W%F"* date Office to authenticate this message directly to you 2( Our irrevocable Documentary Credit ,o 1if re=uired to be advised your

'W%F" CO6E 6-D G#*

C<##E5C; 5 &E 6- DO<<+R *O6,D -T!R<I,G

C+D CGF E*K GND MKR -GD +6D DNN ,ON -!N ,TD +!D !6R 55E?<#E V% -

C+,+DI+, DO<<+R -$I-- FR+,C E+*+,!-! K!, GO,G NO,G DO<<+R M+<+K-I+, RI,GITT -I,G+*OR! DO<<+R +6-TR+<I+, DO<<+R D+,I-G NRO,!R ,OR$!GI+, NRO,!R -$!DI-G NRO,!R ,!$ T!+<+,D DO<<+R 6+! DIRG+M !6RO ccounting !rocedure ,or handling import +u$ine$$ +: 5 6 +ranche$

%&!O#" -E""E#' OF C#E6%" 5 6 4# 5CH t the time o, opening -C. 1(6e+it. Cu$tomer@$ -ia+ilit: on -C )For nominal amount o, #$(1* Credit. 4an9@$ lia+ilit: on -C )For nominal amount o, #$(1* A contra entr: 2(On receipt o, document$ ,rom 6 +ranch.

a( #e3er$e contra entr: +( 6e+it. -C4# ccount Credit. CO&! '' ccount A 6 4ranch )%4' %n$trument$ to +e $ent to 6 +ranch* 3(6e+it. %mporter@$ ccount Credit. -C4# ccount Credit. 6i$count ccount 6 4# 5CH. t the time o, opening -C 1(6e+it. Cu$tomer@$ -ia+ilit: on -C )5 6 4ranche$* Credit. 4an9@$ lia+ilit: on -C )5 6 +ranche$* )contra entr:* 2(On Cr:$talli$ation o, the +ill dra=n u$ )a*#e3er$e contra )+*6e+it. -C4# Credit. CO&! '' Bc FE6CO

%&!O#" 4%--' #ECE%VE6 O5 CO--EC"%O5 4 '%'. 5 6 4# 5CH.

While gi3ing in$truction$ to 6 +ranch ),or retiring a +ill* 6e+it. %mporter@$ ccount ) t pro3i$ional rate* Credit. 'undr: Creditor$ account 6e+it . 'undr: Creditor$ ccount Credit. CO&! '' ccount - 6 +ranch concerned )%4' in$trument $hould +e $ent to 6 +ranch* 6 4# 5CH. 1(6e+it. %64FB%<4F -odged Credit. %64FB%<4F Collection )contra entr:* )6epending upon =hether it i$ demandB<$ance +ill* When the %64FB%<4F i$ paid. 2(6e+it. Compa$$ Bc 5 6 4ranch Credit. Compa$$ ccount A FE6CO Corre$pondent ccount concerned )%4' in$trument $hould +e $ent to FE6CO 3(#e3er$e contra entr: at the time o, retirement (o, %64FB%<4F +ill( )5ote. Voucher$ are to +e pa$$ed a$ in the ca$e o, %nland +ill$ ,or collecting marginC commi$$ionC di$count etc(* 55E?<#E V%% chec9li$t ,or $crutin: o, 3ariou$ document$ recei3ed under -C( 4ranch $hould 3eri,: the ,ollo=ing. %n re$pect o, Commercial %n3oice =hether. 1( The description of merchandise correspond 'ith the description mentioned in the <C 2( The price and =uantity are mentioned as per the <C 3( It mentions the rates as per <C 4( It is made out in the name of the opener of the <C 5 The amount of invoice matches 'ith the amount of <C 6( Customs%consular invoices submitted 1if stipulated by <C2 /( The mar&ing, number of the pac&ing mentioned in the #ill of <ading are identical 'ith those given in the invoice %n re$pect o, 6# F" O# 4%-- OF E?CH 5>E =hether. 1( It is dated, dra'n or endorsed to the order of the #an& 2( It is dra'n by the party indicated as the beneficiary of the credit 3( It is mar&ed as dra'n under the <C, =uoting the <C number, date etc 4( The tenor 1D*, D+ etc2 is in conformity 'ith that stipulated in the <C 5( The amount is identical 'ith the amount mentioned in the invoice 6( The amount in figures corresponds 'ith 'ords

/( The alterations are duly authenticated %n re$pect o, "# 5'!O#" 6OC<&E5" =hether. 1(Full set of bill of lading is submitted 1minimum t'o copies2 including non)negotiable copies as stipulated in the <C 2(The date of shipment indicated in the bill of lading is on or prior to the last date of shipment stipulated in the <C 1The date on 'hich the shipment is put Jon boardJ is considered as the shipment date If 9Received for shipment: bill of lading is submitted, 'hether it comes as a separate notation 9On board: 'ith date and initialed under stamp of the carrier2 3(The bill of lading is to the order of the #an& or to the order of the party as per <C 4(The description of goods, mar&s, number%=uantity and 'eight given in the bill of lading tally 'ith the invoice and consistent 'ith <C 5(The port of shipment, port of destination, the consignee:s name, the shipper:s name given in the bill of lading correspond 'ith those indicated in the <C 6(The endorsement, if any, made in the bill of lading corresponds to the endorsements stipulated in the <C /(The bill of lading is manually signed by the carrier or its agent and properly stamped 0(The bill of lading is 9clean: one and not a 9claused: one 1(+ certificate to the effect that the vessel is not to touch any specific port has been submitted if called for under the <C 12(+ certificate stipulating that the age of the vessel is not more than particular years if called for under the <C has been submitted 11(In case of CIF and C > F terms of payment, bill of lading is mar&ed 9Freight paid: and in case of FO# mar&ed 9Freight *ayable: at the destination 12(9On Dec&: bill of lading is submitted and if so 'hether <C provides for the same 13(The bill of lading is submitted 'ithin the date stipulated in the <C 1<ast date of negotiation2 14(The beneficiary:s name is sho'n as consignor unless <C permits third party bill of lading 15(The bill of lading is ade=uately stamped 16(In case of +ir'ay #ill%*ost *arcel receipts, #ranch should verify 'hether the consignment is in favour of the #an& and not in the name of the buyer and +$# indicates flight number and date %n re$pect o, %5'<# 5CE 6OC<&E5"' =hether. 1(The insurance policy is in the negotiable form signed by an agent or under'riter of an insurance company 1Certificate of Insurance%bro&er:s cover note is not acceptable in place of policy2 2(It is made to the order and endorsed in favour of the ban& 3(It is stamped as per the la's of the country concerned

4(The date of insurance policy is not later than the date of bill of lading 1Or the policy should specifically state that cover of ris& commences from the date of shipment2 5(The insurance is payable in the currency of the draft at the destination of the merchandise or as stipulated in the <C 6(The amount insured is for a minimum cover of 0/F above the CIF value or for the amount stipulated in the <C /(The details given in the policy such as description of merchandise, shipping mar&s, numbers, the name of the vessel, bill of lading number etc identical 'ith those given in the bill of lading and invoice 0(+ll the copies of Insurance *olicy 1negotiable and non negotiable2 are submitted 1(The policy covers 9Dec& shipment ris&: if the <C mentions Ushipment on board: 12(The beneficiary as 9+ssured: ta&es out policy 1Third party policy is not acceptable2 11(The policy indicates 9$arehouse to 'arehouse: cover if stipulated by <C 4ranch mu$t al$o 3eri,: =hether the ,ollo=ing document$ i, $tipulated in -C are $u+mitted. O"HE# 6OC<&E5"'.

o o o o o o o o

Certificate of Origin Consular Invoice Customs Invoice $eight <ist *ac&ing <ist Inspection Certificate Vuality Certificate Vuarantine Certificate The contents of the above documents should correspond 'ith other documents 55E?<#E V%%% -etter ,rom %mporter under <$ance -C From The Importer Customer To Indian Overseas #an&, #ranch Date(

<$ance -etter o, Credit 5o(((((((((((((((((((((((((((( dated((((((((((((((((((((((((((( *lease refer your bill intimation memoLL dated LLLLLL $e hereby ac&no'ledge receipt of the follo'ing documents in respect of the above documentary credit and confirm that the documents are in terms of credit $e have noted that the draft received under the above <C has been accepted by the #an& In terms of the <C application e"ecuted by us on LLLLL'e remain liable and underta&e to ma&e the payment on LLLLLLLLbeing the due date of the bill dra'n under the above <C forLLLLLLL1FCK amount2 'ith interest, commission and other charges if any, incurred by you or by your correspondent 0 Invoice ,umber and Date ( . #ill of <ading or +$# ,o and Date ( @ *ac&ing <ist ,o and Date ( A Draft ,o and Date 1If any on the applicant2 ( 4 Others ( -ignature of the Importer