| Bank Name | Minimum Value |
|---|
| Bank Name | FD Margin | Commission | Mini Collateral | Chances of Loan Approval | |
|---|---|---|---|---|---|
State Bank of India
|
15.00% | 1.00%-2.00% |
|
|
|
Yes Bank Ltd.
|
15.00% | 1.00%-2.00% |
|
|
|
RBL Bank Ltd.
|
20.00% | 1.00%-2.00% |
|
|
|
South Indian Bank Ltd.
|
15.00% | 1.00%-2.00% |
|
|
|
UCO Bank
|
15.00% | 2.00%-3.00% |
|
|
|
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Union Bank Of India
|
15.00% | 1.00%-2.00% |
|
|
|
United Bank Of India
|
15.00% | 2.00%-3.00% |
|
|
|
Punjab National Bank
|
15.00% | 2.00%-3.00% |
|
|
|
Punjab & Sind Bank
|
20.00% | 2.00%-3.00% |
|
|
|
Indian Bank
|
15.00% | 2.00%-3.00% |
|
|
|
Indian Overseas Bank
|
15.00% | 2.00%-3.00% |
|
|
|
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ICICI Bank Ltd.
|
15.00% | 1.00%-2.00% |
|
|
|
Federal Bank Ltd.
|
20.00% | 2.00%-3.00% |
|
|
|
HDFC Bank Ltd
|
15.00% | 1.00%-2.00% |
|
|
|
Axis Bank Ltd.
|
15.00% | 1.00%-2.00% |
|
|
|
Bandhan Bank Ltd.
|
25.00% | 2.00%-3.00% |
|
|
|
Bank Of Baroda
|
15.00% | 1.00%-2.00% |
|
|
|
Bank Of India
|
15.00% | 1.00%-2.00% |
|
|
|
Bank Of Maharashtra
|
20.00% | 2.00%-3.00% |
|
|
|
Canara Bank
|
15.00% | 2.00%-3.00% |
|
|
|
Central Bank Of India
|
25.00% | 2.00%-3.00% |
|
|
|
IDBI Bank
|
25.00% | 2.00%-3.00% |
|
|
|
DCB Bank Ltd.
|
20.00% | 2.00%-3.00% |
|
|
Loan against property can help you to manage your personal & business requirements. Get up to 60% of property value with flexible tenure. Make sure you own residential, commercial or industrial property.
What you mean by Letter of Credit Eligibility Criteria?Letter of credit is a guarantee made by banks or financial institutions in favour of the buyer that payment will be done on time without any default, if due to any reason the buyer fails to make payment, then bank take the responsibility to do so. Hence, Bank cover-up the sum amount as mentioned in agreement. Typically, LC is often used by international trader to build confidence in transactions. Before applying for LC check your eligibility criteria as given below: -
Letter of Credit Eligibility CriteriaLetter of Credit Eligibility Criteria depends on various factors like age of individual, repayment history, business sales/turnover, total work experience & Creditworthiness ...etc.
Generally, letter of credit issued by bank it’s a kind of document assuring the buyer that if suppose seller unable to make payment on given time period, then bank will be responsible to make payment on behalf of buyer.LC is obtained against pledging any collateral/security & before issuing LC bank or financial institution charge certain fee based on type of LC acquired & commercial invoices.
There are almost 8 Type of Letter of credit as under given: -Credit on Sight- Credit on sight is significantly used by beneficiaries to get paid for exported goods by submitting relevant documents to concerned banks. It is known to be the best way to get an instant letter of credit.
Standby Letter of Credit- Standby Letter of Credit (SBLC) allows an importer to get payment in foreign currency just by providing issuance of SBLC to international bank.
Back-to-Back LC- It's referred as negotiable instrument. Where buyer initiates LC in favour of seller with mentioning intermediary broker, once issued LC by buyer immediately shared to intermediary broker then they quote the request to share the same with seller, this is how a back-to-back LC works.
Confirmed LC- Generally, it happens in rare scenarios when seller is unsatisfied with buyer creditworthiness even with the issuing bank & left with the ideal option to get confirmed LC by secondary bank.
Unconfirmed LC- Unconfirmed LC is one such LC which gives is confirmed from issuing bank only, wherein no other bank gives confirmation or guarantee to the beneficiary for payment.
Transferable Credit- This type of LC is especially stated as transferable credit, it won’t allow second beneficiaries to transfer with third beneficiaries as per certain norms.
Revocable LC- Revocable LC is known to be unsafe LC for exporter as it consists high risk, have the chances of cancelling LC without prior information shared to the beneficiary at any time by issuing bank.
Irrevocable LC- Both the importer & exporter is totally stress relaxed due to the presence of Irrevocable LC, exporter is well confirmed about his/her payment surety & at the same time importer get exact goods with respective quality plus quantity as stated in agreement terms.
How to issue Letter of credit?LC is mostly preferred by international traders to build transaction confidentiality, no matter which sector you belong to whether it’s textile, manufacturing, automobiles like much more.
Step 1- Buyer quote request to issuing bank to get letter of credit in favor of exporter.
Step 2-After getting letter of credit application form buyers need to fill in the form with correct value with attach supporting documents to get verified by issuing bank. Note: - Collateral is required to get letter of credit.
Step 3- Once, the issuing bank check application & attached documents then evaluate the collateral meet certain requirements to fulfill contract amount.
Step 4- If all seems good, then only issuing bank initiate charge fee for issuing LC that is totally based on commercial invoice & chosen type of LC.
Step 5- The overall process comes to an end with issuing bank issue the letter of credit & share to the importer for approval, once the importer gets satisfied with terms of agreement then finally letters of credit draft get finalized.
PHOTOGRAPHS 2
PAN CARD COPY
AADHAR CARD + PASSPORT
ADDRESS PROOF IF RENTED ALSO REQUIRED PERMANENT ADDRESS PROOF
LAST 3 YEARS FORM -16, ITR WITH COMPUTATION OF INCOME IF FILE
LAST 1 YEAR BANK STATEMENT - SALARY ACCOUNT
LOAN SCHEDULE & SANCTION LETTER (IF RUNNING)
COMPLETE PROPERTY PAPERS WITH CHAIN & MAP +ATS
PROCESSING FEE CHEQUE IN FAVOUR OF BANK
LAST 3 MONTHS SALARY SLIP + APPOINTMENT LETTER
PHOTOGRAPH BOTH
PAN CARD CLEAR COPY PROPRIETOR
ADDRESS PROOF (PASS PORT, VOTER ID CARD) PROPRIETOR
OFFICE ADDRESS PROOF LATEST (ELECTRICITY BILL, TELEPHONE BILL)
FIRM REGISTRATION CERTIFICATES & GST REGISTRATION COPY
LAST 1 YEAR GST RETURN COPY
FIRM 3 YEARS ITR COMPUTATION, PROFIT LOSS A/C, BALANCE-SHEET, TAX AUDIT
REPORT, ALL SCHEDULED & ANNEXURE
PROVISIONAL FINANCIAL AY 2019-20
BANK ACCOUNTS (CURRENT ACCOUNT, CC ACCOUNT, OD ACCOUNT LAST 1 YEAR UPDATED.BANK ACCOUNTS) 6 MONTH SAVING ACCOUNT STATEMENT UPDATED (PROPRIETOR)
IF RUNNING ANY LOAN PLEASE PROVIDE SANCTION LETTER AND REPAYMENT SCHEDULED
AGREEMENT TO SELL COPY
PROPERTY PAPERS WITH CHAIN SANCTION MAP
PHOTOGRAPH PARTNERS
PAN CARD - COMPANY, ALL PARTNERS
ADDRESS PROOF - ALL PARTNERS (PASS PORT, VOTER I CARD ,PAN ,ADHAAR)
FIRM ADDRESS PROOF- LATEST ANY UTILITY BILL
PARTNERSHIP DEED COPY
GST CERTIFICATE
GST RETURN LAST1 YEARS
3 YEAR COMPANY ITR COI P/L A/C BALANCESHEET + AUDIT REPORT 3CB 3CD, ALL ANNEXXURS, SCHEDULED WITH C.A.CERTIFIED
PROVISIONAL FINANCIAL AY 2019-20
3 YEAR.ALL PARTNER INDIVIDUALS ITR + COMPUTATION
FIRM ALL A/C BANK STATEMENT 1 YEAR UPDATED
ALL PARTNER SAVING A/C STATEMENT 6 MONTH
IF RUNNING ANY LOAN – LATEST SANCTION LETTER + TRACK RECORDS OR REPAYMENT SCHEDULED
AGREEMENT TO SELL COPY
PROPERTY PAPERS COMPLETE CHAIN WITH MAP
ALL DIRECTORS PHOTOGRAPH
CLEAR PAN CARD - COMPANY AND ALL DIRECTORS
ADDRESS PROOF – COMPANY AND DIRECTORS
LIST OF DIRECTOR & SHARE HOLDER WITH CA CERTIFIED AS ON DATE
MEMORANDOM ORDER IN HAND AND COMPLETE COPY (IF APPLICABLE)
GST, SALE, VAT AND SSI REGISTRATION CERTIFICATE
1 YEAR GST RETURNS
ALL DIRECTORS INDIVIDUALS ITR & COMPUTATION LAST 3 YEARS
LAST 3 YEARS COMPLETE FINANCIAL WITH TAX AUDIT REPORT AND ANNEXURE
PROVISIONAL FINANCIAL FY 2019-20 OR MONTH WISE SALE FIGURE LAST 1 YEAR
COMPANY ALL BANK ACCOUNT STATEMENT 1 YEAR UPDATED
ALL DIRECTORS SAVING A/C STATEMENT 6 MONTH
IF RUNNING ANY LOAN – LATEST SANCTION LETTER AND REPAYMENT SCHEDULED
AGREEMENT TO SELL COPY
PROPERTY PAPERS COMPLETE CHAIN WITH SANCTION MAP
Frequently asked questions (FAQ) pages are Q&A-style pages that most brands build to answer queries that slip through the cracks. FAQs are targeted to give a complete sense of query satisfaction to the client.
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There is a slight difference between loan & Letter of Credit, generally in loan bank directly funds loan amount to borrower account upon agreed EMI to repay principal amount while Letter of Credit work as a promise act that seller payment is well secured for which bank charge certain fee from buyers to issue LC to make the transaction stronger.
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The applicant used to pay certain fee charges by banks or financial institutions depending on commercial invoices but generally 1% of contract amount is paid to issue Letter of Credit.
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Banks or financial institutions require certain documents from beneficiaries to submit in order to check all the relevant documents are legally permissible, documents are enlisted below: -
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Letter of Credit might sound tricky as it’s often used by international traders to have a fair & confidential transaction making through the bank commitment as it becomes more secure to participate in importing & exporting trade. Let us have a better understanding with the supporting Letter of Credit with example - many of you might think why banks should take the riskier part of transaction & what is the need of it.
Generally, bank or financial institutions don’t issue letter of credit type of complicated guarantees easily they used to do a thorough analysis of buyer's credit history whether he/she is actually creditworthy or not. Even bank charges a certain fee based on sum of amount with taking collateral for the same to ensure risk seems lower.
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LC Letter of Credit meaning- Bank Guarantees as the word itself say Bank Guarantees, the seller will be given the commitment of payment to be paid within due date even if buyer falls to make payment bank takes the responsibility to do sum of amount as stated in agreement, there are various types of Letter of Credit as given below: -
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Letter of Credit standby works as a guarantee in the transaction-making process, when it comes to the seller and buyer relationship, it requires trust wherein bank give the commitment on behalf of the buyer that your payment is assured. Once the goods are received payment will be done in time.
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Letter of Credit is known to be promise act & mostly preferred by international traders where banks or financial institutions provide assurity of payment to seller on behalf of buyers where Letter of Credit is issued by bank upon applicant request with charge particular percent fee.
Before doing so lender often determine whether the buyer has sufficient potential to do payment without making any default if suppose due to any reason couldn’t able to payback amount, behalf of the borrower lender will take responsibility to pay the same.
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LC Letter of Credit & BG Bank Guarantee both are similar & works with the same motive to ensure transaction is taking place in right manner, In LC banks or financial institutions give guarantee to the seller while in BG lenders ensure debtor meet the liabilities even opposite parties fail to make payment ( amount is assured to take in time ).
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The cost may vary from 0.25% to 2.00% depending on amount stated in Letter of Credit agreement.
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The mode of payment in LC can be varied whether applicant can do online payment via debit card or credit card, net banking, DD in favour of beneficiary.
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Whether is an LC or BG credit both of them work similarly with the main aim to ensure transactions n wider international traders segment.
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The work of LC is fully transparent, banks & financial institutions give payment guarantee document in terms of making seller fell payment is secured & hence exporting goods can take place.
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It’s a sight clause which defines the time period for payment procedure to take place if the letter of credit is made for next 30,60 or maximum 90 days means the importer have sufficient time to do payment.
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Writing LC payment terms & conditions is much easier, just you need to ensure below points are mentioned in agreement.
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One of the core factors considered to determine LC limit is annual consumption of raw materials that to be utilized to purchase goods against LC and such decision shall be taken by issuing bank.
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LC is a guarantee agreement in which applicant used to mention number of days required to make payment it may be 30,60 or 90 days. If applicant can’t to the payment within agreed time period, then the letter of credit gets expires & eventually bank take the responsibility to make payment.
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The bank issues the letter of credit upon buyer request to make in build trust in transaction.
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To get letter of credit buyer required to pay percentage opening charges & it is calculated on the basis of commercial invoices.
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Due to the complexity condition in LC, lenders leverage a charge called discrepancy charge which is determined after evaluating importer creditworthiness.
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Generally, a LC is issued in the irrevocable form which can’t be revised or canceled according to the rules & regulations.
CA Vikas Jain - Our Mentor
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